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RESOLUTION. 2014 - 04 A RESOLUTION OF THE CITY OF MOSCOW, IDAHO, A MUNICIPAL CORPORATION OF THE STATE OF IDAHO; MAKING FINDINGS AND DECLARATIONS WITH RESPECT TO FINANCING THE COST OF CERTAIN ORDINARY AND NECESSARY IMPROVEMENTS TO THE DOMESTIC WATER SYSTEM SERVING THE RESIDENTS OF THE CITY; APPROVING AND AUTHORIZING, SUBJECT TO JUDICIAL CONFIRMATION, THE FINANCING OF THE ORDINARY AND NECESSARY IMPROVEMENTS; AUTHORIZING THE FILING OF A PETITION FOR JUDICIAL CONFIRMATION IN THE DISTRICT COURT OF THE SECOND JUDICIAL DISTRICT OF THE STATE OF IDAHO; AND PROVIDING FOR RELATED MATTERS; PROVIDING THIS RESOLUTION TO BE EFFECTIVE UPON ITS PAS SAGE, APPROVAL, AND PUBLICATION ACCORDING TO LAW. WHEREAS, the City of Moscow, (hereinafter "City") is a municipal corporation organized and operating under the laws of the State of Idaho (hereinafter "State"); and WHEREAS, the domestic water system (the "System") serving City's residents is owned and operated by City; and WHEREAS, pursuant to the System's comprehensive water system plan, as amended and updated (hereinafter "Plan"), certain improvements to the System are necessary to address certain deficiencies in the System's fire suppression capabilities and to comply with the Department of Environmental Quality (DEQ) requirements for source redundancy (the "Ordinary and Necessary Improvements"); and WHEREAS, the Mayor and members of the City Council of City (the "Council") desire to deem the Ordinary and Necessary Improvements for the public good and welfare, and for the improvements of the health, safety, comfort and convenience of the residents of City and the users of the System, and have determined that City will pay the costs of the Ordinary and Necessary Improvements, as further detailed in the proposed Petition for Judicial Confirmation, attached hereto as Exhibit and WHEREAS, City does not have sufficient funds available in its current fiscal year's budget to finance the cost of all of the Improvements and has determined that it is in the best interests of City to finance the Ordinary and Necessary Improvements by issuing and selling revenue bonds under Idaho Code Section 50-237 and Sections 50-1027 through 50-1042, inclusive (the "Revenue Bond Act") in an amount not to exceed Four Million Two Hundred Ninety Five Thousand Dollars ($4,295,000), as further detailed in Exhibit (the "Project Costs"), plus required reserves and issuance costs; and WHEREAS, City has determined that it must first obtain judicial confirmation pursuant to the Idaho Judicial Confirmation Law, Title 7, Chapter 13, Idaho Code (the "Idaho Judicial Confirmation Law"), that its power and authority to issue revenue bonds to finance the Project Costs is not prohibited by the Idaho Constitution; and RESOLUTION 2014-04 DOMESTIC WATER SYSTEM IMPROVEMENTS PAGE I 0F3 ---PAGE BREAK--- WHEREAS, pursuant to Idaho Code Section 7-1304, City properly noticed and held a public hearing on January 6, 2014 (the "Public Hearing") to obtain testimony and/or evidence as to whether it should adopt a resolution authorizing the filing of a petition for judicial confirmation pursuant to the Idaho Judicial Confirmation Law (the "Petition"); and WHEREAS, the Council conducted the Public Hearing at which time it received and considered testimony regarding the Petition; and WHEREAS, members of the Council have had the opportunity to review and consider the testimony and comments received at the Public Hearing; and WHEREAS, the Council desires to declare the immediate need to acquire and construct the Ordinary and Necessary Improvements upon which it is seeking a judicial confirmation, and desires to approve the financing of the Project Costs, plus required reserves and issuance costs, upon City's receipt of a favorable judgment on the Petition; and WHEREAS, the Council desires to authorize the design and construction of the Ordinary and Necessary Improvements; and WHEREAS, the Council desires to approve the form of the Petition presented at this meeting and to authorize the filing of the Petition in the District Court of the Second Judicial District of the State of Idaho (the "District Court") to confirm the power of City to issue revenue bonds to finance the Ordinary and Necessary Improvements as more particularly described in the Petition; and WHEREAS, City has prepared the form of ordinance as required by the Revenue Bond Act, to be adopted