BOARD OF COMMISSIONERS ACTION ITEM REQUEST

Upper Gwynedd Township 1 Parkside Place

North Wales, PA 19454

BOARD OF COMMISSIONERS ACTION ITEM REQUEST

Date: November 20, 2020

To: Sandra Brookley Zadell, Township Manager From: David J. Brill, Finance Director & Treasurer Re: Bank Loan Meeting Date: November 23, 2020 Background: The Township obtained the professional services of PFM Financial Advisors (Financial Advisor) and Obermayer (Debt Legal Counsel) to assist staff in determining the best way to finance the balance of the WIP and satisfying all of the legal requirements of doing so. PFM recommended and Staff supported:

• a bank loan is more attractive than a bond issue for this borrowing • in addition to borrowing $5.5M for the WIP we can reduce interest payments on our existing

General Fund Loan by borrowing an additional $2.7M and replacing with lower interest rate • a wrap financial structure that keeps the overall term to 10 years and leverages the existing

payoff timing of the General Fund Bank Loan (2026) and Sewer Fund Debt (2027) PFM conducted a Request for Proposal to financial institutions to lend the Township the monies. PFM has analyzed the responses and recommends entering into an Agreement with TD Bank to finance this borrowing. Tonight, you are being asked to take two actions. The first is to ratify the authorization of the advertisement of the Ordinance. This ad was placed on Thursday November 19th in accordance with the required advertising requirements. Second, you will be asked to approve the Ordinance that approves this borrowing. PFM and Obermayer are attending our meeting to discuss this transaction and the necessary BOC actions and paperwork to complete. Budget Impact: The 2021 Budget included and assumption on the impacts using a placeholder for the interest on the debt. The results are in and fortunately the available interest rate is much lower than anticipated resulting in a favorable budget variance of $28,590 for General Fund and $36,347 for the Sewer Fund.

Interdepartmental Action: None Recommended Motion/Resolution/Ordinance: 2 Actions: Motion to ratify the advertisement of ordinance 2020-10, WIP Financing. Motion to Approve Ordinance 2020-10, WIP Financing.

PFM Financial Advisors LLC2533 Yellow Springs Road

Malvern, PA 19355610.647.5487 (P) 610.647.2467 (F)

www.pfm.com

Upper Gwynedd Township

$8,180,000Results of Bank Loan RFP

November 23, 2020

Prepared by:Jamie Schlesinger

Director&

Melissa HughesSenior Managing Consultant

&Francesca Neuman

Analyst

BANK LOAN SALE DOCUMENTGeneral Obligation Note, Series of 2020

Upper Gwynedd TownshipSeries of 2020Proposals Due November 17, 2020

1 2 3

All-InBorrowing

Bank Fixed Rate RateTD Bank 1.140 1.14491

JPMorgan Chase Bank 1.300 1.31858Capital One Bank 1.390 1.38996

Webster Bank 1.414 1.42641JPMorgan Chase Bank 1.410 1.42864

The FNB Newton 1.700 1.71440Riverview Bank 2.370 2.37630

First National Bank 2.570 2.58280Republic Bank 2.600 2.60632

5 6 7 9 10 11 12

Fixed/Variable Rate Proposals

All-In Borrowing All-InRate Based Borrowing

Initial Initial Cap on 10-Year Rate BasedBank Rate Years Rate Historic Average on Cap Comments

The FNB Newton Bank 1.250 7 2.515 (1) 4.000 1.4026 1.5630The FNB Newton Bank 1.000 5 2.515 (1) 4.000 1.4295 1.8264

Webster Bank 1.414 7 1.297 (2) 5.250 1.4136 1.83817/15/2025 Call Date; Disclosure requirements - see RFP

Riverview Bank 2.125 7 2.322 (3) 4.000 2.1521 2.3281 no cap rate given

Webster Bank 1.414 5 1.297 (2) 5.250 1.3943 2.44517/15/2025 Call Date; Disclosure requirements - see RFP

Riverview Bank 1.875 5 2.322 (3) 4.000 2.0015 2.4454 no cap rate given

First National Bank 2.280 7 2.557 (4) 4.000 2.3218 2.4721Make-whole call; depository relationship requirement; no cap rate given

Univest Bank 2.320 7 2.846 (6) 4.000 2.3813 2.5013 Yield protection language

First National Bank 1.970 5 2.557 (4) 4.000 2.1400 2.5204Make-whole call; depository relationship requirement; no cap rate given

Republic Bank 2.300 7 3.096 (5) 4.500 2.3896 2.5351Republic Bank 2.000 5 3.096 (5) 4.500 2.2959 2.6629

Variable Rate Assumptions10-Year Avg

(1) 65% of WSJ Prime30-Day LIBOR: 0.6417% (2) 79% x (1 mo. LIBOR + 100bps)

WSJ Prime: 3.8695% (3) 60% of WSJ Prime(4) 79% of WSJ Prime - .50%(5) 80% of WSJ Prime(6) 80% of WSJ Prime - 0.25%

Make-whole call; Depository relationship requirement; no cap rate given

4

SUMMARY OF BANK PROPOSALS

no cap rate given

Fixed Rate Proposals

7/15/2025 Call date

VariableRate

8

7/15/2024 Call date

Comments

Non callable

7/15/2025 Call date; Disclosure requirements - see RFP

PFM Financial Advisors LLC 11/18/20201

SUMMARY OF FINANCING SCENARIOSUPPER GWYNEDD TOWNSHIP

Principal

Construction Fund

Deposit

Term

Structure

Total Interest

3 4 5 6 7 8 9 10 11

Fiscal Existing Existing Existing Estimated Est. Total Proposed Est. Total TotalYear Sewer Debt General Debt Total Debt Net General Debt Debt Sewer Debt Debt

