306 Water & Sewer Revenue Bonds
ORDINANCE NO.. 306
AN ORDINANCE.. AUTHORIZING THE ISSUANCE AND CONFIRMING- THE SALE OF- $2,040 ,000
WItUlR AND SEWER REVENUE- REFUNDING BONDS OF THE CITY OR MERIDIAN" IDAHO, FOR
THE PURPOSE OF PROVIDING FUNDS WITH WHICH: TO REFUND CERTAIN,; OUTSTANDING
WATER AND SEWER REVENUE BONDS OF SAID CITY'- NOW OUTSTANDING ,_ PROVIDING: FOR
THE PAYMENT OF SUCH BONDS, MAKING CERTAIN COVENANTS AND AGREEMENTS WITH
RESPD::T TO THE SmURITY AND PAYMENT FQR SUCH BONDS AND'THE USE OF THE PRO-
CEEDS THERIDF, PROVIDING FOR THE ISSUANCE AND SALE THEREOF, AND PROVIDING
AN EFFECTIVE DATE.
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WHEREAS \ pursuant to Ordinance Number 304 adopted by the City Council of-
the City of Meridian, Idaho (nCity") on June 20, 1977, a -special municipal
bond election was held in the City on July 5~ 1977, at which election the
following question was approved by a majority of the qualified electors
voting at said election:
QUESTION: Shall the City of Meridian, Idaho, issue
and sell its water and sewer revenue refunding bonds
to t~e amount of $2,325,000 for the purpose of
providing funds with which to pay the principal of
and interest on certain Water and Sewer Revenue
Bonds of the City dated October 1, 1975 to be
refunded, to and including their dates of maturity
pr principal redemption in accordance with the
advance refunding plan to be adopted by the City
Council, together with all costs incurred in
accomplishing such refunding, as more fully pro-
vided fn Ordinance Number 304 adopted on Jlme 20,
19771
and
WHEREAS: the City has outstanding certain Water and Sewer Revenue Bonds,
dated October 1, 1975, in the aggregate principal amount of $2,325,000.
of which $2,040,000 bonds are optional for redemption on October 1, 1985,
at the price of par and accrued interest to the date fixed for redemption,
plus a premium of It% of the principal amount of each bond so called for
redemption; and
WHEREAS Section 57-504, Idaho Code, was enacted at the 1977 session of
th~_Idaho Legislature authorizing the issuance of advance refunding bonds,
pursuant to which an advance refunding plan may be adopted by a city
providing for the investment and reinvestment of the proceeds .derived
from the sale of advance refunding bonds in direct obligations of the
United States of America or j)ther_securities, the principal and interest
of which dre unconditionally guaranteed by the United states of America,
maturing at such time or times as may be required to provide funds to
pay principal and interest due in connection with the bonds to be refunded
or the advance refunding bonds, or both; and
. ,
WHEREAS the City desires to refund $2,040,000 outstanding Water and Sewer
Revenue Bonds of the City, dated October 1, 1975, maturing on and after
October l,w 1985, and for such purpose desires to issue a series of refund-
ing bonds, all as permitteQunder the Revenue Bond Act of the State of
Idaho and Section 57-504, Idaho Code; and
WHEREAS such advance refunding program will result in reducing the rate of
interest and the_aggregate amount of interest which the City would other--
wise be required to pay from the revenues of its combined municipal water
system municipal sewerage system on the outstanding Water and Sewer Revenue
Bonds, dated October 1, 1975.
NOW, THEREFORE, BE IT ORDAINED BY THE MAYOR AND COUNCIL OF THE CITY OF
MERIDIAN, ADA COUNTY, IDAHO, AS FOLLOWS:
ARTICLE I
DEFINITIONS
That as used herein, the following terms shall have the meanings indicated
unless the context-otherwise clearly requires:
.1.01 "Bonds" shall mean the $2,040,000 Water and Sewer Revenue Refunding
Bonds of the City herein authorized, and in Articles III, IV and VI hereof
shall mean any Parity Bonds hereina~ter issued on a parity with the Bonds
under the provisions of this ordinance, being a portion of the refunding
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ORDINANCE. 306
bonds ,authorized to be issued by the City at the election held in the City
on July 5, 1977.