simultaneously herewith, which generally describes and provides the terms of financing of the Project Costs, plus required reserves and issuance costs (the "Ordinance"). NOW, THEREFORE, BE IT RESOLVED by the Mayor and City Council of the City of Moscow as follows: 1. The Mayor and Council hereby deem the Ordinary and Necessary Improvements for the System are for the public good and welfare, and for the improvement of the health, safety, comfort and convenience of the residents of City and users of the System 2. The Council hereby declares the immediate need to design and construct the Ordinary and Necessary Improvements; 3. The Petition, in the form presented to the Council at this meeting, is hereby approved, and the Mayor is authorized to execute the verification of the same, together with such changes as the Mayor shall approve in consultation with Bond Counsel, and Bond Counsel for City is hereby authorized to file said Petition in the District Court on behalf of City, and to take all actions necessary with respect RESOLUTION 2014-04 DOMESTIC WATER SYSTEM IMPROVEMENTS PAGE 2 OF 3 ---PAGE BREAK--- thereto in order to obtain a judgment of said District Court in accordance with the prayer of the Petition; 4. Subject to the entry of a final order of the District Court confirming the authority of City as described in the Petition, City resolves to adopt simultaneously with the adoption of this Resolution, the Ordinance substantially in the form presented to the Council, and to adopt such other ordinances as provided therein as needed to issue revenue bonds in an amount not to exceed Four Million Two Hundred Ninety Five Thousand Dollars ($4,295,000), plus required reserves and costs of issuance thereof, to finance City's Project Costs; and 5. If any section, paragraph, clause or provision of the foregoing resolution( s) shall for any reason be held to be invalid or unenforceable, the invalidity or unenforceability of such section, paragraph, clause or provision shall not affect any of the remaining provisions of the resolution(s). PASSED AND APPROVED by the Mayor of the City of Moscow, Idaho, this 21st day of January, 2014. Bill Lambert, Mayor ATTEST: RESOLUTION 2014 -04 DOMESTIC WATER SYSTEM IMPROVEMENTS PAGE 3 0F 3 ---PAGE BREAK--- EXHIBIT PETITION FOR JUDICIAL CONFIRMATION EXHIBIT ---PAGE BREAK--- CASE NO--· S. C. Danielle Quade, ISB No. 6363 Nicole Trammel Pantera, ISB No. 7744 HAWLEY TROXELL ENNIS & HAWLEY LLP 401 Front Street, Suite 212 2016 JAN 24 PH 2: 3Q f;LERK OF COURT LATAH COUNTY Coeur d'Alene, ID 83814 ·Telephone: (208) 344-6000 Facsimile: (208) 954-5285 Roderick Hall, ISB No. 5196 MOSCOW CITY ATTORNEY 306 E. Third Street P.O. Box 9206 Moscow, ID 8384-3 Telephone: (208) 883-7000 Facsimile: (208) 883-7018 Attorneys for Petitioner City of Moscow, Idaho Latah County, Idaho SY_<· _ . DEPUTY ASSIGNED TO HON. JOHN R. STEG)JER DISTRICT JUDGE _ IN THE DISTRICT COURT OF THE SECOND JUDICIAL DISTRICT OF THE STATE OF IDAHO, IN AND FOR THE COUNTY OF LATAH IN THE MATTER OF: City of Moscow, Latah County, Idaho, PETITIONER. Case No. - 9 ( ) ) ) ) ) ) PETITION FOR JUDICIAL CONFIRMATION =>?@ABCD-) Petitioner, City of Moscow, Latah County, Idaho, an Idaho municipal corporation (the "Petitioner") by and through its counsels of record Hawley Troxell Ennis & Hawley LLP and Roderick Hall, Moscow City Attorney, petitions this Court, pursuant to Idaho Code§ 7-1304, for a judicial examination and determination of the validity and authority of Petitioner to enter into a loan agreement with Idaho Department of Environmental Quality ("DEQ") and/or to issue its PETITION FOR JUDICIAL CONFIRMATION - 1 ---PAGE BREAK--- promissory notes, bonds or other evidences of indebtedness to finance certain improvements to its domestic water system (the "System"). The Petitioner has determined the System is in urgent need of a number of improvements, as further described herein, to address certain deficiencies in the System's fire suppression capabilities and to comply with certain DEQ requirements for source redundancy. The Petitioner estimates that the cost of the improvements to be financed pursuant to a loan agreement with DEQ or similar obligation, including the design, construction, and development of a new production well and associated transmission mains and the replacement of a number of the System's booster pump stations and water lines to provide for sufficient fire flow (the "Ordinary and