Ending Service Service Service Savings Service Service Service Service12/31/2020 288,973 476,832 765,805 476,832 288,973 765,80512/31/2021 288,973 473,390 762,363 76,057 397,333 34,179 323,152 720,48512/31/2022 288,973 475,808 764,781 998 474,810 539,099 828,072 1,302,88212/31/2023 288,973 475,948 764,921 257 475,691 539,673 828,646 1,304,33712/31/2024 288,973 475,856 764,829 352 475,504 539,178 828,151 1,303,65512/31/2025 288,973 474,532 763,505 272 474,260 539,626 828,599 1,302,85912/31/2026 288,973 440,999 729,973 29 440,970 539,006 827,979 1,268,95012/31/2027 120,405 120,405 707,329 827,734 827,73412/31/2028 827,668 827,668 827,66812/31/2029 827,548 827,548 827,54812/31/2030 827,325 827,325 827,32512/31/203112/31/203212/31/203312/31/203412/31/203512/31/203612/31/203712/31/203812/31/203912/31/2040

TOTAL 2,143,219 3,293,365 5,436,584 77,965 3,215,400 5,920,629 8,063,848 11,279,248

$93,568 $385,629

1 2

Refunding New Money

$2,645,000 $5,535,000

N/a $5,500,000

6 Years 10 Years

Upfront Savings Wrap

PFM Financial Advisors, LLC. 11/18/20202

UPPER GWYNEDD TOWNSHIPSERIES OF 2020

Settle 12/30/2020Dated 12/30/2020

1 2 3 4 5 6Proposed

Semi-Annual Fiscal YearDate Principal Rate Interest Debt Service Debt Service

442117/15/2021 381,000 1.140 50,511.50 431,511.50 431,511.501/15/2022 1.140 44,454.30 44,454.307/15/2022 925,000 1.140 44,454.30 969,454.30 1,013,908.601/15/2023 1.140 39,181.80 39,181.807/15/2023 937,000 1.140 39,181.80 976,181.80 1,015,363.601/15/2024 1.140 33,840.90 33,840.907/15/2024 947,000 1.140 33,840.90 980,840.90 1,014,681.801/15/2025 1.140 28,443.00 28,443.007/15/2025 957,000 1.140 28,443.00 985,443.00 1,013,886.001/15/2026 1.140 22,988.10 22,988.107/15/2026 934,000 1.140 22,988.10 956,988.10 979,976.201/15/2027 1.140 17,664.30 17,664.307/15/2027 672,000 1.140 17,664.30 689,664.30 707,328.601/15/2028 1.140 13,833.90 13,833.907/15/2028 800,000 1.140 13,833.90 813,833.90 827,667.801/15/2029 1.140 9,273.90 9,273.907/15/2029 809,000 1.140 9,273.90 818,273.90 827,547.801/15/2030 1.140 4,662.60 4,662.607/15/2030 818,000 1.140 4,662.60 822,662.60 827,325.20

TOTALS 8,180,000 479,197.10 8,659,197.10 8,659,197.10

PFM Financial Advisors LLC. 11/19/2020

3

UPPER GWYNEDD TOWNSHIPSERIES OF 2020SOURCES AND USES OF FUNDS

SOURCES: Note 8,180,000.00 Accrued Interest 0.00

Total 8,180,000.00USES: Amount to Call Note 2,625,646.10 Deposit to Construction Fund 5,500,000.00 Total Legal Fees & Expenses (Obermeyer/Rudolph Clarke) 25,000.00 Financial Advisor (PFM) 20,000.00 Bank Fee (TD Bank) 2,000.00 Miscellaneous Expenses/Rounding 7,353.90

Total 8,180,000.00

Dated Date 12/30/2020

Settlement Date 12/30/2020

Yield of the Issue 1.139971


4

Pro Forma 2015 Refunding

PFM Financial Advisors LLC5


Callable Anytime

1 2 3 4 5 6

Semi-Annual Fiscal YearDate Principal Rate Interest Debt Service Debt Service

8/15/20202/15/2021 2.320 30,194.80 30,194.808/15/2021 413,000 2.320 30,194.80 443,194.80 473,389.602/15/2022 2.320 25,404.00 25,404.008/15/2022 425,000 2.320 25,404.00 450,404.00 475,808.002/15/2023 2.320 20,474.00 20,474.008/15/2023 435,000 2.320 20,474.00 455,474.00 475,948.002/15/2024 2.320 15,428.00 15,428.008/15/2024 445,000 2.320 15,428.00 460,428.00 475,856.002/15/2025 2.320 10,266.00 10,266.008/15/2025 454,000 2.320 10,266.00 464,266.00 474,532.002/15/2026 2.320 4,999.60 4,999.608/15/2026 431,000 2.320 4,999.60 435,999.60 440,999.20

TOTALS 2,603,000 213,532.80 2,816,532.80 2,816,532.80


6

UPPER GWYNEDD TOWNSHIPAMOUNT TO CALL BONDS

1 2 3 4

Date Principal Interest Required

12/30/2020 2,603,000.00 22,646.10 2,625,646.10

TOTALS 2,603,000.00 22,646.10 2,625,646.10


7

UPPER GWYNEDD TOWNSHIPSERIES OF 2020 SETTLE 12/30/2020Refunds Series of 2015 DATED 12/30/2020

