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ORDINANCE NO. 1229
Wastewater Revenue Refunding Bond
AN ORDINANCE OF THE CITY OF REXBURG, MADISON COUNTY, IDAHO, AUTHORIZING AND PROVIDING FOR THE ISSUANCE OF A WASTEWATER REVENUE REFUNDING BOND, SERIES 2020, IN A PRINCIPAL AMOUNT NOT
TO EXCEED $3,865,000, FOR THE PURPOSE OF REFUNDING THE CITY’S OUTSTANDING WASTEWATER REVENUE PROMISSORY NOTE, SERIES 2010; PROVIDING FOR THE CREATION OF AN ESCROW FUND AND THE REDEMPTION
OF THE OUTSTANDING WASTEWATER REVENUE PROMISSORY NOTE, SERIES 2010; PROVIDING FOR THE COLLECTION AND APPLICATION OF WASTEWATER REVENUES TO PAY THE PRINCIPAL OF AND INTEREST ON THE BOND;
ESTABLISHING FUNDS; PROVIDING FOR THE FORM, EXECUTION, REGISTRATION, MATURITY, AND PAYMENT OF THE BOND; PROVIDING COVENANTS RELATING TO THE BOND AND THE TAX-EXEMPT STATUS OF THE INTEREST
ON THE BOND; APPROVING A FORM OF LOAN AGREEMENT; APPROVING A FORM OF ESCROW AGREEMENT; PROVIDING FOR RELATED MATTERS; APPROVING A SUMMARY OF THIS ORDINANCE FOR PUBLICATION; AND PROVIDING
AN EFFECTIVE DATE.
WHEREAS, the City of Rexburg, Madison County, Idaho (the “City”), is a municipal corporation duly organized and operating under and pursuant to the laws of the State of Idaho; and
WHEREAS, the City owns and operates a wastewater system (the “System”) for the benefit of the residents of the City; and
WHEREAS, the City heretofore, on December 8, 2010, issued its Wastewater Revenue Promissory Note, Series 2010, in the original principal amount of $10,000,000, the principal amount
of which $4,560,000 remains outstanding (hereinafter referred to as the “Refunded Note”); and
WHEREAS, the Mayor and City Council (“Council”) have determined that it is in the best interests of the City and its utility ratepayers to refund the Refunded Note and to issue refunding
bonds for that purpose; and
WHEREAS, the City is authorized by the Constitution and laws of Idaho to issue refunding bonds to refund its outstanding obligations whenever the Mayor and Council determine that a
savings or other beneficial public objective can be achieved thereby, without an approving vote of the electors of the City, and to sell such refunding bonds at private sale; and
WHEREAS, the resolution pursuant to which the Refunded Note was issued reserves the right of the City to redeem the Refunded Note, in full, prior to maturity, upon notice as provided
in said resolution; and
WHEREAS, the City is authorized to sell its bonds at private sale and the City is further authorized to enter into a loan agreement for such purpose, and the Mayor and Council have
determined to issue the refunding obligations of the City in the form of a single, amortized wastewater revenue refunding bond in an aggregate principal amount not to exceed $3,865,000
to a purchaser to be determined by the Mayor and Council (“Purchaser”).
NOW, THEREFORE, BE IT ORDAINED BY THE MAYOR AND COUNCIL OF THE CITY OF REXBURG, Madison County, Idaho, as follows:
Section 1: DEFINITIONS
As used in this Ordinance, the following words shall have the following meanings:
Act means, collectively, Title 50, Chapter 10, Title 57, Chapters 2, 5, and 9, and Title 67, Chapter 87, Idaho Code.
Additional Bonds means any bonds issued pursuant to Section 9 of this Ordinance.
Annual Debt Service means the amount required in a given Fiscal Year of the City for the payment of the principal of and interest on the Bond.
Average Annual Debt Service means the average annual amount required over the term of the Bond from the time of calculation for the payment of the principal of and interest on the Bond.
Bond means the “City of Rexburg Wastewater Revenue Refunding Bond, Series 2020,” herein authorized to be issued, sold, and delivered.
Bond Counsel means MSBT Law, Chartered, Boise, Idaho, or another attorney at law or a firm of attorneys of nationally recognized standing in matters pertaining to the tax-exempt status
of interest on obligations issued by states and their political subdivisions, duly admitted to the practice of law before the highest court of any state of the United States.
Bond Fund means the Bond Fund established by Section 8(A) of this Ordinance.