Necessary Improvements" as further described herein) will be approximately $4,295,000, plus any required reserves and payment of issuance costs related to the financing. The Petitioner intends to finance the remaining needed improvements with existing cash reserves, as further described herein. The Petitioner petitions this Court for a determination that the Ordinary and Necessary Improvements are an "ordinary and necessary expense" of Petitioner authorized by the general laws of the State, within the meaning of Article VIII, Section 3 of the Idaho Constitution. In support thereof, Petitioner (also hereinafter referred to as "City") represents as follows: I. JURISDICTION 1. This petition is made by Petitioner pursuant to the Idaho Judicial Confirmation Law, Idaho Code§§ 7- 130 1- 1313, inclusive (the "Law"). 2. This action is in the nature of a proceeding in rem, and jurisdiction of all parties interested will be obtained by publication and posting as provided in Sections 7- 1305 and 7- 1306, Idaho Code. PETITION FOR JUDICIAL CONFIRMATION - 2 ---PAGE BREAK--- A. Background II. PRELI:MINARY ALLEGATIONS 3. The City is a public body corporate and politic organized, existing, and operating as an incorporated city pursuant to Title 50 of the Idaho Code, as amended, and as such is a "political subdivision" within the definition contained in Idaho Code§ 7-1303(6). 4. The City owns and operates the System for the purpose of providing a domestic water supply and fire suppression for residents of the City. 5. Idaho Code Section 50-323 authorizes· the City to establish, create, develop, maintain and operat_e domestic water systems; to provide for domestic water from wells or any other source; to provide for storage, treatment and transmission of the same to protect inhabitants of the City; and to do all things necessary to protect the source of water. 6. Idaho Code Sections 50- 1030 and 50-1032 further authorize the City to collect rates, fees, tolls and charges for the services, facilities and conunodities furnished by the System and the City currently collects such rates, fees, tolls and charges. 7. The City operates the System, consisting of a series of wells, reservoirs, pumps, booster stations and transmission and distribution pipes, to provide adequate water supply to meet the needs of its citizens and to provide fire protection for the City. B. The Plan 8. In 2009, the City engaged HDR Engineering, Inc. (the "Engineer") to complete a comprehensive water system plan (the "Plan"), which Plan was completed and adopted in January of 2012. The Plan identified a number of deficiencies in the System's ability to meet fire suppression and redundancy requirements imposed by state law and DEQ regulations. In addition, the Plan included an assessment of existing infrastructure, projections of future system PETITION FOR JUDICIAL CONFIRMATION - 3 ---PAGE BREAK--- demands, and a capital improvement plan that addresses both current system deficiencies and future capital needs. Finally, the Plan outlines improvements needed to address existing deficiencies, including deficiencies in fire flow and redundancy. There are four critical components to those improvements, which are described below. 9. First, the Plan identified a number of improvements to the distribution system to address System-wide fire flow deficiencies, including replacement of water lines with larger pipes, extension and addition of water mains and other piping to create additional fire flow availability (collectively, the "Piping Improvements"). The City intends to commence many of the Piping Improvements immediately to address the fire flow deficiencies, and will continue the Piping Improvements as needed throughout the duration of the Plan. 10. Next, the Plan specifically identifies a number of booster stations that are inadequately sized, causing the System to fail to meet the required fire flow in certain zones of the City. In addition, the water main in an area of the City referred to as the Indian Hills Zone is inadequately sized to meet fire flow requirements in that zone. For this reason; the Plan recommends the replacement of six existing booster pump stations and the replacement of the existing six-inch water main in Indian Hills with an eight-inch water main (the "Booster Station Improvements," as further described below). 