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Home My WebLink About150507P z:\council packets\2015\r150507\150507ra.docx Last Printed: 5/1/2015 10:30 AM Page 1 of 4 REVISED: MAY 4, 2015 NOTICE OF THE EXECUTIVE AND REGULAR SESSIONS OF THE FOUNTAIN HILLS TOWN COUNCIL TIME: 5:00 P.M. – EXECUTIVE SESSION (Executive Session will be held in the Fountain Conference Room - 2nd floor) 6:30 P.M. – REGULAR SESSION WHEN: THURSDAY, MAY 7, 2015 WHERE: FOUNTAIN HILLS COUNCIL CHAMBERS 16705 E. AVENUE OF THE FOUNTAINS, FOUNTAIN HILLS, AZ Councilmembers of the Town of Fountain Hills will attend either in person or by telephone conference call; a quorum of the Town’s various Commission, Committee or Board members may be in attendance at the Council meeting. Notice is hereby given that pursuant to A.R.S. § 1-602.A.9, subject to certain specified statutory exceptions, parents have a right to consent before the State or any of its political subdivisions make a video or audio recording of a minor child. Meetings of the Town Council are audio and/or video recorded and, as a result, proceedings in which children are present may be subject to such recording. Parents, in order to exercise their rights may either file written consent with the Town Clerk to such recording, or take personal action to ensure that their child or children are not present when a recording may be made. If a child is present at the time a recording is made, the Town will assume that the rights afforded parents pursuant to A.R.S. § 1-602.A.9 have been waived. PROCEDURE FOR ADDRESSING THE COUNCIL Anyone wishing to speak before the Council must fill out a speaker’s card and submit it to the Town Clerk prior to Council discussion of that Agenda item. Speaker Cards are located in the Council Chamber Lobby and near the Clerk’s position on the dais. Speakers will be called in the order in which the speaker cards were received either by the Clerk or the Mayor. At that time, speakers should stand and approach the podium. Speakers are asked to state their name and whether or not they reside in Fountain Hills (do not provide a home address) prior to commenting and to direct their comments to the Presiding Officer and not to individual Councilmembers. Speakers’ statements should not be repetitive. If a speaker chooses not to speak when called, the speaker will be deemed to have waived his or her opportunity to speak on the matter. Speakers may not (i) reserve a portion of their time for a later time or (ii) transfer any portion of their time to another speaker. If there is a Public Hearing, please submit the speaker card to speak to that issue during the Public Hearing. Individual speakers will be allowed three contiguous minutes to address the Council. Time limits may be waived by (i) discretion of the Town Manager upon request by the speaker not less than 24 hours prior to a Meeting, (ii) consensus of the Council at Meeting or (iii) the Mayor either prior to or during a Meeting. Please be respectful when making your comments. If you do not comply with these rules, you will be asked to leave. Mayor Linda M. Kavanagh Vice Mayor Dennis Brown Councilmember Henry Leger Councilmember Nick DePorter Councilmember Alan Magazine Councilmember Cassie Hansen Councilmember Cecil A. Yates z:\council packets\2015\r150507\150507ra.docx Last Printed: 5/1/2015 10:30 AM Page 2 of 4 EXECUTIVE SESSION AGENDA  CALL TO ORDER – Mayor Linda M. Kavanagh 1. ROLL CALL AND VOTE TO GO INTO EXECUTIVE SESSION: Pursuant to: (i) A.R.S. § 38-431.03(A)(4), discussion or consultation with the attorneys of the public body in order to consider its position and instruct its attorneys regarding the public body’s position regarding contracts that are the subject of negotiations, in pending or contemplated litigation or in settlement discussions conducted in order to avoid or resolve litigation(specifically, the Fountain Hills Theater lease); and (ii) A.R.S. § 38-431.03(A)(1), discussion or consideration of employment, assignment, appointment, promotion, demotion, dismissal, salaries, disciplining or resignation of a public officer, appointee or employee of any public body (specifically, for the purpose of discussing the Town Manager vacancy). 2. ADJOURNMENT. REGULAR SESSION AGENDA  CALL TO ORDER AND PLEDGE OF ALLEGIANCE – Mayor Linda M. Kavanagh  INVOCATION – Ms. Debby DeBernardi, Spiritual Director and Director of Christian Formation, Fountain Hills Presbyterian Church  ROLL CALL – Mayor Linda M. Kavanagh  MAYOR’S REPORT i) None.  SCHEDULED PUBLIC APPEARANCES/PRESENTATIONS i) The Mayor may review RECENT EVENTS attended relating to ECONOMIC DEVELOPMENT. ii) QUARTERLY BUDGET REPORT by Finance Director Craig Rudolphy for the fiscal quarter ending March 31, 2015. CALL TO THE PUBLIC Pursuant to A.R.S. §38-431-01(H), public comment is permitted (not required) on matters not listed on the agenda. Any such comment (i) must be within the jurisdiction of the Council and (ii) is subject to reasonable time, place, and manner restrictions. The Council will not discuss or take legal action on matters raised during “Call to the Public” unless the matters are properly noticed for discussion and legal action. At the conclusion of the call to the public, individual Councilmembers may (i) respond to criticism, (ii) ask staff to review a matter or (iii) ask that the matter be placed on a future Council agenda. z:\council packets\2015\r150507\150507ra.docx Last Printed: 5/1/2015 10:30 AM Page 3 of 4 CONSENT AGENDA ITEMS All items listed on the Consent Agenda are considered to be routine, non-controversial matters and will be enacted by one motion and one roll call vote of the Council. All motions and subsequent approvals of consent items will include all recommended staff stipulations unless otherwise stated. There will be no separate discussion of these items unless a Councilmember or member of the public so requests. If a Councilmember or member of the public wishes to discuss an item on the consent agenda, he/she may request so prior to the motion to accept the Consent Agenda or with notification to the Town Manager or Mayor prior to the date of the meeting for which the item was scheduled. The items will be removed from the Consent Agenda and considered in its normal sequence on the Agenda. 1. CONSIDERATION of approving the TOWN COUNCIL MEETING MINUTES from April 16 and 21, 2015. 2. CONSIDERATION of approving SPECIAL EVENT LIQUOR LICENSE APPLICATIONS for the Fountain Hills and Lower Verde Valley Museum and Historical Society (Jean Linzer) to be held at the Fountain Hills Community Center, on the following dates and times: August 15, 2015, from 5:00 pm to 10:00 pm; September 16, 2015 from 5:00pm to 8:00pm; November 18, 2015 from 5:00pm to 8:00pm; January 20, 2016 from 5:00pm to 8:00pm; March 12, 2016 from 11:00am to 5:00pm; March 30, 2016 from 5:00pm to 9:00 pm; May 18, 2016 from 5:00 pm to 8:00 pm. REGULAR AGENDA ITEMS 3. CONSIDERATION of the request by the Public Art Committee to ACCEPT a donated bronze sculpture titled, "Wedding Vase", for placement in Fountain Park. 4. CONSIDERATION of RESOLUTION 2015-28, approving and authorizing the Mayor to execute and the Town Clerk to attest an agreement between the Town of Fountain Hills and the Town of Fountain Hills Municipal Property Corporation providing for the refinancing of certain public improvements by providing for the refunding of previously issued and outstanding bonds; approving the issuance by the Town of Fountain Hills Municipal Property Corporation bonds; acknowledging the priority of the pledge of excise taxes; approving the form of the agreement and trust indenture, and authorizing the taking of all other actions necessary to the consummation of the transactions contemplated by this resolution, including the redemption in advance of maturity of certain outstanding bonds. 5. CONSIDERATION of OPTIONS AND COSTS for Avenue of the Fountains banner replacements. 6. PUBLIC HEARING to receive comments on ORDINANCE #15-03, a proposed amendment to the Town of Fountain Hills Zoning Map. If adopted, the amendment would rezone approximately 1.3 acres at 11208 N. Indigo Drive, located on the southwest corner of Indigo Drive and Emerald Drive, from the R1-18 zoning district to the R-3 zoning district. If approved, the rezoning will allow the construction of “Palazzo di Lusso”, a four- unit luxury condominium building. ( Case #Z2014-05 ) z:\council packets\2015\r150507\150507ra.docx Last Printed: 5/1/2015 10:30 AM Page 4 of 4 7. CONSIDERATION of ORDINANCE #15-03, a proposed amendment to the Town of Fountain Hills Zoning Map. If adopted, the amendment would rezone approximately 1.3 acres at 11208 N. Indigo Drive, located on the southwest corner of Indigo Drive and Emerald Drive, from the R1-18 zoning district to the R-3 zoning district. If approved, the rezoning will allow the construction of “Palazzo di Lusso”, a four-unit luxury condominium building. ( Case #Z2014-05 ) 8. CONSIDERATION of a third amendment to the FIRE PROTECTION SERVICES AGREEMENT with Rural/Metro Corporation, extending the term of the agreement for an additional two years terminating on June 30, 2018, deleting the CARES Program funding, and updating the equipment list. 9. CONSIDERATION of RESOLUTION 2015-12, setting forth the tentative budget and establish the maximum budget amount for the Town of Fountain Hills for Fiscal Year 2015- 2016. The Council may address any or all items contained in the budget document and initiate any changes prior to the adoption. 10. DISCUSSION WITH POSSIBLE DIRECTION TO STAFF regarding the FORMATION of a fire/safety district in the Town of Fountain Hills. This item was added at the request of Councilmember Yates with support from Councilmembers Brown and Magazine. 11. DISCUSSION WITH POSSIBLE DIRECTION TO STAFF relating to any item included in the League of Arizona Cities and Towns weekly LEGISLATIVE BULLETIN or relating to any ACTION PROPOSED OR PENDING BEFORE THE STATE LEGISLATURE. 12. COUNCIL DISCUSSION/DIRECTION to the Town Manager. Item(s) listed below are related only to the propriety of (i) placing such item(s) on a future agenda for action or (ii) directing staff to conduct further research and report back to the Council: i.) None. 13. SUMMARY OF COUNCIL REQUESTS and REPORT ON RECENT ACTIVITIES by the Mayor, Individual Councilmembers, and the Town Manager. 14. ADJOURNMENT. DATED this 30th day of April, 2015. Bevelyn J. Bender, Town Clerk The Town of Fountain Hills endeavors to make all public meetings accessible to persons with disabilities. Please call 480-816- 5100 (voice) or 1-800-367-8939 (TDD) 48 hours prior to the meeting to request a reasonable accommodation to participate in this meeting or to obtain agenda information in large print format. Supporting documentation and staff reports furnished the Council with this agenda are available for review in the Clerk’s office. z:\council packets\2015\r150507\150507ra.docx Last Printed: 5/1/2015 10:30 AM Page 1 of 4 REVISED: MAY 4, 2015 NOTICE OF THE EXECUTIVE AND REGULAR SESSIONS OF THE FOUNTAIN HILLS TOWN COUNCIL TIME: 5:00 P.M. – EXECUTIVE SESSION (Executive Session will be held in the Fountain Conference Room - 2nd floor) 6:30 P.M. – REGULAR SESSION WHEN: THURSDAY, MAY 7, 2015 WHERE: FOUNTAIN HILLS COUNCIL CHAMBERS 16705 E. AVENUE OF THE FOUNTAINS, FOUNTAIN HILLS, AZ Councilmembers of the Town of Fountain Hills will attend either in person or by telephone conference call; a quorum of the Town’s various Commission, Committee or Board members may be in attendance at the Council meeting. Notice is hereby given that pursuant to A.R.S. § 1-602.A.9, subject to certain specified statutory exceptions, parents have a right to consent before the State or any of its political subdivisions make a video or audio recording of a minor child. Meetings of the Town Council are audio and/or video recorded and, as a result, proceedings in which children are present may be subject to such recording. Parents, in order to exercise their rights may either file written consent with the Town Clerk to such recording, or take personal action to ensure that their child or children are not present when a recording may be made. If a child is present at the time a recording is made, the Town will assume that the rights afforded parents pursuant to A.R.S. § 1-602.A.9 have been waived. PROCEDURE FOR ADDRESSING THE COUNCIL Anyone wishing to speak before the Council must fill out a speaker’s card and submit it to the Town Clerk prior to Council discussion of that Agenda item. Speaker Cards are located in the Council Chamber Lobby and near the Clerk’s position on the dais. Speakers will be called in the order in which the speaker cards were received either by the Clerk or the Mayor. At that time, speakers should stand and approach the podium. Speakers are asked to state their name and whether or not they reside in Fountain Hills (do not provide a home address) prior to commenting and to direct their comments to the Presiding Officer and not to individual Councilmembers. Speakers’ statements should not be repetitive. If a speaker chooses not to speak when called, the speaker will be deemed to have waived his or her opportunity to speak on the matter. Speakers may not (i) reserve a portion of their time for a later time or (ii) transfer any portion of their time to another speaker. If there is a Public Hearing, please submit the speaker card to speak to that issue during the Public Hearing. Individual speakers will be allowed three contiguous minutes to address the Council. Time limits may be waived by (i) discretion of the Town Manager upon request by the speaker not less than 24 hours prior to a Meeting, (ii) consensus of the Council at Meeting or (iii) the Mayor either prior to or during a Meeting. Please be respectful when making your comments. If you do not comply with these rules, you will be asked to leave. Mayor Linda M. Kavanagh Vice Mayor Dennis Brown Councilmember Henry Leger Councilmember Nick DePorter Councilmember Alan Magazine Councilmember Cassie Hansen Councilmember Cecil A. Yates z:\council packets\2015\r150507\150507ra.docx Last Printed: 5/1/2015 10:30 AM Page 2 of 4 EXECUTIVE SESSION AGENDA  CALL TO ORDER – Mayor Linda M. Kavanagh 1. ROLL CALL AND VOTE TO GO INTO EXECUTIVE SESSION: Pursuant to: (i) A.R.S. § 38-431.03(A)(4), discussion or consultation with the attorneys of the public body in order to consider its position and instruct its attorneys regarding the public body’s position regarding contracts that are the subject of negotiations, in pending or contemplated litigation or in settlement discussions conducted in order to avoid or resolve litigation(specifically, the Fountain Hills Theater lease); and (ii) A.R.S. § 38-431.03(A)(1), discussion or consideration of employment, assignment, appointment, promotion, demotion, dismissal, salaries, disciplining or resignation of a public officer, appointee or employee of any public body (specifically, for the purpose of discussing the Town Manager vacancy). 2. ADJOURNMENT. REGULAR SESSION AGENDA  CALL TO ORDER AND PLEDGE OF ALLEGIANCE – Mayor Linda M. Kavanagh  INVOCATION – Ms. Debby DeBernardi, Spiritual Director and Director of Christian Formation, Fountain Hills Presbyterian Church  ROLL CALL – Mayor Linda M. Kavanagh  MAYOR’S REPORT i) None.  SCHEDULED PUBLIC APPEARANCES/PRESENTATIONS i) The Mayor may review RECENT EVENTS attended relating to ECONOMIC DEVELOPMENT. ii) QUARTERLY BUDGET REPORT by Finance Director Craig Rudolphy for the fiscal quarter ending March 31, 2015. CALL TO THE PUBLIC Pursuant to A.R.S. §38-431-01(H), public comment is permitted (not required) on matters not listed on the agenda. Any such comment (i) must be within the jurisdiction of the Council and (ii) is subject to reasonable time, place, and manner restrictions. The Council will not discuss or take legal action on matters raised during “Call to the Public” unless the matters are properly noticed for discussion and legal action. At the conclusion of the call to the public, individual Councilmembers may (i) respond to criticism, (ii) ask staff to review a matter or (iii) ask that the matter be placed on a future Council agenda. z:\council packets\2015\r150507\150507ra.docx Last Printed: 5/1/2015 10:30 AM Page 3 of 4 CONSENT AGENDA ITEMS All items listed on the Consent Agenda are considered to be routine, non-controversial matters and will be enacted by one motion and one roll call vote of the Council. All motions and subsequent approvals of consent items will include all recommended staff stipulations unless otherwise stated. There will be no separate discussion of these items unless a Councilmember or member of the public so requests. If a Councilmember or member of the public wishes to discuss an item on the consent agenda, he/she may request so prior to the motion to accept the Consent Agenda or with notification to the Town Manager or Mayor prior to the date of the meeting for which the item was scheduled. The items will be removed from the Consent Agenda and considered in its normal sequence on the Agenda. 1. CONSIDERATION of approving the TOWN COUNCIL MEETING MINUTES from April 16 and 21, 2015. 2. CONSIDERATION of approving SPECIAL EVENT LIQUOR LICENSE APPLICATIONS for the Fountain Hills and Lower Verde Valley Museum and Historical Society (Jean Linzer) to be held at the Fountain Hills Community Center, on the following dates and times: August 15, 2015, from 5:00 pm to 10:00 pm; September 16, 2015 from 5:00pm to 8:00pm; November 18, 2015 from 5:00pm to 8:00pm; January 20, 2016 from 5:00pm to 8:00pm; March 12, 2016 from 11:00am to 5:00pm; March 30, 2016 from 5:00pm to 9:00 pm; May 18, 2016 from 5:00 pm to 8:00 pm. REGULAR AGENDA ITEMS 3. CONSIDERATION of the request by the Public Art Committee to ACCEPT a donated bronze sculpture titled, "Wedding Vase", for placement in Fountain Park. 4. CONSIDERATION of RESOLUTION 2015-28, approving and authorizing the Mayor to execute and the Town Clerk to attest an agreement between the Town of Fountain Hills and the Town of Fountain Hills Municipal Property Corporation providing for the refinancing of certain public improvements by providing for the refunding of previously issued and outstanding bonds; approving the issuance by the Town of Fountain Hills Municipal Property Corporation bonds; acknowledging the priority of the pledge of excise taxes; approving the form of the agreement and trust indenture, and authorizing the taking of all other actions necessary to the consummation of the transactions contemplated by this resolution, including the redemption in advance of maturity of certain outstanding bonds. 5. CONSIDERATION of OPTIONS AND COSTS for Avenue of the Fountains banner replacements. 6. PUBLIC HEARING to receive comments on ORDINANCE #15-03, a proposed amendment to the Town of Fountain Hills Zoning Map. If adopted, the amendment would rezone approximately 1.3 acres at 11208 N. Indigo Drive, located on the southwest corner of Indigo Drive and Emerald Drive, from the R1-18 zoning district to the R-3 zoning district. If approved, the rezoning will allow the construction of “Palazzo di Lusso”, a four- unit luxury condominium building. ( Case #Z2014-05 ) z:\council packets\2015\r150507\150507ra.docx Last Printed: 5/1/2015 10:30 AM Page 4 of 4 7. CONSIDERATION of ORDINANCE #15-03, a proposed amendment to the Town of Fountain Hills Zoning Map. If adopted, the amendment would rezone approximately 1.3 acres at 11208 N. Indigo Drive, located on the southwest corner of Indigo Drive and Emerald Drive, from the R1-18 zoning district to the R-3 zoning district. If approved, the rezoning will allow the construction of “Palazzo di Lusso”, a four-unit luxury condominium building. ( Case #Z2014-05 ) 8. CONSIDERATION of a third amendment to the FIRE PROTECTION SERVICES AGREEMENT with Rural/Metro Corporation, extending the term of the agreement for an additional two years terminating on June 30, 2018, deleting the CARES Program funding, and updating the equipment list. 9. CONSIDERATION of RESOLUTION 2015-12, setting forth the tentative budget and establish the maximum budget amount for the Town of Fountain Hills for Fiscal Year 2015- 2016. The Council may address any or all items contained in the budget document and initiate any changes prior to the adoption. 10. DISCUSSION WITH POSSIBLE DIRECTION TO STAFF regarding the FORMATION of a fire/safety district in the Town of Fountain Hills. This item was added at the request of Councilmember Yates with support from Councilmembers Brown and Magazine. 11. DISCUSSION WITH POSSIBLE DIRECTION TO STAFF relating to any item included in the League of Arizona Cities and Towns weekly LEGISLATIVE BULLETIN or relating to any ACTION PROPOSED OR PENDING BEFORE THE STATE LEGISLATURE. 12. COUNCIL DISCUSSION/DIRECTION to the Town Manager. Item(s) listed below are related only to the propriety of (i) placing such item(s) on a future agenda for action or (ii) directing staff to conduct further research and report back to the Council: i.) None. 13. SUMMARY OF COUNCIL REQUESTS and REPORT ON RECENT ACTIVITIES by the Mayor, Individual Councilmembers, and the Town Manager. 14. ADJOURNMENT. DATED this 30th day of April, 2015. Bevelyn J. Bender, Town Clerk The Town of Fountain Hills endeavors to make all public meetings accessible to persons with disabilities. Please call 480-816- 5100 (voice) or 1-800-367-8939 (TDD) 48 hours prior to the meeting to request a reasonable accommodation to participate in this meeting or to obtain agenda information in large print format. Supporting documentation and staff reports furnished the Council with this agenda are available for review in the Clerk’s office. QUARTERLY FINANCIAL REPORT Nine Months Ending March 2015 March, 2015 May 7, 2015 The General Fund is the Town’s main operating fund and is used to fund general government operations including police and fire, parks, Community Center; other funds are restricted for specific purposes. ALL FUNDS REVENUES May 7, 2015 2 Operating 34% HURF 5% Dev Fees 0% Special Revenue 1% Excise Tax 2% Debt Svc MPC 4% Debt Svc GO 4% Capital Projects 41% Revenues by Fund Nine Months Ending March 31, 2015 Total $25.1M (includes $7.6M bond proceeds) OPERATING FUNDS (Consist of General Fund, Public Art Fund, Internal Service Fund and Equipment Replacement Fund) May 7, 2015 3 OPERATING FUND REVENUES BY SOURCE Through March 31 Fountain Hills local sales tax and State shared revenues accounted for 85% of the Operating Funds. Operating Fund revenues are at 100.3% of budget. May 7, 2015 4 Local Sales Tax 52% State Income Tax 19% State Sales Tax 14% Other 9% TOWN OF FOUNTAIN HILLS NINE MONTHS ENDING MARCH 31, 2015 OPERATING FUND REVENUE Local Sls Tax $5.4M State Inc Tax $2.0M State Sls Tax $1.5M Other $1.6M TOTAL $10.5M OPERATING FUNDS REVENUE Local sales tax revenues are at 100.3% of budget; State Shared revenues are at 99.3% of budget –permit revenues are higher than projections while other revenues are generally in line with projections. May 7, 2015 5 $0.0 $1.0 $2.0 $3.0 $4.0 $5.0 $6.0 Local Sales Tax State Shared Revenues Permits and Licenses Fines and Fees OtherMillionsTOWN OF FOUNTAIN HILLS NINE MONTHS ENDING MARCH 31, 2015 OPERATING FUNDS REVENUES FY13-14 FY14 -15 FY14-15 BUDGETTOTAL $10.5M STATE SHARED REVENUES State Shared revenues represent 33.9% of Operating Fund revenue and is distributed to cities/ towns based on population. Income tax is based on two years prior; VLT is now in HURF for pavement management. May 7, 2015 6 $0.0 $0.5 $1.0 $1.5 $2.0 $2.5 State Income Tax State Sales Tax MillionsTOWN OF FOUNTAIN HILLS NINE MONTHS ENDING MARCH 31, 2015 STATE SHARED REVENUES FY13 -14 FY14-15 Budget TOTAL $3.5M May 7, 2015 $5,442,938 = 100.3% OF BUDGET Local Sales tax represents 52% of Operating Fund revenue. Increased 3.9% over prior year LOCAL SALES TAX 7 $1,000,000 $1,500,000 $2,000,000 $2,500,000 $3,000,000 $3,500,000 $4,000,000 $4,500,000 $5,000,000 $5,500,000 $6,000,000 FY10/11 FY11/12 FY12/13 FY13/14 FY14/15 Budget 5 Yr Average TOTAL SALES TAX COLLECTIONS BY YEAR FY11 THROUGH FY15* *excludes construction activity May 7, 2015 $2.9M = Increase of 5.6% over prior year LOCAL SALES TAX - RETAIL 8 $0.5 $1.0 $1.5 $2.0 $2.5 $3.0 FY10-11 FY11 -12 FY12-13 FY13 -14 FY14 -15 Budget 5 Yr Average Retail Activity July through March FY11 -FY15 millions May 7, 2015 $487,942 = Increase of 8.1% over prior year LOCAL SALES TAX - RESTAURANT 9 $250,000 $300,000 $350,000 $400,000 $450,000 $500,000 $550,000 FY10 -11 FY11 -12 FY12-13 FY13-14 FY14-15 Budget 5 Yr Average Restaurant/Bar Activity July through March FY11 -FY15 LOCAL SALES TAX - TELECOM May 7, 2015 $1,079,923 = Increase of 0.5% from prior year 10 $250,000 $500,000 $750,000 $1,000,000 $1,250,000 FY10-11 FY11 -12 FY12-13 FY13 -14 FY14 -15 Budget 5 Yr Average Trans/Telecommunications Activity July through March FY11 -FY15 LOCAL SALES TAX - CONSTRUCTION May 7, 2015 50% of this revenue funds capital projects $663,455 = Increase of 13.1% over prior year 11 $200,000 $300,000 $400,000 $500,000 $600,000 $700,000 FY10 -11 FY11 -12 FY12-13 FY13 -14 FY14-15 Budget 5 Yr Average Construction Sales Tax Activity July through March FY11 -FY15 May 7, 2015 Compared to the corresponding period of last fiscal year, Operating Fund expenditures increased by 8.9% over the same period. 12 MAYOR & COUNCIL 1% ADMINISTRATION 20% MUNICIPAL COURT 2%DEVELOPMENT SERVICES 13% COMMUNITY SERVICES 17% FIRE & EMERGENCY MED 25% LAW ENFORCEMENT 24% Operating Fund Expenditures by Department Nine Months Ending March 31, 2015 Total $10.3M Department 3 Qtr FY13-14 Expenditures 3 Qtr FY14-15 Expenditures Mayor & Council 57,934$ 63,689$ Administration 1,481,671 1,824,374 Municipal Court 216,483 213,659 Development Services 1,320,964 1,380,314 Community Services 1,475,484 1,714,435 Fire & Emergency Medical 2,581,739 2,579,771 Law Enforcement 2,298,959 2,496,252 TOTAL 9,433,233$ 10,272,494$ OTHER FUNDS May 7, 2015 13 HIGHWAY USER REVENUE FUND HURF revenues are derived from gasoline taxes and distributed based on population; VLT revenues are now included in HURF for pavement maintenance. May 7, 2015 $1,645,265 = Decrease of 34.2% from prior year (including Vehicle License Tax) 14 $806,767 $876,693 $904,932 $998,979 $1,194,094 $591,047 $633,712 $867,000 FY11 -12 FY12-13 FY13-14 FY14-15 FY14-15 Budget $.0 $.5 $1.0 $1.5 $2.0 $2.5 TOWN OF FOUNTAIN HILLS NINE MONTHS ENDING MARCH 31, 2015 HIGHWAY USER REVENUE FUND REVENUES HIGHWAY USERS TAX VEHICLE LICENSE TAX IN-LIEU FEES TOTAL $1.6M IN FY14-15 HURF EXPENDITURES May 7, 2015 Council priority for FY14-15 is still pavement maintenance. The HURF fund is accumulating money this fiscal year to allow for a project early in FY15-16. 15 ADMINISTRATION 14% ADOPT A STREET 0% LEGAL SERVICES 3% OPEN SPACE 22% PAVEMENT MANAGEMENT 29% STREET SIGNS 7% STREET SWEEPING 8% TRAFFIC SIGNALS 11% VEHICLE MAINTENANCE 7% HURF Expenditures Nine Months Ending March 31, 2015 TOTAL $0.8M RESTRICTED FUNDS May 7, 2015 16 $0 $200,000 $400,000 $600,000 $800,000 $1,000,000 $1,200,000 $1,400,000 $1,600,000 $1,800,000 $2,000,000 Dev Fees Special Revenue Excise Tax Debt Svc MPC Debt Svc GO Capital Projects 116,132 159,365 471,250 1,001,617 1,030,466 10,181,401 451,768 128,679 1,446,103 62,100 92,842 4,441,599 TOWN OF FOUNTAIN HILLS NINE MONTHS ENDING MARCH 31, 2015 OTHER FUNDS REVENUES & EXPENDITURES Revenues Expenditures FUND BALANCE Fund balance includes Operating Fund reserves that are not available for appropriation; other funds are restricted for specific purposes. Funds are invested only in government securities according to the Town’s adopted investment policy. May 7, 2015 17 Rainy Day Fund 1,345,200$ General Fund 6,497,115 Public Art Fund 15,667 Internal Service Fund (11,031) Vehicle Replacement Fund 456,667 Operating Funds 8,303,618$ Highway User Revenue Fund (HURF)1,448,095 1,448,095 Special Revenue Fund 18,971 Court Enhancement Fund 267,453 Cottonwoods Maintnenance District Fund 10,904 Special Revenue Funds 297,328 Downtown Strategy Fund 1,000,629 Economic Development Fund 85,916 Tourism Fund 27,965 Excise Tax Funds 1,114,510 General Obligation Debt Service Fund 747,139 Eagle Mountain CFD Debt Service Fund 278,435 MPC Debt Service Fund 939,517 Debt Service 1,965,091 Capital Projects Fund 12,860,612 Facilities Replacement Fund 143,772 Capital Projects 13,004,384 Law Enforcement 203,484 Fire & Emergency 67,510 Streets - Parks & Recreation 185,336 Open Space 1,658,639 Library/Museum - Development Fees 2,114,969 Grand Total 28,247,995$ Fiscal Quarter Fund Balances March 31, 2015 SUMMARY •Operating Fund revenues and expenditures are trending favorably in the current year •Reserve fund balances remain acceptable for all funds •Operating Fund revenues are 0.3% over budget and higher (6.1%) than last fiscal year •Operating Fund expenditures are 0.5% under budget but 8.9% higher than last fiscal year •Pavement management remains a priority and is funded through HURF and Vehicle License Tax revenues •Local economic indicators remain stable May 7, 2015 18 TOWN OF FOUNTAIN HILLS QUARTERLY BUDGET REPORT NINE MONTHS ENDING MARCH 31, 2015 2 Where does the money come from and where does it go? Operating 34% HURF 5% Dev Fees 0%Special Revenue 1% Excise Tax 2% Debt Svc MPC 4% Debt Svc GO 4% Capital Projects 41% Revenues by Fund Nine Months Ending March 31, 2015 Total $25.1M (includes $7.6M bond proceeds) Operating 58% HURF 4% Dev Fees 3% Special Revenue 1% Excise Tax 8% Debt Svc MPC 0% Debt Svc GO 1% Capital Projects 25% Expenditures by Fund Nine Months Ending March 31, 2015 Total $17.7M 3 Operating Fund Revenues For the nine month period ending March 31, 2015, total Operating Fund revenues (General Fund, Public Art Fund, Internal Service Funds) were received at 100.3% of budgeted amounts and $597,948 higher than the same time period last fiscal year (an increase of 6.1%). Categories where revenues are higher than the previous year are the State income tax (up 8.6%) as well as Licenses & Permits (up 33.1%). Total Operating Fund revenues for this fiscal period are $10,472,578. FY13-14 Actual FY14-15 Actual % YTD FY14-15 Budget Year End Estimate Operating Fund $9,874,630 $10,472,578 100.3% $13,925,003 The three major revenues in the chart above represent 87.5% of Operating Fund revenues, and as such, provide key indicators of the Town’s overall economic condition and performance. Local sales tax collections have increased back to FY09 levels (3.9% over the same period last year). This total includes construction activity of which 50% is transferred to the Capital Projects Fund. State sales tax is 4.3% higher and income taxes are 8.6% higher than last year as projected; vehicle license taxes are 7.2% higher compared to last year (this revenue source is derived from $0.0 $1.0 $2.0 $3.0 $4.0 $5.0 $6.0 Local Sales Tax State Income Tax State Sales TaxMillionsTOWN OF FOUNTAIN HILLS NINE MONTHS ENDING MARCH 31, 2015 MAJOR REVENUE SOURCES FY13 -14 FY14 -15 Budget TOTAL $8.9 4 vehicle registrations and is now included in the HURF fund). Overall, these major revenue sources are at 99.2% of the budget for the fiscal year. 5 State Shared Revenues State Shared Revenues include a distribution of the State income and sales taxes returned to the Town based on its population in relation to the total population of all incorporated cities and towns. The income tax funds are distributed from tax collections from two years prior to the fiscal year in which the Town receives the funds. Sales taxes are distributed to cities and towns three months after the actual sales activity occurs. These revenues are distributed monthly through a distribution from the State Treasurer’s Office. The revenues from these categories total $3,551,437 which is $224,826 or 6.8% higher than the same time period last year – the increase in revenue was anticipated based on projections by the Arizona League of Cities and Towns. FY13-14 Actual FY14-15 Actual % YTD FY14-15 Budget Year End Estimate State Income Tax $1,879,653 $2,041,824 100.0% $2,722,248 State Sales Tax 1,446,958 1,509,613 98.2% 2,048,760 Local Sales Tax (2.6%) The fiscal quarter revenue for this category totals $5,442,938 (including all funds), which is 100.3% of projections. Compared to the same time period as last year, the total revenues are 3.9% higher. Wholesale/Retail: A retail sales tax of 2.6% is collected for the sale of all tangible personal property including grocery, clothing, home and garden, autos and other related retail activity. This revenue source is sensitive to changes in the economy and can fluctuate from one fiscal year to another. The revenues for this category total $2,858,493 which is 96.8% of projections; compared to last fiscal year, revenues increased by 5.6%. Restaurants/Bars: Food and liquor sales are taxed at a rate of 2.6% in the Town. The revenues for this category total $487,942, which is 92.5% of projections; compared to last fiscal year, revenues are up by 6.4% and higher than any other previous year. Communications/Utilities/Transportation: Utilities, such as Chaparral City Water, cellular telephone companies and Century Link, are taxed at a rate of 2.6% in the Town as well as cellular phone charges. The revenues for this category total $1,079,923, which is 99.4% of what was anticipated; compared to last fiscal year, revenues are up by 0.5%. Construction Contracting: This revenue is generated from the 2.6% tax on new home and business construction as well as improvements to real property. Like retail sales tax, this revenue source is considered to be volatile as it is strongly impacted by changes in the economy. The largest sources of revenues in this category come from residential homebuilders. The revenues for this category total $663,455, which is 133.9% of what was budgeted; compared to last fiscal 6 year, revenues are up 13.1%. The Council has dedicated 50% of this revenue to the Capital Projects Fund for future appropriation. FY13-14 Actual FY14-15 Actual % YTD FY14-15 Budget Year End Estimate Local Sales Tax $6,178,030 $6,518,422 102.6% $8,470,980 Local sales tax makes up 52.0% of Operating Fund revenues; for the period ending March 31, 2015, collections were $6.5M for all funds ($5.4M in the Operating Fund). Retail and restaurant/bar activities represent 51.4% of total collections; telecommunications and utilities represent another 16.6%. Construction revenues collected this fiscal period total $663,455, which is a 13.1% increase over last fiscal year. Retail sales tax collections increased 5.6% over the same period last year; restaurant/bar collections are up 6.4% from the same period last year. Construction Transp/Utilities/Comm Wholesale/Retail Restaurants/Bars Ins/Real Estate Services Other $0.0 $0.5 $1.0 $1.5 $2.0 $2.5 $3.0 $3.5 Local Sales Tax Collections by Type (in millions) July -March FY11 through FY15 FY10 -11 FY11 -12 FY12 -13 FY13 -14 FY14 -15 7 Building Permit Revenue Revenues in this category include both commercial and residential permitting activity with the majority of revenues coming from residential activity. This fiscal period, revenues for this category total $121,694 or 41.5% of the period budget. New housing permits issued for the fiscal period are 24 single family, 10 multi-family and 1 commercial. FY13-14 Actual FY14-15 Actual % YTD FY14-15 Budget Year End Estimate Building Permit Fees $94,173 $121,694 41.5% $390,900 Court Revenue This category summarizes several revenue funds collected by the court. The court generates various revenues through fines, sanctions and court orders. These fines include criminal, civil, Town code violations and diversion fees for defensive driving school attendees. Reimbursement fees for required background checks, incarceration costs, and Public Defender costs are also collected by the court and included in this category. This fiscal period, revenues for this category total $124,695 which is $5,648 (4.7%) more than last year’s same fiscal period and 110.8% of the budgeted amount. FY13-14 Actual FY14-15 Actual % YTD FY14-15 Budget Year End Estimate Court Fines & Fees $119,047 $124,695 110.8% $150,011 License Revenue Revenues in this category include both business and animal licensing activity with the majority of revenues coming from business licenses. Current fiscal revenues for these two categories total $131,049 or 114.7% of the fiscal period budget. FY13-14 Actual FY14-15 Actual % YTD FY14-15 Budget Year End Estimate Business License Fees $81,883 $100,834 120.8% $111,305 Animal License Fees 32,807 30,215 98.2% 41,006 8 Operating Fund Expenditures The Operating Fund accounts for most of the day to day operations of the Town, including Police, Fire and Emergency Medical Services, Development Services, Community Services, Court, Council and Administration functions. At the end of the second quarter, 99.5% of the period budget has been expended. • Salaries and benefits represent one fourth (24.1%) of the total Operating Fund budget and accounts for all staff with the exception of streets employees who are funded through a separate Highway User Revenue Fund (HURF). • Supplies and Services, including Utilities represents 10.0% of the total Operating Fund budget and includes items such as facility maintenance, utilities, office supplies, insurance, software, etc. These types of expenditures can be controlled to avoid expending more than revenues received. • Contractual services represent 56.6% of the Operating Fund budget and include contracts for law enforcement (Maricopa County Sheriff’s Office) and fire and emergency medical services (Rural Metro). The Town utilizes contracts for specialized or one-time services that do not require the addition of full time staff. • Internal Services are charged to the Operating Fund budget by department and transferred to provide monies for future scheduled replacement of vehicles and equipment. • Other includes transfers that are made at the end of the fiscal year from the Operating Fund (Community Center) to the Debt Service Fund for the annual bond repayment due in June as well as contingency and other minor expenditures. YTD FY13-14 YTD FY14-15 % YTD FY14-15 Budget Year End Estimate Salaries and Benefits 2,448,815$ 2,471,530$ 94.6% 3,482,633$ Supplies and Services 1,093,477 1,029,475 84.6% 1,623,139 Contractual Services 5,520,927 5,819,010 98.2% 7,898,867 Internal Services 172,617 919,304 191.2% 641,187 Other 197,396 33,176 37.1% 119,102 Grand Total all Categories 9,433,232$ 10,272,495$ 99.5% 13,764,928$ FY14-15 Expenditures by Category - Operating Funds 9 Department summary • The Mayor & Council and Municipal Court budgets represent a total 0.6% of the Operating Fund expenditures. • Administration includes the Town Clerk, Town Manager, Finance, Human Resources, Volunteer Program, Economic Development, Information Technology and Customer Service and represents 17.8% of the Operating Fund budget. The Department is responsible for business recruitment and retention, Town Manager activities, all licensing activity (business, animal, liquor), customer service, audits, public meetings, Channel 11, Town website, elections, Town Attorney, Town Prosecutor, budget and financial reporting, etc. • Development Services (13.4% of Operating Fund expenditures) includes programs such as public works, engineering, traffic and capital projects, open space maintenance, stormwater management, and facilities maintenance. Divisions included in Development Services are Planning, Zoning, Code Enforcement, Environmental, Facilities Maintenance, Building Safety, and Mapping & Graphics. • Community Services (16.7% of Operating Fund expenditures) includes the Town’s park system (Fountain Park, Golden Eagle Park, Four Peaks Neighborhood Park, and Desert Vista Neighborhood Park), recreation programs for youth, adults and seniors. The Community Center serves the community as a meeting or special event location as well as daytime activities for Seniors. This department includes the cost of the annual debt service payment that is transferred to the Debt Service Fund each year to cover the semi- annual payments in December and June. • Fire & Emergency Medical Services represents 25.1% of the Operating Fund budget and includes the contract with Rural Metro for fire and emergency medical services; the budget also includes expenditures for maintenance of the fleet which is Town owned, fire stations and equipment. YTD FY13-14 YTD FY14-15 YTD Budget FY14-15 Annual Budget Mayor & Council 57,934$ 63,689$ 60,239$ 80,318$ Administration 1,481,671 1,824,374 1,638,518 2,184,690 Municipal Court 216,483 213,659 206,374 275,165 Development Services 1,320,964 1,380,314 1,510,880 2,014,506 Community Services 1,475,484 1,714,435 1,787,640 2,383,520 Fire & Emergency Medical 2,581,739 2,579,771 2,585,324 3,447,099 Law Enforcement 2,298,959 2,496,252 2,534,723 3,379,630 Period Total 9,433,234$ 10,272,495$ 10,323,699$ 13,764,928$ 10 • Law Enforcement represents 24.3% of the Operating Fund budget and includes the contract with Maricopa County Sheriff’s Office as well as costs for jail incarceration fees, which are costs for holding individuals at the jails and billed by Maricopa County. The Town also has a contract with Maricopa County for animal control and shelter services that is included within the Law Enforcement budget. MAYOR & COUNCIL 1% ADMINISTRATION 20% MUNICIPAL COURT 2%DEVELOPMENT SERVICES 13% COMMUNITY SERVICES 17% FIRE & EMERGENCY MED 25% LAW ENFORCEMENT 24% Operating Fund Expenditures by Department Nine Months Ending March 31, 2015 Total $10.3M 11 Other Funds: • Highway User Revenue Fund (Streets) • Excise Tax (Downtown Strategy, Economic Development and Tourism) • Special Revenue (Grants) • Capital Projects • Development Fees 12 Highway User Revenue Fund (HURF) – Streets FY13-14 Actual FY14-15 Actual % YTD FY14-15 Budget Year End Estimate State Shared Revenues $1,495,979 $1,632,691 105.6% $2,061,094 In Lieu Fees 2,522 3,022 33.6% 12,000 Transfers 994,000 562 0.0% 0 Miscellaneous & Other 8,852 8,991 159.8% 7,500 This fund supports most of the Town’s street and traffic operations and is managed by the Development Services Department. Revenues were received less than budgeted therefore expenditures did not exceed the available resources. The fund is primarily supported by the State Highway User Revenue Fund (60.7%), Vehicle License Taxes (38.5%) and from payments for construction in the rights of way (in lieu payments). HURF revenues are distributed partially on a population formula and partially on the county of origin for gasoline sales. There is a State constitutional restriction that these funds be used solely for street and highway purposes. The Town bills contractors when they make cuts in the Town’s rights of way and has recovered $3,022 in lieu fees. Restitution fees are recovered from damage to Town property as a result of vehicle accidents and included in miscellaneous & other. • The Administration program for the Streets division includes activities that are not directly related to a program, for example, insurance, fuel, utilities, etc.). YTD FY13-14 YTD FY14-15 % YTD FY14-15 Budget Year End Estimate Administration 139,965$ 109,025$ 85.2% 170,717$ Adopt A Street 2,697 2,377 66.0% 4,804 Legal Services 18,850 22,716 126.2% 24,000 Open Space 188,850 170,845 82.6% 275,863 Pavement Maintenance 2,095,631 227,939 20.4% 1,493,249 Street Signs 66,488 52,330 80.4% 86,798 Street Sweeping 56,891 65,544 94.4% 92,563 Traffic Signals 74,102 84,407 74.0% 152,034 Vehicle Maintenance 54,270 57,768 88.4% 87,175 Grand Total HURF 2,697,744$ 792,951$ 44.3% 2,387,203$ HURF Expenditures by Program - Quarter Ending March 31, 2015 13 • Open Space program includes maintenance of the medians; the largest component of this category is the contract for landscaping and water usage. • Pavement Maintenance program includes personnel costs related to road repair and maintenance, such as pot holes and curb replacement. A major expenditure for pavement maintenance has been deferred until the next fiscal year to allow funds to accumulate. • Street Signs program includes personnel and maintenance costs for the Town’s 6,800 street signs. • Street Sweeping program’s major expenditure is the contract costs for street sweeping. Arterial streets are swept every three weeks and residential streets every eight weeks. • Traffic Signals program includes personnel and electric costs for the Town’s 13 Traffic signals. Costs include hardware and programs for maintenance and synchronization of the signals. • Vehicle Maintenance program includes personnel as well as costs to maintain the Town’s fleet of 42 vehicles and heavy equipment. 