HomeMy WebLinkAboutORDINANCE NO. 551 JOINT WATER & SEWERORDINANCE NO. 551
AN ORDINANCE RELATING TO THE JOINT WATER AND SEWER SYSTEM OF THE CITY OF
REXBURG, IDAHO: AUTHORIZING THE ISSUANCE OF JOINT WATER AND SEWER REVENUE
BONDS, SERIES JANUARY 1, 1974, IN THE AGGREGATE PRINCIPAL AMOUNT OF
$500,000.00 IN ANTICIPATION OF THE COLLECTION OF REVENUES OF SUCH SYSTEM:
PRESCRIBING THE FORM OF SAID BONDS: PROVIDING FOR THE COLLECTION AND
DISPOSITION OF THE REVENUES DERIVED FROM SAID SYSTEM: RATIFYING ACTION
HERETOFORE TAKEN: PROVIDING OTHER DETAILS IN CONNECTION WITH SAID BONDS AND
SAID SYSTEM: AND PROVIDING AN EFFECTIVE DATE OF THE ORDINANCE.
WHEREAS, the City of Rexburg (herein "City ") in the County of
Madison and State of Idaho, is a municipal corporation duly organized and
existing as a City under the general laws of the State of Idaho; and
WHEREAS, the City now owns and operates and does hereby determine
that it shall continue to operate a joint water and sewer system (herein
"System ") ; and
WHEREAS, the City Council (herein "Council ") has determined and does
hereby determine that the interest of the community and the public interest
and necessity require the immediate improvement, betterment, alteration,
enlargement and extension of the City's water system by the construction,
purchase and other acquisition of wells, reservoirs, storage facilities,
pumping stations, transmission and interconnecting pipelines, mains,
conduits and aqueducts; and all appurtenances and machinery necessary,
useful or convenient, for obtaining, storing, treating, purifying or
transporting water for domestic uses or purposes (herein the "Project ");
and
WHEREAS, for the purpose of defraying in part the cost of the
project, the Council further deems it necessary to publicly advertise and
issue its joint water and sewer revenue bonds in the principal amount of
$500,000.00, payable solely from the revenues of said joint water and sewer
system as so constructed pursuant to the Revenue Bond Act (herein "Act ")
cited as Sections 50 -1027 through 50 -1042, Idaho Code, and all laws
thereunto enabling; and
WHEREAS, pursuant to Ordinance No.432 duly introduced, passed and
signed as of the 2nd day of January, introduced, passed and signed as of
the 2nd day of January, 1963, as supplemented by Ordinances No.433, and 434
and a resolution of the City Council, all duly introduced, passed and
signed on the 6th day of March, 1963, and as supplemented by Ordinance No.
437, duly introduced, passed and signed on the 5th day of June, 1963, the
City has heretofore issued its negotiable, coupon, revenue bonds designated
as the "City of Rexburg Joint Water and Sewer Revenue Bonds, Series January
1, 1963" (herein the "1963 bonds "), in the principal amount of $330,000.00,
bearing date as of January 1, 1963, consisting of 330 bonds in the
denomination of $1,000.00 each numbered consecutively from 1 through 330,
bearing interest until maturity at a rate or rates not exceeding six per
centum (6 %) per annum, evidenced by one set of interest coupons attached to
the 1963 bonds, payable semiannually, commencing on the first day of July,
1963, and thereafter on the first days of January and July in each year,
and being numbered and maturing serially in regular numerical order and
being payable on the first day of January in each of the designated years
and amounts, as follows:
Bond Numbers
(All Inclusive)
1 -5
6 -12
13 -20
21 -29
30 -39
40 -50
51 -62
63 -76
77 -91
Years
Maturing
1964
1965
1966
1967
1968
1969
1970
1971
1972
Amounts
Maturing
$ 5,000.00
7,000.00
8,000.00
9,000.00
10,000.00
11,000.00
12,000.00
14,000.00
15,000.00
92 -107
1973
16,000.00
108 -124
1974
17,000.00
125 -142
1975
18,000.00
143 -161
1976
19,000.00
162 -181
1977
20,000.00
182 -202
1978
21,000.00
203 -225
1979
23,000.00
226 -250
1980
25,000.00
251 -275
1981
25,000.00
276 -302
1982
27,000.00
303 -330
1983
28,000.00
both principal of, any prior redemption premiums due in connection with,
and the interest on said bonds being payable in lawful money of the United
States of America, without deduction for exchange or collection charges, at
the Rexburg Branch of the First Security Bank of Idaho, in Rexburg, Idaho,
from the net revenues derived from the operation of the City's joint water
and sewer system, of which there are outstanding and unpaid, after the
first day of January, 1974, the 1963 bonds numbered 125 through 330, in the
aggregate principal amount of $206,000.00; and
WHEREAS, except as provided in the ordinance authorizing the
issuance of the 1963 bonds, the City has never pledged the revenues derived
from the operation of the joint water and sewer system for the redemption
of revenue bonds payable from such revenues, or otherwise, with the result
that the net revenues to be derived from the operation of the system may be
pledged lawfully and irrevocably to secure the repayment of said revenue
bonds authorized pursuant to the Revenue Bond Act; and
WHEREAS, said revenue bonds shall not be a debt of the City and
it shall not be liable thereon, nor shall said bonds be payable out of any
funds other than the revenue from said system pledged to the payment
thereof; and
WHEREAS, at a special bond election duly held on the 6th day of
November, 1973, there was submitted to the qualified electors of the City
the following question:
JOINT WATER AND SEWER REVENUE BOND QUESTION SUBMITTED:
Shall, the City of Rexburg, Idaho, be authorized to issue and sell its
joint water and sewer revenue bonds in the aggregate principal amount of
$500,000, or so much thereof as may be necessary, for the purpose of
defraying in part the cost of acquiring, constructing, improving, bettering
and extending such joint system by the construction, purchase, extension
equipment of wells, reservoirs, storage facilities, pumping stations, and
transmission and interconnecting pipelines, mains, conduits and aqueducts;
and all appurtenances and machinery necessary, useful or convenient, for
obtaining, storing, treating, purifying or transporting water for domestic
uses or purposes, such bonds to mature serially commencing two years and
ending thirty years from the date of the bonds and to bear interest at a
rate or rates not to exceed 7% per annum, as more fully provided in
Ordinance No. 541, passed and signed on the 28th day of September, 1973,
the principal of and the interest on the bonds to be payable solely from