1 1. In addition to the Piping Improvements and Booster Station Improvements, the Plan identified additional improvements necessary to meet state source and storage capacity requirements for fire flow and fire suppression storage, including the development of a new well and related transmission mains (the "Well Improvements" as further described below) and the replacement of the System's 94-year old reservoir with a new 1 million gallon replacement tank (the "Reservoir Improvements"). PETITION FOR JUDICIAL CONFIRMATION - 4 ---PAGE BREAK--- 12. The City intends to fund the Piping Improvements and Reservoir Improvements with existing cash reserves and as cash is available from rate collections. The City intends to finance the Well Improvements and the Booster Station Improvements, which it believes to be "ordinary and necessary" within the meaning of Article VIII, Section 3 of the Idaho State Constitution, through a loan agreement with DEQ and/or the issuance of promissory notes, bonds or other evidences of indebtedness. Although the Piping Improvements and Reservoir Project may also be "ordinary and necessary," the City does not request a ruling on these projects. C. The Ordinary and Necessary Improvements Generally 13. The Idaho Legislature has given DEQ the authority to promulgate rules governing the quality and safety of drinking water, pursuant to Title 37, Chapter 21 and Title 39, Chapter 1, Idaho Code. The DEQ rules are located in Idaho Administrative Procedures Act ("IDAPA") 58.01.08, titled "Idaho Rules for Public Drinking Water Systems" (hereinafter the "Rules"). The stated purpose of the Rules is "to control and regulate the design, construction, operation, maintenance, and quality control of public drinking water systems to provide a degree of assurance that such systems are protected from contamination and maintained free from contaminants which may injure the health of the consumer." 14. In furtherance of the stated purposes, the Rules contain specific requirements regarding fire flow capacity and source sufficiency and redundancy to ensure the System can adequate I y meet the needs of the City's inhabitants and ensure adequate fire protection for its citizens and properties. D. The Ordinary and Necessary Improvements: Booster Station Improvements 15. Section 501.18 of the Rules contains requirements regarding fire flow capacity, and requires the System be designed to provide for maximum daily demand plus fire flow capacity with any source out of service. The Rules provide that fire flow requirements and PETITION FOR JUDICIAL CONFIRMATION - 5 ---PAGE BREAK--- system adequacy are to be determined by the local fire authority based on the International Fire Code. 16. The Plan tested the System based on the following fire flow requirements, which were established by the local fire authority based on zoning categories, in accordance with the International Fire Code and the Rules: 1,500 gallons per minute for single family residential, 4,250 gallons per minute for multi-family residential, 7,250 gallons per minute for general business and industrial zones, and 2,250 gallons per minute for neighborhood business. This testing demonstrated numerous deficiencies caused by inadequately sized piping and inadequately sized booster pump stations in elevated pressure zones throughout the System. The Plan concluded that the existing System could not produce adequate volume to provide sufficient fire flow and fire suppression storage without additional improvements. 17. The Plan also conducted an analysis of the System's ability to address "extreme fire events" such as an event involving a large residential area, multi-family residential buildings, or a single large fire in the downtown commercial core of the City. The Plan determined the City would be unable to support an extreme fire event involving a large residential area or multi-family residential buildings without improvements. 18. Based on the fire flow and "extreme fire events" analyses, the Plan concluded that the System's aging infrastructure and inadequately sized pipes contributed to areas of low pressure during peak demand hours and substandard fire flows, which puts the City's citizens I and their property at risk and violates the Rules. 