1 2 3 4 5 6 7 8

Semi-Annual Annual ExistingDate Principal Rate Interest Debt Service Debt Service Debt Service Savings

7/15/20201/15/2021 1.140 1,256.38 1,256.387/15/2021 381,000 1.140 15,076.50 396,076.50 397,332.88 473,389.60 76,056.731/15/2022 1.140 12,904.80 12,904.807/15/2022 449,000 1.140 12,904.80 461,904.80 474,809.60 475,808.00 998.401/15/2023 1.140 10,345.50 10,345.507/15/2023 455,000 1.140 10,345.50 465,345.50 475,691.00 475,948.00 257.001/15/2024 1.140 7,752.00 7,752.007/15/2024 460,000 1.140 7,752.00 467,752.00 475,504.00 475,856.00 352.001/15/2025 1.140 5,130.00 5,130.007/15/2025 464,000 1.140 5,130.00 469,130.00 474,260.00 474,532.00 272.001/15/2026 1.140 2,485.20 2,485.207/15/2026 436,000 1.140 2,485.20 438,485.20 440,970.40 440,999.20 28.80

TOTALS 2,645,000 93,567.88 2,738,567.88 2,738,567.88 2,816,532.80 77,964.92

Savings as a % of Refunded Par 3.00%


8

Pro Forma New Money

PFM Financial Advisors LLC9


Settle 12/30/2020Dated 12/30/2020

1 2 3 4 5 6 7 8Proposed Existing

Semi-Annual Fiscal Year Sewer TotalDate Principal Rate Interest Debt Service Debt Service Debt Service Debt Service

442117/15/2021 1.140 34,178.63 34,178.63 34,178.63 288,973.44 323,152.071/15/2022 1.140 31,549.50 31,549.507/15/2022 476,000 1.140 31,549.50 507,549.50 539,099.00 288,973.44 828,072.441/15/2023 1.140 28,836.30 28,836.307/15/2023 482,000 1.140 28,836.30 510,836.30 539,672.60 288,973.44 828,646.041/15/2024 1.140 26,088.90 26,088.907/15/2024 487,000 1.140 26,088.90 513,088.90 539,177.80 288,973.44 828,151.241/15/2025 1.140 23,313.00 23,313.007/15/2025 493,000 1.140 23,313.00 516,313.00 539,626.00 288,973.44 828,599.441/15/2026 1.140 20,502.90 20,502.907/15/2026 498,000 1.140 20,502.90 518,502.90 539,005.80 288,973.44 827,979.241/15/2027 1.140 17,664.30 17,664.307/15/2027 672,000 1.140 17,664.30 689,664.30 707,328.60 120,405.13 827,733.731/15/2028 1.140 13,833.90 13,833.907/15/2028 800,000 1.140 13,833.90 813,833.90 827,667.80 827,667.801/15/2029 1.140 9,273.90 9,273.907/15/2029 809,000 1.140 9,273.90 818,273.90 827,547.80 827,547.801/15/2030 1.140 4,662.60 4,662.607/15/2030 818,000 1.140 4,662.60 822,662.60 827,325.20 827,325.20

TOTALS 5,535,000 385,629.23 5,920,629.23 5,920,629.23 1,854,245.77 7,774,875.00


10

Request for Proposals Township of Upper Gwynedd, PA 4 Internal

FORM OF LOAN PROPOSAL Township of Upper Gwynedd, Pennsylvania

General Obligation Note, Series of 2020

The Bank (the “Bank” or “Lender”) hereby agrees to lend funds sufficient for it to purchase the General Obligation Note, Series of 2020 (the “Note”), to be issued by the Township of Upper Gwynedd (the “Township”), Montgomery County, Pennsylvania in the estimated principal amount of $8,252,000 subject to the terms and conditions set forth in the Request for Proposal (the “Term Sheet”), which is attached hereto and incorporated herein. The Bank agrees to be legally bound to such terms from the date of this Loan Proposal to the Closing Date of the Note described in the Term Sheet. Interest Rate. The Township shall only consider Loan Proposals which clearly express the rate of interest.

I. Fixed Rate of Interest A fixed rate of interest for the term of the Note equal to 1.14% per annum.

II. Variable Rate of Interest - (5 Year Fixed Rate, Variable Rate Thereafter) Initial Interest Rate: The initial interest rate on the Note shall be ______% for a period of approximately five years, ending January 15, 2026. Interest Rate Reset: After the initial fixed interest rate period, the rate shall be reset at ___% of Wall Street Journal Prime (or its equivalent), plus a spread of _______%. Maximum Cap Interest Rate: In no instance shall the interest rate ever exceed ____________.

III. Variable Rate of Interest - (7 Year Fixed Rate, Variable Rate Thereafter) Initial Interest Rate: The initial interest rate on the Note shall be ______% for a period of approximately seven years, ending January 15, 2028. Interest Rate Reset: After the initial fixed interest rate period, the rate shall be reset at ___% of Wall Street Journal Prime (or its equivalent), plus a spread of _______%. Maximum Cap Interest Rate: In no instance shall the interest rate ever exceed ____________.

Cost & Expenses.

The Bank shall request the reimbursement of its Counsel’s legal fees only, subject to a maximum amount of $2,000. Other Bank Fees $0.

11

Request for Proposals Township of Upper Gwynedd, PA 5 Internal

Disclosures & Certificates

The Bank hereby acknowledges and has included an executed Solicitation Disclosure, as shown in Appendix A. The Bank hereby acknowledges and agrees to execute at settlement a Certificate of Qualified Provider, the form of which is shown in Appendix B.