the net revenues to be derived from the operation of the City's joint water
and sewer system; and
WHEREAS, said question was approved by at least a majority of
the qualified electors of the City voting at said election, and the results
are hereby so declared; and
WHEREAS, the City of Rexburg has complied with all prerequisites
established by Section 21 of Ordinance No. 542 for the issuance of
additional bonds with a lien the on net the revenues of the system on a
parity with the lien enjoyed by the 1963 bonds, including, but not limited
to, a written certification of a certified public account, employed by the
City, that the annual earnings of the system for the fiscal year preceding
the date of issuance of the bonds herein authorized, when adjusted as
provided in said Section 21 of Ordinance No. 432, are sufficient to pay the
amounts required by Ordinance No. 432; and
WHEREAS, pursuant to a resolution duly passed and adopted by the
Council on the 17th day of April, 1974, the City's negotiable, coupon,
Joint Water and Sewer Revenue Bonds, Series January 1. 1974, in the
aggregate principal amount of $500,000.00 were publicly offered for sale
pursuant to the laws of the State; and
WHEREAS, pursuant to said notice, sealed bids for the purchase
of the 1974 revenue bonds were received and publicly opened on the 151'' day
of May, 1974, at the hour of 7:30 P.M.; and
WHEREAS, at the meeting of the Council held on the 15th day of
May, 1974, commencing at the hour of 7:30 p.m., the bonds were sold at a
price equal to their principal amount, accrued interest to the date of
their delivery, and a premium of none, at the rates hereinafter designated,
to Foster and Marshall, Seattle, Washington (herein the Purchaser "),
constituting the bidder making the best bid for the bonds; and
WHEREAS, the City Council, including the Mayor, has determined
and does hereby determine that it is necessary and for the best interest of
the City and the inhabitants thereof that the 1974 revenue bonds be so
issued.
NOW, THEREFORE, BE IT ORDAINED BY THE MAYOR AND COUNCIL OF THE
CITY OF REXBURG, IDAHO:
Section 1. Short Title. This ordinance may be designated by the
short title "1974 revenue bond ordinance."
Section 2. Definitions. The terms defined in this section,
except where the context requires otherwise, shall have the following
meanings:
(1) "Bond Fund" means the "City of Rexburg, Idaho, Joint Water
and Sewer Revenue Bonds, Series January 1, 1974, Bond Fund."
(2)(a) "Bonds" or "1974 Revenue Bonds" means the securities
herein authorized designated as the "City of Rexburg, Idaho, Joint Water
and Sewer Revenue Bonds, Series January 1, 1974."
(b) "1963 Bonds" or "1963 Revenue Bonds" means the securities
authorized by Ordinance No. 432 designated as the "City of Rexburg Joint
Water and Sewer Bonds, Series January 1, 1963."
(3) "Consulting Engineer" means any qualified registered or
licensed professior engineer practicing under the laws of the State of
Idaho.
(4) "Gross Income," "gross revenues," "Income" or "revenues" means
all income and revenue derived by the City from any rates, fees, tolls and
charges for the services furnished by, or the use of, the joint water and
sewer system as the same may at any time exist to serve customers within or
outside the municipal limits, whether resulting from improvements or
otherwise.
(5) "Fiscal Year" means the twelve months commencing January 1 of
any year and ending December 31 of said year.
(6) "Holder" means a person in possession and the apparent owner
of coupons or bonds.
(7) "Independent Accountant" means any certified public accountant
practicing under the laws of the State of Idaho who is independent and not
an officer or employee of the municipality.
(8) "Insured Bank" means a bank qualified to accept public
deposits under state law which is a member of the Federal Deposit Insurance
Corporation.
(9) "Net Income" or "Net Revenues" means the gross revenues less
the operation and maintenance expenses.
(10) "Operation and Maintenance Expenses" means all reasonable and
necessary current expenses of the municipality, paid or accrued, for
operating, maintaining and repairing the joint water and sewer system,
including legal and overhead expenses of the municipality directly related
to the administration of the system, insurance premiums, audits, charges of
depository banks and paying agents, professional services, salaries and
administrative expenses, labor and the cost of materials and supplies for
current operation, but not including depreciation, legal liability not
based on contract, the cost of improvements to the system, or charges for
the accumulation of reserves.
(11) "Paving Agent" means the First Security Bank of Idaho, N.
A., in Rexburg, Idaho.
(12) "Project" means the water facilities improvement and
extension program to be financed in part by the bonds.
(13) "Project Engineer" means the Consulting Engineer hires for
the project.
(14) "Purchaser" means Foster and Marshall.
(15) "Reserve Fund" means the "City of Rexburg, Idaho Joint Water
and Sewer Revenue Bonds, Series January 1, 1974, Reserve Fund."
(16) "Revenue Bond Act" or "Act" means Sections 50 -1027 through
50 -1042, Idaho Code.
(17) "System" means all of the City's joint water and sewer
system, and its joint water and sewer system facilities and properties now
owned or hereafter acquired, whether situated within or without the City
boundaries.
Section 3. Ratification. All consistent action taken previously by
the Council and the municipal officers directed toward the project and
toward the issuance of its joint water and sewer revenue bonds for that
purpose is ratified, approved and confirmed.
Section 4. Authorization of Project. The Project is authorized at
a total cost of approximately $1,351,000.00, and the necessity thereof is
hereby declared. The City expects to defray part of the cost by the
issuance of the joint water and sewer revenue bonds herein authorized in
the aggregate principal amount of $500,000.00 or so much thereof as may be
necessary. The City also expects to defray part of the cost of the Project
by the issuance of its general obligation water bonds authorized in
Ordinance No. 550 in the aggregate principal amount of $500,000.00 or so
much thereof as may be necessary. The City expects that the balance of the
cost will be defrayed from state and federal grants and from other sources.