14 Excise Tax - All Funds (Downtown Strategy, Economic Development, Tourism) FY13-14 Actual FY14-15 Actual % YTD FY14-15 Budget Year End Estimate Revenues $245,436 $471,250 119.0% $486,940 These funds are separate operating funds from the Town’s Operating Fund and they support the Town’s downtown strategy, economic development including business retention program, and tourism. Beginning in FY13-14, the Excise Tax Fund was separated into two separate functions supported by a portion of the local sales (excise) tax (.1% of the 2.6%). Downtown Strategy focus is for infrastructure improvements and development; Economic Development focus is dedicated to Town-wide economic development and the Economic Development Plan implementation. The Economic Development Fund also provides the funding for the Tourism Fund. • Salaries and benefits, which represent 5.7% of the total Excise Tax operating budget, replaced contractual services after the hiring of the Town’s Economic Development Specialist and Tourism Coordinator. • Supplies and Services represents 1.3% of the total Excise Tax budget and includes items such as office supplies, insurance, software, etc. These types of expenditures can be controlled to avoid expending more than revenues received. • Contractual services and supplies represent 8.1% of the budget and include contracts for downtown holiday lighting, Greater Phoenix Economic Council (GPEC), and planned professional services for marketing strategies. • Internal/Transfers reflect the expenditures in the Capital Projects Fund for the Avenue of the Fountains median project. This project has been completed. YTD FY13-14 YTD FY14-15 % YTD FY14-15 Budget Year End Estimate Salaries and Benefits 20,984$ 82,664$ 97.4% 113,130$ Supplies and Services 7,990 18,823 22.2% 113,190 Contractual Services 104,189 117,015 112.3% 138,875 Internal/Transfers 5,001 1,227,600 86.8% 1,886,000 Grand Total all Categories 138,164$ 1,446,102$ 85.6% 2,251,195$ Excise Tax Funds Expenditures by Category - Quarter Ending March 31, 2015 15 Development Fees These fees are placed into restricted funds with revenues paid by developers at the time of new residential and commercial construction permits. The decrease in permit activity over the same time period as last year is related to the development fee study that implemented new fees as of August 1, 2014. The study was presented to the public at a Public Hearing in February, 2014 and resulted in the elimination of several categories of fees and changes in the remaining categories. During the first nine months of this fiscal year, there have been thirty five (35) permit applications including development fees. FY13-14 Actual FY14-15 Actual % YTD FY14-15 Budget Year End Estimate Law Enforcement 4,102$ 730$ 1460.0% 100$ Fire/Emergency 7,468 16,933 678.7% 4,990 Streets 178,781 33,804 0.0%- Parks/Rec 77,248 53,057 1414.9% 7,500 Open Space 7,613 11,122 0.0%- Library/Museum 2,859 487 0.0%- Grand Total All Funds 278,071$ 116,133$ 1844.8% 12,590$ FY14-15 Revenues by Category - Development Fees FY13-14 Actual FY14-15 Actual % YTD FY14-15 Budget Year End Estimate Law Enforcement 1,956$ -$ 0.0% 203,000 Fire/Emergency 1,956 - 0.0% 47,000 Streets 10,029 407,921 200.0% 407,921 Parks/Rec 7,825 - 0.0%- Open Space 8,240 403 0.0%- Library/Museum 1,956 43,445 204.4% 42,500 Grand Total All Funds 31,962$ 451,769$ 129.0% 700,421$ FY14-15 Expenditures by Category - Development Fees 16 Capital Projects Fund Capital projects are funded with accumulated reserves that were surplus revenues in the Operating Fund in addition to 50% of sales tax revenues that are derived from construction activity. Some projects are funded with proceeds from grants or developers; the table below is a summary of revenues for the fiscal period ending March 31, 2015. YTD FY14-15 Actual % FY14-15 Budget FY14-15 Budget Construction Sales Tax 331,728$ 102.2% 324,600$ Developer Fee 200,000 100.0% 200,000 Bond Proceeds 7,907,086 96.4% 8,200,000 Grants 735,512 17.0% 4,314,000 Misc.43,601 0.0%- Interest Income 41,348 208.8% 19,800 Transfers In 1,513,866 62.2% 2,434,921 Grand Total CIP Fund 10,773,141$ 69.5% 15,493,321$ FY14-15 Capital Projects Fund Revenues 17 The table below summarizes the projects that were included in the current year budget including the original budgeted expenditure, the year to date expenditures and the percentage of fiscal year end expenditures. Some of the projects have not started yet and therefore have no expenditures. YTD FY14-15 Actual % FY14-15 Budget FY14-15 Budget 94$ 0.0% 1,640,000$ 9,530 19.1% 50,000 - 0.0% 100,000 - 0.0% 200,000 1,095,324 71.8% 1,525,000 11,711 0.5% 2,510,000 107,607 89.7% 120,000 - 0.0% 100,000 23,504 1.7% 1,394,750 - 0.0% 300,000 798 3.6% 22,250 121,647 37.4% 325,000 1,455,648 33.4% 4,360,000 - 0.0% 40,000 1,280,091 15.6% 8,200,000 - 0.0% 296,000 - 0.0% 57,000 - 0.0% 380,000 14,912 3.7% 400,000 320,734 168.7% 190,080 4,441,600$ 20.0% 22,210,080$ P3024 URBAN TRAIL IMPROVEMENTS S6003 UNPAVED ALLEY PAVING PRO D6030 DRAINAGE-ASHBROOK WASH C D6047 MISC DRAINAGE IMPROVEMEN E8502 DOWNTOWN VISION PLAN-PHA F4005 FIRE STATION 2 RELOCATIO F4027 ASSISTANCE TO FIREFIGHTE E8501 DOWNTOWN VISION PLAN-PHA E8504 AOTF MEDIAN & RIGHT-OF-W Grand Total Capital Projects CONTINGENCY S6054 HIGHWAY SAFETY IMPROVEME S6005 SHEA BLVD WIDENING S6009 DOWNTOWN SIDEWALK PROGRA S6010 SAGUARO BLVD RECONSTRUCT S6053 FOUNTAIN HILLS BLVD SHOU S6056 SHEA BLVD EB BIKE LANE & FY14-15 Expenditures by Category - Capital Projects T5011 TS-PALISADES & SAGUARO F4029 CIVIC CENTER IMPROVEMENT P3011 FOUNTAIN PARK, PHASE VI P3022 FOUNTAIN LAKE WATER QUAL 18 Fund Balances/Reserves The Town maintains several funds, some of which are restricted for specific purposes; the Operating Fund is the Town’s main operating fund and has sufficient reserves that satisfy the Town’s fund balance policy. Development fees are restricted for projects that are related to growth and the Economic Development/Downtown Strategy Funds are designated for downtown development. Rainy Day Fund 1,345,200$ General Fund 6,497,115 Public Art Fund 15,667 Internal Service Fund (11,031) Vehicle Replacement Fund 456,667 Operating Funds 8,303,618$ Highway User Revenue Fund (HURF)1,448,095 1,448,095 Special Revenue Fund 18,971 Court Enhancement Fund 267,453 Cottonwoods Maintnenance District Fund 10,904 Special Revenue Funds 297,328 Downtown Strategy Fund 1,000,629 Economic Development Fund 85,916 Tourism Fund 27,965 Excise Tax Funds 1,114,510 General Obligation Debt Service Fund 747,139 Eagle Mountain CFD Debt Service Fund 278,435 MPC Debt Service Fund 939,517 Debt Service 1,965,091 Capital Projects Fund 12,860,612 Facilities Replacement Fund 143,772 Capital Projects 13,004,384 Law Enforcement 203,484 Fire & Emergency 67,510 Streets - Parks & Recreation 185,336 Open Space 1,658,639 Library/Museum - Development Fees 2,114,969 Grand Total 28,247,995$ Fiscal Quarter Fund Balances March 31, 2015 April 9, 2015 Mayor Linda Kavanagh Town Council Members Town of Fountain Hills Dear Ladies and Gentlemen, The Public Art Committee of the Fountain Hills Cultural & Civic Association would like to propose the acquisition of a bronze sculpture entitled “Wedding Vase” by artist Doug Hyde. This piece is being donated by Jean and Rolland Lorenz. The piece is about three feet tall and will need a base. The gallery price is $15,000, as is the insured price. Acquisition of this work has been approved by the Public Art Committee and by the Board of the Fountain Hills Cultural & Civic Association. The suggested location for the work is in Fountain Park near “Return to Puye” in the grass area behind Euro Pizza. A Photo has been sent to you in a separate email. Very Truly Yours, Sandi Thompson Sandi Thompson Chair, Public Art Committee FHCCA KMM:jh2 2369368.3 4/30/2015 RESOLUTION 2015-28 RESOLUTION OF THE MAYOR AND TOWN COUNCIL OF THE TOWN OF FOUNTAIN HILLS , ARIZONA, APPROVING AND AUTHORIZING THE MAYOR TO EXECUTE AND THE TOWN CLERK TO ATTEST AN AGREEMENT BETWEEN THE TOWN OF FOUNTAIN HILLS AND THE TOWN OF FOUNTAIN HILLS MUNICIPAL PROPERTY CORPORATION PROVIDING FOR THE REFINANCING OF CERTAIN PUBLIC IMPROVEMENTS BY PROVIDING FOR THE REFUNDING OF PREVIOUSLY ISSUED AND OUTSTANDING BONDS; APPROVING THE ISSUANCE BY THE TOWN OF FOUNTAIN HILLS MUNICIPAL PROPERTY CORPORATION BONDS; ACKNOWLEDGING THE PRIORITY OF THE PLEDGE OF EXCISE TAXES; APPROVING THE FORM OF THE AGREEMENT AND TRUST INDENTURE, AND AUTHORIZING THE TAKING OF ALL OTHER ACTIONS NECESSARY TO THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED BY THIS RESOLUTION, INCLUDING THE REDEMPTION IN ADVANCE OF MATURITY OF CERTAIN OUTSTANDING BONDS. WHEREAS, the Town of Fountain Hills, Arizona Municipal Property Corporation, an Arizona nonprofit corporation (the "MPC") was formed to assist the Town of Fountain Hills, Arizona (the "Town") in financing, refinancing, acquiring, constructing, furnishing and equipping certain public real and personal property without profit to the MPC; and WHEREAS, the MPC has previously issued its Municipal Facilities Revenue Refunding Bonds, Series 2005 (the "Prior Bonds"); and WHEREAS, the Prior Bonds were executed and delivered by the MPC pursuant to a Trust Indenture, by and between the MPC and BNY Western Trust Company, dated as of July 1, 2000 (the "2000 Trust Indenture"), as supplemented by the First Supplement to Trust Indenture, by and between the MPC and National Bank of Arizona, dated as of July 1, 2001 (the "First Supplement to Trust Indenture"), the Second Supplement to Trust Indenture, by and between the MPC and Zions First National Bank, dated as of December 1, 2004 (the "Second Supplement to Trust Indenture"), and the Series 2004 Refunding Supplement to Trust Indenture, by and between the MPC and Zions First National Bank, dated as of June 1, 2005 (the "Refunding Supplement to Trust Indenture" and, together with the 2000 Trust Indenture, the First Supplement to Trust Indenture and the Second Supplement to Trust Indenture, the "Prior Trust Indenture"); and WHEREAS, the Prior Bonds were secured by a proportionate interest in the Rental Payments (as defined in the Prior Lease-Purchase Agreement) and prepayments made by the Town pursuant to a Series 2005 Refunding Amendment to Lease-Purchase Agreement dated as of June 1, 2005 (the "Refunding Amendment to Lease-Purchase Agreement"), which amended the Lease-Purchase Agreement dated as of July 1, 2000, as previously amended by the First Amendment to Lease-Purchase Agreement dated of July 1, 2001 and the Second Amendment to Lease-Purchase Agreement dated as of June 1, 2005 (collectively, the "Prior Lease-Purchase Agreement"); and WHEREAS, the Prior Bonds were authorized for the purpose of refunding certain maturities of the Town's outstanding municipal facilities revenue bonds; and KMM:kmm 2369368.3 4/30/2015 2 WHEREAS, in order to reduce the debt service on the Prior Bonds, the Town and MPC have decided to provide for the refunding and, as applicable, redemption of all the Prior Bonds on or prior to their maturity dates (the "Bonds Being Refunded"); and WHEREAS, at its April 29, 2015 Board of Directors meeting, the MPC proposed to authorize the issuance of its Municipal Facilities Revenue Refunding Bonds, Series 2015 (the "Bonds") in an amount not to exceed $2,000,000, and together with any payments by the Town to the trustee for the Prior Bonds owed under the Prior Lease-Purchase Agreement, which will be sufficient to redeem and refund the Bonds Being Refunded, in consideration of the Town's agreement to pay to the MPC amounts required to enable the MPC to pay debt service on the Bonds when due; and WHEREAS, it is in the best interests of the Town that the MPC refund the Bonds Being Refunded; and WHEREAS, in furtherance of the intent and purpose of this Resolution there have been prepared proposed forms of the following documents on file with the Town Clerk for this meeting: (a) An Agreement to be dated on or about June 1, 2015 by and between the Town and the MPC (the "Agreement"); (b) A Trust Indenture to be dated on or about June 1, 2015 (the "Trust Indenture") by and between the MPC and the trustee to be selected by the Town's Finance Director (the "Trustee"), providing for the issuance of and payment for the MPC's Municipal Facilities Revenue Refunding Bonds, Series 2015, with such other designation as may be necessary to distinguish different series of the Bonds, in an aggregate original principal amount not to exceed $2,000,000; and (c) A Direct Purchase Agreement by and among the MPC, the Town and the Purchaser, to be completed with the final terms of the Bonds (the "Direct Purchase Agreement"); and (d) The Agreement, the Trust Indenture and the Direct Purchase Agreement are collectively referred to herein as the "Bond Documents"; WHEREAS, the sale of the Bonds can be coordinated with the sale of any other MPC bonds that may be authorized. NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND COUNCIL OF THE TOWN OF FOUNTAIN HILLS, ARIZONA, AS FOLLOWS: 1. MPC's Proposal Accepted. The Town hereby requests the MPC to redeem and refund the Bonds Being Refunded described in this Resolution, and the Town hereby approves and accepts the MPC's proposal to redeem and refund the Bonds Being Refunded pursuant to the Agreement. KMM:kmm 2369368.3 4/30/2015 3 2. Approval and Terms of the Agreement. The terms and provisions contained in the Agreement, including the redemption and refunding of the Bonds Being Refunded by the Town in consideration of the payments to be made by the Town pursuant thereto, are hereby approved; and the Mayor and the Clerk of the Town are hereby authorized to execute and attest, respectively, the Agreement and deliver the same to the MPC. 3. Pledge of Excise Taxes. Pursuant to the Agreement and the Trust Indenture, the Town shall pledge its unrestricted fines and forfeitures, license and permit fees, transaction privilege taxes, other transaction privilege, excise and business taxes, franchise fees and taxes, lease and rental payments and recreation and community program fees which the Town now or in the future imposes and collects, and all State shared sales taxes and all State shared income taxes collected and allocated or apportioned, now or hereafter, to the Town by the State of Arizona or any political subdivision thereof, or by any other governmental unit or agency and which are not required by State of Arizona law, rule or regulation to be expended for other purposes, such as motor vehicle fuel tax, (the "Excise Taxes") to the amounts to come due under the Agreement and the Trust Indenture. The Town's obligation to make the payments under the Agreement or the Trust Indenture does not constitute an obligation of the Town or the State of Arizona, or any of its political subdivisions, for which the Town or the State of Arizona, or any of its political subdivisions, is obligated to levy or pledge any form of ad valorem property taxation nor does the obligation to make any payments under the Agreement or the Trust Indenture constitute an indebtedness of the Town or of the State of Arizona or any of its political subdivisions within the meaning of the Constitution of the State of Arizona or otherwise. The pledge of Excise Taxes is on a parity with the existing pledges of Excise Taxes as described in the Trust Indenture (the "Existing Parity Bonds"). 4. Continuation of Excise Taxes; Rate Covenant. Pursuant to the Agreement, the Town will covenant and agree that the Excise Taxes which it presently imposes will be retained and maintained so that the amount of Excise Taxes, all within and for the preceding fiscal year, shall be equal to at least two and one-half (2.5) times the total of principal and interest payable with respect to the Bonds and Existing Parity Bonds and any additional parity obligations issued in accordance with the Trust Indenture, to the extent outstanding in any current fiscal year. The Town further covenants and agrees that if such receipts for any such preceding fiscal year are not equal to two and one-half (2.5) times such principal and interest requirements of any current fiscal year, or if at any time it appears that the current receipts will not be sufficient to meet such payment requirements, it will, subject to any limitations imposed by law, use its best efforts to either impose additional Excise Taxes, or to increase the rates of such taxes currently imposed, so that (i) the current fiscal year's receipts will be sufficient to meet all such current requirements and (ii) it can be reasonably calculated that the current fiscal year's receipts will be sufficient to meet the succeeding fiscal year's principal and interest requirements. 5. Town Council Dedication, Commitment or Assignment of Excise Taxes Subordinate to Pledge. Notwithstanding any financial policy, budget implementation policy or budget adopted by the Town Council or any other Town Council action, the Mayor and Council hereby acknowledge that the dedication, commitment or assignment of Excise Taxes to a certain fund or funds by the Mayor and Council is subject to and in all respects subordinate to any pledge of Excise Taxes (such as the pledge set forth in Section 3 of this Resolution) now in existence of hereafter made. KMM:kmm 2369368.3 4/30/2015 4 6. Approval of Bonds. The Mayor and Council hereby approve and consent to the issuance and sale by the MPC of the Bonds in a principal amount not to exceed $2,000,000, bearing interest at rates not to exceed 1.65% per annum, to fulfill its obligations in accordance with the Agreement. The Mayor and Council hereby approve and consent to the issuance and sale by the MPC of the Bonds in accordance with the terms of this Resolution and the documents approved herein and as the MPC and Town's Finance Director determine to be in the best interest of the MPC and the Town. 7. Approval of the Bond Documents. The forms, terms and provisions of the Bond Documents (as they pertain to the Town) in substantially the form of such Bond Documents presented at this meeting are hereby approved, with such final provisions, insertions, deletions and changes as shall be approved by Mayor, the execution of each such document being conclusive evidence of such approval, and the Mayor and the Clerk are hereby authorized and directed to execute and deliver, where applicable, or approve the Bond Documents and to take all action to carry out and comply with the terms of such Bond Documents. If the Bonds are sold in more than one series, the Town is authorized to revise the Bond Documents as necessary to reflect the sale of more than one series, including changing the series designation of the Bonds. 8. Execution of Documents. The Mayor of the Town, the Town Clerk and the Town's Finance Director are each hereby authorized and directed to execute and attest, as applicable, any and all documents and to take any and all actions that may be necessary or desirable in consummating the transactions contemplated in this Resolution and the Bond Documents (as they pertain to the Town). Any document specifically approved in this Resolution shall be in substantially the form presented to the Council, with such additions, deletions and modifications as shall be approved by those persons approving, executing and delivery the same on behalf of the Town. 9. Qualified Tax-Exempt Obligations. The Town hereby designates the Bonds as "qualified tax-exempt obligations" for purposes of Section 265(b)(3) of the Code. The Town Manager or Town's Finance Director shall certify in the closing certificates that it is reasonably anticipated that the aggregate amount of qualified tax-exempt obligations (as defined in Section 265(b)(3)(B) of the Code) which shall be issued for or by the Town (including those issued for or by the MPC) in the current calendar year shall not exceed $10,000,000. 10. Resolution Irrepealable. After any of the Bonds are delivered by the Trustee to the purchaser thereof upon receipt of payment therefor, this Resolution shall be and remain irrepealable until the Bonds and the interest and premium, if any, thereon shall have been fully paid, cancelled and discharged. 11. Ratification of Actions. All actions of the officers and agents of the Town which conform to the purposes and intent of this Resolution and which further the issuance and sale of the Bonds as contemplated by this Resolution whether heretofore or hereafter taken are hereby ratified, confirmed and approved. The proper officers and agents of the Town are hereby authorized and directed to do all such acts and things and to execute and deliver all such documents on behalf of the Town as may be necessary to carry out the terms and intent of this Resolution. KMM:kmm 2369368.3 4/30/2015 5 12. Severability. If any section, paragraph, clause or phrase of this Resolution shall for any reason be held to be invalid or unenforceable, the invalidity or unenforceability of such section, paragraph, clause or phrase shall not affect any of the remaining provisions of this Resolution. 13. Waiver. All orders, resolutions and ordinances or parts thereof inconsistent herewith are hereby waived to the extent only of such inconsistency. This waiver shall not be construed as reviving any order, resolution or ordinance or any part thereof. KMM:kmm 2369368.3 4/30/2015 6 PASSED, ADOPTED AND APPROVED by the Mayor and Council of the Town of Fountain Hills, Arizona on May 7, 2015. TOWN OF FOUNTAIN HILLS, ARIZONA, a municipal corporation By_______________________________________ Linda M. Kavanagh Mayor ATTEST: By_________________________________ Bevelyn J. Bender Town Clerk APPROVED AS TO FORM: GUST ROSENFELD P.L.C. By_________________________________ Timothy A. Stratton Bond Counsel CERTIFICATION I, Bevelyn J. Bender, the duly appointed and acting Clerk of the Town of Fountain Hills, Arizona, do hereby certify that the above and foregoing Resolution 2015-28 was duly passed by the Town Council of the Town of Fountain Hills, Arizona, at a regular meeting held on May 7, 2015, and the vote was ____ aye's and ___ nay's and that the Mayor and ___ Council Members were present thereat. DATED: ________, 2015. ______________________________________ Town Clerk KMM:jh2 2369690.1 4/27/2015 $________ TOWN OF FOUNTAIN HILLS, ARIZONA MUNICIPAL PROPERTY CORPORATION MUNICIPAL FACILITIES REVENUE REFUNDING BONDS, SERIES 2015 _______________________________________ DIRECT PURCHASE AGREEMENT _______________________________________ ________, 2015 Town of Fountain Hills, Arizona Municipal Property Corporation 16705 E. Avenue of the Fountain Fountain Hills, Arizona Town of Fountain Hills, Arizona 16705 E. Avenue of the Fountain Fountain Hills, Arizona Ladies and Gentlemen: The undersigned, an authorized representative of the _____________, a _________ corporation (the "Purchaser"), acting on its own behalf and not acting as fiduciary or agent for the Town of Fountain Hills, Arizona Municipal Property Corporation (the "MPC") or the Town of Fountain Hills, Arizona (the "Town"), offers to enter into this Direct Purchase Agreement (this "Purchase Agreement") with the MPC and the Town which, upon the MPC and the Town's written acceptance of this offer, will be binding upon the MPC, the Town and upon the Purchaser. Terms not otherwise defined in this Purchase Agreement shall have the same meanings set forth in the Authorizing Resolution (as defined herein). 1.Purchase and Sale of the Bond. Subject to the terms and conditions and in reliance upon the representations, warranties and agreements set forth herein and any certificates or other documents to be delivered to the Purchaser pursuant to this Purchase Agreement, the Purchaser hereby agrees to purchase from the MPC, and the MPC hereby agrees to sell and deliver to the Purchaser, all, but not less than all, of the MPC's $____________ aggregate principal amount of Municipal Facilities Revenue Refunding Bonds, Series 2015 (the "Bonds"). Inasmuch as this purchase and sale represents a negotiated transaction, the MPC and the Town understand, and hereby confirms, that the Purchaser is not acting as a fiduciary of the MPC or the Town, but rather is acting solely in its capacity as purchaser for its own account. The Purchaser has been duly authorized to execute this Purchase Agreement and to act hereunder. KMM:jh2 2369690.1 4/27/2015 2 The principal amount of the Bonds to be issued, the dated date therefor, the maturities, the redemption provisions, the interest rates per annum and the prices or yi elds per maturity are set forth in the Schedule attached hereto. The Bonds shall be as described in, and shall be issued pursuant to the provisions of Resolution No. 2015-01 adopted by the MPC on April 29, 2015 (the "MPC Resolution")and Resolution 2015-28 adopted by the Mayor and Council of the Town on May 7, 2015 (the "Town Resolution"and together with the MPC Resolution, the "Authorizing Resolution") and the Trust Indenture (the "Trust In denture"), dated as of _______, 2015, between the MPC and _____________, as trustee (the "Trustee"). Concurrently, with the execution of the Trust In denture, the MPC will enter into (i) an Agreement dated as of ________, 2015 (the "Agreement") with the Town, in which the Town will agree to pledge its excise taxes as security for the Bonds and provide for the payment of principal of and premium, if any, and interest on the Bonds and (ii)a Tax Certificate, dated ________, 2015 (the "Tax Certificate") with the Town regarding federal tax matters with the respect to the Bonds. This Purchase Agreement, the MPC Resolution, the Trust Indenture, the Agreement,the Tax Certificate, the Bonds and related documents are collectivel y referred to as the "MPC Documents." This Purchase Agreement, the Town Resolution, the Agreement, the Tax Certificate, and related documents are collectively referred to as the "Town Documents." The purchase price for the Bond shall be $___________(the "Purchase Price"). The Purchase Price represents the aggregate of the par amount of the Bond of $____________, plus [net] original issue premium of $______________. 2.Direct Purchase. The MPC, the Town and the Purchaser agree and determine that the Bonds are being directly purchased by the Purchaser and are not being sold in a public offering. The Purchaser is a Qualified Investor, which includes a qualified institutional buyer, as such term is defined in Rule 144A of the Securities Act of 1933, as amended, or an accredited investor (excluding natural persons) as defined in Rule 501 of Regulation D of the United States Securities and Exchange Commission (either of which constitutes a "Qualified Investor"), and who executes the Certificate of Qualified Investor attached hereto as Exhibit B. 3.Representations, Warranties, and Covenants of the MPC and the Town. The MPC and the Town each represents,warrants and covenants, as applicable,to the Purchaser that: (a)Existence and Powers. The MPC is a State of Arizona (the "State") nonprofit corporation duly organized and validly existing under the laws of the State, the Town is a municipal corporation duly organized and validly existing under the laws of the State and each has full legal right, power and authority to (1)adopt the Authorizing Resolution; (2)authorize, execute, deliver and issue, as applicable, the MPC Documents and the Town Documents, as the case may be; (3)carry out and consummate all other transactions contemplated by the Authorizing Resolution, the MPC Documents, the Town Documents and the Bonds. The MPC and Town have complied with all applicable provisions of law and have taken all actions required to be taken by it in connection with the transactions contemplated by the aforesaid documents. KMM:jh2 2369690.1 4/27/2015 3 (b)Due Authorization. The MPC and the Town have duly authorized (1) the execution, delivery and issuance, as applicable, of and the due performance of the obligations under the Authorizing Resolution,MPC Documents, the Town Documents and the Bonds, as the case may be,and (2) the taking of any and all actions as may be required on the part of the MPC or the Town to carry out,give effect to and consummate the transactions contemplated by the Authorizing Resolution, the Bonds and the MPC Documents or the Town Documents, respectively. The MPC and the Town shall take any and all actions necessary or appropriate to consummate the transactions described in the Authorizing Resolution, the MPC Documents or the Town Documents and the Bonds, as the case may be. (c)Due Execution and Delivery. The MPC Documents and the Town Documents have been or shall be, as applicable, duly executed and delivered by the MPC or Town, respectively. The MPC Documents and the Town Documents (when executed and delivered by the other party or parties thereto) shall be legal, valid and binding obligations of the MPC and Town, respectively,enforceable in accordance with their respective terms, subject as to enforcement of remedies to applicable bankruptcy, insolvency, reorganization, moratorium and similar laws in effect from time to time affecting the rights of creditors generally and to the availability of equitable relief. (d)Authorizing Resolution Valid. The MPC Resolution authorizes the execution, delivery and issuance, as applicable, of the MPC Documents and the Bonds and the sale of the Bonds to the Purchaser, has been duly and validly adopted by the MPC and is in full force and effect. The Town Resolution authorizes the execution, delivery and issuance, as applicable, of the Town Documents and the Bonds and the sale of the Bonds to the Purchaser, has been duly and validly adopted by the Town and is in full force and effect. (e)Officers and Officials. The officers and officials of the MPC executing the MPC Resolution, the MPC Documents and the Bonds and the officers and officials of the MPC listed on the certificate of the MPC to be delivered at the Closing (as hereinafter defined) have been or will have been duly appointed and are or will be qualified to serve and acting as such officers and officials of the MPC.The officers and officials of the Town executing the Town Resolution, and the Town Documents and the officers and officials of the Town listed on the certificate of the Town to be delivered at the Closing (as hereinafter defined) have been or will have been duly appointed and are or will be qualified to serve and acting as such officers and officials of the Town. (f)The Bonds. The form, terms, execution, delivery and issuance of the Bonds have been duly and validly authorized and, when authenticated by the registrar, and delivered and paid for by the Purchaser at the Closing in accordance with the terms of this Purchase Agreement, shall (i)have been duly authorized, executed, delivered and issued and (ii)constitute legal, valid and binding obligations of the MPC enforceable in accordance with their terms and entitled to the benefits and security of the Authorizing Resolution, subject as to enforcement of remedies to applicable bankruptcy, insolvency, reorganization, moratorium and similar laws in effect from time to time affecting the rights of creditors generally and to the availability of equitable relief. KMM:jh2 2369690.1 4/27/2015 4 (g)Governmental Approvals. No approval, permit, consent, authorization or order of any court or any governmental or public agency, authority or person not already obtained (other than any approvals that may be required under the "blue sky"laws of any jurisdiction) is required with respect to the MPC or the Town in connection with the issuance and sale of the Bonds or the execution and delivery by the MPC or the Town of, or the performance by the MPC and the Town of its obligations under, the Bonds or the MPC Documents and the Town Documents, as the case may be. (h)No Conflicts. The adoption by the MPC of the MPC Resolution, the adoption by the Town of the Town Resolution,and the authorization, execution, delivery and issuance, as applicable, of the MPC Documents, the Town Documents, the Bonds and all other documents executed and delivered by the MPC and the Town in connection with the issuance of the Bonds and compliance by the MPC and the Town with the provisions thereof do not and will not materially conflict with or result in a material breach or violation of any of the terms or provisions of, or constitute a default under any resolution, ordinance, indenture, deed of trust, mortgage commitment, agreement or other instrument to which the MPC or the Town is a party or by which the MPC or the Town is bound, or any constitutional provision, existing law, administrative regulation, court order or consent decree to which the MPC and the Town or its properties. (i)No Defaults. As of the time of acceptance hereof and as of the Closing, the MPC and the Town is not and will not be in breach of or in default under any applicable law or administrative regulation of the State or the United States, or any applicable judgment or decree or any trust agreement, loan agreement, bond, note, resolution, ordinance, agreement or other instrument to which the MPC and Town is a party or is otherwise subject, the consequence of any of the foregoing of which materially and adversely affects the operations of the MPC or the Town as of such dates, and, as of such times, the authorization, execution, delivery and issuance, as applicable, of the MPC Documents, the Town Documents and the Bonds and compliance with the provisions thereof do not and shall not conflict with or constitute a material breach of or material default under any applicable law or administrative regulation of the State or the United States or any applicable judgment or decree or any trust agreement, loan agreement, bond, note, resolution, ordinance, agreement or other instrument to which the MPC or the Town is a party or is otherwise subject. (j) Litigation. There is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, governmental agency, public board or body, pending or overtly threatened against or affecting the MPC or the Town, and there is no basis therefor, (i)which in any way questions the powers of the MPC or the Town referred to hereinabove, or the validity of the proceedings taken by the MPC and the Town in connection with the issuance and sale of the Bonds or (ii)wherein an unfavorable decision, ruling or finding would adversely affect the transactions contemplated by the Authorizing Resolution, the MPC Documents, the Town Documents or the Bonds or would in any way adversely affect the validity or enforceability of the Authorizing Resolution, the MPC Documents, the Town Documents or the Bonds (or of any other instrument required or contemplated for use in consummating the transactions contemplated thereby or hereby). Further, there are no lawsuits pending or threatened against the MPC or the Town which question the right of the Town to collect or pledge the excise taxes to be imposed or levied to pay the Bonds,nor lawsuits pending or overtly KMM:jh2 2369690.1 4/27/2015 5 threatened against the MPC or the Town which, if decided adversely to the MPC or the Town, would, individually or in the aggregate, have a material adverse effect on the financial condition of the MPC or the Town, or impair the ability of the MPC and the Town to comply with all the requirements set forth in the Authorizing Resolution, the MPC Documents, the Town Documents or the Bonds, as the case may be. (k)Certificates and Representations. Any certificate signed by an authorized officer of the MPC or the Town, as the case may be,and delivered to the Purchaser shall be deemed a representation and warranty by the MPC or the Town to the Purchaser as to the statements made therein. The representations and warranties of the MPC and the Town set forth herein and in the MPC Documents, the Town Documents and the Authorizing Resolution are, and as of the Closing shall be, true,correct and complete in all material respects unless modified as provided herein or therein, and, between the date hereof and the Closing, the MPC and the Town shall not take any action that shall cause the representations and warranties made herein to be untrue as of the Closing. (l)Disclosure of Agreements, Contracts and Restrictions. The MPC and the Town are not a party to any contract or agreement or subject to any restriction, the performance of or compliance with which may have a material adverse effect on the financial condition, operations or prospects of the MPC or the Town or ability of the MPC or the Town to comply with all the requirements set forth in the Authorizing Resolution, the MPC Documents, the Town Documents or the Bonds, as the case may be. (m)Financial Statements. The Town's comprehensive annual financial report for the fiscal year ended June 30, 2014, presents fairly the financial condition of the Town as of the date thereof and the results for the period covered thereby and was prepared in accordance with generally accepted accounting principles consistently applied as required by Arizona State law. Except as disclosed to the Purchaser, there has been no change in the financial condition of the Town since June 30, 2014, that would in the reasonable opinion of the Town materially impair its ability to perform its obligations pursuant to this Purchase Agreement or to pay the Bonds. All information that has been provided to the Purchaser by the Town with respect to the financial performance of the Town is accurate in all material respects as of its respective date and as of the date of Closing. 4.Closing. (a)By ____ a.m.Phoenix, Arizona Time, on _________, 2015,or at such other time and date as shall have been mutually agreed upon by the MPC, the Town and the Purchaser (the "Closing"), the MPC and the Town will, subject to the terms and conditions hereof, deliver the Bonds to the Purchaser dul y executed and authenticated, together with the other documents hereinafter mentioned, and the Purchaser will, subject to the terms and conditions hereof, accept such delivery and pay the purchase price of the Bonds as set forth in Section 1 of this Purchase Agreement by wire transfer or other funds which are immediately available funds to the Trustee. (b) The Bonds shall be delivered to the Purchaser in definitive fully registered form, registered in the name of the _____________, all as provided in the Trust Indenture. KMM:jh2 2369690.1 4/27/2015 6 5.Closing Conditions. The Purchaser has entered into this Purchase Agreement in reliance upon the representations, warranties and agreements of the MPC and the Town contained herein, in the Authorizing Resolution and in the MPC Documents, the Town Documents and upon the performance by the MPC and the Town of their obligations hereunder, both as of the date hereof and as of the date of the Closing. Accordingly, the Purchaser's obligations under this Purchase Agreement to purchase, to accept delivery of and to pay for the Bonds shall be conditioned upon the performance by the MPC and the Town of their obligations to be performed hereunder and under such documents and instruments at or prior to the Closing, and shall also be subject to the following additional conditions, including the delivery by the MPC of the MPC Documents and the Town of the Town Documents as enumerated herein, in form and substance reasonably satisfactory to the Purchaser: (a)The representations and warranties of the MPC and the Town contained herein shall be true, complete and correct on the date hereof and on and as of the date of the Closing, as if made on the date of the Closing; (b) The MPC and the Town shall have performed and complied with all agreements and conditions required by this Purchase Agreement to be performed or complied with by it prior to or at the Closing; (c)At the time of the Closing, (i) the Authorizing Resolution, the MPC Documents, the Town Documents and this Purchase Agreement shall be in full force and effect in the form heretofore approved by the Purchaser and shall not have been amended, modified or supplemented, and (ii) all actions of the MPC and the Town required to be taken shall be performed in order for Bond Counsel to deliver its opinion referred to hereafter; (d)At the time of the Closing, all official action of the MPC and the Town relating to the Bonds,the MPC Documents and the Town Documents, as applicable,shall be in full force and effect and shall not have been amended, modified or supplemented; (e)At or prior to the Closing, the MPC Resolution shall have been duly executed and delivered by the MPC and the MPC shall have duly executed and delivered,and the registrar shall have duly authenticated,the Bonds and the Town Resolution hall have been duly executed and delivered by the Town; (f) The Purchaser shall have the right to terminate this Purchase Agreement by written notification to the MPC and the Town if at any time prior to or as of the Closing: (i)Any legislation, ordinance, rule or regulation shall be introduced in, or be enacted by any governmental body, department or agency of the State of Arizona (the "State"), or a decision by any court of competent jurisdiction within the State shall be rendered, which materially adversely affects the market price of the Bonds; or (ii) A stop order, ruling, regulation or statement by, or on behalf of, the Securities and Exchange Commission or any other governmental agency having jurisdiction of the subject matter shall be issued or made to the effect that the issuance, KMM:jh2 2369690.1 4/27/2015 7 offering or sale of obligations of the general character of the Bonds, or the issuance, offering or sale of the Bonds, including all underlying obligations, as contemplated hereby, is in violation or would be in violation of any provision of the federal securities laws, including the Securities Act of 1933, as amended and as then in effect, or that the Authorizing Resolution or the Trust Indenture need to be qualified under the Trust Indenture Act of 1939, as amended and as then in effect; or (iii) Legislation shall be enacted by the Congress of the United States of America, or a decision by a court of the United States of America shall be rendered, to the effect that obligations of the general character of the Bonds, or the Bonds, including all the underlying obligations, are not exempt from registration under or other requirements of the Securities Act of 1933, as amended and as then in effect, or the Securities Exchange Act of 1934, as amended and as then in effect, or that the Authorizing Resolution and the Trust Indenture are not exempt from qualification under or other requirements of the Trust Indenture Act of 1939, as amended and as then in effect; or (iv) Legislation shall have been passed by or introduced in the Congress of the United States or recommended to the Congress for passage by the President of the United States or the United States Department of the Treasury or the Internal Revenue Service or any member of the United States Congress or the Arizona Legislature or a decision shall have been rendered by a court of the United States or of the State or by the Tax Court of the United States, or a ruling or statement (including a press release) or proposal shall have been made or a regulation shall have been proposed or made by or on behalf of the Treasury Department of the United States or the Internal Revenue Service or other federal or Arizona authority, with respect to federal or Arizona taxation upon revenues or other income of the general character to be derived by the Town pursuant to the Authorizing Resolution, or upon interest on obligations of the general character of the Bonds, or, with respect to Arizona taxation of the interest on the Bonds as described in the Authorizing Resolution, or other action or events shall have transpired which may have the purpose or effect, directly or indirectly, of changing the federal income tax consequences or Arizona income tax consequences of any of the transactions contemplated in connection herewith, or any other action or events shall have occurred which, in the judgment of the Purchaser, materially adversel y affect the market for the Bonds or the market price generally of obligations of the general character of the Bonds; or (v)Additional material restrictions not in force as of the date hereof shall have been imposed upon trading in securities generall y by any governmental authority or by an y national securities exchange; or (vi) A general banking moratorium shall have been established by federal, Arizona or New York authorities; or (vii) Any action, suit or proceeding described in Section 3(j) hereof shall have been commenced. KMM:jh2 2369690.1 4/27/2015 8 (g)At or prior to Closing, the following documents shall be executed: (i)An unqualified approving opinion of Gust Rosenfeld P.L.C. ("Bond Counsel"), as to the Bonds, dated the date of the Closing, addressed to the MPC; (ii)The supplemental opinion of such counsel, as Bond Counsel and counsel to the MPC, dated the date of the Closing, addressed to the Purchaser and substantially in the form attached hereto as Exhibit A; (iii)A certificate or certificates of the MPC and the Town, dated the date of Closing and signed by the President and Town Manager or other authorized officer of the MPC or the Town, as appropriate,to the effect that: (A)The representations and warranties contained herein are true and correct in all material respects on and as of the date of the Closing with the same effect as if made on the date of the Closing; (B)No litigation is pending or threatened before any judicial, quasi-judicial or administrative forum (1)to restrain or enjoin the issuance or delivery of the Bonds, the application of the proceeds thereof or the performance by the MPC or the Town, as the case may be,of the provisions of the Authorizing Resolution, the MPC Documents or the Town Documents or the levy and receipt of ad valorem taxes for payment of the Bonds; (2)in any way contesting or affecting the authority for, or the validity of, this Purchase Agreement or the application of the proceeds of the Bonds; or (3)in any way contesting the existence or powers of the MPC or the Town; (C) No authority or proceedings for the issuance of the Bonds has been repealed, revoked or rescinded and no petition or petitions to revoke or alter the authorization to issue the Bonds has been filed with or received by any of the signors;and (D)The MPC and the Town has each complied with all the agreements and satisfied all the conditions on its part to be performed or satisfied at or prior to, and to the extent possible before, the Closing. (iv) A specimen of the Bonds; (v)A certified copy of the Authorizing Resolution; (vi)A non-arbitrage certificate of the MPC and Town, in form and substance satisfactory to Bond Counsel; (vii)The filing copy of the Information Return Form 8038-G (IRS) for the Bonds and of the Report Relating to Bond and Security Issuance to the Arizona Department of Revenue for the Bonds; KMM:jh2 2369690.1 4/27/2015 9 (viii)Evidence that the Bonds have been designated by the Town as, and qualify as, qualified tax-exempt obligations for purposes of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended; and (ix) Such additional opinions, letters, certificates, instruments and other documents as the Purchaser or its counsel may reasonably deem necessary to satisfy conditions to the issuance of the Bonds required by the Authorizing Resolution, to evidence the truth and accuracy as of the Closing, or prior to such time, of the representations,warranties and covenants of the MPC and the Town and the due performance or satisfaction by the MPC and the Town of all agreements then to be performed and all conditions then to be satisfied by the MPC and the Town. (All of the opinions, letters, certificates, instruments and other documents mentioned above or elsewhere in this Purchase Agreement shall be deemed to be in compliance with the provisions hereof if, but only if, they are in form and substance satisfactory to the Purchaser and its counsel; provided, however, that acceptance by the Purchaser of the Bonds shall be deemed by the Purchaser to be satisfaction of the foregoing.) If the MPC or the Town shall be unable to satisfy the conditions contained in this Purchase Agreement or if the obligations of the Purchaser shall be terminated for any reason permitted by this Purchase Agreement, this Purchase Agreement (except the warranties and representations of the MPC and the Town herein) shall terminate and neither the Purchaser nor the MPC or the Town shall have any further obligation hereunder. However, the Purchaser may, in its sole discretion, waive one or more of the conditions imposed by this Purchase Agreement and proceed with the Closing. 