The Bank acknowledges that the Township reserves the right to reject any and all proposals received in connection with this Request for Proposals. __TD Bank________________ __610-513-3401 / 610-312-2603 Name of Bank Phone and Fax Numbers _________________________ ___11/18/20____________ Authorized Officer Date Approved by: Township of Upper Gwynedd (Vice) Chairman of Board of Commissioners Date

12

Internal

Appendix A Solicitation Disclosure

RE: Township of Upper Gwynedd, General Obligation Note, Series of 2020

Dear Interested Bank: We are soliciting your interest in the above-named transaction pursuant to Securities and Exchange Commission Release No. 34-89074 (June 16, 2020) granting a temporary conditional exemption from the broker requirements of Section 15(a) of the Securities Exchange Act of 1934 for certain activities of registered municipal advisors. In connection with such solicitation please be advised of the following:

I. PFM Financial Advisors LLC (“PFM” or “we” or “us”) represents solely the interests of Township of Upper Gwynedd with respect to the above-referenced transaction and does not represent your interests.

II. We have not conducted any due diligence on your behalf.

213 Market Street Harrisburg, PA 17101 III. Neither PFM nor the Township of Upper Gwynedd have engaged a broker-dealer to 717.232.2723 act as a placement agent with respect to this transaction. pfm.com IV. You may choose to engage the services of a broker-dealer to represent your interests.

We are required to obtain your acknowledgement that you received this disclosure. Accordingly, please include an executed copy of this letter with your RFP response. In order to comply with the terms of the conditional exemption, at or prior to closing you will be required to deliver the attached representation stating that your firm is a qualified provider in addition to whatever other representations may be required at or before closing. Sincerely,

Jamie Schlesinger, Director

PFM Financial Advisors LLC ACKNOWLEDGED:

Bank: ___TD Bank_____________________

By: _______________________________

13

Internal

Name: __Laura J Serina__________________

Title: __Vice President__________________

14

Internal

Request for Proposals Township of Upper Gwynedd, PA 6 Appendix B Form of Qualified Provider Certificate

December 30, 2020 The undersigned, on behalf of TD Bank (the “Purchaser”), in connection with the purchase of the Township of Upper Gwynedd’s General Obligation Note, Series of 2020 (the “Note”) hereby represents and warrants as follows:

1) The Purchaser is a “Qualified Provider” as required by Securities and Exchange Commission Release No. 34-89074 (June 16, 2020) which is defined as (i) a bank as defined in Section 3(a)(6) of the Exchange Act of 1934; (ii) a wholly-owned subsidiary of a bank engaged in commercial lending and financing activities, such as an equipment lease financing corporation; or (iii) a federally- or state- chartered credit union.

2) The Purchaser is capable of independently evaluating the investment risks of the transaction; and

3) The Purchaser is not purchasing the Note with a view to distributing them.

4) The Purchaser will not transfer any portion of the Note within one year of their issuance date, except

to another purchaser that meets the definition of Qualified Provider in clause (1) above. IN WITNESS WHEREOF, the undersigned has executed this certificate as of the date first mentioned above. TD Bank By: _______________________________ Name: __Laura J Serina__________________ Title: __Vice President__________________

15

TOWNSHIP OF UPPER GWYNEDDSUMMARY OF OUTSTANDING INDEBTEDNESS

1 2 3 4 5Fiscal Estimated G.O. Notes G.O. Note Total

Year State Loan Series of Series of DebtEnded 2010 2015 2020 Service

12/31/2020 288,973 476,832 765,80512/31/2021 288,973 431,512 720,48512/31/2022 288,973 1,013,909 1,302,88212/31/2023 288,973 1,015,364 1,304,33712/31/2024 288,973 1,014,682 1,303,65512/31/2025 288,973 1,013,886 1,302,85912/31/2026 288,973 979,976 1,268,95012/31/2027 120,405 707,329 827,73412/31/2028 827,668 827,66812/31/2029 827,548 827,54812/31/2030 827,325 827,325

Totals 2,143,219 476,832 8,659,197 11,279,248

Principal*: 1,759,984 0 8,180,000 9,939,984

Call Date: Anytime Anytime Anytime

Purpose: New Money Refund 2010 Cur Ref 2015, New Money

Fund: Sewer General General/Sewer

Fixed Rate: 2.00% 2.32% 1.14%

* Outstanding as of November 18, 2020

Debt Service Requirements

PFM Financial Advisors LLC 11/18/202016

UPPER GWYNEDD TOWNSHIP

GENERAL OBLIGATION NOTE

SERIES OF 2020

SUMMARY OF FINANCING

2020 Note Principal: $8,180,000

Pricing Date: 11/23/2020

Settlement Date: 12/30/2020

Use of Proceeds:

Proceeds of the Note will be used to: (1) Refund the Township's General

Obligation Note, Series of 2015, (3) provide for new money of the Township

related to Sewer upgrades and (3) pay the costs and expenses related to

issuing the Note.