The Project briefly and generally described shall consist of the
improvement, betterment, alteration, enlargement and extension of the
City's water system by the construction, purchase and other acquisition of
wells, reservoirs, storage facilities, pumping stations, transmission and
interconnecting pipelines, mains, conduits and aqueducts; and all
appurtenances and machinery necessary, useful or convenient, for obtaining,
storing, treating, purifying or transporting water for domestic uses or
purposes, all as more particularly described in the engineering water
study, plans and specifications which have heretofore been prepared and
filed by Forsgren, Perkins and Associates, P. A., Consulting Engineer,
Rexburg, Idaho, a qualified firm of consulting engineers chosen for that
purpose, which study, plans and specifications are available for inspection
in the office of the City Clerk.
Section 5. Authorization of Bonds. For the purpose of providing
funds to pay a portion of the cost of the Project, 1974 Bonds in the
principal amount of $500,000.00 shall be issued in anticipation of the
collection of revenues of the system, pursuant to the Revenue Bond Act.
Section 6. Bond Details. The bonds shall be dated as of
delivery, shall consist of 100 bonds in the denomination of $5,000.00 each,
numbered from 1 upwards, shall bear interest from delivery until maturity
at the rates hereinafter designated, evidenced by only one set of interest
coupons payable to bearer on the first day of July, 1974, and semiannually
thereafter on the first days of January and July in each year, and shall
mature serially in regular numerical order on January 1 as follows:
Bond Numbers
Interest Rate
Principal
Years
(All Inclusive)
Per Annum)
Maturing
Maturing
1
7.00%
$ 5,000.00
1976
2
7.00%
5,000.00
1977
3
7.00%
5,000.00
1978
4
7.00°%
5,000.00
1979
5
7.00%
5,000.00
1980
6
7.00%
5,000.00
1981
7
7.00%
5,000.00
1982
8
7.00%
5,000.00
1983
9 -10
7.00°%
10,000.00
1984
11 -12
7,00%
10,000.00
1985
13 -15
7.00°%
15,000.00
1986
16 -18
7.000
15,000.00
1987
19 -21
7.00%
15,000.00
1988
22 -24
6.00%
15,000.00
1989
25 -27
6.00%
15,000.00
1990
28 -30
6.00%
15,000.00
1991
31 -34
6.00%
20,000.00
1992
35 -38
6.20%
20,000.00
1993
39 -42
6.20%
20,000.00
1994
43 -47
6.20%
25,000.00
1995
48 -52
6.20°%
25,000.00
1996
53 -57
6.25°%
25,000.00
1997
58 -62
6.250
25,000.00
1998
63 -68
6.300
30,000.00
1999
69 -74
6.30%
30,000.00
2000
75 -80
6.30%
30,000.00
2001
81 -86
6.40%
30,000.00
2002
87 -93
6.40%
35,000.00
2003
94 -100
6.400
35,000.00
2004
Both principal and interest are payable in lawful money of the United
States of America, without deduction for exchange or collection charges at
the Paying Agent. If upon presentation at maturity payment of any bond is
not made, interest shall continue at the coupon rate until the principal is
paid in full.
Section 7. Prior Redemption, Bonds maturing on and after January
1, 1990, shall be subject to redemption prior to their respective
maturities in whole or in part, in inverse numerical order, at the option
of the City, on January 1, 1989, or on any interest payment date thereafter
for the principal amount thereof, accrued interest to the redemption date,
and a premium of 30 of the principal amount redeemed.
Section 8. Redemption Notice. Notice of prior redemption shall be
given by the City Clerk in the name of the City by one publication, not
less than 30 days prior to the redemption date, in a newspaper of general
circulation to the redemption date, in a newspaper of general circulation
in the City. A copy of the notice shall be mailed at least 30 days prior to
the redemption date to:
(A) The original purchaser of the bonds (or to the managing
partner of any purchasing syndicate);
(B) Burrows, Smith & Company, Salt Lake City, Utah 84101; and
(C) First Security Bank of Idaho, N. A., in Rexburg, Idaho, i.e.,
the Paying Agent bank.
The notice shall identify the bonds to be redeemed, specify the redemption
date, and state that on such date the principal amount thereof, accrued
interest to the redemption date, and the stipulated premium will become due
and payable at the Paying Agent and thereafter interest will cease to
accrue. After such notice and presentation of said bonds, together with any
coupons maturing subsequent to the redemption date, the bonds called for
redemption will be paid.
Section 9. Negotiability. Each bond shall be negotiable and
payable to bearer. The bonds and coupons shall have all the qualities of
negotiable paper and each Holder shall possess all rights enjoyed by
holders of negotiable instruments under the Uniform Commercial Code -
Investment Securities.
Section 10. Bond Registration. Registration of any of the bonds
authorized herein as to principal of interest, or both, shall not be
permitted.
Section 11. Form and Execution. The Mayor, Treasurer, Clerk
shall file their manual signatures with the Secretary of State. Each bond
shall be signed and executed in the corporate name of the City with the
facsimile signature of the Mayor, manually subscribed and countersigned by
the Treasurer, and attested with the facsimile signature of the Clerk under
a facsimile of the official seal of the City. The interest coupons shall
be attached to each of such bonds, and shall be numbered from one upwards,
consecutively, commencing with that coupon first maturing and shall bear
the facsimile signature of the Treasurer. Said bonds and coupons bearing
the signatures of the officers in office at the time of the signing thereof
shall be the valid and binding obligations of the city, notwithstanding
that before the delivery thereof and payment therefor, any or all of the
persons whose signatures appear thereon shall have ceased to fill their
respective officers.
Section 12. Incontestable Recital. Pursuant to the Revenue Bond
act, the bonds herein authorized shall recite that they are issued pursuant
to said Act, which recital shall be conclusive evidence of their validity
and of the regularity of their issuance.
Section 13. Special Obligations. Principal and interest of bonds
shall be payable solely out of the net income of the system. The net income
of the system is pledged for that purpose. The Holders may not look to any
general or other fund for the payment of bond principal or interest, except
the special funds pledged therefor. The bonds shall not constitute an
indebtedness nor a debt within the meaning of any constitutional or
statutory provision or limitation and shall not be considered general
obligations of the City. The bonds shall constitute the City's special
obligations.