Bond Register means the registration books on which are maintained the names and addresses of the owners or nominees of the owners of the Bond.
Bond Registrar means the bond registrar, transfer agent, and authenticating and paying agent appointed and designated in Section 6 of this Ordinance, and any successor Bond Registrar.
Capital Reserve Fund means the Capital Reserve Fund referred to in Section 8(A) and Section 8(G) of this Ordinance.
City means the City of Rexburg, Madison County, Idaho.
City Clerk means the Clerk of the City, or other officer of the City who is the custodian of the seal of the City and of the records of the proceedings of the City, or his/her successor
in functions, if any.
Code means the Internal Revenue Code of 1986, as amended.
Cost of Issuance Fund means the fund created by Section 8(A) of this Bond Ordinance for the payment of the costs of issuance of the Bond.
Council means the City Council of the City.
Escrow Agent means Zions Bancorporation, National Association, as escrow and paying agent under the Escrow Agreement.
Escrow Agreement means the Escrow Deposit Agreement between the City and the Escrow Agent as authorized in Section 8 hereof.
Escrow Fund means the Escrow Fund established in Section 8 hereof and in the Escrow Agreement.
Estimated Net Revenues means, for any current or prior Fiscal Year of the City, the estimated Revenues of the System for such year less the estimated Operation and Maintenance Expenses
for such year, based upon estimates prepared by the City Engineer or an independent engineer, or an independent certified public accountant. In computing Estimated Net Revenues, Revenues
of the System may be adjusted as necessary to reflect any changed schedule of rates and charges.
Fiscal Year means the annual fiscal year of the City, currently commencing on October 1 of each year and ending on September 30 of the following year.
Government Obligations means (a) direct, noncallable United States Treasury Obligations, and (b) United States Treasury Obligations - State and Local Government Series.
Interest Payment Date(s) means the payment date(s) on the Bond set forth in the Loan Agreement.
Loan Agreement means the loan agreement between the Purchaser and the City, substantially in the form which is annexed hereto as Exhibit “B,” and referred to and authorized in Section
14 of the Ordinance.
Mayor means the Mayor of the City, or his/her successor in functions, if any.
Net Revenues means Revenue of the System after the deduction of Operation and Maintenance Expenses.
Operation and Maintenance Expenses or any phrase of similar import means all reasonable and necessary current expenses of the City, (except depreciation), paid or accrued, of operating,
maintaining, and repairing the System or of levying, collecting, and otherwise administering the Net Revenues for the payment of the Bond; and the term includes (except as limited by
contract or otherwise limited by law) without limiting the generality of the foregoing:
(1) Engineering, auditing, reporting, legal, and other overhead expenses of the various City departments directly relating and reasonably allocable to the administration of the System;
(2) Fidelity bonds and property and liability insurance premiums pertaining to the System, or a reason ably allocable share of a premium of any blanket bond or policy pertaining thereto;
(3) Payments to pension, retirement, health, and hospitalization funds and other insurance related to the System;
(4) Any taxes, assessments, excise taxes, or other charges which may be lawfully imposed on the City, the System, revenues therefrom, or any privilege in connec tion with their operation;
(5) The reasonable charges of the bond registrar, fiscal or paying agent, commercial bank, trust bank, or other depository bank pertaining to the Bond issued by the City or pertaining
to the Project, if any;
(6) Contractual services, professional services, salaries, other administrative expenses, and the cost of materials, supplies, repairs, and labor, pertaining to the issuance of the Bond
and to the ordinary operation of the System; and
(7) All other administrative, general, and commercial expenses of the System.
Ordinance means this Ordinance No. 1229, adopted on May 6, 2020.
Project means the redemption and refunding of the Refunded Note.
Refunded Note means the City of Rexburg Wastewater Revenue Promissory Note, Series 2010, issued on December 8, 2010, in the principal amount of $10,000,000 pursuant to Resolution No.
2010-14 of the City, adopted on November 3, 2010.
Registered Owner means the purchaser of the Bond and any subsequent transferee or purchaser of the Bond.
Regulations means the Treasury Regulations issued or proposed under Section 103, Section 148, Section 149, or Section 150 of the Code (26 CFR Part 2) or other sections of the Code relating
to “arbitrage bonds” or rebate, including without limitation Sections 1.148 0
through 1.148 11 and 1.150 1 of the Treasury Regulations, to the extent applicable, and includes amendments thereto or successor provisions.