19. To address these deficiencies, the Plan recommends replacement of six booster stations that are inadequately sized, causing the System to fail to meet the required fire flow in six zones, as well as the water main in the Indian Hills Zone, which is inadequately sized to meet fire flow requirements in that zone (collectively, the "Booster Station Improvements"). The PETITION FOR JUDICIAL CONFIRMATION - 6 ---PAGE BREAK--- Booster Station Improvements are urgently needed m order to meet fire flow requirements currently applicable to the System. 20. The System must commence design and construction of the Booster Station Improvements immediately in order to ensure it has adequate water pressure to provide its citizens with adequate fire protection and to meet the requirements of the Rules regarding fire flow. Failure to meet DEQ requirements could result in fines imposed on the System and could cause the City to be unable to issue new building permits. E. The Ordinary and Necessary Improvements: Well Improvements 21. Section 501.17 of the Rules requires that, under normal operating conditions, with any water source out of service, the remaining sources shall be capable of providing either the peak hour demand of the System or a minimum of the maximum day demand plus equalization storage. 22. The Plan determined the System will be unable to meet the requirements of Section 501.17, noting that, with its largest well out of service, the System will have a source deficiency of 0.5 million gallons per day by year 2015 that will increase to a deficiency of 1.6 million gallons per day by year 2030. This places the System in violation of the Rules, and corresponding Idaho Code provisions requiring compliance with the Rules. In addition, the City could be unable to meet the needs of its citizens in the event of an extreme fire or in the event of a fire when one of its existing wells is out of service. 23. In addition, the City and its citizens have experienced several water service problems due to the lack of redundancy in the System since at least 2001 because of well failures. In 2001, the City lost production capacity when Well #9 was out of service for repair, and was forced to implement mandatory watering and outdoor car washing prohibitions. PETITION FOR JUDICIAL CONFIRMATION - 7 ---PAGE BREAK--- Similarly, in 2012, a Well #9 failure required the City to call for voluntary reductions in water consumption. 24. Additionally, as noted above, the Plan determined the City would be unable to support an extreme fire event involving a large residential area or multi-family residential buildings without improvements, in part due to the lack of redundancy and adequate source reliability. 25. Presently, any failure of the City's wells could result in voluntary or mandatory use restrictions, impact the City's ability to fill reservoirs and provide fire protection to its residents, and could result in a violation of Section 501.17. 26. To address these deficiencies, the Plan recommends the development of a new well, Well #10, and associated transmission mains in order to bolster source reliability and meet the redundancy requirements of Section 501.17. Well # 10 will ensure the System has adequate capacity in the event Well #9 or any of its other wells are out of service. Because the City has not sought additional groundwater rights, the addition of Well #10 will only provide System redundancy and serve as an alternate in the event another source is out of service. In order to meet the requirements of Section 501.17, the City must begin the design, development and construction of a new production, Well #10, and association transmission.mains (collectively, the "Well hnprovements") immediately. The City intends to finance the Well Improvements through a loan agreement with DEQ and/or the issuance of promissory notes, bonds or other evidences of indebtedness. 27. The System must commence design and construction of the Well hnprovements immediately il). order to meet the requirements of the Rules, as well as to ensure it has adequate and reliable so'urce capacity to meet peak demand and to provide its citizens with adequate fire PETITION FOR JUDICIAL CONFIRMATION - 8 ---PAGE BREAK--- protection. Failure to meet DEQ requirements could result in fines imposed on the System and could cause the City to be unable to issue new building permits. F. Plan of Finance 28. The City intends to finance a number of the Piping Improvements and the Reservoir Improvements with existing cash reserves, together with cash available to the System from rate collections. 