Section 14. Form of Bonds and Coupons. The bonds, coupons,
registration certificate and form of legal opinion certificate shall be
substantially as follows:
(Form of Bond)
UNITED STATES OF AMERICA
STATE OF IDAHO COUNTY OF MADISON
No
Rexburg,
promises
sum of
CITY OF REXBURG
JOINT WATER AND SEWER REVENUE BOND
SERIES JANUARY 1, 1974
$5,000.0
Solely from the special funds provided therefor, the City of
Madison County, State of Idaho (herein "City "), for value received
to pay to bearer on the first day of January, _, the principal
FIVE THOUSAND DOLLARS
and to pay from said special funds interest hereon from the date of
delivery until maturity at the rate of
per centum ( %)
per annum on July 1, 1974, and semiannually thereafter on the first days of
January and July in each year, upon presentation and surrender of interest
coupons as the severally become due. This bond is payable in lawful money
of the United States of America, without deduction for exchange or
collection charges, at the First Security Bank of Idaho, N. A. Rexburg,
Idaho. If, upon presentation at maturity, payment of this bond is not made
as herein provided, interest shall continue at the coupon rate until the
principal is paid in full.
This bond is one of a series of 100 bonds dated as of January 1,
1974 (herein 111974 revenue bonds "), of like tenor and date, except as to
number, prior redemption option and maturity, said series being in the
principal amount of $500,000.00 and said bonds are authorized for the
purpose of providing funds with which to defray in part the cost of
improvement, betterment, alteration, enlargement and extension of the
City's water system by the construction, purchase and other acquisition of
wells, reservoirs, storage facilities, pumping stations, transmission
and interconnecting pipelines, mains, conduits and aqueducts; and, all
appurtenances and machinery necessary, useful or convenient, for obtaining,
storing, treating, purifying or transporting water for domestic uses or
purposes. The issuance of this bond was authorized by a majority of the
qualified electors of the City voting at an election held on November 6,
1974.
Bonds of this series maturing on and after January 1, 1990, are
subject to prior redemption in whole or in part, in inverse numerical order
at the option of the City on January 1, 1989, or on any interest payment
date thereafter, for the principal amount thereof, accrued interest to the
redemption date, and a premium of 3% of the principal amount so redeemed.
Redemption shall be made upon not less than 30 days, prior notice as
provided in the ordinance authorizing the 1974 revenue bonds (the "1974
revenue bond ordinance ").
Payment of this bond and interest thereon shall be made solely
from, and as security for such payment there are pledged, pursuant to the
1974 revenue bond ordinance, two special funds identified as the "City of
Rexburg, Idaho Joint Water and Sewer Revenue Bonds, Series January 1, 1974,
Bond Fund," and the "City of Rexburg, Idaho Joint Water and Sewer Revenue
Bonds, Series, January 1, 1974, Reserve Fund," into which the City
covenants to pay from the revenues of its joint water and sewer system
(herein "system "), after provision for all necessary and reasonable
operation and main expenses, and all principal, interest and reserve
requirements on its "City of Rexburg Joint Water and Sewer Revenue Bonds,
Series January 1, 1963" ( "1963 bonds "), sums sufficient to pay the
principal and the interest on the 1974 revenue bonds and to create and
maintain a reasonable and specified reserve. For a description of said
funds and the nature and extent of the security afforded thereby, reference
is made to the 1974 revenue bond ordinance. The 1974 revenue bonds are
equitable and ratably secured by and constitute an irrevocable and first
lien (but no necessarily an exclusively first lien) upon the net revenues
of the system, which lien is on a parity with the lien on the net revenues
of the system enjoyed by the 1963 bonds. Additional bonds may be issued
payable from said net revenues and having a lien thereon inferior and
junior to the lien, or, subject to designated conditions, having a lien
thereon on a parity with the lien of the 1974 revenue bonds, in accordance
with the 1974 revenue bond ordinance.
The City covenants and agrees with the holder hereof that it will
keep and perform all the covenants of the 1974 revenue bond ordinance,
including its covenant against the sale or mortgage of the system or any
part thereof unless provision has been made for the payment of the 1974
revenue bonds and its covenant that it will fix, maintain and collect rates
sufficient to pay operation and maintenance expenses and 140°% of both the
principal of and the interest on the 1974 revenue bonds and any other
obligations payable from the revenues (including reserves).
This bond is issued pursuant to the Revenue Bond Act, now cited as
Sections 50 -1027 through 50 -1042, Idaho Code, as amended, and all laws
amendatory thereof and supplemental thereto. This recital shall be
conclusive evidence of the validity of said bond and the regularity of its
issuance.
This bond, including interest thereon, does not constitute a debt
of the City within the meaning of any constitutional or statutory
limitations, but is payable solely out of special funds and the net
revenues of the system pledged to the payment thereof. The holder,may not
look to any general or other fund for payment.
This bond is subject to the conditions, and every holder by
accepting the same agrees with the obligor and every subsequent holder,
that (a) the delivery of this bond to any transferee shall vest title to
this bond and to the attached interest coupons in such transferee to the
same extent for all purposes as would delivery under like circumstances of
any negotiable instrument payable to bearer; (b) the obligor and its agents
may treat the bearer of this bond as the absolute owner for all purposes
and shall not be affected by any notice to the contrary; (c) the principal
of the interest on this bond shall be paid, and this bond and its coupons
are transferable, free from and without regard to any equities between
obligor and the original or any intermediate holder or any setoffs or
cross - claims; and (d) the surrender of this bond and of each of the coupons
shall be a good discharge to the obligor for the same.
It is further certified, recited, and warranted that all the
requirements of law have been fully complied with by the proper municipal
officers in the issue of this bond.
IN WITNESS WHEREOF, the City has caused this bond to be signed and
executed in its name and on its behalf with the facsimile signature of its
Mayor, to be countersigned and manually subscribed by the Treasurer and to
be attested with the facsimile signature of its Clerk under a facsimile of
the City seal, and has caused the interest coupons appertaining hereto to
be executed with the facsimile signature of its Treasurer, all as of
January I , 1974.
(Facsimile Sianature)
Mayor
Countersigned:
(Manual Sianature)
Treasurer
(FACSIMILE SEAL)
Attest:
(Facsimile Signature)
City Clerk
(Form of Coupon)
Coupon No.
January
On July 1, , unless prior to the maturity of this coupon the
bond to which this coupon is attached, if callable, shall have been
previously called for prior redemption, the City of Rexburg, Idaho, will
pay to bearer the amount herein designated in lawful money of the United
States of America, at the First Security Bank of Idaho, N. A., Rexburg,
Idaho, solely from and secured by a pledge of special funds and being
interest then due on its City of Rexburg, Idaho Joint Water and Sewer
Revenue Bonds, Series January 1, 1974, and bearing
Bond
no.