Revenue Fund means the “City of Rexburg Wastewater Revenue Fund” referred to in Sections 8(A) and 8(D) of this Ordinance.
Revenue of the System means all revenues received by the City from its System and may include, at the discretion of the City, moneys derived from one, all, or any combination of revenue
sources pertaining to the System, including, without limitation, rates, charges, rents, connection fees, other fees, and any other income derived from the operation or ownership of,
the use of services of, or the availability of or services pertaining to, or other wise derived in connection with, the System or all or any part of any property pertaining to the System.
System means the sanitary wastewater system of the City, as the same now exists, including its assets, real and personal, tangible and intangible, and as it may later be added to, extended,
and improved, and shall include buildings, structures, utilities, or other income producing wastewater facilities from the operation of or in connection with which the revenues of the
payment of the Bond to be issued here under will be derived, and the lands pertaining thereto.
Treasurer means the Treasurer of the City, or his/her successor in functions, if any.
Treasury Regulations means the Treasury Regulations issued or proposed under Section 103, Section 148, Section 149, or Section 150 of the Code (26 CFR Part 2) or other sections of the
Code relating to “arbitrage bonds” or rebate, including without limitation Sections 1.148-0 through 1.148-11 and 1.150-1 of the Treasury Regulations, to the extent applicable, and includes
amendments thereto or successor provisions.
Written Certificate means an instrument in writing on behalf of the City executed by an authorized officer of the City.
Section 2: FINDINGS
The Mayor and Council hereby find, determine, and declare:
A. That the City’s Refunded Note can be refunded at a cost saving to the benefit of the City and its utility ratepayers; that it is desirable and necessary for the benefit of the City
and its utility ratepayers to refund the Refunded Note for the purpose of achieving a cost saving and other beneficial public objectives; and that the net proceeds of the Bond, together
with other lawfully available moneys of the City, to the extent necessary, shall be used to refund the Refunded Note.
B. That it is the intent of the Mayor and Council to issue the Bond for the purpose of providing funds in an amount sufficient, together with other lawfully available funds of the City,
if necessary, to refund, redeem, and retire the Refunded Note.
Section 3: THE BOND
The Bond, designated “City of Rexburg Wastewater Revenue Refunding Bond, Series 2020” (the “Bond”), in an aggregate principal amount not to exceed $3,865,000, is hereby authorized to
be issued, sold, and delivered pursuant to the Act. The Bond shall consist of a single, transferrable, amortized revenue bond, substantially in the form annexed hereto as Exhibit “A,”
shall be issued in fully registered form, shall be dated as of its date of delivery, and shall bear interest on its unpaid principal balance at such rate or rates, shall be payable
at such times and in such amounts, and shall mature, as shall be set forth in the Loan Agreement.
Section 4: EXECUTION
The Bond shall be executed by the manual signature of the Mayor, countersigned by the manual signature of the Treasurer, and attested by the manual signature of the City Clerk, and the
seal of the City shall be impressed thereon.
Section 5: PLACE AND MANNER OF PAYMENT
Both principal of and interest on the Bond shall be payable in lawful money of the United States of America to the Registered Owner thereof, at the address of such Registered Owner as
shown on the registration records of the City, or at such other address as shall be designated in writing to the City by the Registered Owner.
Section 6: BOND REGISTRAR
The Treasurer is hereby appointed as bond registrar, transfer agent and paying agent, and is herein referred to as the “Bond Registrar.” The Bond Registrar shall keep, or cause to be
kept, sufficient books for the registration and transfer of the Bond. The Bond Registrar is authorized, on behalf of the City, to carry out all of the Bond Registrar’s powers and duties
under this Ordinance.
The Bond may be transferred only upon the books for the registration and transfer of bonds (the “Bond Register”), upon the surrender thereof to the Bond Registrar, together with a form
of transfer duly executed by the Registered Owner or its attorney duly authorized in writing. Upon the transfer of a Bond, there shall be issued in the name of the transferee or transferees
a new fully registered bond or bonds of any authorized denomination or denominations and of the same maturity and interest rate, and of the same aggregate principal amount, as the surrendered
Bond. The new bond or bonds shall bear the same date as the date of the surrendered bond, but shall bear interest from the immediately preceding interest payment date to which interest
has been paid or fully provided for.
This Section is intended to provide the system of registra tion required by Chapter 9, Title 57, Idaho Code.
Section 7: PRE-PAYMENT; DEFEASANCE
The City may have the option to prepay the Bond, in whole or in part, in accordance with the prepayment provisions of the Loan Agreement.