6.Notice. Any notice or other communication to be given to the MPC and the Town pursuant to this Purchase Agreement may be given by delivering the same in writing to the address set forth on the first page of this Purchase Agreement, and any notice or other communication to be given to the Purchaser pursuant to this Purchase Agreement may be given by delivering the same in writing to _________________, __________________, ________________, _________ ____, Attention: ____________. 7.Notice Concerning Cancellation of Contracts. As required by the provisions of Section 38-511, Arizona Revised Statutes, as amended, notice is hereby given that the State, its political subdivisions (including the MPC and the Town) or any department or agency of either may, within three years after its execution, cancel any contract, without penalty or further obligation, made by the State, its political subdivisions, or any of the departments or agencies of either if any person significantly involved in initiating, negotiating, securing, drafting or creating the contract on behalf of the State, its political subdivisions or any of the departments or agencies of either is, at any time while the contract or any extension of the contract is in effect, an employee or agent of any other party to the contract in any capacity or a consultant to any other party of the contract with respect to the subject matter of the contract. The cancellation shall be effective when written notice from the Governor or the chief executive officer or governing body of the political subdivision is received by all other parties to the contract unless the notice specifies a later time. The State, its political subdivisions or any department or agency KMM:jh2 2369690.1 4/27/2015 10 of either may recoup any fee or commission paid or due to any person significantly involved in initiating, negotiating, securing, drafting or creating the contract on behalf of the State, its political subdivisions or any department or agency of either from any other party to the contract arising as the result of the contract. This section is not intended to expand or enlarge the rights of the MPC or the Town hereunder except as required by such Section. Each of the parties hereto hereby certifies that it is not presently aware of any violation of such Section which would adversely affect the enforceability of this Purchase Agreement and covenants that it shall take no action which would result in a violation of such Section. 8.Parties in Interest. This Purchase Agreement shall constitute the entire agreement between the parties and is made solely for the benefit of the MPC, the Town and the Purchaser (including successors or assigns of the Purchaser) and no other person shall acquire or have any right hereunder or by virtue hereof. This Purchase Agreement may not be assigned by the MPC or the Town. All of the MPC's and Town's representations, warranties and agreements contained in this Purchase Agreement shall remain operative and in full force and effect, regardless of (i) any investigations made by or on behalf of any of the Purchaser; (ii) delivery of and payment for the Bonds pursuant to this Purchase Agreement; and (iii) any termination of this Purchase Agreement. 9.Non-waiver. Nothing in this Purchase Agreement or in the Bonds shall affect or impair the obligation of the MPC or the Town, which is absolute and unconditional,to pay when due the principal of and interest on the Bonds to the Purchaser, as provided in the Bonds, from the ad valorem taxes pledged for such payment, or shall affect or impair the right of the Purchaser, which is also absolute and unconditional, to institute suit to enforce such payment by virtue of the contract embodied in the Bonds or this Purchase Agreement. 10.Survival of Representations. Section 9 herein shall survive the issuance, sale, and delivery of the Bonds and Closing and shall continue in full force and effect until the Bonds have been paid in full and the obligations of the MPC and the Town under the Authorizing Resolution have been fully satisfied and discharged. 11.Effectiveness. This Purchase Agreement shall become effective upon the acceptance hereof by the President of the MPC and the Town Manager and shall be valid and enforceable at the time of such acceptance. 12.Choice of Law. This Purchase Agreement shall be governed by and construed in accordance with the law of the State. 13.Severability. If any provision of this Purchase Agreement shall be held or deemed to be or shall, in fact, be invalid, inoperative or unenforceable as applied in any particular case in any jurisdiction or jurisdictions,or in all jurisdictions because it conflicts with any provisions of any Constitution, statute, rule of public policy, or any other reason, such circumstances shall not have the effect of rendering the provision in question invalid, inoperative or unenforceable in any other case or circumstance, or of rendering any other provision or provisions of this Purchase Agreement invalid, inoperative or unenforceable to any extent whatever. KMM:jh2 2369690.1 4/27/2015 11 14.Business Day. For purposes of this Purchase Agreement, "business day" means any day on which the New York Stock Exchange is open for trading. 15.Section Headings. Section headings have been inserted in this Purchase Agreement as a matter of convenience of reference only, and it is agreed that such section headings are not a part of this Purchase Agreement and will not be used in the interpretation of any provisions of this Purchase Agreement. [SIGNATURES ON FOLLOWING PAGE] KMM:jh2 2369690.1 4/27/2015 12 17.Counterparts. This Purchase Agreement may be executed in several counterparts each of which shall be regarded as an original (with the same effect as if the signatures thereto and hereto were upon the same document) and all of which shall constitute one and the same document. If you agree with the foregoing, please sign the enclosed counterpart of this Purchase Agreement and return it to the Purchaser. This Purchase Agreement shall become a binding agreement between you and the Purchaser when at least the counterpart of this letter shall have been signed by or on behalf of each of the parties hereto. Respectfully submitted, ______________, a ______corporation By: ____________________________________ Name: Title: Date: ACCEPTED this __day of ___________, 2015. TOWN OF FOUNTAIN HILLS, ARIZONA MUNICIPAL PROPERTY CORPORATION By:_______________________________________ President TOWN OF FOUNTAIN HILLS, ARIZONA By:_______________________________________ Town Manager KMM:jh2 2369690.1 4/27/2015 I-1 Schedule $______________ TOWN OF FOUNTAIN HILLS, ARIZONA MUNICIPAL PROPERTY CORPORATION MUNICIPAL FACILITIES REVENUE REFUNDING BONDS, SERIES 2015 Dated: ___________, 2015 Maturity Date (July 15) Principal Amount Interest Rate Yield The Bonds are not subject to redemption prior to their stated maturity dates. KMM:jh2 2369690.1 4/27/2015 A-1 EXHIBIT A _________ ___, 2015 Re:$__________Town of Fountain Hills, Arizona Municipal Property Corporation Municipal Facilities Revenue Refunding Bonds, Series 2015 Pursuant to the Direct Purchase Agreement, dated __________, 2015 (the "Purchase Agreement"), among the Town of Fountain Hills, Arizona Municipal Property Corporation (the "MPC"), the Town of Fountain Hills, Arizona (the "Town"), and _____________________(the "Purchaser"), we have delivered to you our approving opinion of even date herewith (the "Approving Opinion") relating to $____________ aggregate principal amount of the MPC's Municipal Facilities Revenue Refunding Bonds, Series 2015 (the "Bonds"). You may rely on the Approving Opinion as if the same was addressed to you. All terms used herein have the same meaning assigned in the Purchase Agreement. In our role as Bond Counsel and counsel to the MPC, we hereby supplement the aforesaid approving opinion and further advise you as follows: 1.The MPC is duly organized and validly existing as a nonprofit corporation pursuant to the Constitution and laws of the State of Arizona, the Town is duly organized and validly existing as a municipal corporation and political subdivision pursuant to the Constitution and laws of the State of Arizona, and each has all requisite power and authority pursuant thereto and in accordance with the provisions of the MPC's articles of organization and bylaws or the laws of the State of Arizona, as the case may be, (a)to adopt the MPC Resolution or the Town Resolution, as applicable, and to enter into and perform its respective covenants and agreements in accordance with the MPC Resolution and Town Resolution, as applicable, the Purchase Agreement and the Trust Indenture, dated as of the date hereof (the "Trust Indenture"), between the MPC and ________________, as trustee (the "Trustee"); (b) to issue and execute the Bonds as provided in the Authorizing Resolution and the Purchase Agreement; and (c) to carry out and consummate all other transactions contemplated by the Trust Indenture, the Authorizing Resolution and the Purchase Agreement. The MPC and the Town have complied with all applicable provisions of law and have taken all actions required to be taken by it to the date hereof in connection with the transactions contemplated by the aforesaid documents. 2.Each of the MPC and the Town has duly authorized (a) the MPC Resolution or the Town Resolution, as the case may be, and the due performance of its respective obligations pursuant to the MPC Resolution or the Town Resolution, as applicable, (b) the execution and delivery of, and the due performance of its obligations pursuant to, the Purchase Agreement and the Trust Indenture, as applicable, and (c) the taking of any and all actions as may be required on the part of the MPC and the Town to carry out, give effect to and consummate the transactions contemplated by such documents. 3.The MPC Documents have been duly authorized, executed and delivered by the MPC, the Town Documents have been duly authorized, executed and delivered by the Town, and, assuming due and valid authorization, execution and delivery by the Purchaser of the Purchase Agreement and by the Trustee of the Trust Indenture, each constitutes a legal, valid and binding obligation of the MPC and the Town, as ___________________-2-__________, 2015 KMM:jh2 2369690.1 4/27/2015 A-2 applicable, enforceable in accordance with its respective terms, subject to the qualification that the enforcement thereof may be limited by laws relating to bankruptcy, reorganization, insolvency, moratorium or other similar laws affecting creditors' rights and except that the availability of equitable remedies is subject to the discretion of the court before which any proceedings may be brought and further subject to the qualification that the enforcement of the indemnification provisions of the Purchase Agreement may be limited by Federal or state securities laws. 4. The authorization, approval, and execution by the MPC of the MPC Documents and the Town of the Town Documents and all other proceedings of the MPC and the Town relating to the authorization, approval and execution of the MPC Documents and the Town Documents, as applicable, have been carried out in conformance with the applicable open meeting, and other laws and ordinances of the MPC, the Town and the State of Arizona. 5.The adoption of the Authorizing Resolution and the execution and delivery by the MPC of the MPC Documents and the Town of the Town Documents and compliance with the provisions of the Authorizing Resolution and of each of such instruments do not and will not conflict with or violate any Federal or State of Arizona constitutional or statutory provision. 6.It is not necessary in connection with the issuance and sale of the Bonds to register the Bonds pursuant to the Securities Act of 1933, as amended, or to qualify the Authorizing Resolution or the Trust Indenture pursuant to the Trust Indenture Act of 1939, as amended. 7.No consent of any other party and no consent, license, approval or authorization of, exemption by, or registration with any governmental body, authority, bureau or agency (other than those that have been obtained or will be obtained prior to the delivery of the Bonds) is required in connection with the adoption by the MPC or the Town of the MPC Resolution or the Town Resolution, as applicable, and performance by the MPC and the Town of its respective duties pursuant to the MPC Resolution or the Town Resolution, as the case may be, or the execution, delivery and performance by the MPC of the MPC Documents or the Town of the Town Documents (except as is set forth therein). This opinion letter is being furnished to you solely for your benefit and only with respect to the execution and delivery of the documents referred to herein. Accordingly, it may not be relied upon by or quoted to any other person or entity or for any other purpose without, in each instance, our prior written consent. GUST ROSENFELD P.L.C. KMM:jh2 2369690.1 4/27/2015 B-1 EXHIBIT B (Form of Certificate of Qualified Investor) TOWN OF FOUNTAIN HILLS, ARIZONA MUNICIPAL PROPERTY CORPORATION [_____________, as Registrar] Re:Town of Fountain Hills, Arizona Municipal Property Corporation Municipal Facilities Revenue Refunding Bonds, Series 2015 1. Please be advised that the undersigned is a Qualified Investor (as hereinafter defined) and is purchasing one of the captioned bonds (hereinafter referred to as the "Bonds"), such Bond, or beneficial interest therein, being in the original aggregate principal amount of $______________, bearing the number ____________. Such purchase is solely for the account of the undersigned, for the purpose of investment and not with an intent for or view to distribution or resale. 2.In the event that the undersigned transfers such Bond or any part thereof, the undersigned shall comply with all provisions of the resolution authorizing issuance of, and certain other matters related to, the Bonds adopted by the Board of Directors of the MPC on ________, 2015 (the "MPC Resolution") and by the resolution adopted by the Town of Fountain Hills, Arizona on ________, 2015 (the "Town Resolution"and, together with the MPC Resolution, the "Authorizing Resolution"). The undersigned understands that, unless the transfer restrictions terminate pursuant to the Authorizing Resolution, a transferee shall be a Qualified Investor or Sophisticated Municipal Market Professional (as defined by the Municipal Securities Rulemaking Board), and must sign a letter in the form of this letter and provide such letter to the Bond Registrar before any transfer of any Bond to such transferee will be registered. 3.The undersigned acknowledges that it is a qualified institutional buyer, as such term is defined in Rule 144A of the Securities Act of 1933, as amended, or an accredited investor (other than a natural person) as defined in Rule 501 of Regulation D of the United States Securities Exchange Commission) (either of which shall constitute a "Qualified Investor"). 4.The undersigned understands that: (i) the Trust Indenture dated as of _______ 1, 2015, by and between ________________, as trustee (the "Trustee") and the Town of Fountain Hills, Arizona Municipal Property Corporation (hereinafter referred to as the "MPC")(the "Trust Indenture"), the Authorizing Resolution and the Bonds are not being registered under the Securities Act of 1933, as amended, in reliance upon certain exemptions set forth in that Act, (ii)the Trust Indenture, the Authorizing Resolution and the Bonds are not being registered or otherwise qualified for sale under the "blue sky"laws and regulations of the State of Arizona or any other state, (iii)any transfer of the Bonds must comply with federal and state securities laws, (iv)any sale or transfer of the Bonds, or interests therein, must be to Sophisticated Municipal Market Professionals or Qualified Investors, (v)the Bonds will not be listed on any stock or other securities exchange, (vi)the Bonds will not carry any bond rating from any rating service, and (vii) the Bonds are not likely to be readily marketable. 5.The undersigned assumes all responsibility for complying with any applicable federal and state securities laws with respect to any transfer of the Bond or an interest therein, and agrees to hold the MPC and the Town of Fountain Hills, Arizona (hereinafter referred to as the "Town"), harmless for, from and against any and all liabilities claims, damages or losses resulting directly or indirectly from such failure to comply. KMM:jh2 2369690.1 4/27/2015 B-2 6.The undersigned acknowledges that the undersigned has had an opportunity and has obtained all information necessary and has evaluated the factors associated with its investment decision and after such evaluation, the undersigned understood and knew that investment in the Bonds involved certain risks, including but not limited to, limited security and source for payment of the Bonds, the parity lien on the Excise Taxes pledged for the payment of the payments due pursuant to the Agreement dated as of ____________ 1, 2015, by and between the Trustee and the Town,and the probable lack of any secondary market for the Bonds. The undersigned acknowledges that it is experienced in transactions such as those relating to the Bonds and that the undersigned is knowledgeable and fully capable of independent evaluation of the risks involved in investing in the Bonds. The undersigned is not relying on the MPC or the Town in making its decision to purchase the Bonds and agrees that the Town is not obligated in any manner for the issuance or payment of the Bonds. 7.The undersigned acknowledges that the MPC, Town and the respective officers, directors, council members, advisors, employees and agents of either of the foregoing have not undertaken to furnish, nor has the undersigned requested, any information or to ascertain the accuracy or completeness of any information that may have been furnished by any other party. 8.This certificate and all rights and responsibilities described in it shall be governed by, and interpreted in accordance with, the laws of the State of Arizona. The federal and state courts of the State of Arizona shall have sole and exclusive jurisdiction over any dispute arising from the purchase and sale of the Bonds. _________________________________________ [PURCHASER] By_______________________________________ Printed Name:__________________________________ Title:_________________________________________ KMM:kmm 2367215.2 4/30/2015 When recorded, return to: Timothy A. Stratton Gust Rosenfeld P.L.C. One East Washington Street, Suite 1600 Phoenix, AZ 85004-2553 AGREEMENT between TOWN OF FOUNTAIN HILLS, ARIZONA MUNICIPAL PROPERTY CORPORATION and TOWN OF FOUNTAIN HILLS, ARIZONA Dated as of __________ 1, 2015 KMM:kmm 2367215.2 4/30/2015 i TABLE OF CONTENTS ARTICLE I REFINANCING THE PRIOR PROJECT Section 1.1 Refinancing of the Prior Project ................................................................................2 Section 1.2 Means of Financing....................................................................................................2 Section 1.3 Transfer to the Town ..................................................................................................2 Section 1.4 Term ...........................................................................................................................2 Section 1.5 Surrender ....................................................................................................................2 Section 1.6 Environmental Matters...............................................................................................2 ARTICLE II ACQUISITION BY THE TOWN; INSTALLMENT PAYMENTS Section 2.1 Acquisition of the Prior Project .................................................................................3 Section 2.2 Installment Payments .................................................................................................3 Section 2.3 Assignment of Installment Payments.........................................................................3 Section 2.4 Additional Installment Payments ...............................................................................3 Section 2.5 Other Costs and Expenses ..........................................................................................4 Section 2.6 Excess Money in Bond Fund.....................................................................................4 Section 2.7 Sources for Installment Payments..............................................................................4 ARTICLE III TAXES, UTILITIES AND OTHER CHARGES Section 3.1 Net Return to the MPC ..............................................................................................4 Section 3.2 Payment of Governmental Charges by the Town ......................................................4 Section 3.3 Payment of Utility Charges by the Town ..................................................................5 ARTICLE IV SOURCES OF PAYMENTS, PLEDGE, EXCISE TAXES Section 4.1 Limited Sources for Installment Payments ................................................................5 Section 4.2 Use of Other Funds at Option of the Town................................................................5 Section 4.3 Pledge of Revenues and Excise Taxes .......................................................................6 Section 4.4 Town to Maintain Excise Taxes Coverage of Two and One-Half Times Debt Service ....................................................................................6 Section 4.5 Surplus and Deficiency of Excise Taxes ...................................................................6 Section 4.6 Enforcement by Trustee .............................................................................................7 Section 4.7 Additional Parity Bonds .............................................................................................7 Section 4.8 Definition of Excise Taxes.........................................................................................7 ARTICLE V MAINTENANCE AND ALTERATIONS Section 5.1 Town to Maintain the Prior Project ...........................................................................7 KMM:kmm 2367215.2 4/30/2015 ii Section 5.2 Alterations by the Town.............................................................................................8 ARTICLE VI INSURANCE Section 6.1 General Liability Insurance........................................................................................8 Section 6.2 Additional Insurance..................................................................................................8 ARTICLE VII INDEMNIFICATION Section 7.1 Indemnity as to Use of the Prior Project .....................................................................8 Section 7.2 General Indemnification.............................................................................................9 Section 7.3 Enforcement Expenses................................................................................................9 Section 7.4 Further Indemnification ..............................................................................................9 Section 7.5 Survival .......................................................................................................................10 ARTICLE VIII CONDEMNATION Section 8.1 Proceeds to the MPC or Trustee ................................................................................10 Section 8.2 New Improvements ....................................................................................................10 Section 8.3 Satisfaction of Bond Indebtedness .............................................................................10 ARTICLE IX RESTRICTIONS ON THE TOWN; ASSIGNMENT Section 9.1 Restrictions on the Town ...........................................................................................10 Section 9.2 Assignment to the Trustee .........................................................................................10 ARTICLE X DEFAULT BY THE TOWN Section 10.1 Remedies Upon Event of Default ..............................................................................11 Section 10.2 Appointment of Receiver ...........................................................................................11 Section 10.3 Recovery of Costs and Attorneys'Fees .....................................................................11 ARTICLE XI DEFAULT BY THE MPC Section 11.1 Remedies of the Town ...............................................................................................11 ARTICLE XII REMEDIES Section 12.1 Accumulation of Remedies ........................................................................................12 Section 12.2 Nonwaiver ..................................................................................................................12 KMM:kmm 2367215.2 4/30/2015 iii ARTICLE XIII ESTOPPEL CERTIFICATE Section 13.1 Certificate by the Town .............................................................................................12 ARTICLE XIV NO ABATEMENT OF PAYMENTS Section 14.1 Nonabatement until Bonds Paid.................................................................................12 ARTICLE XV REDEMPTION OR REFUNDING; PURCHASING OR REDEEMING BONDS; RELEASE OF TRUST INDENTURE; PROVIDING FOR INSTALLMENT PAYMENT Section 15.1 Redemption or Refunding ..........................................................................................13 Section 15.2 Supplemental Agreement ...........................................................................................13 Section 15.3 Purchasing or Redeeming Bonds Prior to Maturity...................................................13 Section 15.4 Release of Trust Indenture .........................................................................................13 Section 15.5 Providing for Installment Payment ............................................................................13 ARTICLE XVI REPRESENTATIONS AND WARRANTIES OF THE MPC Section 16.1 No Amendments or Additional Indebtedness ............................................................14 Section 16.2 Application of Payments ............................................................................................14 ARTICLE XVII TAX COVENANTS; REPRESENTATIONS OF TOWN Section 17.1 Tax Covenants ...........................................................................................................14 Section 17.2 Representations, Warranties and Covenants ..............................................................15 ARTICLE XVIII GENERAL Section 18.1 Notices; Mailing Addresses.......................................................................................16 Section 18.2 Waiver ........................................................................................................................16 Section 18.3 Headings are for Reference Only...............................................................................16 Section 18.4 Execution in Counterparts..........................................................................................16 Section 18.5 Provisions are Severable ............................................................................................16 Section 18.6 Applicable Law ..........................................................................................................17 Section 18.7 Covenants as to Conflict of Interest ...........................................................................17 Section 18.8 E-Verify Requirements ..............................................................................................17 KMM:kmm 2367215.2 4/30/2015 iv SIGNATURES ....................................................................................................................................18 SIGNATURES ....................................................................................................................................18 EXHIBIT A –INSTALLMENT PAYMENT SCHEDULE KMM:kmm 2367215.2 4/30/2015 1 AGREEMENT THIS AGREEMENT, made and entered into as of __________ 1, 2015, by and between the TOWN OF FOUNTAIN HILLS, ARIZONA MUNICIPAL PROPERTY CORPORATION, an Arizona nonprofit corporation (the "MPC") and the TOWN OF FOUNTAIN HILLS, ARIZONA, an Arizona municipal corporation (the "Town"); WITNESSETH: WHEREAS, the MPC was formed for the express purpose of aiding and assisting the Town in financing, refinancing, acquiring, constructing, furnishing and equipping certain public real and personal property at no profit to itself or to an y other person except the Town, and the MPC is willing to assist the Town in accomplishing the objectives stated below in the manner hereinafter set forth; and WHEREAS, on June 22, 2005, the MPC issued its Municipal Facilities Revenue Refunding Bonds, Series 2005 (the "Prior Bonds")for the purpose of refunding certain maturities of the Town's outstanding municipal facilities revenue bonds; and WHEREAS, in connection with the issuance of the Prior Bonds, the MPC and the Town have entered into the following agreements (collectively referred to herein as the "Prior Agreements"),pursuant to which the MPC has acquired certain land and/or acquired, constructed or equipped certain municipal facilities with the proceeds from the sale of the Prior Bonds and transferred the same to the Town (collectively, the "Prior Project"): Lease-Purchase Agreement dated as of July 1, 2000, by and between the MPC and the Town; First Amendment to the Lease-Purchase Agreement dated as of July 1, 2001, by and between the MPC and the Town; Second Amendment to Lease-Purchase Agreement dated as of December 1, 2004, by and between the MPC and the Town; Refunding Amendment to Lease-Purchase Agreement dated as of June 1, 2005, by and between the MPC and Town;and WHEREAS, it has been determined that it would be to the advantage and benefit of the Town and its citizens to provide for the prepayment of payments under the Prior Agreements and the refunding and, as applicable, redemption of all of the Prior Bonds on or prior to their respective maturity dates (the "Bonds Being Refunded"); and WHEREAS,in order to prepay the payments under the Prior Agreements and redeem and refund the Bonds Being Refunded,the MPC proposes to issue and sell its Municipal Facilities Revenue Refunding Bonds, Series 2015, in an original principal amount of $______________, and apply the proceeds thereof, together with $________ representing payment from the Town to the Prior Trustee for amounts owed under the Prior Agreements,to KMM:kmm 2367215.2 4/30/2015 2 refund the Bonds Being Refunded and pay the costs of issuance of the Bonds Being Refunded; and WHEREAS,all terms not otherwise defined herein shall have the meanings set forth in the Trust Indenture entered into between the MPC and __________________, as trustee (the "Trustee"), dated as of _________1, 2015 (the "Trust Indenture"). NOW, THEREFORE, in consideration of the mutual covenants, conditions and agreements hereinafter contained, it is hereby agreed as follows: ARTICLE I REFINANCING THE PRIOR PROJECT Section 1.1 Refinancing of the Prior Project.The MPC hereby agrees to provide the Town sufficient moneys to prepay certain payments due under the Prior Agreements and refinance the Bonds Being Refunded. Section 1.2 Means of Financing.As a means of prepaying certain payments due under the Prior Agreements and refinancing the Prior Project and costs of issuance related to the Bonds, the MPC will issue and sell the Bonds, to be issued pursuant to the Trust Indenture, and will apply the proceeds thereof to prepay certain payments due under the Prior Agreements and refinance the Bonds Being Refunded. Section 1.3 Transfer to the Town.The parties acknowledge and agree that the MPC has no interest of any kind in the Prior Project and, subject to the terms and conditions hereof, the MPC will sell, assign, transfer and convey any of its right, title and interest in and to the Prior Project. Section 1.4 Term.This Agreement will terminate concurrently with the Town's payment or prepayment of all amounts due pursuant to Sections 2.2, 2.4 and 2.5 hereof; provided, however, that such termination shall not relieve an y part y of any obligation or dut y arising, or liability for any amount due and payable, pursuant to the terms hereof prior to such termination. Any and all of the MPC's right, title and interest in and to the Prior Project will transfer to the Town upon the termination of this Agreement in accordance with this Section 1.4. Section 1.5 Surrender.Upon the expiration or termination of this Agreement, the MPC shall, if required by the Town,immediatel y transfer any interest it may have in the title and surrender peaceable possession of any and all of the MPC's interest in the Prior Project to the Town free and clear of all liens and encumbrances except (i) conditions, reservations, exceptions, rights-of-way and easements of record on the date hereof or (ii) liens or encumbrances attaching to the Prior Project as a result of action or inaction on the part of the Town. Section 1.6 Environmental Matters. To the extent permitted by law, the Town hereby agrees to indemnify and hold the MPC and the Trustee, their respective successors and assigns, harmless for, from and against any and all liabilities, obligations, losses, damages, fines, penalties, claims, actions, suits, costs and expenses, including reasonable attorneys' fees and expenses, imposed on, incurred by or levied against the MPC or the Trustee, or the successors KMM:kmm 2367215.2 4/30/2015 3 and assigns of the MPC or the Trustee, as the case may be, in any way relating to or arising from the Town's, or its predecessors'in interest, use, generation, transportation, maintenance, discharge, release, removal, storage or disposal of any Regulated Substances (as defined herein) in, on, under or from the Prior Project, including without limitation, those arising from any violations of applicable Federal, state or local environmental laws, rules, regulations or ordinances, or from damages to any propert y or death or injury to any person. For the purposes hereof, the term "Regulated Substances"refers to any pollutants, contaminants, residues, wastes or other substances subject to or defined as regulated or hazardous substances in applicable Federal, state or local environmental laws, rules, regulations or ordinances. This Section 1.6 shall survive the resignation or removal of the Trustee pursuant to the Trust Indenture, and the discharge or termination of this Agreement and/or the Trust Indenture. ARTICLE II ACQUISITION BY THE TOWN Section 2.1 Acquisition of the Prior Project.To the extent the MPC has any interest in the Prior Project, the MPC hereby transfers the right to use the Prior Project to the Town during the term of this Agreement. Section 2.2 Installment Payments.The aggregate amount of installment payments owed pursuant to this Agreement shall be payable by the Town to the MPC in installments of such amounts at such times as necessary to permit the MPC to make timely payment of the debt service on the Bonds, and the periodic fees and expenses of the Trustee, Bond Registrar and Paying Agent. The installment payment schedule is attached hereto as Exhibit A and incorporated herein by reference. It is understood and agreed by the parties hereto that the Town's payments in accordance with this Section 2.2 shall be paid directly to the Trustee, for and on behalf of the MPC, at least one business day in advance of the date on which the related payment is to be made to the owners of Bonds. It is further declared to be the intention of the parties that the Town's obligation to make installment payments shall be coextensive with the MPC's obligation to pay debt service on the Bonds and Trustee, Bond Registrar and Paying Agent obligations pursuant to the Trust Indenture, and that, when the Bonds, the Trustee's, Bond Registrar's and Paying Agent's fees and expenses, and all other amounts due pursuant to Sections 2.4 and 2.5 hereof have been fully paid or provided for, the Town shall have no further obligation to make installment payments pursuant to this Agreement. Section 2.3 Assignment of Installment Payments.All installment payments and all other payments to be made by the Town pursuant to this Agreement, except as otherwise provided herein, shall be paid to the Trustee, or to such other agent as the MPC may from time to time designate. The MPC shall cause the Trustee to apply the payments made by the Town in the manner and for the purposes expressed in the Indenture. Section 2.4 Additional Installment Payments.If the installment payments set forth in Section 2.2 are insufficient to meet the MPC's requirements pursuant to the Trust Indenture, KMM:kmm 2367215.2 4/30/2015 4 then, upon notice from either the MPC or the Trustee, the Town shall pay pursuant hereto such other amounts as may be required from time to time to cure any such deficiency. Section 2.5 Other Costs and Expenses.The Town shall pay (i) all fees, expenses (including closing fees and expenses) and indemnities of the Trustee, Bond Registrar and Paying Agent pursuant to the Trust Indenture to the extent, if any, that such fees, expenses and indemnities are not met by the scheduled installment payments, (ii) the reasonable expenses of the MPC approved by the Town and not otherwise required to be paid by the Town pursuant to the terms hereof, (iii) losses on investments made by the Trustee at the direction of the Town pursuant to the terms of the Trust Indenture, but only to the extent necessary to meet the Bond requirements and to pay the Trustee's, Bond Registrar's and Paying Agent's fees and expenses in accordance with the Trust Indenture, (iv) fees for maintaining the MPC's corporate existence, and (v) all other expenses of the MPC incurred at the written request of the Town or the Trustee in accordance with the provisions of this Agreement. The Town shall pay the amounts specified in (i) directly to the Trustee, Bond Registrar or Paying Agent as they become due and within twenty (20) days after the receipt by the Town of invoice therefor, in (ii) either to the MPC or its creditors, upon evidence that the expenses or fees have been incurred by it, and within twenty (20) days after receipt by the Town of an invoice therefor, in (iii) to the Trustee, and in (iv) and (v) to the MPC, upon evidence that such expenses have been incurred. Section 2.6 Excess Money in Bond Fund.Unless otherwise requested by the Town pursuant to Section 15.3 hereof, any money in the Bond Fund created pursuant to the Trust Indenture, which on July 1 of each year exceeds the amount necessary for the current debt service on the Bonds then outstanding (including administrative costs and expenses) shall, no less frequently than annually, so long as the Town is not in default hereunder, constitute a credit to the Town on the next succeeding installment payment or payments due or coming due pursuant hereto. Section 2.7 Sources for Installment Payments.Town shall remit to Trustee from Excise Taxes all amounts due under this Agreement in the amounts and at the times and for the purposes as required herein. Town's obligation to make payments of any amounts due under this Agreement, including amounts due after default or termination hereof, is limited to payment from Excise Taxes and shall in no circumstances constitute a general obligation of, or a pledge of the full faith and credit of, Town, the State of Arizona, or any of its political subdivisions, or require the levy of, or be payable from the proceeds of, any ad valorem taxes. ARTICLE III TAXES, UTILITIES AND OTHER CHARGES Section 3.1 Net Return to the MPC.The Town agrees that the aggregate amount payable by the Town for the acquisition of the Prior Project shall be an absolute net return to the MPC, free from any expenses and charges with respect to the Prior Project or the income therefrom, except that any expenses described in clause (ii) of Section 2.5 hereof must first be approved b y the Town. KMM:kmm 2367215.2 4/30/2015 5 Section 3.2 Payment of Governmental Charges by the Town. The Town shall pay or cause to be paid, punctually, when due and payable, all real property and personal property taxes, income taxes, gross receipt taxes, business and occupation taxes, occupational license taxes, water charges, sewer charges, assessments (including but not limited to, assessments for public improvements or benefits), and all governmental taxes and charges of every kind and nature which at any time prior to the termination of this Agreement shall be or become due and payable by the MPC or the Town, and which shall be levied, assessed or imposed: (a) Upon or with respect to the MPC, or which shall be or become liens upon the Prior Project, or an y interest of the MPC or the Town therein or pursuant to this Agreement; or (b) Upon this transaction or any document to which the Town is a part y creating or transferring an interest or an estate in or to the Prior Project. The Town shall furnish to the MPC promptly, upon request, proof of the payment of any such tax, assessment or other governmental charge which is payable by the Town pursuant to this Section 3.2. It shall not be a breach of this Section 3.2 if the Town fails to pay any such tax, charge or assessment during any period or periods in which the Town, or the MPC, in good faith, shall be contesting the amount or validity of such tax, charge or assessment. The MPC will, if requested by the Town, contest the amount or validity of any such tax, charge or assessment, and the Town will pay the MPC's costs and expenses in connection therewith. Section 3.3 Payment of Utility Charges by the Town.The Town shall pay or cause to be paid all charges for gas, water, sewer, electricity, light, heat, power, telephone or other utility service furnished to or used in connection with the Prior Project from the time the Town takes possession of such property until the completion of payment of the aggregate amount payable pursuant to the provisions of this Agreement. The MPC shall not be required to furnish to the Town or any other occupant any gas, water, sewer, electricity, light, heat, power, telephone or other utility service of any kind, nor shall the MPC be required to pay for such charges or services. ARTICLE IV SOURCES OF PAYMENTS AND PLEDGE Section 4.1 Limited Sources for Installment Payments.It is understood and agreed by and between the MPC and the Town that all payments made in accordance herewith shall be made only from Excise Taxes, as defined in Section 4.8 below, subject to the provisions of Section 4.2 hereof. Section 4.2 Use of Other Funds at Option of the Town.The Town may, at the Town's sole option, make such payments from its other funds as may be permitted by law and as the Town shall determine from time to time, but the MPC acknowledges that it has no claim hereunder to such other funds. Notwithstanding any other provision hereof, no part of the installment payments payable pursuant hereto shall be payable out of any ad valorem taxes imposed by the Town or from bonds or other obligations, the payment of which is secured by a pledge of the Town's general taxing authority, unless (i) the same shall have been duly budgeted by the Town according to law, (ii) such payment or payments shall be within the budget KMM:kmm 2367215.2 4/30/2015 6 limitations set forth in the statutes of the State of Arizona (the "State"),and (iii) any such bonded indebtedness or other obligation is within the debt limitations of the Constitution of the State. Section 4.3 Pledge of Revenues and Excise Taxes.The Town does hereby pledge for the payment of the amounts payable pursuant to this Agreement its Excise Taxes, as defined in Section 4.8 below. The Town intends that this pledge shall be a first lien pledge upon such amounts of said Excise Taxes, as will be sufficient to make the payments pursuant hereto. The Town agrees and covenants to make said payments from such Excise Taxes, except to the extent that it chooses to make the payments from other sources as permitted by Section 4.2 hereof.Said pledge of, and said lien on, the Excise Taxes is hereby irrevocably made and created for the prompt and punctual payment of the Payments according to the terms hereof, and to create and maintain the funds as hereinafter specified in this Agreement or as may be specified in the Trust Indenture. All of the Payments are coequal as to the pledge of and lien on the Excise Taxes pledged for the payment thereof and share ratably, without preference, priority or distinction, as to the source or method of payment from Excise Taxes or security therefor. The rights of the Owners of the Bonds to payment from Excise Taxes are on a parity with the rights to payment from such Excise Taxes of the holders of any obligations hereafter issued on a parity therewith pursuant to the Trust Indenture and this Agreement. Section 4.4 Town to Maintain Excise Taxes Coverage of Two and One-Half Times Debt Service.The Town covenants and agrees that the Excise Taxes which it presently imposes will be retained and maintained so that the amount of Excise Taxes, all within and for the preceding Fiscal Year, shall be equal to at least two and one-half (2.5) times the total of principal and interest payable with respect to the MPC's Parity Bonds and any additional parity obligations issued in accordance with this Agreement, to the extent outstanding in any such current Fiscal Year. The Town further covenants and agrees that if such receipts for any such preceding Fiscal Year shall not equal two and one-half (2.5) times such principal and interest requirements of any current Fiscal Year, or if at any time it appears that the current receipts will not be sufficient to meet such payment requirements, it will, subject to any limitations imposed by law, use its best efforts to either impose additional Excise Taxes, or to increase the rates of such taxes currently imposed, so that (i) the current Fiscal Year's receipts will be sufficient to meet all such current requirements and (ii) it can be reasonably calculated that the current Fiscal Year's receipts will be sufficient to meet the succeeding Fiscal Year's principal and interest requirements. Section 4.5 Surplus and Deficiency of Excise Taxes. Subject to the right with respect to any other obligations issued on a parity herewith pursuant to the Trust Indenture and this Agreement with respect to the Excise Taxes, all Excise Taxes in excess of amounts, if any, required to be deposited with or held by Trustee for payments due under this Agreement, the Trust Indenture shall constitute surplus revenues and may be used by Town for any lawful