29. The City intends to finance the Well Improvements and Booster Station Improvements (collectively, the "Ordinary and Necessary Improvements") through a loan agreement with DEQ and/or the issuance of promissory notes, bonds or other evidences of indebtedness. Table One sets forth the primary components of the Ordinary and Necessary Improvements, and their estimated cost. Table One Ordinary and Necessary Improvements Well #10 and associated transmission mains Replacement of Existing Booster Pump Stations Replacement of Indian Hills Drive Waterline Total Estimated Cost $2,700,000 1,275,000 320,000 $4,295,000 30. Petitioner is empowered by Idaho Code Sections 50-237 and 50-1027 through 50-1042, inclusive (the "Act"), to issue revenue bonds in order to finance, in whole or in part, the cost of the acquisition, construction, reconstruction, improvement, betterment or extension of the System and to pledge revenue from the System for the repayment of such bonds, including an amount sufficient to create and maintain a reserve fund for the repayment of such bonds. 31. Idaho Code Section 50-1030(g) authorizes the Petitioner to pledge revenues from the System. It providȐs that the Petitioner has the power: PETITION FOR JUDICIAL CONFIRMATION - 9 ---PAGE BREAK--- To pledge an amount of revenue from such works including improvement, betterment or extensions thereto, thereafter constructed or acquired, sufficient to pay said bonds and interest as the same shall become due, and to create and maintain reasonable reserves therefor. Such amount may consist of all or any part or portion of such revenues. In determining such cost, there may be included all costs and estimated costs of the issuance of said bonds; all engineering, inspection, fiscal and legal expenses and interest which it is estimated will accrue during the construction period and for six ( 6) months thereafter on money borrowed or which it is estimated will be borrowed pursuant to sections 50-1027 through 50-1042, Idaho Code, and the costs of any bond reserve funds or working capital deemed necessary in connection with the bond issue. 32. The City proposes to issue revenue obligations, in the form of a loan agreement with DEQ and/or promissory notes, bonds or other evidences of indebtedness issued to bond investors or financial institutions, in order to finance the costs of the Ordinary and Necessary Improvements, in the approximate amount of $4,295,000, plus required reserves and issuance costs. 33. DEQ has recently provided Petitioner notice that funding is available for the Ordinary and Necessary Improvements. DEQ financing is of utmost importance to the financing of the Ordinary and Necessary Improvements because it provides the lowest interest rate and financing costs available and because of the limited availability of this type of financing. In order to secure DEQ financing, the City must urgently pursue this option. DEQ has indicated a willingness to consider funding based on the filing of this Petition with the Court. G. Source of Payment 34. The City intends to pay the obligations from revenues collected pursuant to the Act. No tax monies will be pledged for repayment of the obligations and the full faith and credit of the City shall not be pledged to repayment. PETITION FOR JUDICIAL CONFIRMATION - 10 ---PAGE BREAK--- H. Authority and Powers 35. Petitioner is subject to the debt limitations contained in Article VIII, Section 3 of the Idaho Constitution. 36. Petitioner has not held an election to obtain voter approval to finance the Ordinary and Necessary Improvements. 37. Article VIII, Section 3 of the Idaho Constitution provides that: No county, city, board of education, or school district, or other subdivision of the state, shall incur any indebtedness, or liability, in any manner, or for any purpose, exceeding in that year, the income and revenue provided for it for such year, without the assent of two thirds (2/3) of the qualified electors thereof voting at an election to be held for that purpose, nor unless, before or at the time of incurring such indebtedness, provisions shall be made for the collection of an annual tax sufficient to pay the interest on such indebtedness as it falls due, and also to constitute a sinking fund for the payment of the principal thereof, within thirty (30) years from the time of contracting the same. Any indebtedness or liability incurred contrary to this provision shall be void: Provided, that this section · shall not be construed to apply to the ordinary and necessary expenses authorized by the general laws of the state . . . 