In the event that money and/or government obligations, maturing or having guaranteed redemption prices at the option of the owner at such time or times and bearing interest to be earned
thereon in such amounts as are sufficient (together with any resulting cash balances) to redeem and retire part or all of the Bond in accordance with its terms, are hereafter irrevocably
set aside in a special account and pledged to effect such redemption and retirement, then no further payments need be made into the Bond Fund for the payment of the principal of and
interest on the Bond so provided for, and the Bond and interest accrued thereon shall then cease to be entitled to any lien, benefit, or security of this Ordinance, except the right
to receive the funds so set aside and pledged, and the Bond and interest accrued thereon shall no longer be deemed to be outstanding hereunder.
Section 8: FUNDS AND ACCOUNTS – REDEMPTION OF REFUNDED NOTE
A. Establishment of Funds and Accounts. The following funds and accounts are created or confirmed with respect to the Bond.
Bond Fund, to be held by the City or the Purchaser.
Cost of Issuance Fund, to be held by the Escrow Agent.
Capital Reserve Fund, to be held by the City.
Revenue Fund, to be held by the City.
Escrow Fund, to be held by the Escrow Agent.
B. Delivery of Bond; Application of Proceeds. The Treasurer is hereby instructed to receive payment therefor in accordance with the terms of this Ordinance and deposit the proceeds
of sale as follows:
1. A portion of the proceeds of sale of the Bond, or other funds of the City, as shall be designated by Written Certificate of the City, shall be deposited in the Cost of Issuance Fund.
2. Accrued interest on the Bond from its date to the date of delivery, if any, shall be deposited into the Bond Fund.
3. The remaining proceeds of sale of the Bond, together with additional funds of the City, shall be deposited into the Escrow Fund to be used as described in Sections 8(C) and 8(D).
C. Approval of Escrow Agreement; Deposits into Escrow Fund.
(1) The Escrow Agreement, in substantially the form set forth in Exhibit “C” which is annexed hereto and by reference incorporated herein, with such changes, omissions, insertions, and
revisions as the Mayor shall approve, is hereby authorized, and the Mayor and Clerk shall sign such Escrow Agreement, which signature shall evidence such
approval. The Mayor and the Clerk are, and each of them is, hereby authorized to do or perform all such acts as may be necessary or advisable to comply with the Escrow Agreement and
to carry the same into effect.
(2) The portion of the proceeds of the sale of the Bonds specified in Section 8(B)(3) hereof, as shall be specified in a Written Certificate to be filed with the Escrow Agent at the
time of the delivery of the Bonds, shall, simultaneously with the delivery of the Bonds, be invested or reinvested as contemplated in the Act (except for any amount to be retained as
cash) and the obligations in which such moneys are so invested and any remaining cash shall be deposited in trust with the Escrow Agent in accordance with the provisions of the Escrow
Agreement.
D. Redemption of Refunded Bonds; Pledge, Etc. of Escrow Fund.
(1) The Refunded Bonds maturing on and after September 15, 2021, are hereby irrevocably called for redemption on September 15, 2020. Notice of such redemption shall be given as provided
in the resolution authorizing the Refunded Note and in accordance with the Act. The Refunded Note is being redeemed at a redemption price of par plus accrued interest to the date of
redemption.
(2) Moneys in the Escrow Fund shall be utilized exclusively for the purposes of (i) paying the interest on the Refunded Note through and including September 15, 2020; and (ii) on September
15, 2020, paying and redeeming the principal of the Refunded Note; and the Escrow Fund is hereby irrevocably pledged to such purposes.
(3) Moneys in the Escrow Fund may be held in cash or invested in Government Obligations, until needed for the purposes of the Escrow Fund as permitted in the Escrow Agreement. It
is hereby found and determined by the City, pursuant to Section 57 504, Idaho Code, that moneys in the Escrow Fund, together with other funds of the City pledged to the payment of the
Refunded Note, will be sufficient to pay, when due, pursuant to stated maturity or call for redemption, the principal of and interest due and to become due on the Refunded Note, and
provision has been made in the Escrow Fund for the refunding of the Refunded Note.
(4) Any moneys remaining in the Escrow Fund and not needed for refunding of the Refunded Note shall be applied to pay any costs of issuance of the Bonds that remain unpaid, if any, and
any moneys remaining thereafter may be used by the City for any lawful purpose.