purpose for the benefit of Town, including the payment of junior lien obligations to which such Excise Taxes may from time to time be pledged. If at any time the moneys in the funds and accounts held for payment of amounts due under this Agreement or the Trust Indenture are not sufficient to make the deposits and transfers required, any such deficiency shall be made up from the first moneys thereafter received and available for such transfers under the terms of this Agreement and, with respect to payment from Excise Taxes, pro rata, as applicable, with amounts due with respect to obligations on a parity herewith with respect to the Excise Taxes, and the transfer of any such sum or sums to said fund or accounts as may be necessary to make KMM:kmm 2367215.2 4/30/2015 7 up any such deficiency shall be in addition to the then-current transfers required to be made pursuant hereto. The Town shall impose all necessary Excise Taxes, shall collect and receive the proceeds of sufficient Excise Taxes, and pay such proceeds to Trustee in such amounts and at such times as will be fully sufficient, in conjunction with any other legally available moneys (but not proceeds of ad valorem taxes, except in compliance with Section 4.2) which Town may from time to time lawfully choose to pay to Trustee, to assure the punctual performance of all duties requiring the payment or expenditure of money by Town under the terms of this Agreement. Such payments shall be made on the dates specified herein during the term of this Agreement and shall be sufficient to meet all requirements for the Obligations. Section 4.6 Enforcement by Trustee.In the event of any default by the Town hereunder, the remedies of the MPC with respect to the enforcement of the lien and pledge set forth in this Article IV and with respect to the covenants and agreements contained in Section 4.4 above shall be as provided in Articles X and XII of this Agreement. The Trustee, on behalf of the holders of the Bonds, may enforce this lien and pledge and the aforesaid covenants and agreements in place of the MPC in accordance with the terms and conditions of the Trust Indenture. Section 4.7 Additional Parity Bonds.The Town, for itself, its successors and assigns, covenants and agrees with the holders of the Bonds that, so long as any Bonds remain outstanding and the principal and interest thereon shall be unpaid or unprovided for, it will not further encumber the Excise Taxes pledged hereunder on a basis equal to the pledge hereunder unless the Excise Taxes collected in the preceding Fiscal Year shall have amounted to at least two and one-half (2.5) times the combined interest and principal requirement for the succeeding twelve (12) month period for all Parity Bonds then outstanding together with any parity bonds or parity obligations then proposed to be issued and secured by a pledge of the Excise Taxes. Subject to the foregoing, and to other terms and conditions set forth herein and in the Trust Indenture, the Town shall have the right to incur future obligations payable from and secured by the Excise Taxes on a parity with the payments due pursuant to this Agreement. Section 4.8 Definition of Excise Taxes. "Excise Taxes" shall mean all unrestricted fines and forfeitures, license and permit fees, transaction privilege taxes, other transaction privilege, excise and business taxes, franchise fees and taxes, lease and rental payments and recreation and community program fees which the Town now or in the future imposes and collects, and all State shared sales taxes and all State shared income taxes collected and allocated or apportioned, now or hereafter, to the Town by the State of Arizona or any political subdivision thereof, or by any other governmental unit or agency and which are not required by State of Arizona law, rule or regulation to be expended for other purposes, such as motor vehicle fuel tax. ARTICLE V MAINTENANCE AND ALTERATIONS Section 5.1 Town to Maintain the Prior Project.During the term of this Agreement and until all payments due hereunder are completed, all maintenance of and repairs to the Prior Project shall be the responsibility of the Town, and the Town covenants and agrees that it will KMM:kmm 2367215.2 4/30/2015 8 continue to maintain the Prior Project or cause the same to be maintained in as good of a condition as when the Town takes possession, ordinary wear and tear excepted. Section 5.2 Alterations by the Town. The Town shall have the right during the term of this Agreement to make any alterations or to attach fixtures to the Prior Project if the same are deemed by the Town to be necessary or beneficial for its use; provided, however, that any such alterations shall maintain the integrity of the Prior Project and shall not decrease the value thereof. ARTICLE VI INSURANCE Section 6.1 General Liability Insurance.The Town will purchase and maintain at all times a commercial general liability insurance policy or cause a self-insurance program to be established and maintained, with coverage and limits appropriate for the nature and use of the Prior Project and the activities conducted in connection with the Prior Project,which shall include coverage for bodily injury and property damage, occurring on, in, around or by use of the Prior Project. The Town's commercial general liability policy or self-insurance program,as the case may be, shall afford protection to the MPC, its directors, officers, agents and employees by naming the MPC as an additional insured. The Town shall furnish evidence of such insurance to the Trustee on or prior to the issuance of the Bonds and promptly upon the revision, modification or renewal of any such insurance. Section 6.2 Additional Insurance.The Town's obligations pursuant to this Article shall not affect its right to carry additional insurance solely for its own account. Any insurance required by this Article VI may be carried in conjunction with any other insurance carried by the Town, and may be provided by self-insurance by the Town. Any claims arising pursuant to the policies of insurance described by this Article shall be adjusted by and at the cost of the Town, provided that the proceeds from such insurance shall be applied pursuant to the terms of this Agreement. ARTICLE VII INDEMNIFICATION Section 7.1 Indemnity as to Use of the Prior Project.The Town covenants and agrees, at its expense, and to the extent permitted by law, to pay and to indemnify and save the MPC harmless against and from any and all claims by or on behalf of any person, firm, corporation or governmental authority arising from the occupation, use, or possession of the Prior Project, including any liability for any violation of conditions, restrictions, laws, ordinances or regulations affecting the Prior Project or the occupancy or use thereof. Section 7.2 General Indemnification.The MPC, its directors, officers, agents and employees shall not be liable to the Town or to any other person whomsoever or entity whatsoever for any death, injury or damage that may result to any person or property by or from any cause whatsoever related to the Prior Project or any part thereof, unless caused by the willful misconduct of the MPC, its directors, officers, agents, or employees. To the extent permitted by law, the Town shall indemnify and hold the MPC, its directors, officers, agents and employees KMM:kmm 2367215.2 4/30/2015 9 harmless from and defend them, collectively and individually, against any and all claims, losses or judgments for death of, or injury to, any person, or for damage to any property whatsoever incurred in or on the adjoining streets, sidewalks and passageways, unless caused by the willful misconduct of the MPC, its directors, officers, agents or employees. In the event any action or proceeding is brought against the MPC or any of the persons referred to in this Section by reason of any such claim, the Town, upon notice from the MPC, shall resist or defend such action or proceeding. Section 7.3 Enforcement Expenses.The Town agrees to pay and indemnify the MPC and Trustee for, from and against all lawful and reasonable costs and charges, including reasonable counsel fees, in enforcing any covenant or agreement of the Town contained in this Agreement. Section 7.4 Further Indemnification.In clarification and extension of the provisions of the other sections of this Article VII, and not in substitution therefor, the Town agrees to and does hereby indemnify and hold the MPC and the Trustee,their directors, officers, agents and employees harmless for, from and against any and all claims, expenses, liens, judgments, liability or loss whatever, including reasonable legal fees and expenses relating to or in any way arising out of (i) this Agreement, the Trust Indenture, security agreements, financing statements, supplements, amendments or additions thereto or the enforcement of any of the terms thereof; (ii) the Bonds; (iii) the issuance and sale of the Bonds or the transactions contemplated in any of the aforementioned acts, agreements or documents; and (iv) malfeasance or nonfeasance in office of any officer, director, agent or employee of the MPC or the Trustee not otherwise included within any of the foregoing; provided, however, that such indemnity shall not extend to any actions of the MPC or the Trustee deliberately taken by it over the objections of the Town. The MPC or the Trustee, as applicable, shall give notice to the Town of any event or condition which requires indemnification by the Town hereunder, or any allegation of such event or condition, promptly upon obtaining knowledge thereof, and, to the extent that the Town makes or provides for payment to the satisfaction of the MPC or the Trustee pursuant to the indemnity provisions hereof, the Town shall be subrogated to the rights of the MPC or the Trustee with respect to such event or condition and shall have the right to determine the settlement of claims thereon, it being agreed that, except to the foregoing extent, the MPC or the Trustee shall have the right to determine such settlement. The Town shall pay all amounts due hereunder promptly upon notice thereof from the MPC or the Trustee. In case any action, suit or proceeding is brought against the MPC or the Trustee by reason of any act or condition which requires indemnification by the Town hereunder, the MPC or the Trustee shall notify the Town promptly of such action, suit or proceeding, and the Town may (and will upon the request of the MPC or Trustee), at the Town's expense, resist and defend such action, suit or proceeding, or cause the same to be resisted and defended, by counsel for the insurer of the liability or by counsel designated by the Town and approved by the MPC or the Trustee. If the MPC or the Trustee desires to participate in the defense of such action, suit or proceeding through its own counsel, it may do so at its own expense. Section 7.5 Survival.The terms of this Article VII shall survive the resignation or removal of the Trustee pursuant to the Indenture, or the discharge or termination of this Agreement or the Trust Indenture. KMM:kmm 2367215.2 4/30/2015 10 ARTICLE VIII CONDEMNATION Section 8.1 Proceeds to the MPC or Trustee.In the event of the taking or condemnation of the Prior Project, in whole or in part, by any authority through the exercise of the power of eminent domain, or the sale of any portion of the Prior Project pursuant to threat of condemnation, an y award or payment therefor shall be paid to the MPC. The MPC and the Town hereby assign all their right, title and interest in and to such award to the Trustee if any of the Bonds remain outstanding and unprovided for, subject to the terms of the Trust Indenture. Section 8.2 New Improvements.Notwithstanding Section 8.1 above, if the Town desires to construct new improvements of the same use and purpose as those condemned, then the condemnation proceeds may be used therefor; provided, however, that there shall be no abatement of the installment payments accruing hereunder as long as any of the Bonds remain outstanding and not provided for. Section 8.3 Satisfaction of Bond Indebtedness.If the amount of any such award is insufficient to pay and satisfy the remaining Bond indebtedness, plus the Trustee's, Bond Registrar's and Paying Agent's fees, expenses and indemnities after taking into account the anticipated profits on investments made and to be made by the Trustee, then the Town shall continue to make such payments as the MPC, the Town and the Trustee shall agree upon for the purpose of satisfying all requirements of the Trust Indenture. If such award or awards are sufficient to meet the Trust Indenture requirements as they shall become due, then the Town shall be relieved of any further installment payments made pursuant to this Agreement. ARTICLE IX ASSIGNMENTS, LEASING AND MORTGAGING Section 9.1 Restrictions on the Town.The Town may sublease or rent the Prior Project, or any portion thereof, without the consent of the MPC; provided, however, that notwithstanding any such leasing or renting, the Town shall nevertheless remain liable for the payments provided herein and for the performance of the other obligations of the Town hereunder. Section 9.2 Assignment to the Trustee.All rights of the MPC to receive the Town's payments pursuant to Section 2.2 are to be assigned and pledged to the Trustee as security for the Bonds, but subject to the Town's rights in accordance with this Agreement. The rights of the Trustee or any party or parties on behalf of whom the Trustee is acting shall not be subject to any defense, setoff, counterclaim or recoupment whatsoever, whether arising out of an y breach of any obligation of the MPC hereunder, or by reason of an y other indebtedness or liability at any time owing by the MPC to the Town. ARTICLE X DEFAULT BY THE TOWN Section 10.1 Remedies Upon Event of Default.Upon the nonpayment of the whole or any part of the aforesaid installment payments at the time when the same is to be paid as herein KMM:kmm 2367215.2 4/30/2015 11 provided, or upon violation by the Town of any other covenant or provision of this Agreement (together an "Event of Default"), and if such Event of Default has not been cured (i) in the case of nonpayment of installment payments, within five (5) days; and (ii) in the case of the breach of any other covenant or provision of this Agreement, within fifteen (15) days, after notice in writing from the MPC specifying such Event of Default, then the MPC may bring an action for the recovery of any of the installment payments due or accruing, or for damages for the breach of said Agreement. Section 10.2 Appointment of Receiver.Upon bringing suit to collect any installment payment in default, the MPC may request foreclosure of the pledges and liens set forth in Article IV of this Agreement, in which event the MPC, as a matter of right, without notice and without providing indemnity to the Town or anyone claiming in accordance with the Town, may have a receiver appointed of all the Excise Taxes which are so pledged for the payment of the installment payments, with such powers as the court making such appointment shall confer; and the Town does hereby irrevocably consent to such appointment. Section 10.3 Recovery of Costs and Attorneys'Fees.In any such suit to enforce the terms of this Agreement, the MPC (and the Trustee, if a party) shall recover its costs therein, as well as reasonable attorneys' fees, as the court shall approve. ARTICLE XI DEFAULT BY THE MPC Section 11.1 Remedies of the Town.The MPC shall in no event be in default in the performance of any of its obligations hereunder unless and until the MPC shall have failed to perform such obligations within thirty (30) days, or such additional time as is reasonably required to correct any such default, after notice by the Town to the MPC and to the Trustee properly specifying wherein the MPC has failed to perform any such obligation. The Town agrees that, so long as any Bonds are outstanding, the Town shall have no right to abate or offset the installment payments to be made by it hereunder as a result of a default by the MPC. In the event of default by the MPC, the MPC agrees that specific performance may be had and the Town shall not be limited to a remedy for damages. KMM:kmm 2367215.2 4/30/2015 12 ARTICLE XII REMEDIES Section 12.1 Accumulation of Remedies.Each right, power and remedy of the MPC or the Town provided for in this Agreement shall be cumulative and concurrent and shall be in addition to every other right, power or remedy provided for in this Agreement, or, unless prohibited by the terms hereof, now or hereafter existing at law or in equity or by statute or otherwise, to be enforced; and the exercise or beginning of the exercise by the MPC or the Town of an y one or more of the rights, powers or remedies provided for in this Agreement shall not preclude the simultaneous or later exercise by the MPC or the Town of any or all of such other rights, powers or remedies provided for in this Agreement. Section 12.2 Nonwaiver.The failure to insist upon a strict performance of any of the covenants or agreements herein set forth shall not be considered or taken as a waiver or relinquishment for the future of the MPC's or the Town's rights to insist upon a strict compliance by the Town or the MPC with all the covenants and conditions hereof. ARTICLE XIII ESTOPPEL CERTIFICATE Section 13.1 Certificate by the Town.The Town agrees at any time and from time to time, upon not less than ten (10) days'prior request by the MPC or Trustee, to execute, acknowledge and deliver to the MPC and Trustee a statement in writing certifying that this Agreement is unmodified and in full force and effect (or if the Agreement has been modified, that the Agreement is in full force and effect except as modified, and stating the modification), that the Town is in compliance with its terms, and the dates to which the installment payments and additional amounts have been paid in advance, if any. ARTICLE XIV NO ABATEMENT OF PAYMENTS Section 14.1 Nonabatement until Bonds Paid. Except as in this Agreement expressly provided, this Agreement shall not terminate or be affected in an y manner by reason of the condemnation, destruction or damage, in whole or in part of, the Prior Project, and except as is expressly provided in this Agreement, the installment payments, as well as additional installment payments payable hereunder, shall be paid by the Town in accordance with the terms, covenants and conditions of this Agreement without abatement, diminution or reduction. KMM:kmm 2367215.2 4/30/2015 13 ARTICLE XV REFINANCING; REFUNDING, REDEMPTION OR PURCHASE OF BONDS; ADDITIONAL BONDS Section 15.1 Redemption or Refunding.Upon notice to the MPC, the Town may request that the MPC refinance the indebtedness evidenced by the Bonds by refunding or redeeming the Bonds then outstanding, subject to the provisions of the Trust Indenture, and issuing new bonds or other obligations. The MPC will use its best efforts to refinance the indebtedness evidenced by the Bonds in response to such request. Section 15.2 Supplemental Agreement.Prior to the issuance of any such new bonds or other obligations for the purpose of refinancing its indebtedness, the MPC and the Town shall enter into a written supplement to this Agreement increasing or decreasing, as the case may be, the installment payments to be paid hereunder by an amount at least sufficient to enable the MPC to fully pay the principal and interest, when due, on such new bonds or other obligations and all other usual and ordinary costs and expenses relating thereto, and such supplement to this Agreement shall be recorded in the office of the County Recorder of Maricopa County, Arizona. Section 15.3 Purchasing or Redeeming Bonds Prior to Maturity.The Town shall have the right to pay installment payments in advance and may specify that they be placed in the Bond Fund created pursuant to the Trust Indenture. At the Town's request, the MPC shall cause the amount of money contained in the Bond Fund from time to time to be used on any redemption date authorized in the Trust Indenture to retire all or any portion of the outstanding Bonds pursuant to the provisions of the Trust Indenture; or if, before Bonds are callable, they may be obtained in the open market at a cost equal to or below par, or, after Bonds are callable, they may be so obtained at a price below the cost of redemption, then, upon the Town's request, the MPC shall cause money contained in the Bond Fund to be used to purchase Bonds in the open market for the purpose of cancellation. At such time or times as Bonds are redeemed or purchased pursuant hereto, the installment payments to be paid by the Town in accordance with Section 2.2 hereof shall be adjusted in such manner as to provide for the debt service on the remaining Bonds. Section 15.4 Release of Trust Indenture.Upon payment or provision for payment of all Bonds, by means of refunding, redemption and/or purchase pursuant to the provisions hereof, and upon payment of any remaining administrative costs and expenses or other amounts due hereunder or pursuant to the Trust Indenture, the MPC shall cause the Trustee to release the lien of the Trust Indenture on the Town's payments pursuant to this Agreement, and both this Agreement and the Trust Indenture shall terminate. Section 15.5 Providing for Installment Payment.Town may provide for the payment of an y installment payment in any one or more of the following ways: (a)by paying such installment payment as provided herein as and when the same becomes due and payable at its scheduled due date pursuant to Section 2.2 hereof or on a date on which it can be prepaid; KMM:kmm 2367215.2 4/30/2015 14 (b)by depositing with a Depository Trustee (as defined below), in trust for such purposes,money which, together with the amounts then on deposit with Trustee and available for such installment payment is fully sufficient to make, or cause to be made, such installment payment at its scheduled due date or on a date on which it can be prepaid; or (c)by depositing with a Depository Trustee, in trust for such purpose, any Government Obligations which are noncallable, in such amount as shall be certified to MPC and Town, by a national firm of certified public accountants acceptable to both MPC and Town, as being fully sufficient, together with the interest to accrue thereon and moneys then on deposit with MPC and available for such installment payment, to make, or cause to be made, such installment payment at its scheduled due date or on a date on which it can be prepaid. A Depository Trustee shall be any bank or trust company with a combined capital and surplus of at least Fifty Million Dollars ($50,000,000) and subject to supervision or examination by federal or State of Arizona authority who holds money and securities in trust for the purposes set forth in subparagraphs (b) or (c) of this Section 15.5 (a "Depository Trustee"). ARTICLE XVI REPRESENTATIONS AND WARRANTIES OF THE MPC Section 16.1 No Amendments or Additional Indebtedness.The MPC represents and warrants that it will not amend its Articles of Incorporation or enter into any indenture or supplemental indenture or issue any notes, certificates of indebtedness or bonds, other than those provided for in the Trust Indenture or this Agreement, or incur any indebtedness other than for routine expenses without obtaining the prior written consent of the Town. Section 16.2 Application of Payments.All sums of money payable hereunder by the Town to the MPC, except as herein expressly provided, shall be paid to the Trustee so long as any indebtedness evidenced by the Bonds is outstanding and unpaid, and the MPC shall cause the Trustee to apply such payments in accordance with the provisions of the Trust Indenture. ARTICLE XVII TAX COVENANTS; REPRESENTATIONS OF TOWN Section 17.1 Tax Covenants.In consideration of the acceptance and execution of this Agreement by MPC and Town and the purchase of the Bonds by the Owners thereof, from time to time, and in consideration of retaining the exclusion of interest income from gross income on the Bonds for federal income tax purposes, MPC and Town covenant with the Owners of the Bonds from time to time to neither take nor fail to take any action, which action or failure to act is within its power and authority and would result in interest income on the Bonds to become subject to inclusion in gross income for federal income tax purposes under either laws existing on the date of execution of this Agreement or such laws as they may be modified or amended or tax laws later adopted. MPC and Town agree that it will comply with such requirement(s) and will take any such action(s) as are necessary to prevent interest income on the Bonds from becoming subject to inclusion in gross income for federal income tax purposes. Such requirements may KMM:kmm 2367215.2 4/30/2015 15 include but are not limited to making further specific covenants;making truthful certifications and representations and giving necessary assurances; complying with all representations, covenants and assurances contained in certificates or agreements to be prepared by bond counsel; paying to the United States of America any required amounts representing rebates of arbitrage profits relating to this Agreement; filing forms, statements and supporting documents as may be required under the federal tax laws; limiting the term of and yi eld on investments made with moneys relating to this Agreement; and limiting the use of the proceeds of this Agreement and propert y financed thereby. In consideration for the issuance of the Bonds the interest on which is tax-exempt, Town agrees to be the ultimate obligor for the payment of arbitrage rebate should the amounts held in the Rebate Fund be insufficient to make all payments required by Section 148(f)(3) of the Internal Revenue Code of 1986, as amended, or any succeeding sections. Town shall cause to be prepared each completed Form 8038-T as may be required pursuant to the Trust Indenture and direct Trustee to file it and remit such payment all as may be necessary to comply with Section 148(f)(3), as amended, or any succeeding sections as may be applicable. Section 17.2 Representations, Warranties and Covenants. (a)Except with respect to its power and authority to enter into this Agreement and to perform its covenants hereunder, MPC has made and makes no representation or warrant y, express or implied, and assumes no obligation with respect to the title, merchantability, condition, quality or fitness of the project for any particular purpose or the conformity of the Prior Project to any plans, specifications, construction contract, purchase order, model or sample, or as to its design, construction, delivery, installation, construction oversight and operation or its suitability for use by Town after completion of construction. All such risks shall be borne by Town without in any way excusing Town from its obligations under this Agreement and MPC shall not be liable to Town for any damages on account of such risks. Except with respect to any acts by MPC which are not undertaken at Town's request or with Town's prior approval, Town agrees to waive all claims against MPC growing out of the acquisition and construction of the Prior Project. MPC shall have no liability to Town for any failure of any acquisition and construction contractor to perform any construction contract in any respect. MPC shall have no obligation to obtain or insure compliance with any required Arizona Department of Environmental Quality permits or approval procedures. In the event of any defect in any item of the Prior Project or other claim with respect to the Prior Project, Town understands and agrees that Town's recourse will be against the contractor, manufacturer or supplier of such Prior Project and, where applicable, the person selling the property to MPC, and not against MPC. For such purpose, MPC hereby assigns and transfers to Town the right, title and interest of MPC in and to all representations, warranties and service agreements relating to the Prior Project made or entered into by MPC and by any contractor, manufacturers or suppliers of the Prior Project. MPC further designates Town as its attorney-in-fact granting to Town the right to initiate and take all actions necessary to enforce any and all construction contracts and all such warranties and service agreements. (b)Town represents, warrants and covenants that it has the power to enter into this Agreement, that this Agreement is a lawful, valid and binding obligation of Town, enforceable against Town in accordance with its terms, and has been duly authorized, executed and delivered KMM:kmm 2367215.2 4/30/2015 16 by Town; that all required procedures for execution and performance of this Agreement, including publication of notice, public hearing or competitive bidding, if applicable, have been or will be complied with in a timely manner; that all installment payments hereunder will be paid when due out of funds which are legally available for such purposes. Section 17.3 Qualified Tax-Exempt Obligations.The Town hereby designates the Bonds as "qualified tax-exempt obligations" pursuant to Section 265(b)(3) of the Code. ARTICLE XVIII GENERAL Section 18.1 Notices; Mailing Addresses. All notices, consents or other communications required or permitted hereunder shall be deemed sufficient if given in writing addressed and mailed by registered mail, or delivered to the party for which the same is intended, as follows: To the MPC:Town of Fountain Hills, Arizona Municipal Property Corporation c/o Town Clerk 16705 E. Avenue of the Fountains Fountain Hills, Arizona 85268 To the Town:Town of Fountain Hills, Arizona, Arizona 16705 E. Avenue of the Fountains Fountain Hills, Arizona 85268 To the Trustee:__________________ With a copy to Bond Counsel:Gust Rosenfeld P.L.C. One East Washington Street, Suite 1600 Phoenix, Arizona 85004 Attn: Timothy A. Stratton or to such other address as such party may hereafter designate by notice in writing addressed and mailed or delivered to the other party hereto. Section 18.2 Waiver.No covenant or obligation herein to be performed by Town may be waived except by the written consent of MPC and a waiver of any such covenant or obligation or a forbearance to invoke any remedy on any occasion shall not constitute or be treated as a waiver of such covenant or obligation as to any other occasion and shall not preclude MPC from invoking such remedy at any later time prior to Town's cure of the condition giving rise to such remedy. Section 18.3 Headings are for Reference Only. The headings in this Agreement are inserted for reference only, and shall not define or limit the provisions hereof. KMM:kmm 2367215.2 4/30/2015 17 Section 18.4 Execution in Counterparts.This Agreement may be executed in several counterparts, each of which shall be an original, but all of which shall constitute but one instrument. Section 18.5 Provisions are Severable.Any term or provision of this Agreement found to be prohibited by law or unenforceable or which would cause this Agreement to be invalid, prohibited by law or unenforceable shall be ineffective to the extent of such prohibition or unenforceability without, to the extent reasonably possible, causing the remainder of this Agreement to be invalid, prohibited by law or unenforceable. Section 18.6 Applicable Law.This Agreement shall be governed exclusively by the provisions hereof and by the applicable laws of the State. The venue for any proceedings relating to a controversy arising from the subject matter of this Agreement will be the State courts located in Maricopa County, Arizona. Section 18.7 Covenants as to Conflict of Interest.A.R.S. Section 38-511 provides that Town may, within three ye ars after its execution, cancel an y contract, without penalty or further obligation, if any person significantly involved in initiating, negotiating, securing, drafting or creating the contract on behalf of Town is, at an y time while the contract or any extension of the contract is in effect, an employee or agent of any other party to the contract in any capacity or a consultant to any other party of the contract with respect to the subject matter of the contract. In addition, Town may recoup any fee or commission paid or due to any person significantly involved in initiating, negotiating, securing, drafting or creating the contract on behalf of Town from any other part y to the contract arising as a result of the contract. Section 18.8 E-Verify Requirements. To the extent applicable under A.R.S.Section 41-4401, the MPC and its subcontractors warrant compliance with all federal immigration laws and regulations that relate to their employees and their compliance with the E-verify requirements under A.R.S.Section 23-214(A). The MPC or its subcontractors'breach of the above-mentioned warranty shall be deemed a material breach of this Agreement and may result in the termination of the MPC's services by the Town. The Town retains the legal right to randomly inspect the papers and records of the MPC or its subcontractor employee who work on this Agreement to ensure that the MPC and its subcontractors are complying with the above- mentioned warrant y. The MPC and its subcontractors warrant to keep the papers and records open for random inspection during normal business hours by the Town. The MPC and its subcontractors shall cooperate with the Town's random inspections including granting the Town entry rights onto its propert y to perform the random inspections and waiving their respective rights to keep such papers and records confidential. (Signature Pages to Follow) KMM:kmm 2367215.2 4/30/2015 18 IN WITNESS WHEREOF, the TOWN OF FOUNTAIN HILLS, ARIZONA MUNICIPAL PROPERTY CORPORATION has executed this Agreement by causing its name to be hereto subscribed by its President and the TOWN OF FOUNTAIN HILLS, ARIZONA, has executed this Agreement by causing its name to be hereunto subscribed by its Mayor and attested by its Clerk, all being done as of the day and year first above written. TOWN OF FOUNTAIN HILLS, ARIZONA MUNICIPAL PROPERTY CORPORATION __________________________________________ By: ________________ Its: President State of Arizona ) ) ss. County of Maricopa ) On this ______ day of ________, 2015, before me personally appeared ____________, the President of TOWN OF FOUNTAIN HILLS, ARIZONA MUNICIPAL PROPERTY CORPORATION, an Arizona nonprofit corporation, whose identity was proven to me on the basis of satisfactory evidence to be the person who she claims to be, and acknowledged that she signed the above document on behalf of TOWN OF FOUNTAIN HILLS, ARIZONA MUNICIPAL PROPERTY CORPORATION. I certify under PENALTY OF PERJURY under the laws of the State of Arizona that the foregoing paragraph is true and correct. (Seal and Expiration Date) ______________________________________ Notary Public in and for the State of Arizona KMM:kmm 2367215.2 4/30/2015 19 TOWN OF FOUNTAIN HILLS, ARIZONA, __________________________________________ By: Linda M. Kavanagh Its: Mayor ATTEST ___________________________________ Bevelyn J. Bender Town Clerk State of Arizona ) ) ss. County of Maricopa ) On this ______ day of __________, 2015, before me personally appeared Linda M. Kavanagh, the Mayor of TOWN OF FOUNTAIN HILLS, ARIZONA, an Arizona municipal corporation, whose identity was proven to me on the basis of satisfactory evidence to be the person who he claims to be, and acknowledged that he signed the above document on behalf of TOWN OF FOUNTAIN HILLS, ARIZONA. I certify under PENALTY OF PERJURY under the laws of the State of Arizona that the foregoing paragraph is true and correct. (Seal and Expiration Date) ______________________________________ Notary Public in and for the State of Arizona APPROVED AS TO FORM: GUST ROSENFELD P.L.C. ______________________________ Timothy A. Stratton Bond Counsel KMM:kmm 2367215.2 4/30/2015 A-1 EXHIBIT A Payment Date Principal Interest Total Payment TOTAL TS2:jh2 2368523.1 4/27/2015 ______________________________________________________________________________ ______________________________________________________________________________ TRUST INDENTURE by and between _________________, as Trustee and TOWN OF FOUNTAIN HILLS, ARIZONA MUNICIPAL PROPERTY CORPORATION Dated as of ____________, 2015 ______________________________________________________________________________ ______________________________________________________________________________ TS2:jh2 2368523.1 4/27/2015 i [TABLE OF CONTENTS] ARTICLE I DEFINITIONS Section 1.1. Definitions ........................................................................................................... 4 Section 1.2.Authorization ....................................................................................................... 9 ARTICLE II MUNICIPAL FACILITIES REVENUE REFUNDING BONDS Section 2.1.Authorized Bonds and Amount of Bonds ...........................................................10 Section 2.2.Issuance of Bonds ...............................................................................................10 Section 2.3.Delivery of Bonds ...............................................................................................11 Section 2.4.Issuance and Delivery of Additional Parity Bonds .............................................11 Section 2.5.Form ....................................................................................................................12 Section 2.6.Authentication and Execution.............................................................................12 Section 2.7.Book-Entry-Only System ...................................................................................13 Section 2.8.Transfer and Exchange .......................................................................................14 Section 2.9.Bonds Mutilated, Lost, Destroyed or Stolen ......................................................15 Section 2.10.Payment ..............................................................................................................15 Section 2.11. Execution of Documents and Proof of Ownership .............................................16 Section 2.12.Bond Register .....................................................................................................17 Section 2.13.Special Agreement with Owners ........................................................................17 ARTICLE III CREATION OF FUNDS APPLICATION OF PROCEEDS RECEIVED BY TRUSTEE Section 3.1.Creation of Funds to be Held by Trustee ............................................................18 Section 3.2.Installment Payments; Credit of Excess Money .................................................18 Section 3.3.Disposition of Bond Proceeds and Other Moneys..............................................18 Section 3.4.Payment of Principal and Interest .......................................................................18 Section 3.5.Payment Fund .....................................................................................................19 ARTICLE IV REDEMPTION OF BONDS Section 4.1.Terms of Redemption .........................................................................................19 ARTICLE V REBATE FUND AND BOND FUND Section 5.1.Rebate Fund ........................................................................................................21 Section 5.2.Surplus ................................................................................................................23 TS2:jh2 2368523.1 4/27/2015 ii Section 5.3. Separate Funds and Accounts.............................................................................23 ARTICLE VI PLEDGE AND LIEN Section 6.1.Pledge .................................................................................................................24 Section 6.2.Protection of Lien ...............................................................................................24 Section 6.3.Additional Parity Bonds .....................................................................................24 ARTICLE VII ADDITIONAL INDEBTEDNESS Section 7.1.Additional Indebtedness Limit ...........................................................................25 Section 7.2.Permitted Additional Indebtedness .....................................................................25 ARTICLE VIII MONEYS IN FUNDS; INVESTMENT Section 8.1.Held in Trust .......................................................................................................25 Section 8.2.Investments Authorized ......................................................................................25 Section 8.3.Accounting..........................................................................................................26 Section 8.4.Allocation of Earnings ........................................................................................26 Section 8.5.Valuation and Disposition of Investments..........................................................26 Section 8.6.Arbitrage Covenant .............................................................................................26 Section 8.7. Tax Covenants for the Bonds .............................................................................26 Section 8.8.Qualified Tax-Exempt Obligations.....................................................................27 ARTICLE IX THE TRUSTEE Section 9.1.Duties of Trustee.................................................................................................27 Section 9.2.Actions of Trustee; No Representations.............................................................28 Section 9.3.Trustee Not Accountable for Actions of MPC ...................................................29 Section 9.4.Trustee May Acquire Bonds ...............................................................................29 Section 9.5.Trustee Compensation ........................................................................................29 Section 9.6.Qualifications of Trustee ....................................................................................30 Section 9.7.Resignation or Removal of Trustee; Appointment of Successor Trustee...........30 Section 9.8.Concerning Any Successor Trustee ....................................................................31 Section 9.9.Merger of Trustee ...............................................................................................31 ARTICLE X SUPPLEMENTAL TRUST INDENTURES Section 10.1. Supplemental Agreements Not Requiring Consent of Owners ..........................32 Section 10.2. Supplemental Agreements Requiring Consent of Owners ................................33 TS2:jh2 2368523.1 4/27/2015 iii Section 10.3. Trust Indenture Deemed Amended .....................................................................34 Section 10.4.Approval of Counsel ...........................................................................................34 Section 10.5.New Bonds with Modifications ..........................................................................34 ARTICLE XI COVENANTS, NOTICES Section 11.1.Payment of Principal and Interest .......................................................................34 Section 11.2.No Accumulation of Interest ..............................................................................34 Section 11.3.Maintaining Office for Payment of Bonds .........................................................35 Section 11.4. Sufficiency of Installment Payments ..................................................................35 Section 11.5. Record and Account Books Available ................................................................35 Section 11.6.Payment of Expenses and Debt Service .............................................................35 Section 11.7.Covenant of Good Title ......................................................................................35 Section 11.8.Validity of Transactions .....................................................................................35 Section 11.9.Trustee Consent Required to Modify Documents ..............................................35 Section 11.10. Assurance of Compliance; Good Faith Contest..................................................36 Section 11.11. Additional Covenants .........................................................................................36 Section 11.12.Notification to the Town of Failure to Make Installment Payments ..................37 Section 11.13.Business Days.....................................................................................................37 ARTICLE XII LIMITATION OF LIABILITY Section 12.1.Limited Liability of the Town ............................................................................37 Section 12.2.No Liability of the Town for Trustee Performance ............................................37 Section 12.3. Indemnification of the Trustee............................................................................38 Section 12.4. Opinion of Independent Counsel ........................................................................39 ARTICLE XIII EVENTS OF DEFAULT AND REMEDIES OF BOND OWNERS Section 13.1. MPC's Rights Held in Trust................................................................................39 Section 13.2.Events of Default ................................................................................................39 Section 13.3. Enforcement of Remedies...................................................................................40 Section 13.4.Application of Amounts Recovered ...................................................................41 Section 13.5.No Waiver of Rights of Trustee or Owners ........................................................41 Section 13.6.No Action by Owners Prior to Demand .............................................................42 ARTICLE XIV DEFEASANCE; UNCLAIMED MONEY; MISCELLANEOUS Section 14.1. Discharge of Indebtedness; Defeasance .............................................................42 TS2:jh2 2368523.1 4/27/2015 iv Section 14.2.Funds for Owners after Defeasance....................................................................43 Section 14.3.Unclaimed Money ..............................................................................................43 Section 14.4.Notices................................................................................................................44 Section 14.5.Covenant as to Conflict of Interest .....................................................................44 Section 14.6.Governing Law ...................................................................................................44 Section 14.7.Binding Effect and Successors ...........................................................................44 Section 14.8. Execution in Counterparts ..................................................................................45 Section 14.9. Destruction of Cancelled Bonds.........................................................................45 Section 14.10.Headings .............................................................................................................45 Section 14.11.Parties Interested Herein .....................................................................................45 Section 14.12.Waiver of Notice.................................................................................................45 Section 14.13.Severability of Invalid Provisions ......................................................................45 Section 14.14. E-Verify Requirements .......................................................................................46 SIGNATURES ...............................................................................................................................47 EXHIBIT A - FORM OF BOND EXHIBIT B - PAYMENT REQUEST FORM –COSTS OF ISSUANCE ACCOUNT TS2:jh2 2368523.1 4/27/2015 1 TRUST INDENTURE THIS TRUST INDENTURE, made and entered into as of _____________1, 2015 (this "Trust Indenture"), by and between _____________, a national banking association, as trustee (the "Trustee"), and THE TOWN OF FOUNTAIN HILLS, ARIZONA MUNICIPAL PROPERTY CORPORATION,an Arizona non-profit corporation organized under the laws of the State of Arizona (the "MPC"); W I T N E S S E T H: WHEREAS, the MPC was created to assist the Town of Fountain Hills, Arizona (the "Town") in financing, refinancing, acquiring, constructing, furnishing and equipping certain public real and personal property at no profit to itself or to any person except the Town; and WHEREAS, the MPC previously issued its issued its Municipal Facilities Revenue Refunding Bonds, Series 2005 (the "Prior Bonds") for the purpose of refunding certain maturities of the Town's outstanding municipal facilities revenue bonds; and WHEREAS, it has been determined that it would be to the advantage and benefit of the Town and its citizens to provide for the refunding and, as applicable, redemption of all of the Prior Bonds on or prior to their respective maturity dates (the "Bonds Being Refunded"); and WHEREAS,in order redeem and refund the Bonds Being Refunded,the MPC proposes to issue and sell its Municipal Facilities Revenue Refunding Bonds, Series 2015 (the "Bonds"), in an original principal amount of $_________, and apply the proceeds thereof, together with any payments by the Town to the trustee for the Prior Bonds owed under the Prior Agreements (as hereinafter defined),to refund the Bonds Being Refunded and pay the costs of issuance of the Bonds Being Refunded; and WHEREAS, the MPC will refund the Bonds Being Refunded pursuant to the terms of an Agreement, dated as of __________1, 2015 (the "Agreement"),between the MPC and the Town and will assign and pledge the installment payments to be made by the Town pursuant thereto to the Trustee as security for the payment of the Bonds; and WHEREAS, in connection with the issuance of the Prior Bonds, the MPC and the Town have entered into the following agreements (collectively referred to herein as the "Prior Agreements"),pursuant to which the MPC has acquired certain land and/or acquired, constructed or equipped certain municipal facilities with the proceeds from the sale of the Prior Bonds and transferred the same to the Town (collectively, the "Prior Project"): Lease-Purchase Agreement dated as of July 1, 2000, by and between the MPC and the Town; First Amendment to the Lease-Purchase Agreement dated as of July 1, 2001, by and between the MPC and the Town; TS2:jh2 2368523.1 4/27/2015 2 Second Amendment to Lease-Purchase Agreement dated as of December 1, 2004, by and between the MPC and the Town; Refunding Amendment to Lease-Purchase Agreement dated as of June 1, 2005, by and between the MPC and Town;and WHEREAS, the MPC and the Town will enter into an Agreement to provide for the issuance of the Bonds; and WHEREAS, the MPC has not made and does not intend to make any profit by reason of any business or venture in which it may engage or by reason of the construction, acquisition or sale of an y real propert y and improvements,and no part of the MPC's net earnings, if any, will ever inure to the benefit of any person, firm, or corporation except the Town; and WHEREAS, the MPC is authorized by law and deems it necessary to borrow money for the purpose of refunding the Bonds Being Refunded, and to carry out its obligations in accordance with the terms of the Agreement, and to that end has duly authorized and directed the issuance of the Bonds, and to secure the payment of the original principal amount and any interest that accrues thereon and the performance and observance of the covenants and conditions herein contained, the MPC has authorized the execution and delivery of this Trust Indenture, NOW, THEREFORE, THIS TRUST INDENTURE FURTHER WITNESSETH: That, in order to secure the payment of the principal of, premium, if any,and interest on all Bonds at any time issued and outstanding pursuant to this Trust Indenture according to their tenor and effect, and to secure the performance and observance of all the covenants and conditions herein contained, and to declare the terms and conditions upon which the Bonds are or shall be issued, received and held, in consideration of the premises and of the purchase and acceptance of the Bonds by the Owners (as defined herein) thereof, and in consideration of the acceptance by the Trustee of the trusts hereby created, and for other good and valuable considerations, receipt whereof is hereby acknowledged, the MPC does hereby assign,transfer in trust, pledge, and set over unto the Trustee, and to its successors in the trusts hereby created, subject to the rights of the Town, its successors and assigns, pursuant to the Agreement, all and singular the property of the MPC hereinafter described (said property being herein sometimes referred to as the "Trust Estate"): 1.All right, title and interest of the MPC in and to the MPC's right to receive the Installment Payments and all other payments pursuant to the Agreement, except payments to indemnify the MPC for certain expenses as set forth in the Agreement; provided that the MPC shall remain liable to observe and perform all of the conditions and covenants in the Agreement provided to be observed and performed by it; 2.All right, title and interest of the MPC in and to amounts on deposit from time to time in the funds and accounts created pursuant hereto, subject to the provisions of this Trust Indenture permitting the application thereof for the purposes and on the terms and conditions set TS2:jh2 2368523.1 4/27/2015 3 forth herein; and 3.All property which is by the express provisions of this Trust Indenture required to be subject to the lien hereof and any additional property that may, from time to time hereafter, by delivery or by writing of any kind, be subjected to the lien hereof by the MPC or by anyone in its behalf; and the Trustee is hereby authorized to receive the same at any time as additional security hereunder; provided, however, that in no event shall the Trustee receive as additional security hereunder any fee title, leasehold or beneficial interest or other rights in the Prior Project. TO HAVE AND TO HOLD, all and singular, the Trust Estate, including all additional propert y which by the terms hereof has or may become subject to the encumbrance of this Trust Indenture, unto the Trustee and its successors and assigns, forever, subject, however, to the rights of the Town, its successors and assigns, pursuant to the Agreement. IN TRUST, however, for the equal and proportionate benefit and securit y of the Owners from time to time of the Bonds authenticated and delivered hereunder and issued by the MPC and outstanding, without preference, priorit y, or distinction as to lien or otherwise of any one of said Bonds over any other or others of said Bonds, to the end that each Owner of such Bonds has the same rights, privileges and lien pursuant to and by virtue of this Trust Indenture; and conditioned, however, that if the MPC shall cause to be paid fully and promptly when due all indebtedness, liabilities, obligations and sums at any time secured hereby, including interest and attorneys'fees, and shall promptly, faithfully, and strictly keep, perform, and observe or cause to be kept, performed, and observed all of its covenants, warranties, and agreements contained herein, then and in such event, this Trust Indenture shall be and become void and of no further force and effect; otherwise, the same shall remain in full force and effect, and upon the trust and subject to the covenants and conditions hereafter set forth. TS2:jh2 2368523.1 4/27/2015 4 ARTICLE I DEFINITIONS Section 1.1.Definitions. Unless the context otherwise requires, the terms defined in this Section 1.1 shall, for all purposes of this Trust Indenture, have the meanings herein specified. "Agreement"means the Agreement, dated as of _________ 1, 2015, by and between the Town and the MPC, together with any duly authorized and executed amendment thereto. "Additional Parity Bonds"mean any obligations issued on a parity herewith with respect to Excise Taxes pursuant to the provisions of Section 6.3 hereof. "Authorized Denominations"means $100,000 and integral multiples of $5,000 in excess thereof in the case of Bonds owned by SMMPs or Qualified Investors; provided, however, that "Authorized Denominations" shall mean $5,000 and integral multiples thereof if any maturity is in an amount less than $100,000. "Authorized Representative"means the Town Manager, the Town Finance Director or any other person designated by the MPC for such purpose and for purposes of executing the requisition forms to pay the Issuance Costs of the Bonds attached as Exhibit B hereto, the Town Manager or Finance Director or any other person designated by the MPC for such purpose. "Bond Fund"means the fund by that name established and held by the Trustee pursuant to Article III hereof. "Bond Register"means the register of ownership of the Bonds maintained by the Trustee. "Bonds"means the Town of Fountain Hills, Arizona Municipal Property Corporation Municipal Facilities Revenue Refunding Bonds, Series 2015, in the aggregate principal amount of $___________. "Book-Entry-Only System"means, as to the Bonds, to the extent administered under book-entry system and not registered in the name of the Purchaser, a system under which (i)physical Bond certificates in fully registered form registered in the name of the Depository or its nominee as Owner, with the physical Bond certificates held in the custody of, or on behalf of, the Depository, and (ii)the ownership of beneficial interests in Bonds and principal of, premium, if any, and interest thereon may be transferred only through a book entry made by others than the Town or the Trustee. The records maintained by entities other than the Town or the Trustee constitute the written record that identifies the owners, and records the transfer, of beneficial interests in those Bonds and principal of, premium, if any, and interest thereon. TS2:jh2 2368523.1 4/27/2015 5 "Business Day"means a day of the year other than (a) a Saturday or a Sunday, (b)a day on which banks in the state in which the Designated Office of the Trustee or Paying Agent, are required or are authorized by law or other governmental action to be closed and (c)a day on which the New York Stock Exchange is closed. "Code"means the Internal Revenue Code of 1986, as amended. References to the Code and Sections thereof include applicable regulations and temporary regulations thereunder and any successor provisions to those Sections, regulations or temporary regulations and any applicable regulations or temporary regulations issued pursuant to the Internal Revenue Code of 1954. "Costs of Issuance Account"means the account of that name created in the Payment Fund pursuant to Article III hereof. "Default"means any event that with the lapse of time or the giving of notice, or both, would be an Event of Default. "Depository"means a securities depository designated by the MPC to hold the Bonds in the Book-Entry-Only System. If the Bonds are registered in book-entry form, the Depository shall be the Depository of Trust Company, New York, New York. "Designated Office"of the Trustee means the office designated as such by the Trustee in writing to the MPC and Town. "Electronically"or "Electronic"notice means notice transmitted through a time- sharing terminal, computer network or facsimile machine, if operative as between any two parties, or if not operative, by telephone (promptly confirmed in writing). "Event of Default"means an event of default under the Agreement, as defined in Section 10.1 thereof. "Excise Taxes"mean all unrestricted fines and forfeitures, license and permit fees, transaction privilege taxes, other transaction privilege, excise and business taxes, franchise fees and taxes, lease and rental payments and recreation and community program fees which the Town now or in the future imposes and collects, and all State shared sales taxes and all State shared income taxes collected and allocated or apportioned, now or hereafter,to the Town by the State of Arizona or any political subdivision thereof, or by any other governmental unit or agency and which are not required by State of Arizona law, rule or regulation to be expended for other purposes, such as motor vehicle fuel tax. "Fiscal Year"means the period commencing each July 1 and ending June 30 of the succeeding calendar year, unless otherwise determined and designated by the Town, and the Excise Taxes shall be accounted for on that basis. TS2:jh2 2368523.1 4/27/2015 6 "Government Obligations"means direct general obligations of, or obligations the timely payment of principal and interest on which are fully and unconditionally guaranteed by, the United States of America (including, without limitation, the interest portion of obligations issued by the Resolution Funding Corporation in book entry form and stripped by request to the Federal Reserve Bank of New York), including Government Obligations which have been stripped of their unmatured interest coupons and interest coupons stripped from Government Obligations, provided any stripped Government Obligations have been stripped by the applicable U.S. Governmental Agency. "Independent Counsel"means an attorney duly admitted to the practice of law before the highest court of the state in which such attorney maintains an office and who is not an employee of the MPC, Town or the Trustee. "Interest Payment Date"means each January 1 and July 1,commencing [January 1, 2016,]while any Bonds are Outstanding provided that, if any such day is not a Business Day, any payment due on such date may be made on the next Business Day, without additional interest and with the same force and effect as if made on the specified date for such payment. "Installment Payments"means all installment payments required to be paid by the Town on the dates pursuant to Article II of the Agreement and as set forth in Exhibit A to the Agreement. "Issuance Costs"means all items of expense directly or indirectly payable by or reimbursable to the Town or the Trustee relating to the execution, sale and delivery of the Agreement, this Trust Indenture and the Bonds, including but not limited to filing and recording costs, settlement costs, printing costs, reproduction and binding costs, initial fees and prepayment of first year administrative fees and charges of the Trustee, financing discounts, legal fees and charges, insurance fees and charges, financial and other professional consultant fees, costs of rating agencies for credit ratings, fees for execution, transportation and safekeeping of the Bonds and charges and fees in connection with the foregoing. "Market Value"means the indicated bid value of the investment or investments to be valued as shown in The Wall Street Journal or any publication having general acceptance as a source of valuation of the same or similar types of securities or any securities pricing service available to or used by the Trustee and generally accepted as a source of valuation. "MPC"means the Town of Fountain Hills, Arizona Municipal Property Corporation, an Arizona non-profit corporation. "Original Purchaser"means __________________, as original purchaser of the Bonds. "Outstanding", when used (a) with respect to Parity Bonds, refers to Parity Bonds issued in accordance with this Trust Indenture, excluding: (i) Parity Bonds which have been exchanged or replaced, or delivered to the trustee therefor for credit against a sinking fund TS2:jh2 2368523.1 4/27/2015 7 installment; (ii)Parity Bonds which have been paid; (iii) Parity Bonds which have become due and for the payment of which moneys have been duly provided to the trustee therefor; and (iv) Parity Bonds for which there have been irrevocably set aside with a trustee therefor sufficient moneys or Defeasance Obligations bearing interest at such rates and with such maturities as will provide sufficient funds to pay the principal of, premium, if any, and interest on such Parity Bonds as provided in the proceedings under which such Parity Bonds were issued, provided, however, that if any such Parity Bonds are to be redeemed prior to maturity, the MPC and Town shall have taken all action necessary to redeem such Parity Bonds and notice of such redemption shall have been duly mailed in accordance with the proceedings under which such Parity Bonds were issued or irrevocable instructions so to mail shall have been given to the trustee therefor; and (b) when used with respect to Bonds, also refers to Bonds issued under this Trust Indenture. "Owner"or any similar term, when used with respect to a Bond means the person in whose name such Bond shall be registered. "Parity Bonds"means, collectively, the Bonds and any Additional Parity Bonds that are Outstanding. "Paying Agent"means the Trustee. "Payment Fund"means the fund by that name held by the Trustee pursuant to Article III hereof and consisting of the Costs of Issuance Account. "Permitted Investments"means investments in any one or more of the following: (a)Direct general obligations of, or obligations unconditionally guaranteed by, the United States of America; (b)Bonds, debentures, notes or other evidences of indebtedness issued by any of the following: Federal Home Loan Banks; Federal Home Loan Mortgage Corporation (including participation certificates); Federal Land Banks; Federal Financing Bank; Government National Mortgage Association; Export-Import Bank of the United States; or the Federal Housing Administration; (c)Interest-bearing time or demand deposits, certificates of deposit, repurchase agreements or other similar banking arrangements with any bank, trust company, national banking association or other savings institution (including the Trustee), provided that such deposits, certificates and other arrangements are fully insured or are in a bank, trust compan y, national banking association or other savings institution having one of the two of the highest credit ratings (without regard to numerical or other modifiers) of Moody's Investors Service or Standard & Poor's Ratings Service; (d)Repurchase agreements with any bank, trust company, national banking association or securities dealer (including the Trustee) of favorable reputation, which agreements are at all times secured by obligations described in (a) or (b) or a combination thereof having a TS2:jh2 2368523.1 4/27/2015 8 Market Value at all times at least equal to the face amount of the agreement and possession of which obligation is held or controlled by the Trustee or by a third party, and which mature in not more than thirty (30) days; and (e)Money market funds rated 'AAA'or better by Standard & Poor's Ratings Services or rated 'Aaa'or better by Moody's Investors Service including any such funds for which the Trustee or an affiliate or subsidiary acts as custodian or advisor. "Principal Payment Date"means each July 1, commencing on or after July 1, 2016, while any Bonds are Outstanding provided that, if any such day is not a Business Day, any payment due on such date may be made on the next Business Day, with the same force and effect as if made on the specified date for such payment. "Purchaser"means, initially,the Original Purchaser of the Bonds. "Qualified Investor"means a qualified institutional buyer, as such term is defined in Rule 144A of the Securities Act of 1933, as amended, or an accredited investor (excluding natural persons) as defined in Rule 501 of Regulation D of the United States Securities Exchange Commission, who executes the Certificate of Qualified Investor. "Rebate Amount"means the amount due to the United States under Section 148(f) of the Code with respect to the investment of proceeds of the Bonds. "Rebate Consultant"means an individual or firm acceptable to, and retained by, the Town experienced in the calculation of rebate due to the United States with respect to tax- exempt municipal bonds. "Rebate Fund"means the fund by that name established and held by the Trustee pursuant to Article V hereof. "Record Date"means the close of business of the Trustee on the fifteenth day of the month preceding an Interest Payment Date, unless such date is a Saturday, Sunday or legal holiday of the Trustee, in which event the Record Date shall be the previous Business Day. "Prior Trustee" means Zions First National Bank, the trustee for the 2005 Bonds. "Registrar"means the Trustee. "Responsible Officer"means, when used with respect to the Trustee, the president, any vice president, any assistant vice president, the secretary, any assistant secretary, the treasurer, any assistant treasurer or any other officer of the Trustee within the office of the Trustee set forth in Section 14.4 hereof (the "Corporate Trust Office") (or any successor corporate trust office) customarily performing functions similar to those performed by the persons who at the time shall be such officers, respectively, or to whom any corporate trust matter is referred at the Corporate Trust Office because of such person's knowledge of and TS2:jh2 2368523.1 4/27/2015 9 familiarity with the particular subject and having direct responsibility for the administration of this Trust Indenture. "Sophisticated Municipal Market Professional" or "SMMP"means, such term as defined by the Municipal Securities Rulemaking Board (the "MSRB") and without limiting the definition used by the MSRB,and generally means a corporation, partnership, trust or other institution, other than a natural person, with total assets of at least $100 million invested in municipal securities in the aggregate in its portfolio and/or under management and whom the broker dealer who is involved in the sale of the Bonds or beneficial interest therein has reasonable grounds to believe: (i) has timely access to publicly available material facts pertaining to the Bonds, (ii) is capable of independently evaluating the investment risk and market value of the Bonds, (iii) is making independent decisions about its ownership of the Bonds and (iv) and who executes the Certificate of Sophisticated Municipal Market Professional. "State"means the State of Arizona. "Supplemental Agreement"means any agreement amending or supplementing the terms of this Trust Indenture or providing for the issuance or securing of Additional Parity Bonds. "Town"means the Town of Fountain Hills, Arizona, a municipal corporation and a political subdivision of the State of Arizona. "Trust Estate"means the property of the MPC which is assigned, transferred in trust, pledged and set over unto the Trustee pursuant to this Trust Indenture. "Trust Indenture"means this Trust Indenture, together with any amendments or supplements hereto permitted to be made hereunder. "Trustee"means ______________, or any successor thereto acting as Trustee pursuant to this Trust Indenture. "2005 Bonds"means the $5,330,000 Town of Fountain Hills, Arizona Municipal Property Corporation Municipal Facilities Revenue Refunding Bonds, Series 2005. Words importing persons include firms, associations and corporations, and the singular and plural forms of words shall be deemed interchangeable wherever appropriate. Section 1.2.Authorization. Each of the parties hereby represents and warrants that it has full legal authority and is duly empowered to enter into this Trust Indenture, and has taken all actions necessary to authorize the execution of this Trust Indenture by the officers and persons signing it. TS2:jh2 2368523.1 4/27/2015 10 ARTICLE II MUNICIPAL FACILITIES REVENUE REFUNDING Section 2.1.Authorized Bonds and Amount of Bonds. No Bonds may be issued hereunder except in accordance with this Article. The total authorized principal amount of Bonds which shall be issued under the provisions of this Trust Indenture is $____________. The MPC may issue, sell and deliver one or more series of Additional Bonds for the purposes, upon satisfaction of the conditions and in the manner provided herein. Section 2.2.Issuance of Bonds. It is determined to be necessary to, and the MPC shall, issue, sell and deliver the "Town of Fountain Hills, Arizona Municipal Property Corporation Municipal Facilities Revenue Refunding Bonds, Series 2015" in the aggregate principal amount of $____________. The Bonds may be administered under the book-entry system, and so long as the Bonds are administered under the book-entry system described herein, interest payments and principal payments that are part of periodic principal and interest payments shall be paid to Cede & Co. or its registered assigns in same-day funds no later than the time established by The Depository Trust Company ("DTC") on each interest or principal payment date (or in accordance with then-existing arrangements between the District and DTC). The District is hereby authorized to enter into an agreement (the "Letter of Representations") with DTC in connection with the issuance of the Bonds, and while the Letter of Representations is in effect, the procedures established therein shall apply to the Bonds. The Bonds shall be substantially as set forth in Exhibit A hereto; shall mature and bear interest as follows: Maturity Date (July 1) Principal Amount Interest Rate The Bonds shall be numbered in sequential order beginning with R-1 in order to distinguish each Bond from any other Bond; shall be in the denominations of $100,000 and in integral multiples of $5,000 and any integral multiple thereof; shall be dated as of the date of delivery; and shall bear interest from the most recent date to which interest has been paid or duly provided for or, if no interest has been paid or duly provided for, from their date, until paid. Interest shall be payable semiannually on July 1 and January 1 of each year, commencing TS2:jh2 2368523.1 4/27/2015 11 January 1, 2016, at the rates set forth above (on the basis of a 360-day year of twelve 30-day months). Section 2.3.Delivery of Bonds. (a)Upon the execution and delivery hereof, and satisfaction of the conditions established by the MPC for delivery of the Bonds, the MPC shall execute the Bonds and deliver them to the Trustee.Thereupon, the Trustee shall authenticate the Bonds and deliver them to, or on the order of, the Original Purchaser thereof, as directed by the MPC in accordance with this Section 2.3. (b)Prior to delivery by the Trustee of any Bonds, there shall have been received by the: (i) Trustee a request and authorization to the Trustee on behalf of the MPC, signed by the President or the Secretary, to authenticate and deliver the Bonds to, or on the order of, the Original Purchaser upon payment to the Trustee of the amounts specified therein (including without limitation, any accrued interest), which amounts shall be deposited as provided in Article III hereof. Section 2.4.Issuance and Delivery of Additional Parity Bonds. (a)The MPC may issue Additional Parity Bonds from time to time for any purpose permitted herein. The Bonds are not considered Additional Parity Bonds for any purpose of this Trust Indenture. (b)Additional Parity Bonds shall be on a parity with the Bonds and any Additional Parity Bonds hereafter issued and then Outstanding, as to the assignment to the Trustee of the right, title and interest of the MPC in the Agreement and moneys in the accounts of the funds created hereby; provided, that nothing herein shall prevent payment of principal, interest and premium, if any, on an y series of Additional Parity Bonds from (i) being otherwise secured and protected from sources or by property or instruments not applicable to the Bonds and any one or more series of Additional Parity Bonds or (ii) not being secured or protected from sources or by property or instruments applicable to the Bonds or one or more series of Additional Parity Bonds. (c)The issuance of such Additional Parity Bonds is subject to the following specific conditions which are hereby made conditions precedent to the issuance of such Additional Parity Bonds: (i)such additional bonds shall have been authorized to aid the Town in financing the construction of new municipal facilities upon real property, or to lease or acquire property and construct other facilities upon the request of the Town for other governmental, civic and community purposes, or to refund obligations incurred for those purposes, and the issuance thereof shall have been determined and declared by the MPC, by appropriate resolution, to be necessary for that purpose; TS2:jh2 2368523.1 4/27/2015 12 (ii)the MPC shall be in compliance with all covenants and undertakings set forth in the Agreement and in this Trust Indenture, as either or both may have been supplemented or amended; (iii)the resolution authorizing issuance of such additional bonds shall require that the proceeds of the sale thereof shall be applied solely (a) for one or more of the purposes set forth in (i) above and expenses and costs incidental thereto, including costs and expenses incident to the issuance and sale of such additional bonds, (b) if desired, to establish a reasonable debt service reserve fund for the protection of the Owners of the additional bonds, and (c) to pay interest on such additional bonds during the actual period of any construction of such facilities, and for a period of not to exceed twelve (12) months thereafter; (iv)such additional bonds shall be equally and ratably secured with the Bonds herein authorized, without preference or priority of any of the Bonds over any other bonds, except as expressly provided in the Trust Indenture, as supplemented; (v)the MPC shall have entered into a revised agreement with the Town, or shall have amended the Agreement, in and by which the Town obligates itself in the manner therein provided to increase the Installment Payments or to make such payments to the MPC at the times and in the amounts sufficient to provide for the payment of principal and interest on such additional bonds as such principal and interest may become due; and (vi)the Town must be in compliance with the terms of the Agreement. Section 2.5.Form. The Bonds shall be in fully registered form. The fully registered book-entry-only form of the Bonds shall be substantially in the form set forth in Exhibit A, attached hereto and incorporated herein. If the Book-Entry-Only System is discontinued, the Bonds shall be in substantially the same form with such changes as may be necessary to provide for issuance of Bonds to the beneficial owners thereof. Section 2.6.Authentication and Execution. Only Bonds authenticated by the endorsement thereon of a certificate substantially in the form as shown on Exhibit A, executed by the MPC by one of its authorized officers, shall be valid or become obligatory for any purpose or be secured by this Trust Indenture or shall be entitled to any benefit hereunder; and every such certificate of the MPC upon any Bond purporting to be secured hereby shall be conclusive evidence that the Owner is entitled to the benefit of the trust hereby created. All bonds issued and to be issued pursuant to this Trust Indenture shall be executed in the name of the MPC with the manual, Electronic or facsimile signature of its President or Vice President. In case any of the officers of the MPC who shall have signed or sealed any bond shall cease to be such officer before the bond so signed or sealed shall have been actually authenticated by the Trustee or delivered or issued, such bond may nevertheless be authenticated and delivered and issued with the same effect as though the person who had signed and sealed such bond had not ceased to be an officer of the MPC. TS2:jh2 2368523.1 4/27/2015 13 Section 2.7.Book-Entry-Only System. The Bonds may be registered in the name of the Depository or its nominee for holding in the Book-Entry-Only System, without further action by the MPC. There shall be a single Bond representing the entire aggregate principal amount of each maturity of each series of the Bonds. Neither the MPC, the Town nor the Trustee shall have any responsibility or obligation to the Depository's participants or the persons for whom they act as nominees with respect to the Bonds regarding accuracy of any records maintained by the Depository or the Depository's participants, the payments by the Depository or the Depository's participants of any amount in respect of principal, redemption price or interest on the Bonds, any notice which is permitted or required to be given to or by Owners of Bonds hereunder (except such notice as is required to be given by the MPC to the Trustee or to the Depository), or any consent given or other action taken by the Depository as an Owner of Bonds. The Trustee, pursuant to a request by the MPC for the removal or replacement of the Depository, and upon 30 days'notice to the Depository, may remove or replace the Depository. The Trustee agrees to remove or replace the Depository at any time at the request of the MPC, and the MPC shall cooperate with the Trustee in effecting such removal or replacement. The Depository may determine not to continue to act as Depository for the Bonds upon 30 days written notice to the Trustee. The Owners have no right to either a Book-Entry- Only System or a Depository for the Bonds. Notwithstanding any other provision of this Trust Indenture or the Bonds, so long as the Bonds are in the Book-Entry-Only System and the Depository or its nominee is the Owner of the Bonds: (a)Presentation. Presentation of Bonds to the Trustee at redemption or at maturity shall be deemed made to the Trustee when the right to exercise ownership rights in the Bonds through the Depository or the Depository's participants is transferred by the Depository on its books. (b)Fractionalized Representation. The Depository may present notices, approvals, waivers, votes or other communications required or permitted to be made by Owners under this Trust Indenture on a fractionalized basis on behalf of some or all of those persons entitled to exercise ownership rights in the Bonds through the Depository or its participants. (c)Limitations on Transfer. Bonds or any portion thereof shall not be transferable or exchangeable except: (1)To any successor of the Depository; (2)To any new Depository not objected to by the Trustee, upon (a) the resignation of the then current Depository or its successor from its functions as Depository, or (b) termination of the use of the Depository by direction of the MPC; TS2:jh2 2368523.1 4/27/2015 14 (3)To any Persons who are the assigns of the Depository or its nominee, upon (A) the resignation of the Depository from its functions as Depository hereunder or (B) termination by the MPC of use of the Depository. If the use of the Book-Entry-Only System is discontinued, then after the Trustee has made provision for notification of the beneficial owners of their book entry interests in the Bonds by appropriate notice to the then Depository, the MPC and the Trustee shall permit withdrawal of the Bonds from the Depository, and authenticate and deliver Bond certificates in fully registered form and in denominations authorized by this Article to the assignees of the Depository or its nominee. Such withdrawal, authentication and delivery shall be at the cost and expense (including costs of printing or otherwise preparing, and delivering, such replacement Bond certificates) of the MPC. Subject to any arrangements made by the Trustee with a Depository with respect to the Bonds held in a Book-Entry-Only System, which arrangements are hereby authorized subject to the approval of the MPC, principal of, premium, if any, and interest shall be payable on any Bond as provided in this Agreement. Section 2.8.Transfer and Exchange. So long as the Book-Entry-Only System is in effect the Bonds will be issued as a single Bond for each maturity date of each series, registered in the name of DTC or its nominee. If the Book-Entry-Only System is no longer in effect, the following will apply: (a)Transfer of Bonds. Any maturity of a Bond may be transferred only in whole and only to a “qualified investor,” which means a qualified institutional buyer, as such term is defined in Rule 144A, of the Securities Act of 1933, as amended or an accredited investor (excluding natural persons) as defined in Rule 501 of Regulation D of the United States Securities Exchange Commission, who executes a Certificate of Qualified Investor in the form attached to the form of Bond, attached as Exhibit 1 hereto, and who agrees to comply with all applicable federal and state securities laws. Any Bond may, in accordance with its terms, be transferred upon the books required to be kept pursuant to the provisions of Section 2.12 hereof by the person in whose name it is registered, in person or by his duly authorized attorney, upon surrender of such Bond for cancellation, accompanied by delivery of a written instrument of transfer in a form approved by the Trustee, duly executed. Whenever any Bond or Bonds shall be surrendered for transfer, the Trustee shall execute and deliver a new Bond or Bonds in fully registered form of the same series, maturity and interest rate and for a like aggregate principal amount. (b)Exchange of Bonds. Bonds may be exchanged at the Designated Office of the Trustee for a like aggregate principal amount of Bonds of Authorized Denominations of the same series, maturity and interest rate. In connection with any such exchange or transfer of Bonds, the Owner requesting such exchange or transfer shall, as a condition precedent to the exercise of the privilege of making such exchange or transfer, remit to the Trustee an amount sufficient to pay any tax, or other governmental charge required to be paid, other than one imposed by the MPC (for which the MPC will reimburse the Trustee), or any fee or expense of the Trustee or the MPC with respect to such exchange or transfer. TS2:jh2 2368523.1 4/27/2015 15 Section 2.9.Bonds Mutilated, Lost, Destroyed or Stolen. If any Bond shall become mutilated, the Trustee, at the expense of the Owner of said Bond, shall execute and deliver a new Bond of like series, tenor, maturity and amount in exchange and substitution for the Bond so mutilated, but only upon surrender to the Trustee of the Bond so mutilated. Any mutilated Bond so surrendered to the Trustee shall be cancelled by it and redelivered to, or upon the order of, the Bond Owner. If any Bond shall be lost, destroyed or stolen, evidence of such loss, destruction or theft may be submitted to the Trustee, and, if such evidence is satisfactory to the Trustee and, if an indemnity satisfactory to the Trustee shall be given, the Trustee, at the expense of the Bond Owner, shall execute and deliver a new Bond of like tenor, maturity and amount and numbered as the Trustee shall determine in lieu of and in substitution for the Bond so lost, destroyed or stolen. The Trustee may require payment of an appropriate fee for each new Bond delivered under this Section 2.9 and of the expenses which may be incurred by the Trustee in carrying out the duties under this Section 2.9. Any Bond issued under the provisions of this Section 2.9 in lieu of any Bond alleged to be lost, destroyed or stolen shall be equally and proportionately entitled to the benefits of this Trust Indenture with all other Bonds secured by this Agreement. The Trustee shall not be required to treat both the original Bond and any replacement Bond as being Outstanding for the purpose of determining the principal amount of Bonds which may be executed and delivered hereunder or for the purpose of determining any percentage of Bonds Outstanding hereunder, but both the original and replacement Bond shall be treated as one and the same. Notwithstanding any other provision of this Section 2.9, in lieu of delivering a new Bond for a Bond which has been mutilated, lost, destroyed or stolen, and which has matured, the Trustee may make payment with respect to such Bond upon receipt of the aforementioned indemnity. Section 2.10.Payment. A.Book-Entry-Only System. In the event the Bonds are issued under the Book-Entry-Only System and so long as the Book-Entry-Only System is in effect,interest payments and principal payments that are part of periodic principal and interest payments shall be paid to Cede & Co. or its registered assigns in same-day funds no later than the time established by DTC on each Interest Payment Date or Principal Payment Date (or in accordance with then existing arrangements between the MPC and DTC). B.Without Book-Entry-Only System. If the Bonds are registered in the name of the Purchaser or if the Book-Entry-Only Sys tem is no longer in effect, the following will apply: (a)Payment of interest due with respect to any Bond on any Interest Payment Date shall be made to the person appearing on the registration books of the Trustee as the Owner thereof as of the Record Date immediately preceding such Interest Payment Date, such interest to be paid by check mailed on the date due by first class mail to such Owner at his address as it appears on such registration books. TS2:jh2 2368523.1 4/27/2015 16 (b) The principal and redemption price, if any, with respect to the Bonds shall be payable in lawful money of the United States of America upon surrender when due at the Designated Office. (c)Interest and, if arrangements for surrender are made with the Trustee, principal and redemption price, if any, payable to any securities depository or to any Owner of $1,000,000 or more in principal amount of Bonds shall be paid by wire transfer in immediately available funds to an account in the United States if the Owner makes a written request of the Trustee at least twenty (20) days before the Interest Payment Date specifying the account address. The notice may provide that it shall remain in effect for subsequent payments until otherwise requested in a subsequent written notice. (d)Any interest on an y Bond which is payable on, but is not punctually paid or duly provided for on, any Interest Payment Date (herein referred to as "Defaulted Interest") shall forthwith cease to be payable to the Owner on the relevant Record Date solely by virtue of such Owner having been such Owner. Such Defaulted Interest shall thereupon be paid, together with interest thereon at the same rate per annum as such Defaulted Interest, by the Trustee to the persons in whose names such Bonds are registered at the close of business on a special record date (the "Special Record Date") for the payment of such portion of Defaulted In terest as may then be paid from the sources herein provided. When the Trustee has funds available to pay the Defaulted Interest and interest thereon, the Trustee shall fix a Special Record Date for the payment of such Defaulted Interest and interest thereon which shall be not more than fifteen (15) nor less than ten (10) days prior to the date of the proposed payment by the Trustee. The Trustee shall promptly cause notice of the proposed payment of such Defaulted Interest and interest thereon and the Special Record Date therefor to be mailed, first class postage prepaid, to each Owner of a Bond at his address as it appears in the Bond Register not less than ten (10) days prior to such Special Record Date. Notice of the proposed payment of such Defaulted Interest and interest thereon and the Special Record Date therefor having been mailed as aforesaid, such Defaulted Interest and interest thereon shall be paid to the persons in whose names the Bonds are registered on such Special Record Date. Section 2.11.Execution of Documents and Proof of Ownership. Any request, direction, consent, revocation of consent, or other instrument in writing required or permitted by this Agreement to be signed or executed by Bond Owners may be in any number of concurrent instruments of similar tenor, and may be signed or executed by such Owners in person or by their attorneys or agents appointed by an instrument in writing for that purpose, or by any bank, trust company or other depository for such Bonds. Proof of the execution of any such instrument, or of any instrument appointing any such attorney or agent, and of the ownership of Bonds shall be sufficient for any purpose of this Trust Indenture (except as otherwise herein provided), if made in the following manner: (a)The fact and date of the execution by any Owner or his attorney or agent of any such instrument and of any instrument appointing any such attorney or agent, may be proved by a certificate, which need not be acknowledged or verified, of an officer of any bank or trust company located within the United States of America, or of any notary public, or other officer authorized to take acknowledgments of deeds to be recorded in such jurisdictions, that the TS2:jh2 2368523.1 4/27/2015 17 persons signing such instruments acknowledged before him the execution thereof. Where any such instrument is executed by an officer of a corporation or association or a member of a partnership on behalf of such corporation, association or partnership, such certificate shall also constitute sufficient proof of his authority. (b) The fact of the ownership of Bonds by any person and the amount, the maturity and the numbers of such Bonds and the date of