FINANCING TEAM MEMBERS

Issuer Upper Gwynedd Township

Solicitor Rudolph Clarke LLC

Bond Counsel Obermeyer Rebmann Maxwell & Hippel

Financial Advisor PFM Financial Advisors LLC

Bank TD Bank

Redemption Agent Univest Bank

PFM Financial Advisors LLC 17

Disclosures:

PFM is the marketing name for a group of affiliated companies providing a range of services. All services are provided through separate agreements with each company. This material is for general information purposes only and is not intended to provide or give a specific recommendation. Financial advisory services are provided by PFM Financial Advisors LLC and Public Financial Management Inc. Both are registered municipal advisors with the Securities and Exchange Commission (SEC) and the Municipal Securities Rulemaking Board (MSRB) under the Dodd-Frank Act of 2010. Investment advisory services are provided by PFM Asset Management LLC which is registered with the SEC under the Investment Advisers Act of 1940. Additional applicable regulatory information is available upon request. Swap advisory services are provided by PFM Swap Advisors LLC which is registered as a municipal advisor with both the MSRB and SEC, a commodity trading advisor with the Commodity Futures Trading Commission, and a member of the National Futures Association. Consulting services are provided through PFM Group Consulting LLC. PFM financial modeling platform for strategic forecasting is provided through PFM Solutions LLC. For more information regarding PFM’s services or entities, please visit www.pfm.com.

The information and any analyses contained in this presentation are taken from, or based upon, information obtained from the recipient or from publicly available sources, the completeness and accuracy of which has not been independently verified, and cannot be assured by PFM. The information and any analyses in these materials reflect prevailing conditions and PFM’s views as of this date, all of which are subject to change. To the extent projections and financial analyses are set forth herein, they may be based on estimated financial performance prepared by or in consultation with the recipient and are intended only to suggest reasonable ranges of results. Opinions, results, and data presented are not indicative of future performance. Actual rates may vary based upon market conditions at the time of pricing. The printed presentation is incomplete without reference to the oral presentation or other written materials that supplement it. To the extent permitted by applicable law, no employee or officer of PFM’s financial advisory business, nor any of PFM’s affiliated companies, accept any liability whatsoever for any direct or consequential loss arising from negligence or from any use of this presentation or its contents. Any municipal financial product or financial strategy referenced may involve significant risks, including, but not limited to: market, interest rate, or credit risk, and may not be suitable for all clients. The ultimate decision to proceed with any transaction rest solely with the client.

18

4837-6446-1521

UPPER GWYNEDD TOWNSHIP MONTGOMERY COUNTY, PENNSYLVANIA

ORDINANCE NO. 2020 -10

AN ORDINANCE OF THE BOARD OF COMMISSIONERS OF UPPER GWYNEDD TOWNSHIP, MONTGOMERY, COUNTY, PENNSYLVANIA (THE “TOWNSHIP”) PURSUANT TO THE ACT OF THE GENERAL ASSEMBLY OF THE COMMONWEALTH OF PENNSYLVANIA, KNOWN AS THE LOCAL GOVERNMENT UNIT DEBT ACT, 53 PA. C.S. CHS. 80-82 (THE “DEBT ACT”); SETTING FORTH ITS INTENTION TO AUTHORIZE AND DIRECT THE INCURRING OF NON-ELECTORAL DEBT THROUGH THE ISSUANCE OF A GENERAL OBLIGATION NOTE (THE “NOTE”) IN A MAXIMUM AGGREGATE PRINCIPAL AMOUNT OF UP TO $8,180,000 FOR THE PURPOSE OF PROVIDING FUNDS TO (1) FINANCE THE COSTS OF REFUNDING THE TOWNSHIP’S OUTSTANDING GENERAL OBLIGATION NOTE, SERIES OF 2015; (2) FUND A PORTION OF THE TOWNSHIP’S CAPITAL IMPROVEMENT PROGRAM, INCLUDING A SEWER DIVERSION PROJECT AND OTHER IMPROVEMENTS TO THE TOWNSHIP’S WASTEWATER TREATMENT FACILITY AND SYSTEM; AND (3) PAY THE COSTS AND EXPENSES OF ISSUING THE NOTE (COLLECTIVELY, THE “PROJECT”); MAKING CERTAIN FINDINGS AND DETERMINATIONS IN CONNECTION WITH THE PROJECT; ACCEPTING A NEGOTIATED PROPOSAL FOR THE PURCHASE OF THE NOTE; PROVIDING THAT THE NOTE MAY BE DESIGNATED AS A “QUALIFIED TAX-EXEMPT OBLIGATION” CONSISTENT WITH FEDERAL TAX LAW PROVISIONS; PROVIDING FOR THE MANNER OF EXECUTION AND OTHER PROVISIONS OF THE NOTE; COVENANTING TO BUDGET IN EACH FISCAL YEAR WHEN DUE; PLEDGING THE FULL FAITH, CREDIT AND TAXING POWER OF THE TOWNSHIP FOR THE TIMELY PAYMENT OF DEBT SERVICE ON THE NOTE; AUTHORIZING AND DIRECTING THE PREPARATION, VERIFICATION AND FILING OF A DEBT STATEMENT, BORROWING BASE CERTIFICATE AND RELATED MATERIAL WITH THE PENNSYLVANIA DEPARTMENT OF COMMUNITY AND ECONOMIC DEVELOPMENT TOGETHER WITH AN APPLICATION BY THE TOWNSHIP FOR THE APPROVAL OF THE INCURRENCE OF SUCH NON-ELECTORAL DEBT AND ISSUANCE OF THE NOTE; MAKING COVENANTS, REPRESENTATIONS AND WARRANTIES AS TO CERTAIN TAX MATTERS RELATING TO THE NOTE; AUTHORIZING THE REIMBURSEMENT FROM NOTE PROCEEDS OF CERTAIN PROJECT EXPENDITURES; APPOINTING NOTE COUNSEL TO THE TOWNSHIP; APPOINTING FINANCIAL ADVISOR TO THE TOWNSHIP; AUTHORIZING AND DIRECTING THE EXECUTION AND DELIVERY OF THE NOTE AND SUCH OTHER DOCUMENTS AS MAY BE NECESSARY OR ADVISABLE IN CONNECTION WITH THE ISSUANCE OF THE NOTE, UPON THE APPROVAL OF PENNSYLVANIA DEPARTMENT OF COMMUNITY AND ECONOMIC DEVELOPMENT; DIRECTING THE PROPER OFFICERS AND OFFICIALS OF THE TOWNSHIP TO DO ALL THINGS NECESSARY TO CARRY OUT SUCH ORDINANCE; AND RESCINDING ALL INCONSISTENT ORDINANCES.