(Facsimile Signature)
City Treasurer
(Form of Registration Certificate)
I, the undersigned, the duly chosen, qualified and acting City
Clerk -- Treasurer of the City of Rexburg, in the County of Madison and
State of Idaho, do hereby certify that the within bond has been duly
registered in permanent public record books kept in my office for said
purpose, in full compliance with the Constitution and laws of the State of
Idaho, showing the number, date and denomination of the bond, the rate of
interest thereon, and the date if maturity and place of payment, the number
and denominations of the attached coupons, the names and addresses of the
purchasers, and the date and amount of sale.
IN WITNESS WHEREOF, I have hereunto set my hand and seal of
the City of Rexburg, County of Madison, State of Idaho, as of the first day
of January, 1974.
(SEAL)
(Facsimile Signature)
City Clerk- Treasurer
(Form of Legal Opinion Certificate)
STATE OF IDAHO )
COUNTY OF MADISON) SS.
CITY OF REXBURG)
LEGAL OPINION
CERTIFICATE
The undersigned Clerk of the City of Rexburg in the County of
Madison and State of Idaho, does hereby certify that the following
approving legal opinion of Messrs. Dawson, Nagel, Sherman & Howard,
Attorneys at Law, Denver, Colorado, to -wit:
(Attorneys' opinion was inserted in sub - margins, including complimentary
closing and " /s/ Dawson, Nagel, Sherman & Howard, "Attorneys at Law, Denver,
Colorado, to -wit:
(Attorneys' opinion was inserted in sub - margins, including
complimentary Closing and " /s/ Dawson, Nagel, Sherman& Howard. ") is a true,
perfect and complete copy of a manually executed and dated copy thereof on
file in the records of the City in my office; that a manually executed and
dated copy of the opinion was forwarded to a representative of the
purchasers for retention in its records; and that the opinion was dated and
issued as of the date of the delivery of and payment for the bonds of the
series of which this bond is one.
IN WITNESS WHEREOF, I have caused to be hereunto set a facsimile
of my signature and affixed a facsimile of the seal of the City.
(FACSIMILE SEAL)
(Facsimile Signature)
City Clerk
Rexburg, Idaho
(End of Form of Legal Opinion Certificate)
Section 15. Period of Facilities' Usefulness. The facilities to be
acquired with bond proceeds will be useful for at lease 30 years, i.e.,
until January 1, 2004.
Section 16. Bond Preparation Execution and Delivery. The Mayor,
Clerk and Treasurer are directed to prepare and execute the bonds.
Thereafter, the Treasurer shall deliver them to the Purchaser on receipt of
the agreed purchase price.
Section 17. Disposition of Bond Proceeds.
A. Construction Account. Bond proceeds shall be promptly deposited
in a separate account in an Insured Bank selected by the Purchaser, which
account shall be known as the "City of Rexburg, Idaho Joint Water and Sewer
Revenue Bonds, Series January 1, 1974, Construction Account." Amounts in
the construction account exceeding the applicable federal deposit insurance
coverage shall be secured by the depository bank in advance in accordance
with U. S. Treasury rules and regulations governing the deposit of
government moneys. Moneys in the account shall be used solely for the
Project and shall be withdrawn only upon warrants or checks drawn and
signed by the Mayor and the Treasurer. Warrants or checks shall not be
issued until the Council has received engineering approval that such sum is
due and owing. The City's share of any liquidated damages and other moneys
paid by defaulting contractors or their sureties shall be deposited in said
account to assure completion of the Project. After the engineer has
certified that the Project has been completed and all expenses have been
paid, such certification shall be filed with the depository bank, and
thereupon such bank shall transfer to the "City of Rexburg, Idaho Joint
Water and Sewer Revenue Bonds, Series January 1, 1974, Reserve Fund" all
money, if any, remaining in the Constitution Account.
B. Accrued Interest and Premium. Accrued Interest received at the
time of delivery of the bonds and any premium shall be deposited in the
Bond fund to apply to the payment of interest next due.
C. Purchaser not Responsible. The Purchaser or any Holder shall
not be responsible for the application or disposal of funds.
Section 18. Fiscal Year. For the purpose of this ordinance the
system shall be operated upon a fiscal year commencing January 1 in each
year and ending on December 31 of said year.
Section 19. Income Fund. A special fund and bank account shall be
maintained known as the "City of Rexburg, Idaho Joint Water and Sewer
Revenue Bonds, Series January 1, 1974, Gross Income Fund," herein sometimes
designated as the 1974 Income Fund." So long as any of the 1974 revenue
bonds shall be outstanding all income and revenue derived from the
operation of the system shall be deposited into the 1974 Income Fund.
Section 20. Administration of Income Fund. The following payments
shall be made from the Income Fund.
A. Operation and Maintenance Expenses. Firstly, there shall be
set aside each month such reasonable percentage of the Income Fund as the
Council shall determine to be reasonable and necessary for the proper
operation and maintenance of the system. Said moneys shall be used solely
therefor, including but not limited to the cost of all salaries, necessary
repairs, labor, materials, adequate insurance, and bank collection and
other proper charges concerning the accounts, the 1963 joint water and
sewer revenue bonds and the 1974 joint water and sewer revenue bonds, and
other obligations in connection with the system. Any surplus remaining at
the end of the fiscal year and not used for operation and maintenance
purposes shall be transferred back to the 1974 Income Fund.
B. Bond Fund Payments. Secondly, from any moneys remaining in
the Income Fund, the following payments shall be made:
(1) There shall continue to be deposited and paid into a bank
account to be known as the "City of Rexburg, Idaho Joint Water and Sewer
Revenue Bonds, Series January 1, 1963, Interest and Bond Retirement Fund,"
(herein the "1963 Bond Fund ") created by Section 19B of Ordinance No. 432,
the following:
(a) Monthly, commencing on each interest payment date of the 1963
bonds, an amount in six substantially equal monthly installments necessary
to pay the next maturing installment of interest on the outstanding 1963
of principal and interest on additional bonds including reasonable reserves
therefor. The lien of additional bonds on net income shall be on a parity
with, or subordinate to, the lien and pledge of the 1963 bonds and the 1974
bonds. Any payments in respect of additional parity bonds shall be made
concurrently with those required by this section.