his holding the same be proved on the registration books maintained pursuant to Section 2.12 hereof. Nothing contained in this Article II shall be construed as limiting the Trustee to such proof, it being intended that the Trustee may accept any other evidence of the matters herein stated which the Trustee may deem sufficient. Any request or consent of the Owner of any Bond shall bind every future Owner of the same Bond in respect of anything done or suffered to be done by the Trustee in pursuance of such request or consent. Section 2.12.Bond Register. The Trustee will keep or cause to be kept, at its Designated Office of the Trustee, sufficient books for the registration and transfer of the Bonds which shall at all times during regular business hours be open to inspection by the Town and, upon presentation for such purpose, the Trustee shall, under such reasonable regulations as it may prescribe, register or transfer or cause to be registered or transferred, on said books, Bonds as hereinbefore provided. Section 2.13.Special Agreement with Owners. Notwithstanding any provision of this Trust Indenture or of any Parity Bond to the contrary,with the approval of the MPC (exclusive of any agreements with a Depository), the Trustee may enter into an agreement with any Owner providing for making all payments to that Owner of principal of, premium, if any, and interest on that Parity Bond or any part thereof (other than an y payment of the entire unpaid principal amount thereof) at a place and in a manner other than as provided in this Trust Indenture and in the Parity Bond, without presentation or surrender of the Parity Bond, upon any conditions which shall be satisfactory to the Trustee and the MPC; provided, that payment in any event shall be made to the Person in whose name a Parit y Bond shall be registered on the Bond Register, with respect to payment of principal and premium, on the date such principal and premium is due, and, with respect to the payment of interest, as of the applicable Record Date or special record date, as the case may be. Upon request, the Trustee will furnish a cop y of each of those agreements, certified to be correct by an officer of the Paying Agent, to the MPC. Any payment of principal of, premium, if any, and interest on any Parit y Bond pursuant to such an agreement shall constitute payment thereof pursuant to, and for all purposes of, this Trust Indenture. TS2:jh2 2368523.1 4/27/2015 18 ARTICLE III CREATION OF FUNDS; APPLICATION OF PROCEEDS RECEIVED BY TRUSTEE Section 3.1.Creation of Funds to be Held by Trustee. There is hereby created a Bond Fund and a Payment Fund, and within the Payment Fund there is hereby created a Costs of Issuance Account. The money deposited therein shall be held by the Trustee in trust for the purposes set forth in this Article. Section 3.2.Installment Payments; Credit of Excess Money. The Installment Payments to be paid by the Town pursuant to the terms of the Agreement have been assigned by the MPC to the Trustee so that such moneys shall be paid by the Town directly to the Trustee at least one day prior to the date the Trustee is required to make a payment on the Bonds; and the Trustee shall deposit such moneys to the Bond Fund. If on July 1 of each year money in the Bond Fund exceeds the amount necessary for the current debt service on all Bonds then Outstanding, including administration costs and expenses, and the Town is not then in default pursuant to the Agreement, such excess shall constitute a credit to the Town on the next succeeding Installment Payment or Installment Payments due or to become due pursuant to the Agreement; provided, however, that the Town may exercise its prepayment and redemption rights in accordance with Sections 1.4 and 15.5 of the Agreement, in which event such excess funds shall be applied in accordance with Section 2.6 of the Agreement. The aforesaid credit or transfer shall be made by the Trustee no less frequently than annually. Section 3.3.Disposition of Bond Proceeds and Other Moneys. The MPC shall deposit with the Trustee $_____________representing the proceeds from the sale of the Bonds, net of an y discounts, together with $________ representing payment from the Town to the Prior Trustee for amounts owed under the Prior Agreements,and the Trustee shall apply such proceeds as follows: (a)An amount equal to $______________will be transferred to the Prior Trustee to be used to refund the Bonds Being Refunded on _____________, 2015. (b)An amount equal to $___________will be deposited in the Costs of Issuance Account of the Payment Fund and applied to pay Issuance Costs of the Bonds. (c)An amount equal to $___________will be deposited in the Bond Fund and used to pay the principal and interest on the Bonds. Section 3.4.Payment of Principal and Interest. The Trustee shall pay from the Bond Fund the following amounts at the time and in the manner hereinafter provided for: (a)Interest. On each Interest Payment Date, the Trustee shall withdraw from the Bond Fund an amount equal to interest due and payable on the Outstanding Bonds for the purpose of paying such interest. TS2:jh2 2368523.1 4/27/2015 19 (b)Principal. On each Principal Payment Date, the Trustee shall withdraw from the Bond Fund an amount equal to the principal due and payable on the Outstanding Bonds for the purpose of paying such principal. Section 3.5.Payment Fund. (a)Moneys in the Payment Fund will be used to pay Issuance Costs of the Bonds. (b)Disbursements from the Costs of Is suance Account of the Payment Fund for payment of Issuance Costs of the Bonds will be made by the Trustee upon receipt of a written requisition substantially in the form attached as Exhibit B hereto signed by the Authorized Representative, which identifies the Issuance Costs for which payment or reimbursement is due, and gives the name, address and amount due to that person. (c)In the event that the Bonds are declared due and payable prior to maturity for any reason, moneys in the Payment Fund, other than funds held pursuant to a redemption notice with respect to Bonds to be redeemed, which will be paid in accordance with such notice, will be immediately transferred to the Bond Fund to the extent needed to pay unpaid interest and then to pay unpaid principal. (d)Any moneys remaining in the Costs of Issuance Account of the Payment Fund on _________, 20__shall be transferred to the Bond Fund and used to pay the next ensuing interest and principal payments due on the Bonds. ARTICLE IV REDEMPTION OF BONDS Section 4.1.Terms of Redemption. (a)Bonds; Optional Redemption. The Bonds are not subject to redemption prior to maturity. (b)Additional Parity Bonds. Additional Parity Bonds may be subject to redemption as provided in the applicable Supplemental Agreement or bond resolution. ARTICLE V REBATE FUND AND BOND FUND Section 5.1.Rebate Fund. In the event the MPC is required to rebate its earnings and profits from the investment of the Bonds, the Trustee shall upon direction from the MPC establish, as a separate deposit account in the custody of the Trustee, a fund to be designated as the "Town of Fountain Hills, Arizona Municipal Property Corporation Rebate Fund". Money and investments in the Rebate Fund shall not be used for the payment of debt TS2:jh2 2368523.1 4/27/2015 20 service on the Bonds and any provision hereof to the contrary notwithstanding, amounts credited to the Rebate Fund shall be free and clear of any lien hereunder. Moneys and investments in the Rebate Fund are not included within the trust estate executed in the granting clauses hereof and shall be invested pursuant to the procedures and in the manner provided for investment of moneys in the Funds. Unless otherwise provided in Subsequent Rebate Instructions (defined below), promptly after the end of every fifth Bond Year and promptly after the payment in full of all Outstanding Bonds, the MPC, at the direction of the Town, shall engage, and furnish information to, the Rebate Consultant to calculate the Rebate Amount as of the end of every fifth Bond Year or the date of such payment in full and shall provide to the Trustee copies of such calculations along with any applicable Rebate Amount. Upon the occurrence of an Event of Default and at the request of the Trustee, the Rebate Consultant shall calculate the Rebate Amount as of the date requested by the Trustee and provide such calculation to the Trustee on or before the date so requested. Whenever there is a rebate calculation and the Rebate Consultant provides the calculation to the Trustee, the Trustee shall then notify the Authorized Representative in writing of the amount then on deposit in the applicable account in the Rebate Fund. If the Rebate Consultant fails to make the calculation of Rebate Amount by the 30th day after the end of every fifth Bond Year or the date of payment in full of the Bonds, the Trustee shall retain an independent certified public accounting firm or other qualified independent person, at the expense of the MPC, to make or cause to be made such calculation and shall provide copies of such calculations to the MPC. The MPC is obligated to pay the Rebate Amount to the Trustee which will be deposited by the Trustee into the Rebate Fund. If the amount then on deposit in the Rebate Fund is in excess of the Rebate Amount as computed by the Rebate Consultant, the Trustee shall forthwith pay that excess amount to the MPC. If the amount then on deposit in the Rebate Fund is less than the Rebate Amount (computed by taking into account the amount or amounts, if any, previously paid to the United States pursuant to this Section), the MPC shall, within five days after receipt of the aforesaid notice from the Trustee, pay to the Trustee from Excise Taxes or other funds legally available therefore from the Town, for deposit in the Rebate Fund an amount sufficient to cause the Rebate Fund to contain an amount equal to the Rebate Amount. If at any time the Trustee is required to retain or pay a Rebate Consultant, then the Trustee, after delivering to the MPC a demand for payment of an amount sufficient to pay the Rebate Consultant, the MPC shall pay or cause the Trustee to pay from the Rebate Fund such amount as may be needed to pay the Rebate Consultant. If at any time when the Trustee is required to withdraw money from the Rebate Fund to make a payment to the United States of America the amount held by the Trustee in the Rebate Fund is insufficient to permit such withdrawal and payment, then the Trustee, after delivering a demand for such deficiency to the MPC and upon receipt of such deficient funds from the MPC, shall deposit such amount to the Rebate Fund in such amounts as may be necessary to make the amount in the Rebate Fund, after such transfers, equal to the amount required to be withdrawn and paid to the United States of America. TS2:jh2 2368523.1 4/27/2015 21 This Section shall supersede all other sections of this Trust Indenture, to the end that the interest on the Bonds shall not be included in gross income for federal income tax purposes as a result of the inadequacy at any time of the Rebate Fund, unless the total amount held by the Trustee in all funds established hereunder is insufficient, and no money for such purpose is provided by MPC. Within 60 days after the end of the fifth Bond Year and every fifth succeeding Bond Year thereafter, the Trustee, acting on behalf of the MPC, shall pay to the United States in accordance with Section 148(f) of the Code from the moneys then on deposit in the Rebate Fund an amount equal to 90% (or such greater percentage not in excess of 100% as the MPC may direct the Trustee to pay) of the Rebate Amount (such Rebate Amount to be notified to the Trustee by the MPC or the Rebate Consultant) earned from the date of the original delivery of the Bonds to the end of such fifth Bond Year including income attributable to Rebate Amount during the final payment period (as defined in applicable Regulations under the Code). Within 60 days after the payment in full of all Outstanding Bonds, the Trustee shall pay to the United States in accordance with Section 148(f) of the Code from the moneys then on deposit in the Rebate Fund an amount equal to 100% of the Rebate Amount earned from the date of the original delivery of the Bonds to the date of such payment. Any moneys remaining in the Rebate Fund following such payment shall be paid to the Town. The MPC and the Trustee shall comply with any written instructions relating to this Section 5.1 furnished after the issuance of the Bonds from the MPC and accompanied by an opinion of nationally recognized bond counsel addressed to the MPC and the Trustee to the effect that compliance with such instructions will not adversely affect any exclusion of interest on any of the Bonds from gross income for federal income tax purposes (the "Subsequent Rebate Instructions"), even if such Instructions are different from or inconsistent with this Section. The MPC and the Trustee shall be entitled to rely conclusively on the calculations made pursuant to this Section and any Subsequent Rebate Instructions and shall not be responsible for any loss or damage resulting from any action taken or omitted to be taken in reliance upon those calculations. The MPC shall obtain and keep records of the computations made pursuant to this Section and all original source documents and other information necessary to, or from, such computations for a period ending six (6) years after the last of the Bonds is retired, or such later date as required by its policies and procedures. The Trustee shall keep and make available to the MPC such records concerning the investments of the gross proceeds of the Bonds and the investments of earnings from those investments as may be required by the Rebate Consultant in order to enable the Rebate Consultant to make the aforesaid computations as are required under Section 148(f) of the Code. The MPC shall obtain and keep such records of the computations made pursuant to this Section as are required under Section 148(f) of the Code. TS2:jh2 2368523.1 4/27/2015 22 The Trustee shall establish in the Rebate Fund and any other Fund such accounts and subaccounts as it is instructed by the MPC in order to assist it in determining applicable accounting for tax purposes and recordkeeping activities in connection therewith. All computations and determinations pursuant to this Section shall be made in accordance with Section 148(f) of the Code. Section 5.2.Surplus. Any surplus remaining in any of the funds created hereunder, after redemption and payment of all Bonds, including accrued interest and redemption premium, if any, and payment of any applicable fees, expenses or indemnities to the Trustee, or provision for such redemption and payment having been made to the satisfaction of the Trustee, shall be withdrawn by the Trustee and remitted to the MPC. Section 5.3.Separate Funds and Accounts. Monies and investments properly paid into and held in the funds and accounts established hereunder shall not be subject to the claims of the owners of any Parity Bonds other than the Bonds and the Owners of the Bonds shall have no claim or lien upon any monies or investments properly paid into and held in the funds and accounts established under the proceedings for any other Parity Bonds. TS2:jh2 2368523.1 4/27/2015 23 ARTICLE VI PLEDGE AND LIEN Section 6.1.Pledge. Installment Payments and all other amounts due under the Agreement by the Town are payable from a pledge of, and secured by a lien on, the Excise Taxes as may be necessary for their prompt and punctual payment. Said pledge of, and said lien on, the Excise Taxes is irrevocably made and created by the Town pursuant to the Agreement for the prompt and punctual payment of amounts due under the Agreement according to its terms, and to create and maintain the funds as hereinafter specified therein and herein. None of the Bonds shall be entitled to priority or distinction one over the other in the application of the Excise Taxes thereby pledged to the payment thereof, regardless of the delivery of any of the Bonds prior to the delivery of any other of the Bonds or regardless of the time or times the Bonds mature or are called for redemption prior to maturity. All of the Bonds are co-equal as to the pledge of and lien on the Excise Taxes pledged for the payment thereof and share ratabl y, without preference, priority or distinction, as to the source or method of payment from Excise Taxes or securit y therefor. Section 6.2.Protection of Lien. The Trustee, the MPC and the Town hereby agree not to make or create or suffer to be made or created any assignment or lien having priority or preference over the assignment and lien hereof upon the interests granted hereby or any part thereof. The Trustee, the MPC and the Town agree that no obligations the payment of which is secured by an equal claim on or interest in property or revenues pledged hereunder will be issued or delivered by either except (a)in lieu of, or upon transfer of registration or exchange of any Bond as provided herein, and (b) obligations issued on a parit y herewith pursuant to Section 6.3 hereof. No obligation with a subordinate lien on Excise Taxes may be accelerated so long as any Bond is Outstanding. Section 6.3.Additional Parity Bonds. So long as any of the Bonds remain Outstanding and the principal and interest thereon shall be unpaid or unprovided for or any other amounts remain unpaid or unprovided for hereunder, Town will not further encumber the Excise Taxes pledged hereunder on a basis equal to the pledge hereunder unless the Excise Taxes collected in the preceding Fiscal Year shall have amounted to at least two and one-half (2.5) times the combined interest and principal requirement for the succeeding twelve (12) month period for all Parity Bonds then Outstanding together with any parity bonds or parity obligations then proposed to be issued and secured by a pledge of the Excise Taxes. Subject to the foregoing, and to other terms and conditions set forth herein and in the Trust Indenture, the Town shall have the right to incur future obligations payable from and secured by the Excise Taxes on a parit y with the Installment Payments due pursuant to this Trust Indenture. TS2:jh2 2368523.1 4/27/2015 24 ARTICLE VII ADDITIONAL INDEBTEDNESS Section 7.1.Additional Indebtedness Limit. Except as to indebtedness permitted in accordance with Section 7.2 hereof, the MPC covenants that it will not incur indebtedness of any kind except for the indebtedness evidenced by the Bonds issued pursuant hereto or any indebtedness issued to refund or refinance the Bonds, or indebtedness which is to be paid out of available proceeds from the sale Bonds issued pursuant hereto, or indebtedness which the Town is required to pay pursuant to the terms of the Agreement. Section 7.2.Permitted Additional Indebtedness. The MPC may incur additional indebtedness on a parity with the Bonds by means of the issuance of bonds pursuant to Section 6.3 hereof or otherwise, subject to an agreement with the Town whereby the Town agrees to pay from and grants a lien on its Excise Taxes to secure the prompt payment of the principal and interest in respect of such new indebtedness of the MPC and, provided, further, the Town is then in compliance with Sections 4.4 and 4.7 of the Agreement. ARTICLE VIII MONEYS IN FUNDS; INVESTMENT Section 8.1.Held in Trust. Except or otherwise provided herein, moneys and investments held by the Trustee under this Trust Indenture are irrevocably held in trust for the benefit of the Owners of the Bonds, and for the purposes herein specified, and such moneys, and an y income or interest earned thereon, shall be expended only as provided in this Trust Indenture, and shall not be subject to lev y or attachment or lien by or for the benefit of any creditor of the MPC, the Town, the Trustee or any Owner of Bonds. Section 8.2.Investments Authorized. Upon written order of the Authorized Representative, moneys held by the Trustee hereunder shall be invested and reinvested by the Trustee, to the maximum extent practicable in Permitted Investments. The Authorized Representative may direct such investment in specific Permitted Investments. Such investments, if registrable, shall be registered in the name of the Trustee and shall be held by the Trustee. The Trustee may purchase from or sell to, itself or any affiliate, as principal or agent, investments authorized by this Section 8.2. Such investments and reinvestments shall be made giving full consideration to the time at which funds are required to be available. The Trustee may act as purchaser or agent in the making or disposing of any investment. The Trustee shall not invest any cash held by it hereunder in the absence of timely and specific written direction from the MPC or Authorized Representative. In no event shall the Trustee be liable for the selection of investments. The Trustee may conclusively rely upon such written direction from the MPC or Authorized Representative as to both the suitability and legality of the directed investments. Section 8.3.Accounting. The Trustee shall furnish to the MPC, not less than semiannually, an accounting (which may be in the form of its customary statement) of all TS2:jh2 2368523.1 4/27/2015 25 investments made by the Trustee. The Trustee shall not be responsible or liable for any loss suffered in connection with any investment of funds made by it in accordance with Section 8.2 hereof. Section 8.4.Allocation of Earnings. Any income, profit or loss on such investments shall be deposited in or charged to the respective funds from which such investments were made, and any interest on any deposit of funds shall be deposited in the fund from which such deposit was made, except as otherwise provided herein. At the written direction of the MPC or Authorized Representative, any such income, profit or interest shall be transferred to the Rebate Fund. Section 8.5.Valuation and Disposition of Investments. For the purpose of determining the amount in any fund, all Permitted Investments credited to such fund shall be valued at Market Value. The Trustee may sell at the price obtainable, or present for redemption, any Permitted Investment so purchased by the Trustee whenever it shall be necessary in order to provide moneys to meet any required payment, transfer, withdrawal or disbursement from the fund to which such Permitted Investment is credited, and the Trustee shall not be liable or responsible for any loss resulting from such investment. Section 8.6.Arbitrage Covenant. The MPC and the Town hereby covenants with the Owners of the Bonds that they will make no use of the proceeds of the Bonds or other moneys which would cause the obligations of the MPC to be "arbitrage bonds" subject to federal income taxation by reason of Section 148 of the Code. Section 8.7.Tax Covenants for the Bonds. In consideration of the acceptance and execution of the Bonds and the purchase by the Owners, from time to time, and in consideration of retaining the exclusion of interest income from gross income on the Bonds for federal income tax purposes, the MPC and Town covenant with the Trustee and the Owners from time to time to neither take nor fail to take any action, which action or failure to act is within its power and authority and would result in interest income on the Bonds to become subject to inclusion in gross income for federal income tax purposes under either laws existing on the date of execution of the Bonds or such laws as they may be modified or amended or tax laws later adopted. The MPC and Town agree that they will comply with such requirement(s) and will take any such action(s) as are necessary to prevent interest income on the Bonds from becoming subject to inclusion in gross income for federal income tax purposes. Such requirements may include but are not limited to making further specific covenants; making truthful certifications and representations and giving necessary assurances; complying with all representations, covenants and assurances contained in certificates or agreements to be prepared by special counsel; to pay to the United States of America an y required amounts representing rebates of arbitrage profits relating to the Agreement; filing forms, statements and supporting documents as may be required under the federal tax laws; limiting the term of and yield on investments made with moneys relating to the Agreement; and limiting the use of the proceeds of the Agreement and property financed thereby. TS2:jh2 2368523.1 4/27/2015 26 Section 8.8.Qualified Tax-Exempt Obligations. The MPC hereby designates the Bonds as "qualified tax-exempt obligations"pursuant to Section 265(b)(3) of the Code. ARTICLE IX THE TRUSTEE Section 9.1.Duties of Trustee. The Trustee shall, prior to the occurrence of an Event of Default described in Section 13.2, and after curing all such Events of Default which may have occurred, perform such duties and only such duties as are specifically set forth in this Trust Indenture. The Trustee shall, during the existence of any such Event of Default (which has not been cured) exercise such of the rights and powers vested in it by this Trust Indenture and use the same degree of care and skill in their exercise as a prudent indenture trustee would exercise or use under the circumstances in the conduct of the Trustee's corporate trust business. No provision of this Trust Indenture shall be construed to relieve the Trustee from liability for its own negligence or its own willful misconduct except that: (a)Prior to the occurrence of an Event of Default described herein and after curing all such Events of Default which may have occurred: (i)The duties and obligations of the Trustee shall be determined solely by the express provisions of this Trust Indenture, and the Trustee shall not be liable except for the performance of such duties and obligations as are specifically set forth in this Trust Indenture, and no implied covenants or obligations shall be read into this Trust Indenture against the Trustee; and (ii)In the absence of bad faith on the part of the Trustee, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon any certificate or opinion furnished to the Trustee; and (b)At all times, regardless of whether or not any such Event of Default has occurred: (i)The Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer unless the Trustee was negligent in ascertaining the pertinent facts; and (ii)The Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Owners of not less than a majority (or such lesser or greater percentage as is specifically required or permitted by this Trust Indenture) in aggregate principal amount of all Bonds at the time Outstanding relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee in accordance with this Trust Indenture. TS2:jh2 2368523.1 4/27/2015 27 None of the provisions contained in this Trust Indenture shall require the Trustee to expend or risk its own funds or otherwise incur individual financial liability in the performance of its duties or in the exercise of any of its rights or powers. Section 9.2.Actions of Trustee; No Representations. Except as otherwise provided in Section 9.1, (a)The Trustee may rely and shall be protected in acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, bond, coupon or other paper or document believed by it to be genuine and to have been signed or presented by the proper part y or parties; (b)Any notice, request, direction, election, order or demand of the MPC mentioned herein shall be sufficiently evidenced by an instrument signed in the name of the MPC by any officer of the MPC (unless other evidence in respect thereof be herein specificall y prescribed); and any resolution of the Board of Directors of the MPC may be evidenced to the Trustee by a resolution; (c)The Trustee may consult with counsel (who may be counsel for the MPC) and the opinion of such counsel shall be full and complete authorization and protection in respect of any action taken or suffered by it hereunder in good faith and in accordance with the opinion of such counsel; (d)Whenever in the administration of the trusts of this Trust Indenture, the Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering any action hereunder, such matter (unless other evidence in respect thereof be herein specificall y prescribed) may, in the absence of negligence or bad faith on the part of the Trustee, be deemed to be conclusively proved and established by a certificate of the MPC; and such certificate of the MPC shall, in the absence of negligence or bad faith on the part of the Trustee, be full warrant to the Trustee for any action taken or suffered by it pursuant to the provisions of this Trust Indenture upon the faith thereof; (e)The recitals herein and in the Bonds (except the Registrar's certificate of authentication thereon) shall be taken as the statements of the MPC and shall not be considered as made by, or imposing any obligation or liability upon, the Trustee. The Trustee makes no representations as to the value or conditions of the Trust Estate or any part thereof, or as to the title of the MPC or as to the validity of this Trust Indenture or of the Bonds issued hereunder; and the Trustee shall incur no liability or responsibility in respect of any of such matters; (f)The Trustee shall not in any event be required to take, defend or appear in any legal action or proceeding hereunder unless it shall first be adequately indemnified to its satisfaction against the costs, expenses and liabilities which may be incurred thereby. Every provision of this Trust Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section; and TS2:jh2 2368523.1 4/27/2015 28 (g) The Trustee shall not be required to take notice or be deemed to have notice of any default or Event of Default hereunder, or in any other document or instrument executed in connection with the execution and delivery of the Bonds, except an Event of Default described in Section 13.2(a)hereof, unless the Trustee shall be specifically notified in writing of such default or Event of Default by the MPC, the Town, or the Owners of at least 25% in aggregate principal amount of the Bonds then Outstanding. All notices or other instructions required by this Trust Indenture to be delivered to the Trustee shall be delivered pursuant to Section 18.1 of the Agreement and, in the absence of such notice so delivered, the Trustee may conclusively assume there is no default except as it is notified as described above. Section 9.3.Trustee Not Accountable for Actions of MPC. The Trustee makes no representations as to the validity or sufficiency of this Trust Indenture or of the Bonds. The Trustee shall not be accountable for the use or application by the MPC of any of the Bonds authenticated or delivered hereunder or of the proceeds of such Bonds. Section 9.4.Trustee May Acquire Bonds. The Trustee and its officers and directors may acquire and hold, or become the pledgee of, Bonds, and may otherwise deal with the MPC in the manner and to the same extent and with like effect as though it were not trustee hereunder. Section 9.5.Trustee Compensation. The MPC covenants and agrees to pay to the Trustee from time to time, and the Trustee shall be entitled to, reasonable compensation for all services rendered by it in the execution of the trusts hereby created and in the exercise and performance of any of the powers and duties hereunder of the Trustee under the Trust Indenture, which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust, and the MPC will pay or reimburse the Trustee upon its request for all expenses, disbursements and advances incurred or made by the Trustee in accordance with any of the provisions of this Trust Indenture (including the reasonable compensation and the expenses and disbursements of its counsel and of all persons not regularly in its employ) except any such expense, disbursement or advance as may arise from its negligence or bad faith. If any property, other than cash, shall at any time be held by the Trustee subject to this Trust Indenture, or any supplemental agreement, as security for the Bonds, the Trustee, if and to the extent authorized by a receivership, bankruptcy or other court of competent jurisdiction or by the instrument subjecting such property to the provisions of this Trust Indenture as such security for the Bonds, shall be entitled to make advances for the purpose of preserving such property or of discharging tax liens or other prior liens or encumbrances thereon. The MPC also covenants to indemnify the Trustee for, from, and to hold it harmless against any loss, liability, expense or advance incurred or made without negligence or bad faith on the part of the Trustee arising out of or in connection with the acceptance or administration of this Trust, including the costs and expenses of defending itself against any claim of liability in the premises. The obligations of the MPC pursuant to this Section to compensate the Trustee for services and to pay or reimburse the Trustee for expenses, disbursements, liabilities and advances shall constitute additional indebtedness hereunder. Such additional indebtedness shall have priority over the Bonds in respect of all property and funds held or collected by the Trustee as such, except any fund held in trust by the Trustee for the benefit of the Owners of particular Bonds. TS2:jh2 2368523.1 4/27/2015 29 Section 9.6.Qualifications of Trustee. There shall at all times be a trustee hereunder, which shall be a corporation organized and doing business pursuant to the laws of the United States or the State, authorized pursuant to such laws to exercise corporate trust power, having its principal office and place of business in the State, having a combined capital and surplus of at least one hundred million dollars ($100,000,000.00), and subject to supervision or examination by federal or State authority. If such corporation publishes reports of condition at least annually, pursuant to law or to the requirements of any supervising or examining authority above referred to, then for the purposes of this Section the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. In case at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section, the Trustee shall resign immediately in the manner and with the effect specified in Section 9.7 hereof. Section 9.7.Resignation or Removal of Trustee; Appointment of Successor Trustee. (a)The Trustee may at any time resign by giving written notice to the MPC. Upon receiving such notice of resignation, the MPC shall promptly appoint a successor trustee by an instrument in writing executed by order of its Board of Directors. If no successor trustee shall have been so appointed and accepted appointment within thirty (30) days after receipt by the MPC of written notice of resignation, the resigning trustee may petition any court of competent jurisdiction for the appointment of a successor trustee, or any Owner who has been a bona fide Owner of a Bond or Bonds for at least six (6) months may, on behalf of himself and others similarly situated, petition any such court for the appointment of a successor trustee. Such court may thereupon, after such notice, if an y, as it may deem proper and may prescribe, appoint a successor trustee. (b)In case at any time any of the following shall occur: (i)The Trustee shall cease to be eligible in accordance with the provisions of Section 9.6 hereof and shall fail to resign after written request therefor by the MPC or b y any Owner who has been a bona fide Owner of a Bond or Bonds for at least six (6) months, or (ii)The Trustee shall become incapable of acting, or shall be adjudged bankrupt or insolvent, or a receiver of the Trustee or of its property shall be appointed, or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, then, in any such case, the MPC may remove the Trustee and appoint a successor trustee by an instrument in writing executed by order of its Board of Directors; or any such Owner may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor trustee. Such court may thereupon, after such notice, if any, as it may deem proper and may prescribe, remove the Trustee and appoint a successor trustee. TS2:jh2 2368523.1 4/27/2015 30 (c)The Owners of a majority in aggregate principal amount of all the Bonds at the time Outstanding may at any time remove the Trustee and appoint a successor trustee by an instrument or concurrent instruments in writing signed by such Owners. (d)Any resignation or removal of the Trustee and appointment of a successor trustee pursuant to any of the provisions of this Section shall become effective upon acceptance of appointment by the successor trustee as provided in Section 9.8 hereof. Section 9.8.Concerning Any Successor Trustee. An y successor trustee appointed as provided in Section 9.7 shall execute, acknowledge and deliver to the MPC and to its predecessor trustee an instrument accepting such appointment hereunder, and thereupon the resignation or removal of the predecessor trustee shall become effective and such successor trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts, duties and obligations of its predecessor in the trusts hereunder, with like effect as if originally named as trustee herein; but, nevertheless, on the written request of the MPC or the request of the successor trustee, the trustee ceasing to act shall execute and deliver an instrument transferring to such successor trustee, upon the trusts herein expressed, all the rights, powers and trusts of the trustee so ceasing to act. Upon request of an y such successor trustee, the MPC shall execute an y and all instruments in writing for more fully and certainly vesting in and confirming to such successor trustee all such rights, powers and duties. Any trustee ceasing to act shall, nevertheless, retain a lien upon all property or funds held or collected by such trustee to secure the amounts due it as compensation, reimbursements, expenses and indemnity afforded to it by Section 9.5 hereof. No successor trustee shall accept appointment as provided in this Section 9.8 unless at the time of such acceptance such successor trustee shall be eligible pursuant to the provisions of Section 9.6 hereof. Section 9.9.Merger of Trustee. Any corporation into which the Trustee may be merged or with which it may be consolidated, or any corporation resulting from any merger or consolidation to which the Trustee shall be a party, or any corporation succeeding to the business of the Trustee or to which all or substantially all of the corporate trust business of the Trustee may be transferred, shall be the successor of the Trustee hereunder without the execution or filing of any paper or any further act on the part of any of the parties hereto, anything herein to the contrary notwithstanding, provided that such successor trustee shall be eligible pursuant to the provisions of Section 9.6 hereof. TS2:jh2 2368523.1 4/27/2015 31 ARTICLE X SUPPLEMENTAL AGREEMENTS Section 10.1.Supplemental Agreements Not Requiring Consent of Owners. The MPC,when authorized by resolution of its Board of Directors, and the Trustee from time to time and at any time, subject to the conditions and restrictions in this Trust Indenture contained, may enter into an indenture or indentures supplemental hereto, which indenture or indentures thereafter shall form a part hereof, for any one or more or all of the following purposes: (a)To add to the covenants and agreements of the MPC in this Trust Indenture contained, other covenants and agreements thereafter to be observed or to surrender any right or power herein reserved to or conferred upon the MPC; (b)To make such provisions for the purpose of curing any ambiguity, or of curing, correcting or supplementing any defective or inconsistent provision contained in this Trust Indenture, or in regard to matters or questions arising pursuant to this Trust Indenture, as the MPC may deem necessary or desirable and not inconsistent with this Trust Indenture and which shall not adversely affect the interests of the Owners of the Bonds; (c)To describe or redescribe any property subjected to the lien of this Trust Indenture; (d)To modify, amend or supplement this Trust In denture or any indenture supplemental hereto in such manner as to permit the qualification hereof and thereof pursuant to the Trust Indenture Act of 1939 or any similar federal statute hereafter in effect, and, if they so determine, to add to this Trust Indenture or any indenture supplemental hereto such other terms, conditions and provisions as may be permitted by said Trust Indenture Act of 1939 or a similar Federal statute; (e)To provide for additional bonds on a parity with the Bonds to the extent permitted by this Trust Indenture; (f)To make any other change or amendment which the Trustee determines does not materially adversely affect the interests of any Owner; and (g)To make provisions and amendments applicable only to a single series of bonds sold or remarketed on the basis of the effectiveness of such provisions or amendments with respect to those bonds. Any supplemental agreement authorized by the provisions of this Section may be executed by the MPC and the Trustee without the consent of the Owners of any of the Bonds at the time Outstanding, notwithstanding any of the provisions of Section 10.2 hereof, but the Trustee shall not be obligated to enter into any such supplemental agreement which affects the Trustee's own rights, duties or immunities pursuant to this Trust Indenture or otherwise. TS2:jh2 2368523.1 4/27/2015 32 Section 10.2.Supplemental Agreement Requiring Consent of Owners. With the consent (evidenced as provided in this Section 10.2) of the Owners of not less than a majority in aggregate principal amount of the Bonds at the time Outstanding, the MPC, when authorized by a resolution of its Board of Directors, and the Trustee, may from time to time and at any time enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to or changing in any manner or eliminating an y of the provisions of this Trust Indenture or of an y supplemental agreement, provided, however, that copies of such proposed indenture or indentures supplemental hereto shall be received by any rating agency then rating the Bonds at least fifteen (15) days prior to adoption of the same; and provided further, that no such supplemental agreement shall (1) extend the fixed maturity of the Bonds or reduce the rate of interest thereon or extend the time for the payment of interest, or reduce the amount of the principal thereof, without the consent of the Owner of each such Bond so affected, or (2) reduce the aforesaid percentage of Owners Bonds required to approve any such supplemental agreement, or (3) permit the creation of any lien on the properties pledged and conveyed hereunder prior to or on a parity with the lien of this Trust Indenture (except as expressly herein permitted), or deprive the Owners of the Bonds (except as aforesaid) of the lien created by this Trust Indenture upon said properties, without the consent of the Owners of all the Bonds then Outstanding. Upon receipt by the Trustee of a resolution authorizing the execution of any such supplemental agreement, and upon the filing with the Trustee of evidence of the consent of Owners, as aforesaid, the Trustee shall join with the Board of Directors in the execution of such supplemental agreement unless such supplemental agreement affects the Trustee's own rights, duties or immunities pursuant to this Trust Indenture, or otherwise, in which case the Trustee may in its discretion, but shall not be obligated to, enter into such supplemental agreement. When the Trustee determines that the requisite number of consents have been obtained for a supplemental agreement requiring consent of the Owners, the Trustee shall date and file a certificate to that effect in its records and shall notify the MPC. Such determination shall be conclusive and no action or proceeding to invalidate the supplemental agreement shall be instituted or maintained unless commenced within sixty (60) days after the filing of such certificate. Upon the filing of such certificate, the supplemental agreement shall become effective without liability or responsibility to any Owner of any Bond, whether or not such Owner shall have consented thereto. Consent of Owners may be evidenced by Bonds being sold or remarketed on the basis of the effectiveness of the proposed supplemental agreement or in any other manner acceptable to the Trustee. If the supplemental agreement will not take effect so long as an y particular Bonds remain Outstanding, the consent of the Owners of such Bonds shall not be required and such Bonds shall not be deemed to be Outstanding for the purpose of determining the required consents. It shall not be necessary for the consent of the Owners pursuant to this Section to approve the particular form of any proposed supplemental agreement, but it shall be sufficient if consent is given to the substance thereof. Any such consent shall be binding upon the Owner of the Bond giving such consent and upon any subsequent Owner of such Bond and of any Bond issued in exchange therefor (whether or not such subsequent Owner thereof has notice thereof), unless such consent is revoked in writing by the Owner of such Bond giving such TS2:jh2 2368523.1 4/27/2015 33 consent or by a subsequent Owner thereof by filing written notice of such revocation with the Trustee prior to the execution by the Trustee of such supplemental agreement. If the Owners of the required amount or number of the Bonds Outstanding shall have consented to and approved the execution of such supplemental indenture as herein provided, no Owner of any Bond shall have any right to object to the execution thereof, or to object to any of the terms and provisions contained therein or the operation thereof, or in any manner to question the propriety of the execution thereof, or to enjoin or restrain the Trustee or the MPC from executing the same or from taking any action pursuant to the provisions thereof. Section 10.3.Indenture Deemed Amended. Upon the execution of any supplemental agreement pursuant to the provisions of this Article X, this Trust Indenture shall be and be deemed to be modified and amended in accordance therewith; and the respective rights, duties and obligations pursuant to this Trust Indenture of the MPC, the Trustee and all Owners of Bonds Outstanding shall thereafter be determined, exercised and enforced hereunder subject in all respects to such modification and amendments, and all the terms and conditions of any such supplemental agreement