(5) It is hereby found and determined that, upon compliance by the City and the Escrow Agent with the foregoing provisions of this Section 8(D), adequate provision shall have been made
for the payment of the principal amount of the Refunded Note.
E. Revenue Fund. There has heretofore been created a special fund known as the “City of Rexburg Wastewater Revenue Fund” (the “Revenue Fund” or a similar designation by the City), which
shall be maintained by the Treasurer and into which the Revenue of the System shall be deposited forthwith upon its receipt.
The Revenue of the System shall be used for payment of the following obligations in the following order of priority:
1. First Charge and Lien: the costs of Operation and Maintenance Expenses;
2. Second Charge and Lien: the principal of and interest on the Bond and any Additional Bonds, by payment into the Bond Fund; and
3. To administer surplus funds. Funds remaining in the Revenue Fund, after having been applied to the purposes provided in this Ordinance, shall constitute surplus funds and may be
used for the purposes set forth in Section 8(I) of this Ordinance.
F. Bond Fund. There is heretofore created a special fund known as the “City of Rexburg Wastewater Revenue Bond Fund” (the “Bond Fund”), into which shall be deposited, from Net Revenues,
the following described revenues:
1. Each annual installment of interest and principal payable on the Bond shall be payable into the Bond Fund from the Revenue Fund. The moneys herein allocated shall be used solely
to pay currently maturing installments of principal of and interest on the Bond.
2. Interest earnings on deposits in the Bond Fund shall remain in the Bond Fund to be used for the purposes of the Bond Fund.
G. Capital Reserve Fund. There has heretofore been created a special fund known as
the “City of Rexburg Wastewater Capital Reserve Fund” (the “Capital Reserve Fund”), into which
shall be deposited the City’s System connection fees. The Capital Reserve Fund is pledged
as security for the payment of the Bond.
H. Cost of Issuance Fund. There is hereby established a separate fund designated as the “Cost of Issuance Fund.” At the time of the delivery of the Bond, the City shall deposit into
the Cost of Issuance Fund such amount as shall be required to pay the reasonable and necessary costs of issuance of the Bond. Moneys in the Cost of Issuance Fund shall be used for
the payment of costs of issuance of the Bond. Any moneys remaining in the Cost of Issuance Fund on the date of the full and final payment of all costs of issuance of the Bond shall
be transferred to the City and deposited into the Bond Fund.
I. Surplus Funds. Funds remaining in the Revenue Fund after having been applied to or designated funds for the purposes provided in Section 8(E) of this Ordinance shall constitute surplus
funds and may be used for any of the following purposes:
To pay the costs of unusual or extraordinary maintenance of or repair to the System;
To pay the principal of and interest on any subordinate lien obligations which may have been issued to provide wastewater facilities in or for the City;
To improve, extend, enlarge, or replace any wastewater facilities;
To acquire or construct additional wastewater facilities in or for the City;
To prepay the principal, interest, and any costs of the Bond; and
For any other lawful purpose.
Section 9: ADDITIONAL BONDS OR OTHER OBLIGATIONS
A. Limitation Upon Issuance of Parity Obligations. Nothing contained in this Ordinance shall be construed in such a manner as to prevent the issuance by the City of Additional Bonds
or other additional obligations payable from the Net Revenues on a parity with, but neither prior nor superior to, the lien of the Bond herein authorized; provided, however, that before
any such Additional Bonds or other additional parity obliga tions are authorized or actually issued:
(1) The City is not, and has not been, in default as to any payments required by the provisions of this Ordinance for a period of not less than twelve (12) months immediately preceding
the issuance of such Additional Bonds or other additional parity obliga tions.
(2) The Net Revenues of the System for the past twelve (12) consecutive months immediately preceding the year of the issuance of such Additional Bonds shall have been sufficient to pay
the Operation and Maintenance Expenses of the System for said past twelve (12) months, and, in addition, suffi cient so that the Net Revenues for such preceding year equal an amount
representing at least 125% of the annual principal and interest requirements of the outstanding Bond, and any other obliga tions of the City payable from the Net Revenues of the System.
(3) In the alternative, the Estimated Net Revenues of the System for the twelve-month period immediately succeeding the issuance of the bond or other obligations proposed to be issued
will be not less than 125% of the annual principal and interest requirements of the Bond and any other obliga tions of the City payable from the Net Revenues of the System, plus the
average annual principal and interest requirements of the Additional Bonds or other obligations proposed to be issued.