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WHEREAS, Upper Gwynedd Township, Montgomery County, Pennsylvania (the “Township”) is a political subdivision of the Commonwealth of Pennsylvania and is a “local government unit” under terms of the Pennsylvania Local Government Unit Debt Act, as codified by the Act of December 19, 1996 (P.L. 1158, No. 177) (the “Debt Act”); and WHEREAS, the Board of Commissioners (the “Board”) of the Township has determined to incur non-electoral indebtedness and issue a Note (as defined herein) in accordance with the Debt Act, the proceeds of which shall be used for the purpose of providing funds to (1) finance the costs of refunding the Township’s Outstanding General Obligation Note, Series of 2015 (the “2015 Refunded Note”); (2) fund a portion of the Township’s capital improvement program, including a sewer diversion project and other improvements to the Township’s wastewater treatment facility and system; and (3) pay the costs and expenses of issuing the Note, as hereinafter defined (collectively, the “Project” ); and WHEREAS, the Board has determined to finance the costs of the Project by incurring indebtedness and issuing its General Obligation Note, Series of 2020 in a principal amount that shall not exceed $8,180,000 (the “Note”); and WHEREAS, the Board has received proposals for the purchase of the Note, and has determined to award the Note to TD Bank, N.A. (the “Bank”) pursuant to the Bank’s proposal to purchase the Note from the Township on the terms and conditions set forth in Exhibit A hereto; and WHEREAS, the Township desires by this ordinance (the “Ordinance”) to authorize and approve all actions necessary and appropriate to facilitate the issuance and sale of the Note to the Bank; and WHEREAS, the Township desires to authorize execution of the Note, and the execution and delivery of a Loan and Security Agreement (the “Loan Agreement”), and such other related documents as are necessary to complete the Project (all such documents collectively referred to herein as the “Loan Documents”), all in accordance with the Debt Act and other applicable law. NOW, THEREFORE, BE IT RESOLVED, by the Board of the Township as follows: SECTION 1. Authorization of Issuance of the Note and Approval of the Project. The Township hereby approves the Project described in the recitals hereto and authorizes the incurring of indebtedness pursuant to the Debt Act by the issuance of the Note in the principal amount of up to $8,180,000 for the purpose of providing funds for and toward the costs of the Project, including the financing of expenses associated therewith. The Project is being undertaken by the Township for the purpose of providing funds to (1) finance the costs of refunding the Township’s Outstanding General Obligation Note, Series of 2015; (2) fund a portion of the Township’s capital improvement program, including a sewer diversion project and other improvements to the Township’s wastewater treatment facility and system; and (3) pay the costs and expenses of issuing the Note. SECTION 2. Useful Life/Maturities Realistic Cost Estimates. The estimated useful lives of the projects funded by the 2015 Refunded Note were determined by Township at the time the

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2015 Refunded Note was issued. Such determination is hereby ratified and confirmed, and the Township certifies that the maturity of the portion of the Note that will be allocated to refunding the 2015 Refunded Note shall not extend beyond the latest maturity of the 2015 Refunded Note. In addition, components of the capital project that is approved by this Ordinance have various estimated useful lives, each of which is between 20 and 30 years; the Township has obtained realistic estimates of the cost of such capital project through bid prices or estimates from persons qualified by experience to provide such estimates. The Township hereby states that the Note is scheduled to mature in within the limitations set forth in Section 8142 of the Act, taking into account the estimated useful life of the projects financed by the 2015 Refunded Note, and this Note. SECTION 3. Non-Electoral Debt. All of the debt to be incurred upon issuance of the Note shall be incurred as non-electoral debt. SECTION 4. Execution of Debt Statement and Note and Filing of Debt Proceedings. The President and Secretary of the Board or the Vice President and Assistant Secretary, in the absence of the President or Secretary, respectively, or any duly appointed successors, as the case may be, are hereby directed to prepare and certify and to file the debt statement required by Section 8110 of the Debt Act, to execute and deliver the Note, and to prepare and certify all filings required pursuant to Section 8111 of the Debt Act, pertaining to the submission to the Pennsylvania Department of Community and Economic Development (the “Department”), of the transcript of the proceedings, which shall include certified copies of the Ordinance, proofs of proper publication, the accepted proposal for the purchase of the Note and such other documents as may be necessary in connection with the same, and to take all such further action and to execute and deliver such other documents as may be necessary or appropriate to comply with all requirements of the Debt Act or to carry out the intent and purposes of this Ordinance. SECTION 5. Maximum Principal Amount of Obligations Expected to be Issued for the Project. The total maximum amount of obligations that are expected to be issued for the Project is $8,180,000 for the Project.