38. Petitioner has exercised its authority under the Act to approve a resolution (the "Resolution") to proceed with the filing of judicial confirmation proceedings and declaring the immediate need to constȏct the Ordinary and Necessary Improvements, as well as an ordinance (the "Ordinance"), as required by the Act, which authorizes the Petitioner to issue obligations payable from revenues of the System to finance the Ordinary and Necessary Improvements upon final approval of such projects by the City and upon the Court's issuance of a favorable judgment on this Petition. A copy of the Resolution and the Ordinance are attached hereto and incorporated herein as Exhibit A. 39. Judicial determination of the validity of such proposed obligations pursuant to Idaho Code§ 7-1301 et seq. will serve the public interest and welfare. PETITION FOR JUDICIAL CONFIRMATION - 11 ---PAGE BREAK--- 40. Petitioner has complied or will comply with all publication, posting, mailing of notice, and hearing requirements pursuant to Idaho Code 7-1304, 7-1305, and 7-1306. Petitioner mailed notice of the public hearing to all persons requesting such notice informing them of the time and place of the public hearing to consider the resolution authorizing the filing of this petition at least 14 days before the public hearing via certified mail pursuant to Idaho Code §7-1304. Additionally, Petitioner posted notice of the public hearing at or near the main door of the City's administrative office prior to the date of the public hearing and published notice in The Moscow-Pullman Daily News, the official newspaper of general circulation in Latah County, on December 21, 2013, which was more than 15 days prior to January 6, 2014, the date of the public hearing. The form of notice published in The Moscow-Pullman Daily News complied with Idaho Code§ 7-1306(2). A copy of the notice published in The Moscow-Pullman Daily News is attached as Exhibit B and incorporated herein. III. CLAIM FOR JUDICIAL DETERMINATION - ORDINARY AND NECESSARY 41. Petitioner repeats and realleges each of the allegations contained in paragraphs 1 through 40. 42. Petit5oner seeks a judicial determination that the expenditures for the planned Ordinary and Necessary Improvements constitute ordinary and necessary expenses under Article VIII, Section 3 of the Idaho Constitution and that the Ordinary and Necessary hnprovements are authorized by the general laws of the State. WHEREFORE, Petitioner prays: 1. For an Order setting the date and time of a hearing herein and directing the giving of notice thereof as provided by law; PETITION FOR JUDICIAL CONFIRMATION - 12 ---PAGE BREAK--- 2. For a judicial examination and confirmation of the validity of the power and authority of Petitioner to enter into a loan agreement with DEQ and/or to issue its promissory notes, bonds, or other evidences of indebtedness to the bond investors or financial institutions to finance the Ordinary and Necessary Improvements based on the finding that such obligations and agreements are not debts or obligations under Article VIII, Section 3 of the Idaho Constitution, and to incur the obligations for the Ordinary and Necessary Improvements based on the finding that such Ordinary and Necessary Improvements, as described herein, are "ordinary and necessary expenses" under Article VIII, Section 3 of the Idaho Constitution; and 3. For such other and further relief as the Court deems proper. DATED THIS2,3Jday of January, 2014. HAWLEY TROXELL ENNIS & HAWLEY LLP ByȎ 1,f( Nicole Trammel.Pantera, ISB No. 7744 Attorneys for Petitioner City of Moscow, Latah County, Idaho PETITION FOR JUDICIAL CONFIRMATION - 13 ---PAGE BREAK--- V E R I F I C A T I O N Bill Lambert, being first duly sworn upon oath, deposes and says: That he is the Mayor of the City of Moscow, Latah County, Idaho, Petitioner in the above-entitled action; that he has read the within and foregoing PETITION FOR JUDICIAL CONFIRMATION, and that the statements iiiLfilnbert, Mayor STATEOFIDAHO ) ) SS. County of Latah ) I, l 0. 1)-Yle.i Le..t.Jj\4 , a notary public, do hereby certify that on this 24th day of January, 2014, personally appeared before me Bill Lambert, who, being by me first duly sworn, declared that he is the Mayor of the City of Moscow, Latah County, Idaho, Petitioner in the foregoing action, that he signed the foregoing document, and that the statements therein contained are true.