1.02 "1975 Bonds" shall mean the Water and Sewer Revenue Bonds of the City,
~d October 1, 1975, which were authorized by ,Ordinance No. 283, now
outstanding in the amount of $2,325,000.
1.03 "City" shall mean the City of Meridian, Ada County, Idaho.
1.04 "Cost of Operation and Maintenance" shall mean all costs reasonably
~necessarily incurred in connection with the operation and maintenance
of the System including repairs and renewals (other than capital improve-
ments) necessary to keep the System in efficient operating condition, the
cost of audits hereinafter required, fees of the Depository and of any
paying agent, properly allocated charges for insurance hereinafter required
to be carried on -the System, and, generally, all expenses (exclusive of
depreciation) which under general accounting practices are properly
chargeable to operation and maintenance, in.every instance, however, only
such expenses as are reasonably and properly necessary to the efficient
operation and maintenance of the System shall be included.
1.05 uDepositoryU shall mean The Idaho First National -Bank in the City
O'f"'Meridian, Idaho. If such bank shall become no longer available to
carry out its duties as Depository, the City shall select a successor
Depository bank which shall be a bank having capital and surplus of not
less than $1,000,000 and which is a member of the Federal Deposit
Insurance Cbrparation at the time of such appointment; similar successor
Depositories may be appointed thereafter from time to time as such
appointment becomes necessary. Such successor Depository shall replace
the original Depository as Depository and custodian of the Refunding Bond
Redemption Fund including the Refunding Bond Reserve Funill hereinafter
created and required to be held by the Depository, and there shall be
paid overt!. each snch successor Depository by its predecessor Depository
all money, funds and other property of evey nature then held by such
predecessor Depository under the provisions of this ordinance, or any
subsequent ordinance authorizing the issuance of any Parity Bonds.
1.06 "Escrow Agent" shall mean The Idaho First National Bank, in the City
"OTBoise,' Idaho.
1.07 "Escrow Agreement" shall mean the Escrow Agreement dated as of
September 1, 1977, by and between the City and the Escrow Agent providing
for the payment of interest on the Bonds until the call for redemption
on 0ctober 1, 1985, of the 1975 Bonds with the pr~ceeds of the Bonds and
other legally available moneys.
1.08 "Escrow Fund" shall mean the Escrow Fund established in the Escrow
Agreement.
1.0.2 "Fiscal Year" shall mean ,the twelve month period used by the City
for its general accounting purposes as the same may be changed from time
to time, initially being a twelve month period beginning on October 1,
and ending on the next succeeding September 30.
1.10 "Income AcCount" shall mean the account known as the "City of
Meridian Gross Income Joint Water and Sewer System Account" established
in Section 3.02 of Ordinance No. 283~
1.11 "Net Revenuesu s~all mean all Revenues after deducting therefrom
~sums expended for payment of the Cost of Operation and Maintenance of
the System, including all incidental costs, fees and expenses expended
from Revenues so deposited or withdrawn and properly chargeable to Costs
of Operation and Maintenance.
1.12 "Operation and Maintenance Fund" shall mean the fund known as the
T~y of Meridian Joint Water and Sewer System Operation and Maintenance
Fund" established in Section 3.03 of Ordinance No. 283.
1.13 '''Ordinance No. 283" shall mean Ordinance Numbered 283 adopted and
approved respectively by the Mayor and Council of the City on October 28,
1975, authorizing the issuance of the 1975 Bonds.
1.14 "Parity B'onds" Sl1all mean any obligations which may be hereafter
issued on a parity with the Bonds herein authorized pursuant to the con-
ditions and restrictions hereinafter set forth in Article IV hereof.
ORDINANCE 306
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1.15 "ReflUlding Bond Act" shall mean Section 57-504, Idaho Code, as
enacted by Chapter 237, Idaho Session Laws, 1977.
1.16 "Revenue Bond Act" shall mean Sections 50-1027 to 50-1042, inclusive,
ldiho Code, as amended.
1.17 "Revenues" shall mean all revenues, income or profits of any kind
howsoever derived directly or indirectly from water or sewer services, or
both, supplied by the System, and ,from-,the use and operation of the System,
including but without limitation monthly water and sewer service charges,
connection fees collected from and after the date of adoption of this
ordinance, interest received on invested money and profits realized from the
sale of investments made with the -Revenues of the System.