SECTION 6. Limitation on Indebtedness. It is declared that the debt to be incurred hereby, together with any other indebtedness of the Township, is not in excess of any limitation imposed by the Debt Act upon the incurring of debt by the Township. SECTION 7. Sale of the Note. In compliance with Section 8161 of the Debt Act and after due consideration, the Board hereby determines that a private sale by negotiation is in the best financial interest of the Township. The Note shall be sold at private sale by negotiation upon receipt of an acceptable proposal for the purchase thereof from the on the terms and conditions set forth in Exhibit A, attached to this Ordinance (“Bank Proposal”), which shall be in compliance with the provisions of the Debt Act. SECTION 8. Acceptance of Proposal for Purchase of the Note. The Township hereby acknowledges receipt of the Bank Proposal, which has been delivered to the Secretary of the Township and shall be affixed to and shall become part of this Ordinance. The Township hereby finds the Bank Proposal to be in conformity with the requirements of the Debt Act and of this

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Ordinance, and is hereby authorized to accept the Bank Proposal and pursuant to Section 1 of this Ordinance is further authorized to sell the Note to the Bank as provided in the Bank Proposal. The officers of the Township are hereby authorized to deliver the Note to the Bank upon receipt of the principal amount thereof and upon compliance with all of the conditions precedent to such delivery required by the Debt Act, the Ordinance, and the Bank Proposal.

SECTION 9. Terms and Form of the Note. The Note when issued shall be a general obligation note and the terms and conditions of the Note and the form of the Note shall be as approved by the Township and the Township Solicitor, the execution and delivery thereof to constitute conclusive evidence of Township approval and approval by the Township Solicitor. The Township agrees that is shall establish service rates and otherwise take appropriate action with respect to all annual budgets to be adopted by the Township during the term of the Note, and will duly pay or cause to be paid when due the principal of and interest when due under the Note.

SECTION 10. Appointment of Sinking Fund Depository; Sinking Fund; Appropriation of

Annual Payments for Debt Service. The proper officers of the officers of the Township are hereby authorized and directed to contract with the Bank for its services as sinking fund depository, paying agent, and registrar with respect to the Note, and the Bank is appointed to act in all such capacities with respect to the Note. There is hereby established a separate sinking fund for the Township designated as “Sinking Fund – General Obligation Note, Series of 2020 (the “Sinking Fund”), and into the Sinking Fund there shall be paid, when and as required, all moneys necessary to pay principal and interest on the Note, when due, and the Sinking Fund shall be applied exclusively to the payment of interest and principal, at maturity or for prior required redemption, and no other purpose whatsoever, except as may be authorized by law, until the same shall have been fully paid. The Bank, as Sinking Fund depository, shall, as and when said payments are due, without further action by the Township, withdraw available monies in the Sinking Fund and apply such monies to the payment of the principal and interest due on the Note. SECTION 11. Execution, Authentication and Delivery of Note and Other Loan Documents. The duly elected officers of the Board are hereby authorized and directed to execute and deliver the Note to the Bank, as purchasers upon receipt of required payment therefor and upon compliance with all of the conditions precedent to such delivery required by the Debt Act, this Ordinance, and the Loan Documents. Furthermore, the proper officers of the Board are hereby authorized and directed to execute and deliver the Loan Agreement for the Project, and all other Loan Documents, and to take such other action as may be necessary or appropriate in order to redeem the Township’s General Obligation Note, Series of 2015, and to issue, sell and deliver the Note and to consummate the Project, all in accordance with this Ordinance, the Debt Act and the Loan Documents and all substantially in the forms of such documents as may be approved by an officer of the Board, the execution and delivery thereof to constitute conclusive evidence of Township and the Township Solicitor of the Loan Documents (including, without limitation, all instruments and documents attached as exhibits thereto). The Note and the other Loan Documents shall be executed either by the President, Vice President, or Treasurer of the Township and shall be duly attested by the Secretary or Assistant Secretary (or any acting Secretary or Assistant Secretary appointed for such purpose) of the Township.

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SECTION 12. Authorization of Refunding of 2015 Refunded Note. Subject only to completion and delivery of, and settlement for, the Note, the Township hereby authorizes and directs the irrevocable deposit in trust, in the sinking fund for the 2015 Refunded Note (the “2015 Refunded Note Sinking Fund”) established with Univest Bank and Trust, as Sinking Fund Registrar and paying agent for the 2015 Refunded Note (the “2015 Refunded Note Paying Agent”), proceeds of the Note in an amount which will be sufficient to effect the current refunding and redemption of the 2015 Refunded Note on December 30, 2020 or such other date as shall be determined by the Township in a notice of redemption directed to such paying agent (the “2015 Refunded Note Redemption Date”). Upon receipt of such proceeds and until applied to the redemption and payment of the 2015 Refunded Note, the 2015 Refunded Note paying agent, to the extent that it is deemed necessary or advisable, is authorized and directed to apply the monies held by it to the full redemption of the of the 2015 Refunded Note. Subject to the completion of delivery of, and settlement for, the Note, the Township hereby authorizes the call for redemption and payment on the 2015 Refunded Note Redemption Date of the outstanding 2015 Refunded Note.