(4) A written certification by the Treasurer that the 125% Net Revenue requirement of subsection (2) above, or the 125% Estimated Net Revenues requirement of subsection (3) above has
been satisfied shall be obtained and filed with the City, which certification shall be conclusively presumed to be accurate in determining the right of the City to authorize, issue,
sell, and deliver said Additional Bonds or other additional obligations on a parity with the Bond authorized herein.
(5) The foregoing limitations, or any of them, may be waived or modified by the written consent of the Registered Owner of not less than 75% of the principal amount of the Bond then
outstanding.
B. Subordinate Lien Bond. No provision of this Ordinance shall be deemed to limit or restrict the power of the City to issue bonds, notes or warrants, or to make pledges of the revenues
which shall be subordinate as to the lien of the Bond and which shall provide for compliance with the current provisions hereof prior to the application of any funds to said subordinate
purpose.
C. Refunding. The restrictions with respect to the issuance of parity obligations shall not apply if such additional parity bonds proposed to be issued are for the sole purpose of refunding
outstanding wastewater revenue bonds.
Section 10: PLEDGE OF REVENUES
The Net Revenues of the System are hereby pledged for the payment of the Bond and shall be used and applied in the order of priority provided in Section 8(E) of this Ordinance.
The City shall establish, revise, maintain, and collect charges sufficient, with other revenues received, after taking into consideration anticipated delinquencies, to provide Net Revenues
equal to not less than 1.25 times the average annual debt service on the Bond and any Additional Bonds.
Section 11: INVESTMENTS
Surplus funds in any of the funds set forth in this Ordinance may be invested in securities as permitted by law.
Section 12: GENERAL COVENANTS
For the protection and security of the Bond, it is covenanted and agreed to and with the Registered Owner of the Bond from time to time, that the City will perform the following covenants:
A. Operate System. It will operate the System in an efficient and economical manner and prescribe, revise, and collect such charges in connection therewith so that the services, facilities,
and properties of the System may be furnished at the lowest possible cost consistent with sound economy and prudent management.
B. Good Repair. It will operate, maintain, preserve, and keep the System and every part hereof in good repair, working order, and condition.
C. Preserve Security. It will preserve and protect the security of the Bond and the rights of the Registered Owner thereof.
D. Collect Revenues. It will collect and hold in trust the revenues and other funds pledged to the payment of the Bond and apply such revenue or other funds only as provided in this
Ordinance.
E. Service Bond. It will pay and cause to be paid punctually the principal of the Bond and the interest thereon on the date or dates and at the place or places and in the manner provided
in the Bond, and in accordance with this Ordinance.
F. Pay Claims. It will pay and discharge any and all lawful claims for labor, materials, and supplies which, if unpaid, might by law become a lien or charge upon the Revenue of the
System, or any part of said Revenue of the System, or any funds in the hands of the Treasurer, prior or superior to the lien of the Bond or which might impair the security of the Bond,
to the end that the priority and security of the Bond shall be fully preserved and protected.
G. Encumbrances. It will not mortgage or otherwise encumber, sell, lease, or dispose of the System or any part thereof, nor enter into any lease or agreement which would impair or impede
the operation of the System or any part thereof necessary to secure adequate revenues for the payment of the principal of and interest on the Bond, nor which would otherwise impair
or impede the rights of the Registered Owner of the Bond with respect to such revenues of the operation of the System without provisions for the retirement of the Bond then outstanding
from the proceeds thereof.
H. Insurance. It will procure and keep in force insurance upon all buildings and structures of the System and the machinery and equipment therein, which are usually insured by entities
operating like property, in good and responsible insurance companies. The amount of the insurance shall be such as may be required to adequately protect it and the Registered Owner
of the Bond from loss due to any casualty, and in the event of any such loss, the proceeds shall be used to repair or restore the System or for the payment of the Bond issued under
this Ordinance.
I. Engineers. It will employ consulting engineers of acknowledged reputation, skill, and experience in the improvement and operation of the System for any unusual or extraordinary items
of maintenance, repair, or betterments as shall be required from time to time, all reports, estimates, and recommendations of such consulting engineers to be filed with the Clerk and
furnished to the Registered Owner of the Bond issued hereunder, upon request.
J. Accounts. It will keep proper and separate accounts and records in which complete and separate entries shall be made of all transactions relating to the System, and it will furnish
complete operating and income statements upon request.