I
1.18 "Sewerage System" shall mean the same as is defined in the Revenue
Bond Act, and as used herein shall apply 'to the facilities of the City
coming within such definition.
1.19 "Sinking Fund Year" shall mean the twelve month period beginning
September 1 and ending on the next secceeding August 31.
1.20 "System" shall meanihe public utility comprising the Water System of
~City and the Sewerage System of 'the City, the whole constituting and
operated as a revenue producing pub1ec utility for said City, as it now
and may hereafter exist and be improved and extended while any of the Bonds
or Parity Bonds remain outstanding, including all improvements, additions
and- extensions made thereto and including all real and personal property
of every nature owned by the City and used or useful in the operation
thereof, whether within or without the boundaries of the City.
1.21 "Water System" shall mean the same as is defined in Revenue Bond Act,
~as used herin shall apply to the facilities of the City coming within
such definition.
ARTICLE II
BOND DErAILS
2.01 That for the purpose of providing funds with which to refund
$2,040,000 of the 1975 Bonds maturing on and after October 1, 1985, there
shall be borrowed upon the credit of the Revenues of the System the sum
of $2,040 ,000.
In evidence of the sum to be borrowed, there shall be issued the negotiable
revenue refunding Bonds of the City, pursuant to the provisions of Ordinance
Number 304, the Revenue Bond Act, and the Refunding Bond Act. Interest
falling due on the Bonds on and prior to Ootober 1, 1985, shall be paid from
the moneys deposited from the Escrow Fund into the Refunding Bond Redemption
Fund hereinafter created and, subject to the rights of the holders of the
1975 Bonds, the Bonds shall be payable from the Revenues to be derived from
the operation and ownership of the System, as more specifically provided "
herein.
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2.02 That the Bonds shall be designated "Water and Sewer Revenue Refunding
Bonds ", shall be in the total principal amount of $2,040 ,000, shall be dated
September 1, 1977, shall be in the denomination of $5,000 -each, shall be
numbered 1 to 408, inclusive, and shall bear interest at the rate of six
and twenty-five one hundredths per cent (6.25%) per annum, payable Maroh 1,
1978, and semiannually thereafter on the first days of March and September
of each year. The Bonds shall be payable as to both principal and interest
in lawful money of the United States of America at The Idaho First National
Bank: in the City of Meridian, Idaho, and shall be numbered and mature ser-
ially in numerical order on September 1 of each of the years as follows:
Bond Numbers Amount Year
1 to 14 $ 70,000 1986
15 to 30 80,000 1987
31 to 47 85,000 1988
48 to 64 85,000 1989
65 to 83 95,000 1990
84 to 103 100,000 1991
104 to 124 105,000, 1992
125 to 147 115,000 1993
148 to 171 120"~ 000 1994
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l1li ORDINANCE 306
Bond Numbers Amount Year ..
(Cont'd) (Cont'd) (Cont'd)
1
.172 to 197 $130,000 1995 "
198 to 224 135,000 1996
225 to 253 145,000 1997
254 to 285 160,000 1998,
286 to 318 165,000 1999
319 to 353 175,000 2000
354 to 390 185,000 2001
391 to 405 75,000 2002
-~6 5,000 2003
407 5,000 2004
408 5,000 2005
2.~~ Bonds numbered 15 to 408, inclusive, maturing after September 1,
19 ,shall be subject to the right of the City to redeem the same in
inverse numericle order on that date and on any interest payment date
thereafter at par and accrued interest, plus a premium (expressed as a
percentage of principal amount of each Bond so called for redemption) of
3% for each Bond so called for redemption on or prior to March 1, 1989,
a premium of 2% for each Bond so called for redemption thereafter and on
or prior to March 1, 1992, and a premium of 1% for each Bond so called for
redemption thereafter prior to maturity..
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Notice of any such redemption shall be.given not less than thirty (30)
days prior to the date fixed for redemption by publication of an appro-
priate notice one time in a financial newspaper of journal published in
the City of .New York, New York, Chicago, Illinois, or San Francisco,
California, and sent by registered mail to the place of payment of the
Bonds and to the original purchasers of the Bonds. If any Bond which is.
called for redemption is, at the time of such call, registered as to
principal, thirty (30) days notice of redemption shall be ~iven by _
registered mail sent to the registered holder at the address shown on the
Registrar's Registration Books. No failure to give any such notice, or
any defect therein, or in the mailing or publication thereof, shall affect
the effectiveness of the call for redemption of any of the Bonds to be so
redeemed.