SECTION 13. Application of Note Proceeds. The Township hereby authorizes the creation of a settlement account, to be held at the Bank, into which the proceeds of the sale of the Note shall be deposited. From the settlement account, the Bank, in capacity as paying agent shall make the deposits and disbursements set forth on the Closing Statement executed by the officers of the Township, for the payment on behalf of the Township of the costs of the issuance and sale of the Bonds, upon presentation of proper invoices therefor, and the refunding of the 2015 Refunded Note, and shall deposit the remaining proceeds of the sale of the Note into a segregated Project Fund which shall be established by the Township, and applied toward the acquisition of the capital assets, or reimbursement therefore, as contemplated by this Ordinance. SECTION 14. Federal Tax Covenants. The Township hereby covenants that it will at all times do and perform all actions and things within its power which are necessary or desirable in order to assure that interest paid on the Note will, for purposes of federal income taxation, be and remain excludable from the gross income of the recipients thereof and that it will refrain doing or performing any act or things that would cause such interest not to be so excludable and to otherwise comply with the requirements of Sections 103 and 141 through 150 of the Internal Revenue Code of 1986, as amended (the “Code”). The Township further covenants that it will make no investment or other use of the proceeds of the Note, which, if such investment or use had been reasonably expected on the date of issuance of the Note, would cause the Note to be an “arbitrage bond” within the meaning of Section 148 of the Code, and the regulations applicable thereto and that this covenant shall extend throughout the term of the Note and shall apply to all amount which are proceeds of the Note for purposes of said section and regulations. Neither the Treasurer nor any other official or agent of the Township shall make any investment inconsistent with the foregoing covenant. The Treasurer and all other Township officials responsible for investment shall follow the advice or direction of note counsel for the Township (“Note Counsel”) as to investments, which may be made in compliance with this covenant. The proper officers of the Township are hereby authorized to execute tax compliance agreements (collectively, the “Tax Compliance Agreement”) to carry out the foregoing covenants. The Tax Compliance Agreement shall be in the form acceptable to the Township’s Note Counsel, with such changes as may be approved by the officer executing the Tax Compliance Agreement, upon the advice of Note Counsel, such approval to be

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conclusively evidenced by such officer’s execution of the Tax Compliance Agreement. If required by the Tax Compliance Agreement, there shall be established a “bond rebate fund,” which shall be held and maintained by the Township in accordance with the Tax Compliance Agreement, separate and apart from other funds of the Township. The foregoing tax covenants may be excused or modified if, and to the extent that, the Township receives an opinion of nationally recognized Note Counsel that such absence of compliance will not adversely affect the exemption from federal income taxation of interest on the Note.

SECTION 15. Qualified Tax-Exempt Obligations. In accordance with the Code, the Township hereby represents and warrants, after due investigation and to the best of its knowledge, that: (i) the Note shall not be deemed a “private activity bond” within the meaning of Section 141 of the Code, and (ii) the aggregate face amount of “qualified tax-exempt obligations” within the meaning of Section 265(b)(3)(B) of the Code (which includes qualified 501(c)(3) bonds but not any other private activity bond) issued or to be issued by the Township (and all other issuers which must be aggregated with the Township pursuant to the Code), including the Note, but excluding current refunding obligations not required to be taken into account for purposes of that Section of the Code and further excluding those bonds “deemed designated” under the Code, is not reasonably expected to exceed $10,000,000 during the 2020 calendar year. For purposes of this Ordinance and the undertaking of the Project, the Township intends that the portion of the Note which is allocable to the refunding of the 2015 Refunded Note be treated as a “qualified tax exempt obligation” for purposes of Section 265(b)(3)(B) of the Code by reason of being “deemed designated” under Section 265(b)(3)(D)(ii) of the Code. To the extent the Note is not “deemed designated,” the Township hereby designates the Note to be “qualified tax-exempt obligation” within the meaning of Section 265(b)(3)(B) to the extent permitted by applicable law. The Township hereby authorizes the proper officers of the Township to execute a certificate to that effect at the time of the issuance of the Note. SECTION 16. Reimbursement. On October 5, 20120, the Township, by the adoption of Resolution 29-2020, declared its official intent to reimburse itself from proceeds of the Note for part or all of (a) those costs of the Project which have been paid by the Township during the sixty (60) day period ending on the date of Resolution 29-2020 and (b) such other costs of the Project which have been paid by the Township prior to the date of Resolution 29-2020 and which may properly be reimbursed from proceeds of the Note pursuant to Treasury Regulation 1.150-2. The Township hereby ratifies and confirms Resolution 29-2020, which remains in full force and effect. SECTION 17. Appointment of Note Counsel. In connection with the issuance of the Note, the Township hereby appoints the firm of Obermayer Rebmann Maxwell & Hippel LLP as Note Counsel. SECTION 18. Appointment of Financial Advisor. In connection with the issuance of the Notes, the Township hereby appoints the firm of PFM Financial Advisors LLC, as Financial Advisor.

SECTION 19. Further Actions. The President and Secretary of the Board or the Vice President and Assistant Secretary, in the absence of the President or Secretary, respectively, or any duly appointed successors, as the case may be, are hereby authorized to execute any agreements,

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instruments or documents and to do or cause to be done any and all acts and things deemed necessary or appropriate for the carrying out of the purposes of this Ordinance and to comply with the Debt Act. SECTION 20. Severability. In the event any provision, section, sentence, clause or part of this Ordinance shall be held to be invalid, such invalidity shall not affect or impair any remaining provision, section, sentence, clause or part of this Ordinance, it being the intent of the Township that such remainder shall be and shall remain in full force and effect. SECTION 21. Repealer. All prior ordinances or parts thereof inconsistent herewith are hereby repealed. SECTION 22. Effective Date. This Ordinance shall take effect on the earliest date permitted by the Debt Act.

(Signature page follows)

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BOARD OF COMMISSIONERS OF UPPER GWYNEDD TOWNSHIP

Attest: ________________________ By: ________________________________ Sandra Brookley Zadell Liz McNaney Secretary President

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EXHIBIT A

SERIES 2020 NOTE PURCHASE PROPOSAL

See attached