shall be and be deemed to be part of the terms and conditions of this Trust Indenture for any and all purposes. Section 10.4.Approval of Counsel. Subject to the provisions of Section 9.1 hereof, the Trustee may receive and rely upon an Opinion of Independent Counsel as conclusive evidence that any Supplemental Agreement executed pursuant to the provisions of this Article X complies with the requirements of this Article X. Section 10.5.New Bonds with Modifications. Bonds authenticated and delivered after the execution of any Supplemental Agreement pursuant to the provisions of this Article X may bear a notation, in form approved by the Trustee, as to any matter provided for in such Supplemental Agreement; and if such Supplemental Agreement shall so provide, new bonds, so modified as to conform, in the opinion of the Trustee, to any modification of this Trust Indenture contained in any such Supplemental Agreement, may be prepared by the MPC, authenticated by the Registrar and delivered without cost to the Owners of the bonds then Outstanding upon surrender for cancellation of such bonds in equal aggregate principal amounts. ARTICLE XI COVENANTS, NOTICES Section 11.1.Payment of Principal and Interest. The MPC covenants that it will promptly pay the principal of and the interest on every Bond issued in accordance with the provisions of this Trust Indenture at the place, on the dates and in the manner provided herein and in such Bonds. Section 11.2.No Accumulation of Interest. In order to prevent any accumulation of accrued interest, the MPC covenants that it will not, directly or indirectly, extend or assent to the extension of the time for the payment of any claim for interest on any of the Bonds, and will not, directly or indirectly, be a party to or approve any such arrangement by funding such claims or in any other manner. TS2:jh2 2368523.1 4/27/2015 34 Section 11.3.Maintaining Office for Payment of Bonds. The MPC covenants that so long as the Bonds or any of them shall be Outstanding it will cause offices or agencies where the Bonds may be presented for payment to be maintained in the Town or at the office of the Trustee as provided in the Bond form. Section 11.4.Sufficiency of Installment Payments. The MPC covenants that while any Bonds are Outstanding hereunder, money received by it from the Town as Installment Payments pursuant to the Agreement will, in the aggregate, be sufficient to make all payments which the Trustee is obligated to set aside in the various accounts established hereunder. Section 11.5.Record and Account Books Available. The MPC covenants and agrees to keep or cause to be kept proper books of record and account in which complete and correct entries shall be made of all transactions relating to the receipts, disbursements, allocation and application of the revenues accruing to the trust and the amounts thereof forwarded to the Trustee, and such books shall be available for inspection by the Owner of any of the Bonds at reasonable hours and pursuant to reasonable conditions. Section 11.6.Payment of Expenses and Debt Service. The MPC covenants that all charges made by the Trustee, the Registrar and any Paying Agents for services rendered and for payment of principal of and interest on the Bonds (not paid by the Town), will be paid by the MPC from revenues of the Trust Estate and will not be required to be paid by the Owners of the Bonds. Section 11.7.Covenant of Good Title. The MPC covenants that it has or will acquire and, so long as any Bonds are Outstanding hereunder, will retain good title to the Trust Estate. Section 11.8.Validity of Transactions. The MPC covenants that it is, at the date of the execution and delivery of this Trust Indenture, or will be, possessed of the Trust Estate; that the Agreement is, at the date of the execution and delivery of this Trust Indenture, a valid and subsisting agreement; that the Agreement was lawfully made by the MPC; that the covenants contained in the Agreement are binding; that the MPC has good right, full power and lawful authorit y to assign, and to transfer in trust and pledge the Trust Estate in the manner and form herein provided; and that the MPC forever will warrant and defend the title to the same to the Trustee against the claims of all persons whomsoever. Section 11.9.Trustee Consent Required to Modify Documents. The MPC further covenants that it will not, without the written consent of the Trustee, alter, modify or cancel, or agree or consent to alter, modify or cancel the Agreement, Articles of Incorporation of the MPC, or any other agreements heretofore or hereafter entered into by the MPC which relate to or affect the security of the Bonds issued hereunder. With the written consent of the Trustee, the MPC may consent to alterations and modifications thereof, provided that no such alterations or modifications will decrease the amounts available for payment of the Bonds, and provided further that prior to giving its consent with respect to an alteration or modification of the Agreement, the Trustee shall obtain an opinion of counsel or financial consultant selected by the TS2:jh2 2368523.1 4/27/2015 35 Trustee, that the proposed alteration or modification will not be materially adverse to the interests of the Owners and will not decrease the amounts available for payment of the Bonds. At least ten (10) days prior to giving its written consent to any alteration or modification of the Agreement, the Trustee may, in its discretion, notify each Owner of any Bonds, in writing, of the proposed alteration or modification. Parity bonds secured by taxes within the limitations contained in the Agreement shall not be deemed to have decreased the amounts available for payment of the Bonds, nor shall agreements supplemental to or independent of the Agreement, pursuant to which such parity bonds are to be issued, be deemed alterations or modifications of the Agreement so as to require consent of the Trustee or notification of Owners. The MPC further covenants that it will comply with all the terms and provisions of such documents. Section 11.10.Assurance of Compliance; Good Faith Contest. The MPC covenants that it will in all respects promptly and faithfully keep, perform and comply with all the terms, provisions, covenants, conditions and agreements of the Agreement to be kept, performed and complied with by it. The MPC further covenants that it will not do or permit anything to be done, or omit or refrain from doing anything, in any case where any such act done, or permitted to be done, or any such omission of or refraining from action would or might be a ground for declaring a forfeiture of the Agreement; that upon request of the Trustee, the MPC will promptly deposit with the Trustee (to be held by the Trustee until title and rights of the Trustee in accordance with this Trust Indenture shall be released and/or reconveyed) any and all documentary evidence received by it showing compliance with the provisions of the Agreement to be performed by it; that the MPC, immediately upon its receiving or giving any notice, communication, or other document in any way relating to or affecting said Agreement, thereby created, will deliver the same, or a copy thereof, to the Trustee; that the MPC will pay (or cause the Town to pay) all taxes, assessments and other charges, if an y, that may be levied, assessed or charged upon the Trust Estate, or any part thereof, promptly as and when the same shall become due and payable, but it shall not be a breach of this covenant if the MPC fails to pay any such tax, assessment or charge during any period in which the MPC or the Town, in good faith, shall be contesting the amount or validity of such tax, assessment or charge; that the MPC will, upon request of the Trustee, from time to time keep the Trustee advised of such payments, and deliver such evidence thereof as the Trustee may reasonably require; and that the MPC will not suffer such Trust Estate hereby conveyed, and transferred in trust, or any part thereof, to be sold for any taxes, assessments or other charges whatsoever, or to be forfeited therefor, nor do or permit to be done, in, upon or about such Trust Estate, or any part thereof, anything that might in any way weaken, diminish, or impair the security intended to be given by or pursuant to this Trust Indenture, nor suffer any portion of the Trust Estate to be sold pursuant to any mechanics'or materialmen's lien or other proceedings. Section 11.11.Additional Covenants. The MPC further covenants and agrees as follows: (a)Whenever and so often as requested to do so by the Trustee or any Owner, to execute and deliver promptly or cause to be executed and delivered promptly all such other and further instruments, documents or assurances and to promptly do or cause to be done all such other and further things, as may be necessary or reasonably required in order to further and more TS2:jh2 2368523.1 4/27/2015 36 fully vest in the Trustee and the Owners all rights, interests, powers, benefits, privileges and advantages conferred or intended to be conferred upon them by this Trust Indenture; (b)Upon the request of the Trustee or any Owner, from time to time, to take such actions as may be necessary or proper to remedy or cure any defect in or cloud upon the title to the Trust Estate or any part thereof, whether now existing or hereafter developing, and to prosecute all such suits, actions and other proceedings as may be appropriate for such purpose and to indemnify and save the Trustee and every such Owner harmless for, from and against all loss, cost, damage and expense, including attorneys'fees, which they or either of them may incur by reason of any such defect, cloud, suit, action or proceeding; (c)To maintain its existence as a nonprofit corporation organized and existing pursuant to the laws of the State; and (d)Not to be or become a party to any merger or consolidation. Section 11.12.Notification to the Town of Failure to Make Installment Payments. The Trustee shall notify the Town of any failure by the Town to make any Installment Payment or other payment required under the Agreement to be made to the Trustee, in writing and within one (1) Business Day of knowledge of any such failure. Such notice shall not be a prerequisite for the occurrence of an Event of Default. Section 11.13.Business Days. Except as otherwise required herein, if this Trust Indenture requires any party to act on a specific day and such day is not a Business Day, such party need not perform such act until the next succeeding Business Day, and such act shall be deemed to have been performed on the day required. ARTICLE XII LIMITATION OF LIABILITY Section 12.1.Limited Liability of the Town. Except for the payment of Installment Payments from Excise Taxes when due in accordance with the Agreement and the performance of the other covenants and agreements of the Town contained in the Agreement, the Town shall have no pecuniary obligation or liability to an y of the other parties or to the Owners of the Bonds with respect to this Trust Indenture, or the terms, execution, delivery or transfer of the Bonds, or the distribution of Installment Payments to the Owners by the Trustee. Section 12.2.No Liability of the Town for Trustee Performance. The Town shall have no obligation or liability to any of the other parties or to the Owners of the Bonds with respect to the performance by the Trustee of any duty imposed upon it under this Trust Indenture. Section 12.3.Indemnification of the Trustee. The MPC and, to the extent permitted by law, the Town shall indemnify and save the Trustee and its officers, directors, TS2:jh2 2368523.1 4/27/2015 37 agents and employees harmless for, from and against all claims, losses, costs, expenses, liability and damages, including legal fees and expenses, arising out of: (a)the use, maintenance, condition or management of, or from any work or thing done on, the Prior Project, or the site of the Prior Project, or any portion thereof or interest therein, by the Town; (b)any breach or default on the part of the MPC or Town in the performance of any of its obligations under this Trust Indenture and any other agreement made and entered into for purposes of the Prior Project or any interest therein; (c)any act of negligence of the MPC or Town or of any of its agents, contractors, servants, employees or licensees with respect to the Prior Project; (d)any act of negligence of any assignee of, or purchaser from, the MPC or Town or of any of its or their agents, contractors, servants, employees or licensees with respect to the Prior Project; (e)the construction or acquisition of the Prior Project or any interest therein; (f)the actions of any other party, including but not limited to the operation or use of the Prior Project or the site of the Prior Project, or interest therein, by the Town; (g)the ownership of the Prior Project, or the site of the Prior Project, or interest therein, (h)this Trust Indenture and the Agreement, including the Trustee's exercise and performance of its powers and duties hereunder, or (i)any untrue statement or alleged untrue statement of any material fact or omission or alleged omission to state a material fact necessary to make the statements made, in light of the circumstances under which they were made, not misleading in any official statement or other offering circular utilized in connection with the sale of the Bonds, including the costs and expenses of defending itself against any claim of liability arising under this Trust Indenture. No indemnification will be made under this Section or elsewhere in this Trust Indenture for willful misconduct, negligence or breach of duty under this Trust Indenture by the Trustee, or by its officers, agents, employees, successors or assigns. The MPC's and Town's obligations hereunder for indemnification under this Section shall remain valid and binding notwithstanding, and shall survive, the maturity and payment or redemption of the Bonds or resignation or removal of the Trustee or the termination of this Trust Indenture. The Trustee, promptly after determining that any event or condition which requires or may require indemnification by the MPC and Town hereunder exists or may exist, or after receipt of notice of the commencement of any action in respect of which indemnity may be sought hereunder, shall notify the MPC and Town in writing of such circumstances or action (the "Notification"). Upon giving of the Notification, the Trustee shall cooperate fully with the MPC and Town in order that the MPC or Town may defend, compromise or settle any such matters or actions which may result in payment by Town hereunder. The MPC and Town shall give the Trustee notice of its election within fifteen (15) days after receiving the Notification whether the MPC and Town, at its sole cost and expense, shall represent and defend the Trustee in any claim or action which may result in a request for indemnification hereunder. If the MPC and Town timely give the notice that it will represent and defend the Trustee thereafter, the Trustee shall not settle or compromise or otherwise interfere with the defense or undertakings of the MPC and Town hereunder. The MPC and Town shall not settle or compromise any claim or action against the Trustee without the written approval of the Trustee, except to the extent that the MPC and Town shall pay all losses and the Trustee shall be fully released from such claim or action. If the MPC and Town either fail to timely give its notice or notify the Trustee that the MPC and Town will not represent and defend the Trustee, the Trustee may defend, settle, compromise or admit liability as it shall determine in the reasonable exercise of its discretion and in an effort to minimize any claims for indemnity made hereunder. In the event the MPC and Town are TS2:jh2 2368523.1 4/27/2015 38 required to and do indemnify the Trustee as herein provided, the rights of the MPC and Town shall be subrogated to the rights of the Trustee to recover such losses or damages from any other person or entity. Section 12.4.Opinion of Independent Counsel. Before being required to take any action, the Trustee may require an opinion of Independent Counsel acceptable to the Trustee, which opinion shall be made available to the other parties hereto upon request, which counsel may be counsel to any of the parties hereto, or a verified certificate of any party hereto, or both, concerning the proposed action. If it does so in good faith, the Trustee shall be absolutely protected in relying thereon. ARTICLE XIII EVENTS OF DEFAULT AND REMEDIES OF BOND OWNERS Section 13.1.MPC's Rights Held in Trust. As provided herein, the Trustee holds in trust hereunder all of the MPC's rights in and to the Agreement, including without limitation all of the MPC's rights to exercise such rights and remedies conferred on the MPC pursuant to the Agreement as may be necessary or convenient to enforce payment of the Installment Payments and any other amounts required to be deposited in the Bond Fund and enforcement of the pledge of Excise Taxes for the payment of the Bonds. Section 13.2.Events of Default. Any one or more of the following events is an "Event of Default"for purposes of this Trust Indenture: (a)Default in the due and punctual payment of the principal of, or interest on, any Bond when and as the same shall become due and payable, whether by declaration or otherwise, and such default continues until the business day following the due date; (b)Default by the MPC in the performance or observance of any other of the covenants, agreements or conditions on its part in this Trust Indenture or in the Bonds, and such default continues for a period of thirty (30) days after written notice thereof, specifying such default and requiring the same to be remedied, has been given to the MPC by the Trustee, or to the MPC and the Trustee by the Owners of not less than a majority in aggregate principal amount of the Bonds at the time Outstanding; provided, however, that if the failure stated in such notice is correctable but cannot be corrected within thirty (30) days after the receipt of such notice, such failure shall not constitute an Event of Default if and so long as corrective action is instituted by the MPC within such thirty (30) day period and is diligently pursued to the satisfaction of the Trustee; (c)If either the MPC or the Town (1) admits in writing its inability to pay its debts generally as they become due, (2) files a petition in bankruptcy or takes advantage of any insolvency act, (3) makes an assignment for the benefit of its creditors, (4) consents to the TS2:jh2 2368523.1 4/27/2015 39 appointment of a receiver of itself or of the whole or any substantial part of its property, or (5) on a petition in bankruptcy filed against the MPC or the Town, is adjudicated a bankrupt; (d)If either the MPC or the Town files a petition or answer seeking reorganization or arrangement in accordance with the federal bankruptcy laws or any other applicable law or statute of the United States of America or of any state thereof; if a court of competent jurisdiction enters an order, judgment or decree appointing, without the consent of the MPC or the Town, a receiver of the MPC or the Town, or of the whole or any substantial part of its property, or approving a petition filed against the MPC or the Town seeking reorganization of the MPC or the Town pursuant to the federal bankruptcy laws or any other applicable law or statute of the United States of America or of any state thereof, and such order, judgment, or decree is not vacated or set aside or stayed within sixty (60) days from the date of entry thereof; or if, pursuant to the provisions of any other law for the relief or aid of debtors, any court of competent jurisdiction assumes custody or control of the MPC or the Town or of the whole or any substantial part of its property, and such custody or control is not terminated or stayed within sixty (60) days from the date of assumption of such custody or control; (e)If the Town defaults in its obligations pursuant to the Agreement and such default is not remedied within the applicable period of time for remedy therein expressed; or (f)If an event of default occurs with respect to any obligations then Outstanding which are on a parity basis with the Bonds as to the lien upon the Excise Taxes. Section 13.3.Enforcement of Remedies. The Trustee, in case of the occurrence of an Event of Default described in Section 13.2 hereof, may, and upon the written request of the Owners of not less than a majority in principal amount of the Bonds then Outstanding shall, exercise any or all of the following remedies: (a)The Trustee may proceed to protect and enforce its right and the rights of the Owners of the Bonds in accordance with this Trust Indenture by a suit or suits in equity or at law, in aid of the execution of any power granted herein or in the Agreement, or for the enforcement of any other appropriate legal or equitable remedy, as the Trustee, being advised by counsel, may deem most effectual to protect and enforce any of the rights or interests pursuant to the Bonds, this Trust Indenture or the Agreement. All rights of action pursuant to this Trust Indenture, an y of the Bonds or the Agreement may be enforced by the Trustee without the possession of any of the Bonds or the production thereof on any trial or other proceeding relative thereto, and any such suit or proceeding instituted by the Trustee shall be brought in its name as Trustee, and any recovery of judgment shall be for the ratable benefit of the Owners of the Bonds. (b)The Trustee, upon the bringing of a suit to enforce this Trust Indenture and the Agreement, as a matter of right, without notice and without providing indemnity to the MPC or the Town or anyone claiming under them, may have a receiver appointed of all the Excise Taxes which are pledged for the payment of the amounts due in accordance with the Agreement, pending such proceedings, with such powers as the Court making such appointment shall confer, including such powers as may be necessary or usual in such cases for the collection and proper TS2:jh2 2368523.1 4/27/2015 40 disbursement of the Excise Taxes pledged for the payment of the installment payments pursuant to the Agreement, and the MPC does hereby irrevocably consent to such appointment. (c)The Trustee is hereby appointed, and the successive respective Owners of the Bonds by taking and holding the same, shall be conclusively deemed to have so appointed the Trustee, the true and lawful attorney-in-fact of the respective Owners of the Bonds, with authority to make or file, in the respective names of the Owners of the Bonds or in behalf of all Owners of the Bonds as a class, any proof of debt, amendment to proof of debt, petition or other document; to receive payment of all sums becoming distributable on account thereof; to execute any and all acts and things for and on behalf of all Owners of the Bonds as a class, as may be necessary or advisable, in the opinion of the Trustee, in order to have the respective claims of the Owners of the Bonds against the MPC allowed in any equity receivership, insolvency, liquidation, bankruptcy or other proceedings to which the MPC shall be a party. The Trustee shall have full powers of substitution and delegation in respect of any such powers. Section 13.4.Application of Amounts Recovered. Amounts recovered through proceedings undertaken due to an Event of Default shall be paid to and applied by the Trustee as follows: (a)To the payment of costs and expenses of suit, if any, and the reasonable compensation of the Trustee, its agents, attorneys and counsel, and of all proper expenses, liabilities and advances incurred or made hereunder by the Trustee or by any Owner or Owners of the Bonds; then (b)To the payment of the whole amount then owing or unpaid upon the Bonds for principal and interest, and in case such proceeds shall be insufficient to pay the whole amount so due and unpaid on the Bonds, then to the payment of such principal and interest, without preference or priority of principal over interest or of interest over principal or of any installment of interest over any other installment of interest, ratably, in proportion to the aggregate of such principal and accrued and unpaid interest; and then (c)To the payment of the surplus, if any, to the MPC, its successors and assigns, or to whomsoever may be lawfully entitled to receive the same. Section 13.5.No Waiver of Rights of Trustee or Owners. No delay or omission of the Trustee or of any Owner of any of the Bonds to exercise any right or power arising from any default on the part of the MPC shall exhaust or impair any such right or power or prevent its exercise during the continuance of such default. No waiver by the Trustee or Owners of any such default, whether such waiver be full or partial, shall extend to or be taken to affect any subsequent default, or to impair the rights resulting therefrom, except as may be otherwise provided herein. No remedy hereunder is intended to be exclusive of any remedy, but each remedy shall be cumulative and in addition to any and every other remedy given hereunder or otherwise existing. Section 13.6.No Action by Owners Prior to Demand. No Owner shall have any right to institute or prosecute any suit or proceeding at law or in equity, for the appointment TS2:jh2 2368523.1 4/27/2015 41 of a receiver of the MPC, for the enforcement of any of the provisions hereof or of any of the remedies hereunder unless the Trustee after request in writing by the Owners of a majority in aggregate principal amount of the Bonds then Outstanding shall have refused to take such action or be unreasonabl y delayed in taking the same; provided, however, that the right of any Owner of any Bond to receive payment of the principal thereof or interest thereon on or after the respective due dates expressed therein or to institute suit for the enforcement of any such payment shall not be impaired or affected without the consent of such Owner. ARTICLE XIV DEFEASANCE; UNCLAIMED MONEY; MISCELLANEOUS Section 14.1.Discharge of Indebtedness; Defeasance. If the MPC shall pay and discharge the entire indebtedness on all Bonds Outstanding hereunder in any one or more of the following ways, to wit: (a)By well and truly paying or causing to be paid the principal of and interest on Bonds Outstanding hereunder, as and when the same become due and payable; (b)By depositing or causing to be deposited with an entity meeting the requirements of a successor trustee provided in Section 9.8 hereof that agrees to transfer amounts to the Trustee as required hereby (a "Depository Trustee"), in trust, at or before maturity, money in the necessary amount to pay or redeem Bonds Outstanding pursuant hereto; (c)By delivering to the Trustee, for cancellation by it, all the Bonds Outstanding pursuant hereto; or (d)By depositing or causing to be deposited in escrow with a Depository Trustee or the Trustee, upon its receipt, obligations described in paragraph (a)of the definition of Permitted Investments sufficient in amount, bearing such interest and maturing on such dates as to (according to a certificate to that effect of a firm of certified public accountants acceptable to the Trustee) either, (i) pay the entire principal of and the accruing interest on any Bonds then Outstanding, or (ii) if the MPC elects to provide for the prior redemption of such Bonds as may be redeemed prior to maturity, pay the principal of the Bonds, accrued and accruing interest to their respective dates of maturity or redemption, as the case may be, all premiums on Bonds so called for redemption prior to their maturity and all expenses pertaining to the prior redemption of the Bonds; and if the MPC shall also pay or cause to be paid all other sums payable hereunder by the MPC, then and in any such case this Trust Indenture shall cease, determine, and become null and void, and thereupon the Trustee shall, upon written request of the MPC, and upon receipt by the Trustee of a certificate of the MPC and an Opinion of Independent Counsel, each stating that in the opinion of the signers all conditions precedent to the satisfaction and discharge of this Trust In denture have been complied with, forthwith execute proper instruments TS2:jh2 2368523.1 4/27/2015 42 acknowledging satisfaction of and discharging this Trust Indenture. The satisfaction and discharge of this Trust Indenture shall be without prejudice to the rights of the Trustee to charge and be reimbursed by the MPC for any expenditures which it may thereafter incur in connection herewith. The MPC may at any time surrender to the Trustee for cancellation by it any Bonds previously authenticated and delivered hereunder which the MPC may have acquired in any manner whatsoever, and such Bonds, upon such surrender and cancellation, shall be deemed to be paid and retired. Payment of all or any portion (as determined by the MPC) of the Bonds Outstanding from time to time may be made as hereinabove provided, and any such Bonds so paid or provided for shall be deemed defeased and no longer Outstanding. Section 14.2.Funds for Owners after Defeasance. Upon the satisfaction and discharge of the Trust Indenture pursuant to Section 14.1(b) or (d) above, all liability of the MPC in respect to such Bonds shall cease, determine and be completely discharged; and the Owners thereof shall thereafter be entitled only to payment out of the money deposited with the Trustee as aforesaid for their payment, subject, however, to the provisions of Section 14.3 hereof. Section 14.3.Unclaimed Money. Notwithstanding any other provisions of this Trust Indenture, any money deposited with the Trustee or any other Paying Agent in trust for the payment of the principal of, or interest and any premium on any Bonds and remaining unclaimed for three (3) years after the principal of all the Bonds Outstanding pursuant hereto has become due and payable, shall be repaid to the MPC upon its written request, and the Owners of such Bonds shall thereafter be entitled to look only to the MPC for repayment thereof, and all liability of the Trustee or any other Paying Agent with respect to such money shall thereupon cease. In the event of the repayment of any such money to the MPC, as aforesaid, the Owners of the Bonds in respect of which such money was deposited shall thereafter be deemed to be unsecured creditors of the MPC for amounts equivalent to the respective amounts deposited with the MPC (without interest thereon). Notwithstanding the foregoing, the Trustee shall, upon the written request of the MPC, repay such money to the MPC at any time earlier than three (3) years if failure to repay such money to the MPC within such earlier period shall give rise to the operation of any escheat or unclaimed property statute pursuant to State law. Section 14.4.Notices. All written notices to be given under this Trust Indenture shall be given by mail or personal delivery to the party entitled thereto at its address set forth below, or at such address as the party may provide to the other party in writing from time to time. Notice shall be effective upon deposit in the United States mail, postage prepaid or, in the case of personal delivery, upon delivery to the address set forth below: To the MPC:Town of Fountain Hills, Arizona Municipal Property Corporation c/o Town Clerk 16705 E. Avenue of the Fountains Fountain Hills, Arizona 85268 TS2:jh2 2368523.1 4/27/2015 43 To the Town:Town of Fountain Hills, Arizona c/o Town Clerk 16705 E. Avenue of the Fountains Fountain Hills, Arizona 85268 To Trustee: With a copy to Bond Counsel:Gust Rosenfeld P.L.C. One East Washington Street, Suite 1600 Phoenix, Arizona 85004 Attn: Timothy A. Stratton Section 14.5.Covenant as to Conflict of Interest. A.R.S. Section 38-511 provides that the Town may, within three years after its execution, cancel any contract, without penalty or further obligation, if any person significantly involved in initiating, negotiating, securing, drafting or creating the contract on behalf of the Town is, at any time while the contract or any extension of the contract is in effect, an employee or agent of any other party to the contract in any capacity or a consultant to any other party of the contract with respect to the subject matter of the contract. In addition, the Town may recoup any fee or commission paid or due to any person significantly involved in initiating, negotiating, securing, drafting or creating the contract on behalf of the Town from any other party to the contract arising as a result of the contract. Section 14.6.Governing Law. This Trust Indenture shall be construed and governed in accordance with the laws of the State of Arizona. Section 14.7.Binding Effect and Successors. This Trust Indenture shall be binding upon and inure to the benefit of the parties and their respective successors and assigns. Whenever in this Trust Indenture the MPC, Town or the Trustee is named or referred to, such reference shall be deemed to include successors or assigns thereof, and all the covenants and agreements in this Trust Indenture contained by or on behalf of the MPC, Town or the Trustee shall bind and inure to the benefit of the respective successors and assigns thereof whether so expressed or not. Section 14.8.Execution in Counterparts. This Trust Indenture may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same Trust Indenture. Section 14.9.Destruction of Cancelled Bonds. Whenever in this Trust Indenture provision is made for the surrender to or cancellation by the Trustee and the delivery to the MPC of an y Bonds, the Trustee may, upon the request of the MPC, in lieu of such cancellation and delivery, destroy such in the presence of an officer of the MPC (if the MPC shall so require) and deliver a certificate of such destruction to the MPC. TS2:jh2 2368523.1 4/27/2015 44 Section 14.10.Headings. The headings or titles of the several Articles and Sections hereof, and any table of contents appended to copies hereof, shall be solely for convenience of reference and shall not affect the meaning, construction or effect of this Trust Indenture. All references herein to "Articles", "Sections", and other subdivisions are to the corresponding Articles, Sections or subdivisions of this Trust Indenture; and the words "herein", "hereof", "hereunder" and other words of similar import refer to this Trust Indenture as a whole and not to any particular Article, Section or subdivision hereof. Section 14.11.Parties Interested Herein. Nothing in this Trust In denture or the Bonds, expressed or implied, is intended or shall be construed to confer upon, or to give or grant to, any person or entity, other than the MPC, the Town, the Trustee, the Registrar, the Paying Agent and the Owners of the Bonds, any legal or equitable right, remedy or claim under or by reason of this Trust Indenture or any covenant, condition or stipulation hereof, and all covenants, stipulations, provisions and agreements in this Trust Indenture contained by and on behalf of the Town shall be for the sole and exclusive benefit of the MPC, the Town, the Trustee, the Registrar, the Paying Agent and the Owners of the Bonds. The Trustee, Registrar and the Paying Agent shall be third-party beneficiaries of the provisions hereof which grant rights to them. Section 14.12.Waiver of Notice. Whenever in this Trust Indenture the giving of notice by mail or otherwise is required, the giving of such notice may be waived in writing by the person entitled to receive such notice and in any case the giving or receipt of such notice shall not be a condition precedent to the validity of any action taken in reliance upon such waiver. Section 14.13.Severability of Invalid Provisions. In case any one or more of the provisions contained in this Trust Indenture or in the Bonds shall for any reason be held to be invalid, illegal or unenforceable in any respect, then such invalidity, illegality or unenforceability shall not affect any other provision of this Trust Indenture, and this Trust Indenture shall be construed as if such invalid or illegal or unenforceable provision had never been contained herein. The parties hereto hereby declare that they would have entered into this Trust Indenture and each and every other section, paragraph, sentence, clause or phrase hereof and authorized the delivery of the Bonds pursuant thereto irrespective of the fact that any one or more sections, paragraphs, sentences, clauses or phrases of this Trust In denture may be held illegal, invalid or unenforceable. Section 14.14.E-Verify Requirements. To the extent applicable under A.R.S. Section 41-4401, the Trustee and its subcontractors warrant compliance with all federal immigration laws and regulations that relate to their employees and their compliance with the E- verify requirements under A.R.S.Section 23-214(A). The Trustee or its subcontractors' breach of the above-mentioned warranty shall be deemed a material breach of this Trust Indenture and may result in the termination of the Trustee's services by the Town. The Town retains the legal right to randomly inspect the papers and records of the Trustee or its subcontractor employee who work on this Trust Indenture to ensure that the Trustee and its subcontractors are complying with the above-mentioned warranty. TS2:jh2 2368523.1 4/27/2015 45 The Bank and its subcontractors warrant to keep such papers, information, and records necessary to verify compliance with the above-mentioned warranty (collectively, the "Information") open for random inspection by the Town during the Bank's normal business hours. The Bank and its subcontractors shall reasonably cooperate with the Town's random inspections including granting the Town entry rights onto its property to perform the random inspections, granting the Town access to,and use of,the Information, provided that, the Town agrees that it will use the Information solely for the purpose of verifying compliance with the E- verify requirements and the warranty of this Section 14.14 and, subject to the requirements of law, including the public records law of the State of Arizona, the Town will preserve the confidentiality of any information, records, or papers the Town views, accesses, or otherwise obtains during any and every such random inspection, including, without limitation,the Information. (Signature Page to Follow) TS2:jh2 2368523.1 4/27/2015 46 IN WITNESS WHEREOF, the parties have executed this Trust Indenture as of the day and year first above written. TOWN OF FOUNTAIN HILLS, ARIZONA MUNICIPAL PROPERTY CORPORATION,an Arizona non-profit corporation By__________________________________ Its President _________________,a national banking association,as Trustee By___________________________________ Its___________________________________ TOWN OF FOUNTAIN HILLS, ARIZONA, an Arizona municipal corporation (as to Sections 2.7, 2.12, 3.2, 4.1, 5.1, 6.1, 6.2, 6.3, 7.2, 8.1, 8.6, 8.7, 9.2, 11.3, 11.10, 11.12, 12.1, 12.2, 12.3, 13.2, 14.5, 14.7, 14.11 and 14.14) By__________________________________ Mayor ATTEST: _______________________________ Town Clerk APPROVED AS TO FORM: Gust Rosenfeld P.L.C. _______________________________ Timothy A. Stratton Bond Counsel TS2:jh2 2368523.1 4/27/2015 A-1 EXHIBIT A (Form of Bond) [UNLESS THIS BOND IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY BOND ISSUED IS REGISTERED IN THE NAME OF THE CEDE & CO. OR TO SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC). ANY TRANSFER, PLEDGE OR OTHER USE THEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.] BENEFICIAL OWNERSHIP INTERESTS IN THE HEREINAFTER DESCRIBED BOND IS ONLY TRANSFERABLE IN AUTHORIZED DENOMINATIONS OF A PRINCIPAL AMOUNT OF $100,000 OR MORE (1) IN CONNECTION WITH A SALE TO OR THROUGH A BROKER/DEALER PURSUANT TO THE RULES AND REGULATIONS APPLICABLE TO SALES TO "SOPHISTICATED MUNICIPAL MARKET PROFESSIONALS" OR (2) IN CONNECTION WITH A SALE OR TRANSFER TO A QUALIFIED INVESTOR UPON RECEIPT BY THE DISTRICT'S PAYING AGENT OF A "CERTIFICATE OF SOPHISTICATED MUNICIPAL MARKET PROFESSIONAL" OR A "CERTIFICATE OF QUALIFIED INVESTOR" IN THE FORM INCLUDED IN THIS BOND. TOWN OF FOUNTAIN HILLS, ARIZONA MUNICIPAL PROPERTY CORPORATION MUNICIPAL FACILITIES REVENUE REFUNDING BOND, SERIES 2015 R-_____$__________ INTEREST RATE: MATURITY DATE: ORIGINAL ISSUE DATE:CUSIP: _____%July 1, 20__ _______, 2015 [350715___] Registered Owner:[CEDE & CO.] Principal Amount:________________________ AND NO/100 DOLLARS ($___________) KNOW ALL MEN BY THESE PRESENTS: That the Town of Fountain Hills, Arizona Municipal Property Corporation (the "MPC"), an Arizona nonprofit corporation, for value received, promises to pay as hereinafter stated to the Registered Owner hereof, on the maturity date, the principal amount stated above, together with interest on said sum, at the rate stated above, payable semiannually on the first days of January and July of each year, commencing January 1, 2016 (each, an "Interest Payment Date"). Interest will be paid by check payable to the order of and mailed to the registered owner at the address shown on the registration books maintained by the Trustee (a "Owner") at the close of business on the 15th day of the month preceding the Interest Payment Date, unless such date is a Saturday, Sunday or legal holiday of the Trustee in which event the Record Date shall be the previous Business Day (the "Record Date") unless a wire transfer is elected as described below. An Owner of $1,000,000 or more in aggregate principal amount of this Municipal Facilities Revenue Refunding Bond, Series 2015 (the "Bonds")as of the close of business of the Trustee on the Record Date for a particular Interest Payment Date may request interest, and if arrangements for surrender of TS2:jh2 2368523.1 4/27/2015 A-2 such Owner's Bonds can be made, principal to be paid by wire transfer in immediately available funds sent on the Interest Payment Date to such recipient (at the Owner's expense) upon written notice from such recipient containing the wire transfer address (which shall be in the United States) to which such recipient wishes to have such wire transfer directed, which written notice is received not later than ten (10) business days prior to the Record Date with respect to such Interest Payment Date, and may refer to multiple interest payments. In other cases, the principal will be paid when due to the Owner upon surrender of this Bond for payment at the designated office of the Trustee, which on the original issue date is _____________in ___________, _________(the "Trustee"). This Bond is one of a series of bonds of like tenor and date for the total sum of ___________________and No/100 Dollars ($_________) issued for the purpose of refinancing the MPC's aggregate purchase payment obligation pursuant to that certain Agreement, dated as of __________ 1, 2015 (the "Agreement"), between the Town of Fountain Hills, Arizona (the "Town") and the MPC, wherein the Town agreed to make Installment Payments (as defined in the Agreement) therefor in sufficient amounts and at such times as to pay all principal of and interest on the Bonds when due. The Town has agreed to apply and has granted a lien on all of its unrestricted Excise Taxes (as defined in the Agreement) collected by or on behalf of the Town in amounts sufficient to pay the Installment Payments and other amounts provided for in the Agreement. The Town's obligations pursuant to the Agreement are not ge neral obligations of the Town, but are special obligations enforceable only against the special revenues specified. The Bonds are issued on a parity basis with certain other obligations of the MPC and the Town heretofore or hereafter issued as provided in the Agreement. The Bonds are issued pursuant to that certain Trust Indenture, dated as of ___________ 1, 2015 (the "Trust Indenture"), between the MPC and Trustee. The Bonds are not subject to redemption prior to maturity. This Bond is the obligation of the MPC, and no officer, director, employee or agent, as such, past, present or future, of the MPC shall be personally liable for the payment hereof. This Bond may be transferred only in whole and only to a "qualified investor,"which means a qualified institutional buyer, as such term is defined in Rule 144A, of the Securities Act of 1933, as amended or an accredited investor (excluding natural persons) as defined in Rule 501 of Regulation D of the United States Securities Exchange Commission, who executes a Certificate of Qualified Investor in the form attached hereto as Exhibit 1, and who agrees to comply with all applicable federal and state securities laws. [So long as the book-entry system is in effect, this bond is non-transferable. If the book-entry system is discontinued,] this bond is transferable by the registered owner in person or by attorney duly authorized in writing at the designated office of the registrar, which on the original issue date is the [Trustee], upon surrender and cancellation of this bond. Bonds of this issue will be issued only in fully registered form in authorized denominations of $100,000 and integral multiples of $5,000 in excess thereof; provided, however, that "Authorized Denominations" shall mean $5,000 and integral multiples thereof if any maturity is in an amount less than $100,000.Upon such transfer a new Bond or Bonds of the same maturity and interest rate and in the same aggregate principal amount will be issued the transferee in exchange heretofore. Should this Bond be submitted to the Trustee for transfer during the period commencing after the close of business on the Record Date and continuing to and including the next subsequent Interest Payment Date, registered ownership will be transferred in the normal manner, but the interest payment will be TS2:jh2 2368523.1 4/27/2015 A-3 made payable to and mailed to the Owner as shown on the Trustee's books at the close of business on the Record Date. The Trustee may be changed without notice. This Bond may be exchanged for Bonds of like aggregate principal amount in Authorized Denominations having the same series, maturity date and interest rate. The MPC and the Trustee may treat the Owner of this Bond as the absolute Owner for the purpose of receiving principal and interest and for all other purposes, and none of them shall be affected by any notice to the contrary. This Bond shall be authenticated by an authorized manual signature of the Trustee, without which authentication this Bond shall not be valid. The Bonds have been designated as "Qualified Tax-Exempt Obligations"pursuant to Section 265(b)(3) of the Internal Revenue Code of 1986, as amended. IN WITNESS WHEREOF, the MPC has caused this Bond to be signed in its name by the manual or facsimile signature of its President. TOWN OF FOUNTAIN HILLS, ARIZONA MUNICIPAL PROPERTY CORPORATION, an Arizona nonprofit corporation By:__________________________________ Name____________ Its: President ATTEST: By:_______________________________ Name: _____________ Its: Secretary TS2:jh2 2368523.1 4/27/2015 A-4 AUTHENTICATION CERTIFICATE Date of Authentication: _________________, 2015 This Bond is one of the Town of Fountain Hills, Arizona Municipal Property Corporation Municipal Facilities Revenue Refunding Bonds, Series 2015, as described above. _____________________,as Trustee By: ____________________________________ Name: _________________________________ Its: Authorized Representative - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - The following abbreviations, when used in the inscription on the face of this Bond, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM -as tenants in common UNIF GIFT/TRANS MIN ACT TEN ENT -as tenants by the entireties Custodian JT TEN -as joint tenants with right of (Cust)(Minor) survivorship and not as tenants in under Uniform Gifts/Transfers common to Minors Act ___________________________ Additional abbreviations may also be used though not in the above list. ASSIGNMENT FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto _______________________________________________________________________________________________________ (Please Print or Typewrite Name and Address of Transferee) the within bond and all rights thereunder, and hereby irrevocably constitutes and appoints _____________________, attorney to transfer the within bond on the books kept for registration thereof, with full power of substitution in the premises. Dated_____________ _______________________________________________________ Note: The signature(s) on this assignment must correspond with the name(s) as written on the face of the within registered bond in every particular without alteration or enlargement or any change whatsoever. Signature Guaranteed: _______________________________________________________ Firm or Bank _______________________________________________________ Authorized Signature The signature(s) should be guaranteed by an eligible guarantor institution pursuant to Securities and Exchange Commission Rule 17Ad-15 TS2:jh2 2368523.1 4/27/2015 1-1 EXHIBIT 1 Certificate of Qualified Investor TOWN OF FOUNTAIN HILLS, ARIZONA MUNICIPAL PROPERTY CORPORATION [_____________, as Registrar] Re:Town of Fountain Hills, Arizona Municipal Property Corporation Municipal Facilities Revenue Refunding Bonds, Series 2015 1. Please be advised that the undersigned is a Qualified Investor (as hereinafter defined) and is purchasing one of the captioned bonds (hereinafter referred to as the "Bonds"), such Bond, or beneficial interest therein, being in the original aggregate principal amount of $______________, bearing the number ____________. Such purchase is solely for the account of the undersigned, for the purpose of investment and not with an intent for or view to distribution or resale. 