B. Use of Surplus Revenues. After making the above payments, the
remaining net income shall be applied to any other lawful purpose or
purposes authorized by the Constitution and laws of the State of Idaho as
the City Council may direct, including, without limitation, any purpose
stated in Section 50 -1033, Idaho Code, as amended.
Section 21. General Administration of Funds. The funds and
accounts hereof shall be administered as follows:
A. Places and Times of Deposits. The above accounts and funds
shall be separately maintained and deposited in one or more bank accounts
in an Insured Bank or Banks. Each account shall be continuously secured to
the extent required by law and shall be irrevocable and not withdrawable by
anyone for any other purpose. Payment shall be made into the proper
accounts on the first day of the month or year, as the case may be, except
when the first day shall be a Sunday or legal holiday, then payment shall
be made on the preceding secular day. At least 5 days prior to any interest
payment date, moneys sufficient to pay interest and principal then due
shall be credited at the Paying Agent. Nothing in this ordinance shall
prevent the Council from establishing one bank account for any of the funds
required by this ordinance.
B. Investment of Money. Any moneys in any fund or account
designated in Section 17, 19, and 20 of this ordinance may be invested or
reinvested by the City Treasurer in such obligations as may be permitted by
the Constitution and laws of the State of Idaho, and applicable federal
statutes and regulations. The obligations so purchased as an investment of
moneys in said fund shall be deemed at all times to be part of said fund,
and the interest accruing thereon and any profit realized therefrom shall
be credited to the fund and any loss resulting from such investment shall
be charged to the fund. The City Treasurer shall present for redemption or
sale on the prevailing market any obligations so purchased as an investment
of moneys in the fund whenever it shall be necessary to do so in order to
provide moneys to meet any payment or transfer from such fund.
C. Bonds Not Arbitrage Bonds. The City and the Council covenant
with the Purchasers and holders of the Bonds from time to time, that the
City will make no use of the proceeds of the Bonds which will cause the
Bonds to be arbitrage bonds; and the City and the Council covenant and
agree to comply with the requirements of Section 103(d) of the Internal
Revenue Code and proposed Treasury Regulations Sections 1.103 -13 and 1.103-
1 (as hereafter amended and supplemented from time to time) throughout the
term of the Bond.
Section 22. First Lien Bonds. The 1974 revenue bonds, subject to
the payment of all necessary and reasonable operation and maintenance
expenses, constitute in irrevocable and first (but not necessarily, an
exclusively first) lien upon the revenues of the system on a parity with
the lien thereon to secure the outstanding 1963 bonds.
Section 23. Additional Bonds.
A. Earnings Test. This ordinance shall not prevent the issuance of
additional bonds payable from and constituting a lien upon net income on a
parity with the lien of the 1963 revenue bonds and the 1974 revenue bonds.
Before any such additional parity bonds are actually issued it must be
determined that:
(1) The amount in the Reserve Fund for the 1963 revenue bonds
created by Ordinance No. 432 must equal at least $25,000.00, i.e., the
Minimum Reserve for said Reserve Fund; and
(2) The amount in the 1974 Reserve Fund must equal at least
$35,000.00, i.e., the Minimum Reserve for said 1974 Reserve Fund;
(3) The revenues derived from the operation of the system for the
fiscal year immediately preceding the date of the issuance of such
additional parity obligations. shall have been sufficient to pay the costs
of operation and maintenance for said fiscal year, and, in addition,
sufficient to pay an amount equal to one hundred forty per centum (140%) of
the combined maximum annual principal and interest requirements of the
outstanding 1963 revenue bonds and any other obligations of the City
payable from the net revenues of the system and the bonds or other
obligations proposed to be issued.
B. Certification of Revenues. A written certificate by an
Independent Accountant that annual net revenues are sufficient shall
conclusively determine the right of the City to issue additional parity
bonds.
C. Consideration of Additional Expenses.
In determining whether additional parity bonds may be issued, the
Independent Accountant shall consider any probable increase (but not
reduction) in operation and maintenance expenses that will result from the
expenditure of the proceeds of the proposed additional parity bonds.
D. Subordinate Obligations Permitted. The City may issue bonds or
other obligation having a lien on net revenues subordinate to the lien of
the 1963 revenue bonds and the 1974 revenue bonds.
E. Superior Obligations Prohibited. The City shall not issue any
bond or other obligation having a lien on net revenues prior and superior
to the lien of the 1963 revenue bonds and the 1974 revenue bond.
F. Use of Proceeds. The proceeds of any additional bonds or other
obligations payable from system revenues shall be used only for improving,
bettering and extending the system.
G. Payment Dates for Additional Obligations. Any additional parity
or junior lien bonds or other parity or junior lien obligations issued in
compliance with the terms hereof shall bear interest payable semi - annually
on the first days of January and July in each year, except that the first
coupon or any bond may represent interest accruing for any period not in
excess of one year, and such obligations shall mature on the first day of
January in the years designated by the Council during the term of said
bonds or other obligations.
Section 24. Refunding Bonds. The provisions of Section 23 hereof
are subject to the following exceptions:
A. Privilege of Issuing Refunding Obligations. If at any time the
Council shall find it desirable to refund any of the 1974 revenue bonds
herein authorized, said bonds or other obligations may be refunded (but
only with the consent of the holders unless the bonds or other obligations
shall then mature, or be callable) without changing lien priority for the
payment of the refunding obligations.
B. Refunding Part of an Issue.
The refunding bonds or obligations shall enjoy complete equality
of lien with any portion of the same issue which is not refunded. The
holder of such refunding bonds or obligations shall be subrogated to all of
the rights and privileges enjoyed by the holders of the bonds or
obligations of the same issue refunded thereby.
C. Limitation upon Issuance of any Refunding Obligations. Any
refunding bonds or obligations payable from system revenues shall be issued
with such details as the Council may provide, but without impairing any
contractual obligation imposed by any proceedings authorizing any
unrefunded portion of any issue (including the 1974 revenue bonds). If only
a part of any issue is refunded, and if such bonds or other obligations are
refunded in such manner that the interest rate thereon is increased or if
any refunding obligation matures at an earlier date than the maturity date
of the corresponding obligations refunded thereby, then such obligations
may not be refunded without the consent of the holder or holders of the
unrefunded portion of said obligations; and that the refunding bonds or
other obligations shall either be sold for cash at not less than the par
value and accrued interest, and the proceeds thereof shall be used to pay
the bonds refunded, or if so permitted by law and then only with the
consent of the holder or holders of the bonds or other obligations
refunded, the refunding bonds or other obligations shall be delivered
dollar for dollar in exchange for the bonds or other obligations refunded.