2.04 That said Bonds shall be signed by the Mayor and shall be c01Ulter_-
signed by the City Treasurer (the signatures of said Mayor and C1 ty
Treasurer being by facsimile), shall be attested by the City- Clerk,and
shall have printed thereon the facsimile of the official seal of the
City. Interest accruing on said Bonds on and prior to maturity shall be
evidenced by coupons to be thereto attached, which coupons shall be signed
by the City Treasurer by his facsimile signature.
Said officials and each of them are hereby authorized and instructed to
execute said Bonds accordingly, and the printed facsimile signatures of
said Mayor and Treasurer upon said Bonds and coupons are hereb~ author-
ized as the authorized signing and execution of said Bonds and coupons by
said officials who shall adopt, as and for their own proper signatures,
their respective facsimile signatures appearing on said Bonds and coupons.
Said Bonds shall be registrable as to principal in the name of the holder
and with the effect more particularly set out- in the for~ of bond
appearing in Section 2.05 hereof.
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2.05 That the Bonds herein authorized and the coupons to be thereto"
attached shall be in substantially the following form::
UNITED STATES OF AMERICA
STATE OF IDAHO
COUNTY OF ADA
CrTY OF MERIDIAN
WATER AND SEWER REVENUE REFUNDING BOND
Number
$5,000
KNOW ALL MEN BY THESE PRESENTS, that the City of M"eridian ("City"), a
duly organized and existing municipal corporation in Ada County, Idaho,
for value received, hereby promises- to pay to bearer or, if this bond is
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. ORDINANCE 306
m
then registered as to principal, to the registered holder hereof, in the
manner and from the funds hereinafter provided, the sum of Five Thousand
Dollars ($5,000) on the first day of September, , and to pay interest
on :said sum from the date hereof until payment of principal at the rate of
six. and twenty-five one-hundredths per cent (6.25%) per annum, payable
ini tially on March 1, 1978, and semiannually thereafter on the firs.t days'
of March and September of each year, interest falling due on and prior to
maturity being payable upon presentation and surrender of the annexed interest
coupons as the same severally become due. Both principal of and interest on
this bond are payable in lawfUl money of the United States of America at
The Idaho First National Bank, in the City of Meridian, Idaho.
This bond is one of an issue of $2,040,000 Water and Sewer Revenue Refunding
Bonds ("Bonds") all of like date, tenor and effect, except as to date of
maturity and option of redemption, issued by the City under the provisions
of the Revenue Bond Act of the state of Idaho, and of Section 57-504, Idaho
Code, for the purpose of providing funds with which to refund a like
principal amount of certain outstanding Water and Sewer Revenue Bonds of
the City. Subject to any rights existing in the holders of the outstanding
Water and Sewer Bonds refunded by this issue pending the payment. thereof,
the Bonds, together with s~ch bonds as may be hereafter issued on a parity
therewith, are payable, after all payments required to be made in connection
with the outstanding Water and Sewer Revenue Bonds of the City have been
made, from the net revenues to be deriv~d from the operation of the combined
public utility comprising the municipal water system and municipal sewerage
system of the City, the same to constitute and pe operated as a revenue
producing public utility for the City, as spch system now and may hereafter
exist and be improved and extended, a portion of which revenues has been
set aside as a special fund identified as "City of Meridian, Idaho., Joint
Water and Sewer Revenue Refunding Bond Redemption Fund", and irrevocably
pledged to the payment of principal of and interest on the Bonds.
Pending the retirement of the outstanding Water and, Sewer Revenue Bonds,
interest on the B~ds will be payable from earnings on investments of the
Bonel proceeds deposited in an irrevocable Escrow Fund pursuant to an
Escrow Agreement between the City and The rdaho First National Bank, as
Escrow Agent. This Bond does not constitute an indebtedness of the City
withiIfthemeaning of any constitutional, or statutory limitation of
indebtedness, is not (except as to interest accruing on and prior to
October 1, 1985, as described above payable from the Escrow Fund) payable
from or a charge upon any funds of the City other than said "City of
Meridian, Idaho, Joint Water and Sewer Revenue Refunding Bond Redemption
Fund", and the City shall not be subject to any liability thereon. No
holder or holders of this BClIIld shall ever have the right to compel any
exercise of the taxing power of the City to pay this Bond or interest
thereon nor to enforce payment thereof against anYcproperty of the City,
nor shall this Bond constitute a charge, lien or encumbrance, legal or
equitable, upon any property of the City, except the ab9ve mentioned
sources. .