2.In the event that the undersigned transfers such Bond or any part thereof, the undersigned shall comply with all provisions of the resolution authorizing issuance of, and certain other matters related to, the Bonds adopted by the Board of Directors of the MPC on ________, 2015 (the "MPC Resolution") and by the resolution adopted by the Town of Fountain Hills, Arizona on ________, 2015 (the "Town Resolution" and, together with the MPC Resolution, the "Authorizing Resolution"). The undersigned understands that, unless the transfer restrictions terminate pursuant to the Authorizing Resolution, a transferee shall be a Qualified Investor or Sophisticated Municipal Market Professional (as defined by the Municipal Securities Rulemaking Board), and must sign a letter in the form of this letter and provide such letter to the Bond Registrar before any transfer of any Bond to such transferee will be registered. 3.The undersigned acknowledges that it is a qualified institutional buyer, as such term is defined in Rule 144A of the Securities Act of 1933, as amended, or an accredited investor (other than a natural person) as defined in Rule 501 of Regulation D of the United States Securities Exchange Commission) (either of which shall constitute a "Qualified Investor"). 4.The undersigned understands that: (i) the Trust Indenture dated as of _______ 1, 2015, by and between ________________, as trustee (the "Trustee") and the Town of Fountain Hills, Arizona Municipal Property Corporation (hereinafter referred to as the "MPC")(the "Trust Indenture"), the Authorizing Resolution and the Bonds are not being registered under the Securities Act of 1933, as amended, in reliance upon certain exemptions set forth in that Act, (ii)the Trust Indenture, the Authorizing Resolution and the Bonds are not being registered or otherwise qualified for sale under the "blue sky"laws and regulations of the State of Arizona or any other state, (iii)any transfer of the Bonds must comply with federal and state securities laws, (iv)any sale or transfer of the Bonds, or interests therein, must be to Sophisticated Municipal Market Professionals or Qualified Investors, (v)the Bonds will not be listed on any stock or other securities exchange, (vi)the Bonds will not carry any bond rating from any rating service, and (vii) the Bonds are not likely to be readily marketable. 5.The undersigned assumes all responsibility for complying with any applicable federal and state securities laws with respect to any transfer of the Bond or an interest therein, and agrees to hold the MPC and the Town of Fountain Hills, Arizona (hereinafter referred to as the "Town"), harmless for, from and against any and all liabilities claims, damages or losses resulting directly or indirectly from such failure to comply. TS2:jh2 2368523.1 4/27/2015 1-2 6.The undersigned acknowledges that the undersigned has had an opportunity and has obtained all information necessary and has evaluated the factors associated with its investment decision and after such evaluation, the undersigned understood and knew that investment in the Bonds involved certain risks, including but not limited to, limited security and source for payment of the Bonds, the parity lien on the Excise Taxes pledged for the payment of the payments due pursuant to the Agreement dated as of ____________ 1, 2015, by and between the Trustee and the Town, and the probable lack of any secondary market for the Bonds. The undersigned acknowledges that it is experienced in transactions such as those relating to the Bonds and that the undersigned is knowledgeable and fully capable of independent evaluation of the risks involved in investing in the Bonds. The undersigned is not relying on the MPC or the Town in ma king its decision to purchase the Bonds and agrees that the Town is not obligated in any manner for the issuance or payment of the Bonds. 7.The undersigned acknowledges that the MPC, Town and the respective officers, directors, council members, advisors, employees and agents of either of the foregoing have not undertaken to furnish, nor has the undersigned requested, any information or to ascertain the accuracy or completeness of any information that may have been furnished by any other party. 8.This certificate and all rights and responsibilities described in it shall be governed by, and interpreted in accordance with, the laws of the State of Arizona. The federal and state courts of the State of Arizona shall have sole and exclusive jurisdiction over any dispute arising from the purchase and sale of the Bonds. _________________________________________ [PURCHASER] By_______________________________________ Printed Name:__________________________________ Title:_________________________________________ TS2:jh2 2368523.1 4/27/2015 B-1 EXHIBIT B PAYMENT REQUEST FORM The Trustee is hereby requested to pay from the Costs of Issuance Account of the Payment Fund established by the Trust Indenture, dated as of ___________ 1, 2015 (the "Trust Indenture"), between the Town of Fountain Hills, Arizona Municipal Property Corporation and __________________, as Trustee, to the person or corporation designated below as Payee, the sum set forth below as payment (all/a portion) of the Issuance Costs (as defined in the Trust Indenture) described below. Name of Payee Amount ____________________ ____________________ ____________________ ____________________ ____________________ ____________________ DATED: _______________________. TOWN OF FOUNTAIN HILLS, ARIZONA MUNICIPAL PROPERTY CORPORATION, an Arizona nonprofit corporation By__________________________________ Authorized Representative Please forward payment to Payee at the following address(es): ________________________________________ ________________________________________ ________________________________________ 2322378.1 ORDINANCE 15-03 AN ORDINANCE OF THE MAYOR AND COUNCIL OF THE TOWN OF FOUNTAIN HILLS, ARIZONA, AMENDING THE TOWN OF FOUNTAIN HILLS OFFICIAL ZONING DISTRICT MAP FOR APPROXIMATELY 1.239 ACRES GENERALLY LOCATED AT THE SOUTHWEST CORNER OF INDIGO DRIVE AND EMERALD DRIVE AS SHOWN IN CASE NO. Z2014-05, FROM R1-18 (SINGLE-FAMILY RESIDENTIAL) TO R-3 (MULTI- FAMILY RESIDENTIAL). WHEREAS, the Mayor and Council of the Town of Fountain Hills (the “Town Council”) desires to amend the Town of Fountain Hills Official Zoning District Map (the “Zoning Map”) pursuant to ARIZ. REV. STAT. § 9-462.04, to change the zoning description for an approximately 1.239 acre parcel of real property from R1-18 (Single Family Residential) to R-3 (Multi-Family Residential) (the “Zoning Map Amendment”); and WHEREAS, the Zoning Map Amendment proposed by this Ordinance is consistent with the Fountain Hills General Plan 2010, as amended by GPA2013-01, approved by the Town Council on May 1, 2014; and WHEREAS, all due and proper notices of public hearings on the Zoning Map Amendment to be held before the Town of Fountain Hills Planning and Zoning Commission (the “Commission”) and the Town Council were given in the time, form, substance and manner provided by ARIZ. REV. STAT. § 9-462.04; and WHEREAS, the Commission held a public hearing on April 9, 2015, on the Zoning Map Amendment, after which the Commission recommended approval; and WHEREAS, The Town Council held an additional public hearing regarding the Zoning Map Amendment on May 7, 2015. NOW, THEREFORE, BE IT ORDAINED BY THE MAYOR AND COUNCIL OF THE TOWN OF FOUNTAIN HILLS as follows: SECTION 1. The recitals above are hereby incorporated as if fully set forth herein. SECTION 2. The approximately 1.239 acre parcel of real property generally located at the southwest corner of Indigo Drive and Emerald Drive, as shown in Case No. Z2014-05, as more particularly described and depicted on Exhibit A, attached hereto and incorporated herein by reference, is hereby rezoned from R1-18 (Single-Family Residential) to R-3 (Multi-Family Residential), subject to the Town’s adopted codes, requirements, standards and regulations, and the following stipulations: 1. The applicants shall submit Site Improvement Plans that are in substantial conformance with the Town-approved proposal included in the Town’s official records for Case No. Z2014-05 (the “Case File”). All utilities and drainage 2322378.1 features must be installed and functional as shown on the improvement plans and approved by the Town Engineer prior to the issuance of any building permit. 2. No occupancy permit shall be issued prior to the completion of all approved (as shown in the Case File) site improvements. Said improvements must be approved by both the Town Engineer and the Planning & Zoning Administrator. 3. The applicants shall submit plans showing any and all notes and revisions required by this decision to the Planning & Zoning Administrator for review and approval prior to making application for a Building Permit. A copy of said plans shall be submitted with any and all building permit applications for this project. 4. Prior to the issuance of a Certificate of Occupancy, the applicants shall comply with the following: A. The requirements noted in the Fountain Hills Sanitary District’s review memo dated December 9, 2014, or as subsequently amended (included in Case File). B. The items noted in the Fountain Hills Fire Department’s review memo dated December 4, 2014, or as subsequently amended (included in Case File). C. The items noted in the Fountain Hills Town Engineer’s memorandum of March 9, 2015 (included in Case File). 5. No site work or construction activities may be undertaken during the 30-day period following approval of this Ordinance. SECTION 3. If any provision of this Ordinance is for any reason held by any court of competent jurisdiction to be unenforceable, such provision or portion hereof shall be deemed separate, distinct and independent of all other provisions and such holding shall not affect the validity of the remaining portions of this Ordinance. SECTION 4. The Mayor, the Town Manager, the Town Clerk and the Town Attorney are hereby authorized and directed to take all steps necessary to carry out the purpose and intent of this Ordinance. [SIGNATURES ON FOLLOWING PAGE] 2322378.1 PASSED AND ADOPTED by the Mayor and Council of the Town of Fountain Hills, May 7, 2015. FOR THE TOWN OF FOUNTAIN HILLS: ATTESTED TO: Linda M, Kavanagh, Mayor Bevelyn J. Bender, Town Clerk REVIEWED BY: APPROVED AS TO FORM: Kenneth W. Buchanan, Town Manager Andrew J. McGuire, Town Attorney 2322378.1 EXHIBIT A TO ORDINANCE 15-03 [Legal Description and Map of the Property] See following pages. 2322378.1 LEGAL DESCRIPTION Fountain Hills Arizona Final Plat No. 203, Lot 2, Block 8, as recorded in Book 149, Page 29, Records of Maricopa County Recorder, Maricopa County, Arizona, being a portion of Section 22, T. 3 N., R. 6 E. of the G. & S. R. B. & M., Maricopa County , Arizona. 2322423.2 THIRD AMENDMENT TO FIRE PROTECTION SERVICES AGREEMENT THIS THIRD AMENDMENT TO FIRE PROTECTION SERVICES AGREEMENT (this “Third Amendment”) is entered into on April 2, 2015 (“Effective Date”), by and between the TOWN OF FOUNTAIN HILLS, an Arizona municipal corporation (hereinafter called the “Town”), and RURAL/METRO CORPORATION, an Arizona corporation with a local place of business at 8465 North Pima Road, Scottsdale, Arizona 85258 (hereinafter called “Rural/Metro”). RECITALS A. The Town and Rural/Metro entered into a FIRE PROTECTION SERVICES AGREEMENT (the “Original Agreement”) dated May 21, 2009, for fire protection and emergency medical services. B. The Town and Rural/Metro entered into a First Amendment to the Original Agreement on August 2, 2012 (the “First Amendment”) to (i) add provisions relating to the CARES Services and (ii) replace the Manpower Exhibit. C. The Town and Rural/Metro entered into a Second Amendment to the Original Agreement on May 15, 2014 (the “Second Amendment”) to (i) extend the term for two years, (ii) address the operational period for the Eagle Mountain Ambulance Station, (iii) delete the provisions relating to telephone services at the Fire Stations, (iv) replace Appendix I to include recently purchased equipment and (v) update the notice provisions. Collectively, the Original Agreement, the First Amendment and the Second Amendment are referred to herein as the “Agreement.” D. The Town and Rural/Metro desire to further amend the Agreement to (i) extend the term for two years subject to the terms and conditions set forth herein, (ii) delete the provisions relating to the CARES program and (iii) replace Appendix I to include updates to the vehicle list. AGREEMENT NOW, THEREFORE, in consideration of the foregoing recitals, which are incorporated herein by reference, the following mutual covenants and conditions, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Town and Rural/Metro hereby agree as follows: 1. Term Extended. The Parties agree to extend the term of this Agreement for an additional two years, terminating on June 30, 2018, which shall be the second of the two, two-year term extensions permitted in Section 2.1 of the Agreement. 2. Deletion of CARES Services. ARTICLE I, GENERAL RESPONSIBILITIES, OBLIGATIONS AND DUTIES OF RURAL/METRO, Section 1.1, Fire and Emergency Related Activities, is hereby revised to delete paragraph N in its entirety. 2322423.2 2 3. Removal of Compensation for CARES. ARTICLE II, TERM, TERMINATION AND CONSIDERATION, Section 2.4, Consideration, is hereby deleted in its entirety and replaced with the following: 2.4 Consideration. For the performance of the Services set forth in this Agreement, the Town shall pay RURAL/METRO Two Million Eight Hundred Fifty Two Thousand Three Hundred Sixty Eight Dollars ($2,852,368.00 (the “Contract Price”) for the twelve (12) months period commencing upon the Effective Date and ending on June 30, 2010, and such amount shall be adjusted annually during the remainder of the term of this Agreement as set forth in Subsection 2.5 below. Said amount shall be paid in twelve (12) equal monthly installments of Two Hundred Thirty Seven Thousand Six Hundred Ninety Seven Dollars (237,697.00) in immediately available funds, in addition to such additional amounts provided for in Section 2.5(a), on or before the tenth (10th) day of each month for which service is provided with the first payment due within ten (10) days after the Effective Date. 4. Appendix Replaced. The text of Appendix I (Initial Vehicles and Equipment) is deleted in its entirety and replaced with the following: VEHICLE VIN # LICENSE PLATE 2014 Spartan (E822) 4S7AU2E94EC077602 G-501GF 2014 Ford F550 (BR823) 1FD0W5HY9EEA17584 G-795GM 2008 Crimson (E 823) 497AT2C958CO63752 G-946EZ 1998 LaFrance (Reserve) 4Z36EFBXYRF75528 G-151CK 1999 LaFrance (L822) 4Z36ESB1XRB05483 G-354DL 2011 Ford (Chief) 1FTFW1CF1BFA44166 G-567GD 2009 Ford 150 4X4 (Asst.Chief) 1FTPW14VX9KB48053 G-968EZ 2011 Ford 550 (SQ 822) 1FD0W5HY4CEB08422 G-794GE 5. Notice. Section 7.8 (Notices) is deleted in its entirety and replaced with the following: 7.8 Notices. Any notice or other communication required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been duly given if (A) delivered to the party at the address set forth below, (B) deposited in the U.S. Mail, registered or certified, return receipt requested, to the address set forth below or (C) given to a recognized and reputable overnight delivery service, to the address set forth below: If to the Town: Town of Fountain Hills 16705 East Avenue of the Fountains Fountain Hills, Arizona 85268 Attn: Kenneth W. Buchanan, Town Manager 2322423.2 3 With copy to: GUST ROSENFELD, P.L.C. One East Washington Street, Suite 1600 Phoenix, Arizona 85004-2553 Attn: Andrew J. McGuire, Esq. If to Rural Metro: Rural/Metro Corporation, Inc. 8465 North Pima Road Scottsdale, Arizona 85258 Attn: Fire Chief With a Copy to: Rural/Metro Corporation, Inc. 8465 North Pima Road Scottsdale, Arizona 85258 Attn: General Counsel or at such other address, and to the attention of such other person or officer, as any party may designate in writing by notice duly given pursuant to this subsection. Notices shall be deemed received (A) when delivered to the party, (B) three business days after being placed in the U.S. Mail, properly addressed, with sufficient postage or (C) the following business day after being given to a recognized overnight delivery service, with the person giving the notice paying all required charges and instructing the delivery service to deliver on the following business day. If a copy of a notice is also given to a party’s counsel or other recipient, the provisions above governing the date on which a notice is deemed to have been received by a party shall mean and refer to the date on which the party, and not its counsel or other recipient to which a copy of the notice may be sent, is deemed to have received the notice. 6. Effect of Amendment. In all other respects, the Agreement is affirmed and ratified and, except as expressly modified herein, all terms and conditions of the Agreement shall remain in full force and effect. 7. Non-Default. By executing this Third Amendment, Rural/Metro affirmatively asserts that (i) to its knowledge the Town is not currently in default, nor has been in default at any time prior to this Third Amendment, under any of the terms or conditions of the Agreement and (ii) any and all claims, known and unknown, relating to the Agreement and existing on or before the date of this Third Amendment, are forever waived. [SIGNATURES ON FOLLOWING PAGES] 2322423.2 4 IN WITNESS WHEREOF, the parties hereto have executed this instrument as of the date and year first set forth above. “Town” TOWN OF FOUNTAIN HILLS, an Arizona municipal corporation Kenneth W. Buchanan, Town Manager ATTEST: Bevelyn J. Bender, Town Clerk (ACKNOWLEDGMENT) STATE OF ARIZONA ) ) ss. COUNTY OF MARICOPA ) On , 2015, before me personally appeared Kenneth W. Buchanan, the Town Manager of the TOWN OF FOUNTAIN HILLS, an Arizona municipal corporation, whose identity was proven to me on the basis of satisfactory evidence to be the person who he claims to be, and acknowledged that he signed the above document, on behalf of the Town of Fountain Hills. Notary Public (Affix notary seal here) [SIGNATURES CONTINUE ON FOLLOWING PAGE] Page 1 of 2 TOWN OF FOUNTAIN HILLS TOWN COUNCIL AGENDA ACTION FORM Meeting Date: 5/7/2015 Meeting Type: Regular Session Agenda Type: Regular Submitting Department: Administration Staff Contact Information: Craig Rudolphy, Finance Director; 480-816-5162; crudolphy@fh.az.gov Strategic Planning Goal: Not Applicable (NA) Operational Priority: Not Applicable (NA) REQUEST TO COUNCIL (Agenda Language): CONSIDERATION of RESOLUTION 2015-12, adopting the maximum amount for the Town of Fountain Hills’ Fiscal Year 2015/16 Tentative Budget with appropriate direction to publish said documents in accordance with state law. The Council may address any or all items contained in the budget document and initiate any changes prior to the adoption. Applicant: Applicant Contact Information: Property Location: Related Ordinance, Policy or Guiding Principle: Staff Summary (background): The proposed FY15-16 budget was presented to the Town Council and the public during the month of April as well as a Budget Open House (April 16). Total proposed expenditures for all funds are $38.0M with estimated revenues of $25.9; Resolution 2015-12 establishes the maximum amount of expenditures for the fiscal year. Subsequent to approval of this Resolution, changes to the budget can be made within line items but the total amount cannot exceed $38.0M. Risk Analysis (options or alternatives with implications): Fiscal Impact (initial and ongoing costs; budget status): $37,960,501.75 Budget Reference (page number): pp 97-100, 114-116 Funding Source: NA If Multiple Funds utilized, list here: Budgeted; if No, attach Budget Adjustment Form: NA Recommendation(s) by Board(s) or Commission(s): Staff Recommendation(s): Approve List Attachment(s): Resolution 2015-12 SUGGESTED MOTION (for Council use): Move to approve Resolution 2015-12. TOWN OF FOUNTAIN HILLS TENTATIVE BUDGET FY 2015-16 Ken Buchanan, Town Manager Craig Rudolphy, Finance Director May, 2015 Town Manager’s FY2015/16 Budget Proposal $37,960,502 2 Minor Changes to 2015/16 Tentative Budget •$6,470 increased adjustment to the Tentative Budget due to the following: –A requirement from the FH Fiscal Policy and Az State Budget Law requires the General Fund to be structurally balanced and a CIP project moved to the Special Revenue Fund due to the Fiscal Policy. –Town Council reduced the Community Contracts in the General Fund to Economic Development Fund which requires an accounting adjustment because its increases another fund (the Economic Development Fund) to $6,620 . –Additionally, the CIP was reduced $150 of its contingency portion of the fund by moving the Stop Sign Grant to the Special Revenue Fund and removed from the CIP Fund in accordance with the FH Fiscal Policy. –This move is more of an subsequent Audit Issue than a budget issue. 3 Previous Fiscal Year Budgets •FY11 $29.6M •FY12 $38.3M •FY13 $31.5M •FY14 $41.7M •FY 15 $44.8M •FY16 $38.0M 4 OUTSTANDING BONDS at 7/1/15 Revenue Bonds include Community Center and Preserve General Obligation Bonds include Library/Museum, Preserve and Saguaro Blvd. Special Assessment Bonds are for Eagle Mountain CFD 5 Bond Purpose Date of Interest Date of Original Principal Principal Amount Outstanding Type of Issue Bond Issue Rate Maturity Amount Amount Retired Refunded Principal GO Refunding 6/1/2005 4.00 7/1/2019 7,225,000$ 5,615,000$ -$ 1,610,000$ GO Road Construction 12/4/2014 2.00- 3.00 7/1/2020 7,565,000 - - 7,565,000 Total GO 14,790,000 5,615,000 - 9,175,000 Rev Revenue 12/1/2004 4.25- 4.50 7/1/2015 3,645,000 3,645,000 - - * Rev Refunding 6/1/2005 3.25- 4.00 7/1/2020 5,330,000 3,545,000 - 1,785,000 Total Rev 8,975,000 7,190,000 - 1,785,000 SA Eagle Mtn 7/12/2005 4.00- 4.125 7/1/2021 4,555,000 2,375,000 - 2,180,000 Total SA 4,555,000 2,375,000 - 2,180,000 Grand Total 28,320,000$ 15,180,000$ -$ 13,140,000$ GO General Obligation Bonds Rev Revenue Bonds SA Special Assessment Bonds * Bonds were defeased on 11/9/2011 and funds are currently held in escrow. Bonds were called 7/1/2015. Pavement Management Program Economic Development Plan Rural/Metro Contract Negotiations Solid Waste Services Negotiations/RFP Saguaro Blvd Project Fire Station #2 Environmental Fee Operational Priorities FY15-16 Strategic Planning Goals FY2015-16 C3 Solicit Public/Stakeholder Feedback EV4 Promote retention, expansion and relocation of Quality Businesses I2 Develop reliable funding source for infrastructure maintenance CR7 Communicate the Role of Local Government I6 Adequate infrastructure and amenities for downtown development CR4 Implement communications plan for civic involvement EV3 Promote a mixed use core EV6 Identify slate of economic development tools and strategies CR6 Evaluate Customer Satisfaction on regular basis Capital Improvement Plan $14,261,200 8 2015/16 Pavement Maintenance Capital Expenditures •$1,000,000 accumulated over a 12- month period of both Highway User Fund and Vehicle License Tax. •Zone #1 – 1st Phase is slated as the next pavement maintenance project. •Note: •3 – year project •Mill & Overlay - Glennbrook, El Pueblo & Grande •712,026 sq. yd. of asphalt •73 pavement replacement locations •19,000 square yards 9 Personnel •Personnel Requests from Development Services, Magistrate Court, Finance and Community Services. •No new staff positions budgeted. •42 Full Time Employees/ 21 Part Time Employees…52.32 Total Full Time Equivalent Employees. •2.5% Increase recommendation for all employees in the amount of $63,822 included. •Total Personnel Cost $3,819,016. Increase of 1.6%. 10 2015/16 Tentative Budget Town Council Changes •“Movies in the Park” and “Music Festival” were funded from the Contingency Fund in the amount of $13,250. •Reduction in the Strategic Plan Update from $60,000 to $40,000. •10% Reduction in four community partner contracts: $450 from JumpStartBiz; $5,100 from Boys & Girls Club; $6,300 from the Fountain Hills Community Theater; and $1,400 from the MCSO Posse. 2015/16 Tentative Budget It is a Town Manager Recommendation to Approve the 2015/16 Tentative Budget In the amount of $37,960,502 Questions? 2373613.3 RESOLUTION 2015-12 A RESOLUT ION OF THE MAYOR AND COUNCIL OF THE TOWN OF FOUNTAIN HILLS, ARIZONA, SETTING FORTH THE TENTATIVE BUDGET AND ESTABLISHING THE MAXIMUM BUDGET AMOUNT FOR THE TOWN OF FOUNTAIN HILLS FOR FISCAL YEAR 2015-2016. WHEREAS, pursuant to the provisions of the laws of the State of Arizona, the Mayor and Council of the Town of Fountain Hills (the “Town Council”) is required to adopt a budget; and WHEREAS, in accordance with ARIZ. REV. STAT. § 42-17102, the Town Manager has prepared and filed with the Town Council the Town Manager’s Budget estimates for the fiscal year beginning July 1, 2015 and ending June 30, 2016. NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND COUNCIL OF THE TOWN OF FOUNTAIN HILLS as follows: SECTION 1. The recitals above are hereby incorporated as if fully set forth herein. SECTION 2. The statements and schedules attached hereto as Exhibit A and incorporated herein by reference are hereby adopted as the Town’s official tentative budget for the fiscal year beginning July 1, 2015 and ending June 30, 2016, including the establishment of the maximum budget amount for such fiscal year in the amount of $37,960,501.75. SECTION 3. Upon approval of the Town Council, the Town Manager or designee shall publish in the official Town newspaper once a week for two consecutive weeks (i) the official tentative budget and (ii) a notice, in the form attached as Exhibit B and incorporated herein by reference, of the public hearing of the Town Council to hear taxpayers and make tax levies at designated times and places. The notice shall include the physical addresses of the Fountain Hills Town Hall, the Fountain Hills branch of the Maricopa County Library and the Town website where the tentative budget may be found. SECTION 4. The Town Manager or designee shall, no later than seven business days after the date of this Resolution, (i) make available at the Fountain Hills Town Hall and the Fountain Hills branch of the Maricopa County Library a complete copy of the tentative budget, and (ii) post the tentative budget in a prominent location on the Town’s website. SECTION 5. The Mayor, the Town Manager, the Town Clerk and the Town Attorney are hereby authorized and directed to take all steps necessary to carry out the purpose and intent of this Resolution. [SIGNATURES ON FOLLOWING PAGE] 2373613.3 2 PASSED AND ADOPTED BY the Mayor and Council of the Town of Fountain Hills, May 7, 2015. FOR THE TOWN OF FOUNTAIN HILLS: ATTESTED TO: Linda M. Kavanagh, Mayor Bevelyn J. Bender, Town Clerk REVIEWED BY: APPROVED AS TO FORM: Kenneth W. Buchanan, Town Manager Andrew J. McGuire, Town Attorney 2373613.3 3 EXHIBIT A TO RESOLUTION 2015-12 [Tentative Budget] See following pages. Fiscal YearGeneral FundSpecial Revenue Fund Debt Service FundCapital Projects Fund Permanent FundEnterprise Funds AvailableInternal Service Funds Total All Funds2015 Adopted/Adjusted Budgeted Expenditures/Expenses* E 13,220,510 4,142,9532,008,335 22,353,8520090,14641,815,7962015 Actual Expenditures/Expenses** E 13,220,510 4,142,9532,008,335 22,353,8520090,14641,815,7962016 Fund Balance/Net Position at July 1*** 7,872,471 2,993,370173,442 12,794,907431,88524,266,0752016 Primary Property Tax LevyB002016 Secondary Property Tax LevyB2,109,4772,109,4772016 Estimated Revenues Other than Property Taxes C 13,901,466 4,900,8611,091,931 2,398,75700 275,01722,568,0322016 Other Financing Sources D0000000 02016 Other Financing (Uses) D0000000 02016 Interfund Transfers In D2,000411,5790 827,4010001,240,9802016 Interfund Transfers (Out) D309,194661,1000 270,6860001,240,9802016 Reduction for Amounts Not Available:LESS: Amounts for Future Debt Retirement173,442173,442Rainy Day Fund 2,633,8102,633,810002016 Total Financial Resources Available18,832,933 7,644,7103,201,408 15,750,37900 706,90246,136,3322016 Budgeted Expenditures/ExpensesE 13,594,272 5,591,7323,040,542 14,393,4200099,55536,719,521EXPENDITURE LIMITATION COMPARISON201520161. Budgeted expenditures/expenses41,815,796$ 36,719,521$ 2. Add/subtract: estimated net reconciling items(1,539,835) (949,863) 3. Budgeted expenditures/expenses adjusted for reconciling items40,275,961 35,769,658 4. Less: estimated exclusions15,813,575 12,552,089 5. Amount subject to the expenditure limitation24,462,386$ 23,217,569$ 6. EEC expenditure limitation26,097,167$ 26,804,069$ ******TOWN OF FOUNTAIN HILLSSummary Schedule of Estimated Revenues and Expenditures/ExpensesFiscal Year 2016Includes actual amounts as of the date the proposed budget was prepared, adjusted for estimated activity for the remainder of the fiscal year.Amounts on this line represent Fund Balance/Net Position amounts except for amounts not in spendable form (e.g., prepaids and inventories) or legally or contractually required to be maintained intact (e.g., principal of a permanent fund).SchFUNDSIncludes Expenditure/Expense Adjustments Approved in the current year from Schedule E. The city/town does not levy property taxes and does not have special assessment districts for which property taxes are levied. Therefore, Schedule B has been omitted. 4/15SCHEDULE A 2015 2016 1. $$ 2. $ 3. Property tax levy amounts A. Primary property taxes $$ B. Secondary property taxes 463,622 2,109,477 C. Total property tax levy amounts $463,622 $2,109,477 4. Property taxes collected* A. Primary property taxes (1) Current year's levy $ (2) Prior years’ levies (3) Total primary property taxes $ B. Secondary property taxes (1) Current year's levy $463,622 (2) Prior years’ levies (3) Total secondary property taxes $463,622 C. Total property taxes collected $463,622 5. Property tax rates A. City/Town tax rate (1) Primary property tax rate (2) Secondary property tax rate 0.1151 0.5246 (3) Total city/town tax rate 0.1151 0.5246 B. Special assessment district tax rates Secondary property tax rates - As of the date the proposed budget was prepared, the two (2) special assessment districts for which secondary property taxes are levied. For information pertaining to these special assessment districts and their tax rates, please contact the city/town. * city/town was operating Includes actual property taxes collected as of the date the proposed budget was prepared, plus estimated property tax collections for the remainder of the fiscal year. Amount received from primary property taxation in the current year in excess of the sum of that year's maximum allowable primary property tax levy. A.R.S. §42-17102(A)(18) TOWN OF FOUNTAIN HILLS Tax Levy and Tax Rate Information Fiscal Year 2016 Maximum allowable primary property tax levy. A.R.S. §42-17051(A) 4/15 SCHEDULE B ESTIMATED REVENUES ACTUAL REVENUES* ESTIMATED REVENUES 2015 2015 2016 GENERAL FUND Local taxes Local Sales Tax $ 7,232,640 $ 7,232,640 $ 7,317,367 Franchise Tax 316,400 316,400 324,310 Licenses and permits Animal License Fees 41,006 41,006 41,832 Business License Fees 111,305 111,305 109,575 Liquor License Fees 1,500 1,500 1,500 Building Permit Fees 390,900 390,900 257,755 Sign Permits 3,350 3,350 3,350 Landscape Permit Fees 1,348 1,348 2,100 Subdivision Fees 21,000 21,000 21,000 Special Event Permits 2,500 2,500 2,500 Engineering Fees 2,500 2,500 2,500 Planning & Zoning Fees 10,000 10,000 10,000 Improvement Plan Review Fees 50,000 50,000 193,316 Intergovernmental State Sales Tax 2,048,760 2,048,760 2,148,444 Fire Insurance Premium Tax 35,000 35,000 36,050 Shared Income Tax 2,722,248 2,722,248 2,707,673 Charges for services Parks & Rec User Fees 124,850 124,850 135,200 Encroachment Fees 35,000 35,000 20,000 Variances 4,000 4,000 4,000 Inspection Fees 17,000 17,000 17,000 Community Center Rental Fees 101,350 101,350 81,300 Leases & Rents 140,412 140,412 199,531 Fines and forfeits Court Fines 150,011 150,011 147,011 Interest on investments Interest on Investments 62,424 62,424 50,000 In-lieu property taxes Contributions Voluntary contributions Miscellaneous Miscellaneous 53,280 53,280 68,152 Total General Fund $ 13,678,784 $ 13,678,784 $ 13,901,466 * TOWN OF FOUNTAIN HILLS Revenues Other Than Property Taxes Fiscal Year 2016 Includes actual revenues recognized on the modified accrual or accrual basis as of the date the proposed budget was SOURCE OF REVENUES 4/15 SCHEDULE C ESTIMATED REVENUES ACTUAL REVENUES* ESTIMATED REVENUES 2015 2015 2016 TOWN OF FOUNTAIN HILLS Revenues Other Than Property Taxes Fiscal Year 2016 SOURCE OF REVENUES SPECIAL REVENUE FUNDS Highway User Revenue Fund Highway User Tax $ 1,194,094 $ 1,194,094 $ 1,403,324 Vehicle License Tax 867,000 867,000 888,838 In-Lieu Fees 12,000 12,000 12,000 Interest 1,200 1,200 300 Miscellaneous 6,300 6,300 6,000 $ 2,080,594 $ 2,080,594 $ 2,310,462 Downtown Strategy Fund Sales-Excise Tax $ 117,540 $ 117,540 $ 66,517 Interest 6,000 $ 117,540 $ 117,540 $ 72,517 Economic Development Fund Sales-Excise Tax $ 176,400 $ 160,300 $ 266,066 $ 176,400 $ 160,300 $ 266,066 Grants Miscellaneous $ 1,566,132 $ 1,433,211 $ 1,655,000 $ 1,566,132 $ 1,433,211 $ 1,655,000 Public Art Public Art $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 Court Enhancement Fund Court Enhancement Fund $14,550 $14,550 $16,450 $14,550 $14,550 $16,450 Cottonwoods Maintenance District Cottonwoods Maintenance District $4,823 $4,823 $5,366 $4,823 $4,823 $5,366 Tourism Fund Grants $$$20,000 $$$20,000 Environmental Fund Environmental Fee $$$540,000 $$$540,000 Total Special Revenue Funds $ 3,975,039 $ 3,826,018 $ 4,900,861 * Includes actual revenues recognized on the modified accrual or accrual basis as of the date the proposed budget was 4/15 SCHEDULE C ESTIMATED REVENUES ACTUAL REVENUES* ESTIMATED REVENUES 2015 2015 2016 TOWN OF FOUNTAIN HILLS Revenues Other Than Property Taxes Fiscal Year 2016 SOURCE OF REVENUES DEBT SERVICE FUNDS General Obligation Debt Service Interest Income 210 210 210 $ 210 $ 210 $ 210 Eagle Mountain CFD $ 430,848 $ 430,848 $ 426,456 Municipal Property Corp 620,300 620,300 665,265 $ 1,051,148 $ 1,051,148 $ 1,091,721 Total Debt Service Funds $ 1,051,358 $ 1,051,358 $ 1,091,931 CAPITAL PROJECTS FUNDS Sales Tax-Local $ 324,600 $ 324,600 $ 332,035 Grants 4,314,000 4,214,000 1,790,000 Interest 12,000 Miscellaneous 8,219,800 8,400,000 154,082 $ 12,858,400 $ 12,938,600 $ 2,288,117 Law Enforcement Development Fees $100 $100 $ Fire/Emergency Development Fees 4,990 4,990 26,580 Parks & Recreation Development Fees 7,500 7,500 78,060 Open Space Development Fees-Interest Only 6,000 $ 12,590 $ 12,590 $ 110,640 Total Capital Projects Funds $ 12,870,990 $ 12,951,190 $ 2,398,757 PERMANENT FUNDS $$$ $$$ Total Permanent Funds $$$ ENTERPRISE FUNDS $$$ Total Enterprise Funds $$$ INTERNAL SERVICE FUNDS Internal Service Fund $ 62,246 $ 62,246 $ 68,555 Vehicle Replacement Fund 168,973 168,973 206,462 $ 231,219 $ 231,219 $ 275,017 Total Internal Service Funds $ 231,219 $ 231,219 $ 275,017 TOTAL ALL FUNDS $ 31,807,390 $ 31,738,569 $ 22,568,032 * Includes actual revenues recognized on the modified accrual or accrual basis as of the date the proposed budget was 4/15 SCHEDULE C FUND SOURCES <USES>IN <OUT> GENERAL FUND Economic Development fund $$$$50,000 Facilities Replacement fund 81,715 Excise Tax 2,000 Environmental Fund 177,479 Total General Fund $ $ $ 2,000 $ 309,194 SPECIAL REVENUE FUNDS Economic Development Fund $$$ 50,000 $ 139,100 Tourism Fund 139,100 HURF-Environmental Fund 45,000 Excise Tax-General Fund 2,000 Excise Tax-Project S6010 275,000 Excise Tax-Project E8502 200,000 Environmental Fund 222,479 Total Special Revenue Funds $ $ $ 411,579 $ 661,100 DEBT SERVICE FUNDS Annual Debt Pmt for Community Center $$$$ Total Debt Service Funds $$$$ CAPITAL PROJECTS FUNDS Facilities Replacement Fund $$$ 81,715 $ Project S6010 275,000 Project F4005 270,686 Development Fees-Project F4005 270,686 Project E8502 200,000 Total Capital Projects Funds $ $ $ 827,401 $ 270,686 PERMANENT FUNDS $$$$ Total Permanent Funds $$$$ ENTERPRISE FUNDS $$$$ Total Enterprise Funds $$$$ INTERNAL SERVICE FUNDS $$$$ Total Internal Service Funds $$$$ TOTAL ALL FUNDS $ $ $ 1,240,980 $ 1,240,980 2016 2016 TOWN OF FOUNTAIN HILLS Other Financing Sources/<Uses> and Interfund Transfers Fiscal Year 2016 OTHER FINANCING INTERFUND TRANSFERS 4/15 SCHEDULE D ADOPTED BUDGETED EXPENDITURES/ EXPENSES EXPENDITURE/ EXPENSE ADJUSTMENTS APPROVED ACTUAL EXPENDITURES/ EXPENSES* BUDGETED EXPENDITURES/ EXPENSES 2015 2015 2015 2016 GENERAL FUND Mayor & Town Council $80,318 $$80,318 $80,084 Municipal Court 275,165 275,165 277,107 Administration 2,004,545 2,004,545 2,166,210 Development Services 1,870,734 1,870,734 1,624,530 Community Services 2,194,021 (19,002)2,175,019 2,260,574 Law Enforcement 3,379,630 3,379,630 3,683,970 Fire & Emergency Medical 3,435,099 3,435,099 3,501,797 Total General Fund $ 13,239,512 $(19,002)$ 13,220,510 $ 13,594,272 SPECIAL REVENUE FUNDS Highway User Revenue Fund $ 2,387,204 $$ 2,387,204 $ 2,798,025 Downtown Strategy Fund 114,079 114,079 80,886 Economic Development Fund 126,741 126,741 182,001 Tourism Fund 110,175 16,100 126,275 136,921 Public Art Fund 15,000 15,000 15,000 Court Enhancement Fund 80,615 80,615 80,615 Grants Fund 1,566,132 (276,693)1,289,439 1,655,000 Cottonwoods Maint District 3,600 3,600 4,043 Environmental Fund 639,241 Total Special Revenue Funds $ 4,403,546 $(260,593)$ 4,142,953 $ 5,591,732 DEBT SERVICE FUNDS General Obligation Bonds $472,100 $$472,100 $ 2,094,722 Eagle Mountain CFD 423,035 423,035 421,420 Municipal Property Corp 1,113,200 1,113,200 524,400 Total Debt Service Funds $ 2,008,335 $$ 2,008,335 $ 3,040,542 CAPITAL PROJECTS FUNDS Capital Projects $ 22,207,830 $2,250 $ 22,210,080 $ 14,262,885 Law Enforcement Dev Fee Fire/Emergency Dev Fee Streets Dev Fee Open Space Dev Fee 535 Library/Museum Dev Fee Facilities Replacement Fund 143,772 143,772 130,000 Total Capital Projects Funds $ 22,207,830 $ 146,022 $ 22,353,852 $ 14,393,420 PERMANENT FUNDS $$$$ Total Permanent Funds $$$$ ENTERPRISE FUNDS $$$$ Total Enterprise Funds $$$$ INTERNAL SERVICE FUNDS Internal Service $72,394 $$72,394 $68,555 Vehicle Replacement 1,000 16,752 17,752 31,000 Total Internal Service Funds $73,394 $16,752 $90,146 $99,555 TOTAL ALL FUNDS $ 41,932,617 $ (116,821) $ 41,815,796 $ 36,719,521 * Expenditures/Expenses by Fund Fiscal Year 2016 TOWN OF FOUNTAIN HILLS Includes actual expenditures/expenses recognized on the modified accrual or accrual basis as of the date the proposed budget FUND/DEPARTMENT 4/15 SCHEDULE E ADOPTED BUDGETED EXPENDITURES/ EXPENSES EXPENDITURE/ EXPENSE ADJUSTMENTS APPROVED ACTUAL EXPENDITURES/ EXPENSES* BUDGETED EXPENDITURES/ EXPENSES 2015 2015 2015 2016 Mayor & Council General Fund $80,318 $$80,318 $80,084 Mayor & Council Total $80,318 $$80,318 $80,084 Administration General Fund $ 2,004,545 $ $ 2,004,545 $ 2,166,210 Downtown Strategy Fund 114,079 114,079 80,886 Economic Development Fund 126,741 126,741 182,001 Special Revenue Fund 1,566,132 (276,693)1,289,439 1,655,000 General Obligation Debt 472,100 472,100 2,094,722 Municipal Property Corp 1,113,200 1,113,200 524,400 Cottonwoods Maint District 3,600 3,600 4,043 Capital Projects 2,055,080 2,055,080 342,885 Internal Service 72,394 72,394 68,555 Vehicle Replacement 1,000 16,752 17,752 31,000 Administration Total $ 7,528,871 $ (259,941) $ 7,268,930 $ 7,149,702 Municipal Court General Fund $ 275,165 $ $ 275,165 $ 277,107 Court Enhancement Fund 80,615 80,615 80,615 Municipal Court Total $355,780 $$355,780 $357,722 Development Services General Fund $ 1,870,734 $ $ 1,870,734 $ 1,624,530 Highway User Revenue Fund 2,387,204 2,387,204 2,798,025 Environmental Fund 639,241 Eagle Mountain CFD 423,035 423,035 421,420 Capital Projects 15,808,000 15,808,000 9,140,000 Streets Development Fee Facilities Replacement Fund 143,772 143,772 130,000 Development Services Total $ 20,488,973 $ 143,772 $ 20,632,745 $ 14,753,216 Community Services General Fund $ 2,194,021 $(19,002)$ 2,175,019 $ 2,260,574 Tourism Fund 110,175 16,100 126,275 136,921 Public Art Fund 15,000 15,000 15,000 Capital Projects 1,714,750 2,250 1,717,000 1,130,000 Open Space Development Fee 535 Library/Museum Dev Fee Community Services Total $ 4,033,946 $ (652) $ 4,033,294 $ 3,543,030 Fire & Emergency Medical General Fund $ 3,435,099 $ $ 3,435,099 $ 3,501,797 Capital Projects 2,630,000 2,630,000 3,650,000 Fire/Emergency Dev Fee Fire & Emergency Medical Total $ 6,065,099 $ $ 6,065,099 $ 7,151,797 Law Enforcement General Fund $ 3,379,630 $ $ 3,379,630 $ 3,683,970 Law Enforcement Dev Fee Law Enforcement Total $ 3,379,630 $ $ 3,379,630 $ 3,683,970 * Expenditures/Expenses by Department Fiscal Year 2016 TOWN OF FOUNTAIN HILLS Includes actual expenditures/expenses recognized on the modified accrual or accrual basis as of the date the proposed budget was prepared, plus estimated expenditures/expenses for the remainder of the fiscal year. DEPARTMENT/FUND 4/15 SCHEDULE F Full-Time Equivalent (FTE)Employee Salaries and Hourly Costs Retirement Costs Healthcare CostsOther Benefit CostsTotal Estimated Personnel Compensation2016 2016 2016 2016 2016 201646.57 $ 2,542,462 $238,168 $349,124 $$ 3,129,754Highway User Revenue Fund4.50 $268,815 $29,570 $55,465 $$353,850Economic Development Fund1.0080,8668,89512,296102,057Tourism Fund1.1047,3035,20310,13762,643Environmental Fund0.2517,6651,9432,20421,812Total Special Revenue Funds6.85 $ 414,649 $ 45,611 $ 80,102 $ $ 540,362$$$$$Total Debt Service Funds$$$$$$$$$$Total Capital Projects Funds$$$$$$$$$$Total Permanent Funds$$$$$$$$$$Total Enterprise Funds$$$$$$$$$$Total Internal Service Fund$$$$$TOTAL ALL FUNDS53.42 $ 2,957,111 $283,779 $429,226 $$ 3,670,116FUNDTOWN OF FOUNTAIN HILLSFull-Time Employees and Personnel CompensationFiscal Year 2016GENERAL FUNDINTERNAL SERVICE FUNDSPECIAL REVENUE FUNDSDEBT SERVICE FUNDSCAPITAL PROJECTS FUNDSPERMANENT FUNDSENTERPRISE FUNDS 4/15SCHEDULE G 2373613.2 4 EXHIBIT B TO RESOLUTION 2015-12 [Notice] See following page. 2373613.2 5 Town of Fountain Hills Public Notice Final Budget Adoption and Tax Levy Members of the public wishing to appear and testify or make inquiries regarding Fiscal Year 2015/16 Budgets for (i) the Town of Fountain Hills, (ii) the Eagle Mountain Community Facilities District Board, and (iii) the Cottonwoods Maintenance District Board, ending June 30, 2016, which will include fee increases or new fees, will be heard at public hearings scheduled for the June 4, 2015, beginning at 6:25 PM in the Town Hall Council Chambers, 16705 E. Avenue of the Fountains, Fountain Hills, AZ 85268. On June 18, 2015, beginning at 6:25 PM in the Town Hall Council Chambers, 16705 E. Avenue of the Fountains, Fountain Hills, AZ 85268, the Town of Fountain Hills, the Eagle Mountain Community Facilities District Board, and the Cottonwoods Maintenance District Board will adopt their property tax levies for Fiscal Year 2015/16, ending June 30, 2016. The final levy amount may be increased over the approved levy for fiscal year 2014-15. A complete copy of the each of the budgets for the Fiscal Year 2015-16 may be viewed at: 1. Fountain Hills Town Hall, 16705 E. Avenue of the Fountains, Fountain Hills, AZ 85268 2. Fountain Hills branch of the Maricopa County Library, 12901 LaMontana Drive, Fountain Hills, AZ 85268 3. The Town of Fountain Hills website at: www.fh.az.gov Anyone wishing to respond may do so in person at the meeting or in writing prior to the date of the meeting: Town Clerk’s office, 16705 E. Avenue of the Fountains, Fountain Hills, AZ 85268