K. Delinquencies. It will not furnish wastewater service to any customer whatsoever free of charge, and it shall not later than sixty (60) days after an account becomes delinquent,
take such legal action as may be reasonable to enforce collection of any collectible delinquent account.
L. Disclosure. The City will provide the Registered Owner with its annual audit within 270 days of the fiscal year end and its annual budget within 30 days of adoption. The City will
provide other financial information as reasonably requested by the Registered Owner.
Section 13: SPECIAL COVENANTS
The City further covenants and agrees:
A. In accordance with Section 149(a) of the Internal Revenue Code of 1986, as amended (the “Code”), the Bond, and any serial bonds to which it may be converted, shall be issued and remain
in fully registered form in order that interest thereon be excluded from gross income of the owner or owners for federal income tax purposes. The City covenants and agrees that it
will take no action to permit the Bond, or any serial bonds to which it may be converted, to be issued in or converted to bearer or coupon form.
B. None of the proceeds of the Bond will be used, directly or indirectly, (i) to make or finance loans to persons or (ii) in any trade or business carried on by any person (other than
as a member of the general public). For purposes of the preceding sentence, the term “person” does not include a govern ment unit other than the United States or any agency or instrumen tality
thereof, and the term “trade or business” means any activity carried on by a person other than a natural person. The City further covenants and agrees to take no action which would
cause the Bond to become a “private activity bond,” nor will it omit to take any action necessary to prevent the Bond from becoming a “private activity bond,” within the meaning of
Section 141 of the Code.
C. The Mayor, Clerk, and Treasurer, and other appropriate officials of the City, or any one or more of such officials, as may be appropriate, are each hereby authorized and directed
to execute, on behalf of the City, such certificate or certificates as shall be necessary to establish that the Bond is not an “arbitrage bond” within the meaning of Section 148 of
the Code and the Treasury Regulations promulgated thereunder, and to establish that interest on the Bond is not and will not become includable in the gross income of the Registered
Owner of the Bond under the Code and applicable regulations. The City covenants and agrees that no use will be made of the proceeds of the Bond, or any funds of the City which may,
pursuant to Section 148 of the Code and applicable regulations, be deemed to be proceeds of the Bond, which would cause the Bond to become an “arbitrage bond” within the meaning of
Section 148 of the Code. The City further covenants to comply throughout the term of the Bond with the requirements of Section 148 of the Code and the regulations promulgated thereunder
in order to prevent the Bond from becoming an “arbitrage bond.”
D. The Bond is hereby designated as a “qualified tax-exempt obligation” within the meaning and for the purpose of Section 265(b)(3) of the Internal Revenue Code of 1986 (the “Code”),
and the City, including all aggregated issuers as described in Section 265(b)(3)(E), does not reasonably anticipate that it will issue more than $10,000,000, including the Bond, as
qualified tax-exempt obligations during the calendar year 2020.
Section 14: LOAN AGREEMENT
The Loan Agreement, as may be amended and similar to the form annexed hereto as Exhibit “B,” is hereby approved. The Mayor and City Clerk, or such officer’s designee, are
each hereby authorized and directed, on behalf of the City, to execute and attest, respectively, and to deliver the Loan Agreement as such Agreement may be revised; provided, however,
that (i) the term of the Loan Agreement shall end no later than September 15, 2025; (ii) the principal amount set forth in the Loan Agreement shall not exceed $3,865,000; and (iii)
the minimum savings achieved is at least $200,000 of cash flow savings. The sale of the Bond to the Purchaser, with such Purchaser to be determined by the Mayor and Council, is hereby
approved provided that the Bond complies with the parameters set forth herein. The City shall comply with all terms and provisions of the Loan Agreement, and, in the event that any
provision of this Ordinance or the Bond is inconsistent with the provisions of the Loan Agreement, the provisions of the Loan Agreement shall control.
Section 15: AMENDMENTS
A. The City from time to time and at any time may adopt an ordinance or ordinances supplemental hereto, which ordinance or ordinances thereafter shall become a part of this Ordinance,
for any one or more of all of the following purposes:
1. To add to the covenants and agreements of the City in this Ordinance, other covenants and agreements there after to be observed, which shall not adversely affect the interest of the
Registered Owner of the Bond, or to surrender any right or power herein reserved.
2. To make such provisions for the purpose of curing any ambiguities or of curing, correcting, or supplementing any defective provisions contained in this Ordinance, or any ordinance
authorizing future bonds in regard to matters or questions arising under such ordinances as the Council may deem necessary or desirable and not incon sistent with such ordinances and
which shall not adversely affect, in any material respect, the interest of the Registered Owner of the Bond.