Section 2S. Equality of Bonds. The 1974 revenue bonds shall not be
entitled to any priority one over the other in the application of net
revenues, regardless of the time of their issuance.
Section 26. Protective Covenants. The City covenants and agrees
with each and every holder that:
A. Use of Bond Proceeds. The Project shall be constructed and
acquired without delay.
B . Payment of Bonds Herein Authorized. The City will pay bond
principal and interest at the place, on the dates, and in the manner
specified according to the true intent and meaning thereof.
C. Use Charges. Rates for services rendered by the system shall be
reasonable and just, taking into account the cost and value of the system,
operation and maintenance expenses, possible delinquencies, proper
allowances for depreciation, contingencies, and the amounts necessary to
retire all bonds payable from net revenues, and the reserves therefor.
There shall be charged against all users, including the State and its
subdivisions rates and amounts sufficient to produce revenues to pay the
annual operating and maintenance charges, and 140% of both and principal of
and interest on all bonds and other obligations payable from net revenues,
including reserves therefor. No free service shall be furnished by system.
Any use of the system by the City will be paid for from the City's general
fund at the reasonable value of the use so made. Income so derived from the
City shall be treated in the same manner as any other system income.
D. Levy of Charges. Prior to the delivery of any 1974 revenue
bonds, the City will establish and levy the required rates and charges. No
reduction in any initial rate schedule may be made unless:
(1) The City has complied with Section 20 for at least the full
fiscal year immediately preceding such reduction.
(2) The audit for the full fiscal year immediately preceding such
reduction discloses that the estimated revenues resulting from the proposed
rate schedule will be sufficient to meet the requirements of paragraph C of
this section.
E. Efficient Operation. The City shall make such improvements and
repairs to the system as may be necessary to insure its economical and
efficient operation and its ability to meet demands for service.
F. Records. Separate records will be kept showing complete and
correct entries of all transactions relating to the system. Such records
shall include monthly entries showing:
(1) The number of water customers, and the number of customers;
(2) The revenues received from water charges and sewer charges by
classes of customer; and
(3) A detailed statement of expenses of the system.
G. Right to Inspect. Any Holder of any of the bonds, or his duly
authorized agent, shall have the right at all reasonable times to inspect
the system, and all records, accounts and data relating thereto.
H. Audits and Budgets. The City agrees that it will, within 60
days following the close of each fiscal year, cause an audit of such books
and accounts to be made by an Independent Accountant. Each such audit, in
addition to matters thought proper by the account, shall include:
(1) A statement for the fiscal year just closed, of the income
and expenditures of the system, including gross revenues, net revenues, the
amount of any capital expenditures and profit or loss;
(2) A balance sheet as of the end of such fiscal year, including
all funds created by proceedings authorizing bonds and other obligations
payable from system revenues;
(3) The accountant's comment regarding the City's methods of
operation and accounting practices;
(4) A list of the insurance policies in force, setting out the
amount of each policy, the risks covered, the name of the insurer, and the
expiration date;
(5) A recapitulation of each fund or account created by the
various proceedings showing deposits and withdrawals for said fiscal year;
(6) The number of any metered water connections, any unmetered
water connection any metered sewer connections and any unmetered sewer
connections at the beginning and at the end of the year;
(7) The number of customers in each class of customers and the
revenues per class of customers.
The City will furnish a copy of each audit and report to any Holder
at his request, and without request to the original purchaser of the 1974
revenue bonds and to the First Security Bank of Idaho, N. A., in Rexburg,
Idaho. Any Holder shall have the right to discuss the contents with any
person making the audit.
I. Billing Procedure and Discontinuance of Service. All bills
shall be sent out on a regularly established day of each month in advance
or after service is rendered. Bills shall be due within 20 days from date.
If bills are not paid 90 days after such date they shall be collected in
any lawful manner, including the denial or discontinuance of water service
and the cost of disconnection and reconnection thereof. Sewer charges shall
be billed jointly with water charges. Each such bill shall show separately
water and sewer charges. In no case shall payment be accepted from a user
of both water and sewer services unless payment is made in full for each
such service.
J. Use of Bond and Reserve Funds. The 1974 Bond Fund and the 1974
Reserve Fund shall be used solely and only, and said fund are hereby
pledged, for the purposes set forth above.
K. Charges and Liens upon System. The City will pay all taxes and
governmental charges lawfully levied in respect of said system when due.
The city will comply with all valid requirements of any governmental
authority relative to the system. It will not create or permit to be
created any lien or charge upon the system or the revenues except as
permitted herein. The City will satisfy all claims and demands within 60
days after the same shall accrue with might by law become a lien upon the
system or upon the revenues unless the validity thereof is being contested
in good faith by appropriate legal proceedings.
L. Construction Contract and Bond. The City will require each
person, firm or corporation with whom it may contract for labor or
materials to furnish a performance and payment bond in the full amount of
any contract.
M. Insurance. Fire and extended coverage insurance on the
facilities above ground, including their contents, will be determined with
the assistance of the Project Engineer. The City will carry workmen's
compensation insurance on all full -time employees and public liability
insurance if authorized by state law as interpreted by the City's attorney.
In the event of property loss or damage, insurance proceeds shall be used
first for the purpose of restoring or replacing the property lost or
damaged, and any remainder shall be treated as net income derived from the
operation of the system.
N. Competing System or Works. The City shall not grant any
franchise or license to a competing system, or permit any person or
organization to sell water or sewer service within the City.
0. Alienating System. The City will not sell, lease, mortgage,
pledge, or otherwise alienate, the system, or any part thereof, except any
portion which shall have been replaced by other property of at least equal
value or which shall cease to be necessary for the efficient operation of
the system. In the event of any sale as aforesaid, the proceeds of such
sale shall be distributed as net income.