Any such supplemental ordinance may be adopted without the consent of the Registered Owner of the Bond at any time outstanding, notwithstanding any of the provisions of subsection B
of this Section.
B. With the consent of the Registered Owner of not less than 75% in aggregate principal amount of the Bond at the time outstanding, the Council may adopt an ordinance or ordinances supplemental
hereto for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Ordinance or of any supplemental ordinance; provided, however,
that no such supplemental ordinance shall:
1. Extend the fixed maturities of the Bond, or reduce the rate of interest thereon, or extend the time of payments of interest from their due date, or reduce the amount of the principal
thereof, or reduce any premium payable on the redemption thereof, if applic able, without the consent of the Registered Owner of the Bond so affected; or
2. Reduce the aforesaid percentage of the Registered Owner required to approve any such supplemental ordinance.
It shall not be necessary for the consent of the Registered Owner under this subsection B to approve the particular form of any proposed supplemental ordinance, but it shall be sufficient
if such consent shall approve the substance thereof.
C. Upon the adoption of any supplemental ordinance pursuant to the provisions of this Section, this Ordinance shall be deemed to be modified and amended in accordance therewith, and
the respective rights, duties, and obligations of the City under this Ordinance and the Registered Owner of the Bond outstanding hereunder shall thereafter be determined, exercised,
and enforced thereunder, subject in all respects to such modification and amendments, and all terms and conditions of any such supplemental ordinance shall be deemed to be part of the
terms and conditions of this Ordinance for any and all purposes.
D. Any bond executed and delivered after the execution of any supplemental ordinance adopted pursuant to the provisions of this Section may have a notation as to any matter provided
for in such supplemental ordinance, and if such supplemental ordinance shall so provide, new bonds so modified as to conform, in the opinion of the Council, to any modification of this
Ordinance contained in any such supplemental ordinance, may be prepared and delivered without cost to the Registered Owner of the Bond then outstanding, upon surrender for cancellation
of the Bond.
Section 16: VALIDITY OF ISSUANCE
The Bond is issued pursuant to the Idaho Revenue Bond Act, being Idaho Code Sections 50 1027 through 50 1042. This recital is conclusive evidence of the validity of the Bond and the
regularity of its issuance.
Section 17: REGISTERED OWNER’S REMEDIES RECEIVER
By action or suit in equity, the Registered Owner or subse quent owners of the Bond may, in the event of a material violation of any of the foregoing covenants, cause the appointment
of a receiver, which receiver may enter and take possession of the System and any Net Revenues for the payment of the Bond, prescribe fees to be derived from the System, and collect,
receive, and apply all Net Revenues of other moneys pledged for the payment of the Bond in the same manner as the City might do in accordance with the obligations of the City. In addition,
the Registered Owner shall have the remedies set forth in the Loan Agreement.
Section 18: ORDINANCE A CONTRACT
The provisions of this Ordinance shall constitute a contract between the City and the Registered Owner so long as the Bond hereby authorized remains unpaid.
Section 19: SEVERABILITY
If any one or more of the covenants or agreements provided in this Ordinance to be performed on the part of the City shall be declared by any court of competent jurisdiction to be contrary
to law, then such covenant or covenants, agreement or agreements, shall be null
and void and shall be deemed separable from the remaining covenants and agreements in this Ordinance and shall in no way affect the validity of the other provisions of this Ordinance
or of the Bond.
Section 20: REPEALER
All other ordinances or parts thereof, to the extent inconsistent herewith, are hereby repealed and shall, to the extent of such inconsistency, have no further force or effect.
Section 21: AUTHORIZATION
The Mayor, City Clerk, and City Treasurer, or any one of such officers, as may be appropriate to the circumstances, are hereby authorized to execute, on behalf of the City, the Bond,
the Bond Purchase Agreement, and all such additional documents as may be necessary to effect the sale and delivery of the Bond.
Section 22: PUBLICATION
This Ordinance, or a summary thereof in compliance with Section 50-901A, Idaho Code, shall be published once in the official newspaper of the City, and shall take effect immediately
upon passage, approval, and publication.
DATED this 6th day of May, 2020.
CITY OF REXBURG
Madison County, Idaho
By________________________________ Jerry L. Merrill, Mayor
ATTEST:
____________________________
Deborah Lovejoy, City Clerk
( S E A L )