P. Extension of Interest Payments. The City will not extend or be a
party to the extension of the time for paying any coupon or claim for
interest. Any coupon or installment of interest so extended shall not be
entitled in case of default hereunder to the benefit or security of this
ordinance except subject to the prior payment in full of the principal of
all bonds and interest which has not been extended.
Q. Management of the System. If an "event of default" shall occur
or if the net revenues in any fiscal year fail to equal principal, interest
and reserves for all bonds payable from net revenues, the City shall retain
a Consulting Engineer to assist the management of the system so long as
such default continues or the net revenues are less than the amount
designated.
R. Fidelity Bonds. Each municipal official or other individual
having custody of any monies derived from the operations of or otherwise
pertaining to the system, or responsible for their handling, shall be
bonded in any amount at least equal to the total monies in his custody at
any one time. The cost of each such bond shall be considered one of the
operation and maintenance expenses of the system.
S. City's Existence. The City will maintain its corporate identity
and existence so long as any,of the 1974 revenue bonds remain outstanding,
unless another political subdivision by operation of law succeeds to the
liabilities and rights of the City, without adversely affecting to any
substantial degree the privileges and rights of any Holder.
Section 27. Events of Default. It is an "event of default" if:
A. Nonpayment of Principal. Payment of principal of any 1974
revenue bond is not made when due at maturity or upon prior redemption.
B. Nonpayment of Interest. Payment of interest is not made when
due
C. Incapable to Perform. The City is not capable of fulfilling its
obligations hereunder.
D. Default of Any Provision. The City default in the punctual
performance of its covenant hereunder for 60 days after written notice
shall have been given by the Holders of 25% of the outstanding bonds.
Section 28. Remedies of Defaults. Upon the happening of any
event of default, the Holder or Holders of not less than 25% in principal
amount of the outstanding bonds, or a trustee therefor, may protect and
enforce the rights of any bondholder by proper legal or equitable remedy
deemed most effectual including mandamus, specific performance of any
covenant , the appointment of a receiver ( the consent to such appointment
being hereby granted), injunctive relief, or requiring the governing body
of the City to act as if it were the trustee of an expressed trust, or any
combination of such remedies. All proceedings shall be maintained for the
equal benefit of all Holders. Any receiver appointed to protect the rights
of bondholders may take possession any operate and maintain the system in
the same manner as the City itself might do. The failure of any Holder to
proceed does not relieve the City or any person of any liability for
failure to perform any duty hereunder. The foregoing rights are in addition
to any other right and the exercise of any right by any bondholder shall no
be deemed a waiver of any other right.
Section 29. Duties upon Default. Upon the happening of any event
of default, the City will perform all proper acts to protect and preserve
the security created for the prompt payment of the principal of and
interest on bonds. The holders of not less than 25% in principal amount of
the outstanding bonds, after written demand, may proceed to protect and
enforce the rights provided by this section.
Section 30. Prior Charge Upon Lower Rates. If any commission or
authority lawfully prescribes a lower schedule of rates than contemplated
by this ordinance then the payment of principal and interest on the 1963
revenue bonds and the 1974 revenue bonds, and any other parity bonds, shall
constitute a first and prior charge of such revenues.
Section 31. Defeasance. When the bonds have been paid, the
pledge and lien and all obligations hereunder shall be discharged and the
bonds shall no longer be deemed to be outstanding. Subject to Section 213,
payment shall be deemed made when the Council has placed in escrow with a
commercial bank exercising trust powers, an amount sufficient (including
the known minimum yield from Federal Securities) to meet all requirements
of principal and interest as the same become due to their final maturities.
Any Federal Securities shall become due when needed in accordance with a
schedule agreed upon between the Council and such bank at the time of the
creation of the escrow. Federal Securities within the meaning of this
section shall include only direct obligations of, or which are
unconditionally guaranteed by, the United States of America.
Section 32. Amendment of Ordinance. This ordinance may be
amended, without receipt by the City of any additional consideration, but
with the written consent of the Holders of three - fourths (3/4) of the 1974
revenue bonds then outstanding (not including bonds which may be held for
the account of the City); but no ordinance adopted without the written
consent of the Holders of all outstanding bonds shall have the effect of
permitting:
(1) An extension of the maturity of any bond; or
(2) A reduction in the principal amount, interest rate or prior
redemption premium of any bond; or
(3) The creation of a lien upon revenues ranking prior to the
lien or pledge created by this ordinance; or
(4) A reduction of the principal amount of bonds required for
consent to such amendatory ordinance; or
(5) The establishment of priorities as between bonds issued and
outstanding under the provisions of this ordinance; or
(6) The modification of or otherwise affecting the rights of the
Holders of less than all of the outstanding bonds.
Section 33. Delegated Powers. The officers of the City be, and
they hereby are, authorized and directed to take all action necessary or
appropriate to effectuate the provisions of this ordinance, including,
without limitations, the execution of such certificates as may be
reasonably required by the Purchaser, relating, inter alia, to the signing
of the bonds, the tenure and identity of the officials of the Council and
of the City, the delivery of the bonds and the receipt of the bond purchase
t
price, and, if it is in accordance with fact, the absence of litigation,
pending or threatened, affecting the validity thereof, and the absence or
existence of factors affecting the exemption of interest on the bonds from
federal income taxation, the assembly and dissemination of financial and
other information concerning the City and the bonds, and the sale and
issuance of the bonds pursuant to the provisions of this ordinance and to
any instrument supplement thereto.
Section 34. Ordinance Irrepealable. After any of the 1974
revenue bonds are issued, this ordinance shall be irrepealable until
defeasance.
Section 35. Severability Clause. The invalidity or
unenforceability of any provision of this ordinance shall not affect the
remaining provision.
Section 36. Repealer Clause. All bylaws, orders, resolutions and
ordinances or parts thereof, inconsistent herewith are hereby repealed to
the extent of such inconsistency.
Section 37. Publication. This ordinance shall be published in at
least one issue of the Rexburg Standard, which is the official newspaper of
the City.
Section 38. Effective Date. This ordinance shall be in full force
and effect from and after its passage, approval and publication, as
provided by law.
PASSED BY the City Council of the City of Rexburg, Idaho, this
15th day of May, 1974.
Approved by the Mayor of the City of Rexburg, Idaho, this 15th day
of May, 1974.
(Seal)
ATTEST:
Afton Anderson, City Clerk
APPROVED:
John C. Porter Mayor