The Bonds of the issue of which this Bond. is one, maturing after September
1,1986, are subject to the right of: the City to redeem the same in inverse
numerical order on that date and on any interest payment date thereafter at
par and accrued interest,. plus a premium (expressed as a percentage of
principal amount of each Bond so called for redemption) of 3% for each
Bond so called for redemption on or prior to March 1, 1989, a premium of
2% for each Bond 60 called for redemption thereafter and on or prior to
March 1, 1992, and a premium of 1% for each Bond so called for redemption
thereafter prior to maturity.
Notice of any such redemption shall be given not less than thirty (30) days
prior to the date fixed for redemption by publication of.an appropriate
notice one time in a financial newspaper or journal published in the City
of New York, New York, Chicago, Illinois, or San Francisco, California,
and sent by registered mail to the place of payment of the Bonds and to
the original purchasers of the Bonds. If any Bond which is called for
redemption is, at the time of such call, registered as to prinCipal,
thirty (30) days notice of redemption shall be given by registered mail
sent to the registered holder at the address shown on the Registrar's
Registration Books. No failure to give any such notice, or any defect
therein, or in the mailing or publication thereof, shall affect the
effectiveness of the call for redemption of any of the Bonds to be so
redeemed.
The City has covenanted and hereby covenants and agrees at all times while
this Bond, or any Bond of the issue of which it is a part, is outstanding
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ORDINANCE 306
and unpaid, to fix and maintain such rates for water and sewer services
furnished by said public utility as will be fully sufficient to provide
for the payment of .the interest on and principal of all of the Bonds as
interest and principal become due, to. create a proper reserve therefor,
and to provide for the payment ~f the expenses of operating and maintain~
ing said public utility. For a more particular statement of the covenants
and provisions securing the Bonds, the conditions under which the holders
of 75% of the Bonds may consent to modification of the authorizing
ordinance and the conditions under which ...pari ty bonds may . be issued on
a parity with the Bonds, reference is made to Ordinance Number 306
adopted by the City Council of the City on August 1, 1977, authorizing
this issue.
This Bond and the issue of which it is a part are issued in conformity
with and after full compliance with the Constitution of the state of
Idaho.. and pursuant to the provisions of the Revenue Bond Act of the State
of Idaho and of the provisions of Section 57~504, Idaho Code, and alL
other laws applicable thereto, after having been authorized by vote of more
than a majority of the qualified electors of the City at an election held
<lID. July 5, 1977.
It is hereby certified, recited and declared that all acts, conditions and
things required to exist, happen and be performed precedent to and in the
issuance of this Bond have existed, have happened and have been performed
in due time, form and manner as required by law, that the amount of this
Bond, together with the issue of which it forms a part,- does not exceed
any limitation prescribed by the Constitution or statutes of the state of
Idaho, that an amount of the revenues to be derived from the operation and
ownership of the combined municipal water system and mUnicipal sewerage
system of the Cit~ has, together with earnings on investments in the above
described. Escrow Fund to be used to pay interest accruing on the Bonds on
and prior to October 1, 1985, been pledged and will be set aside into a
special fund by the City sufficient for the prompt payment of the principal
of and interest on this Bond and the issue of which it forms a part, and
that, except for the pledge of revenues to the outstanding Water and Sewer
Revenue Bonds pending their retirement pursuant to stated maturity or call
for redemption on October 1, 1985, the revenues of the combined mUnicipal
water' -.'. system and municipal sewerage system are not pledged, hypothecated
or anticipated in any way other than by the issue of Bonds-of which this
Bond is one, and'that this Bond is exempt from taxation, except transfer
and estate taxes, in the State of Idaho.
This Bond is by statute made fully negotiable, but may be registered as to
principal only in the manner and with the effect for which provision is
made on the back hereof.
IN WITNESS WHEREOF, the City acting through its' Ci ty Council, has caused!
this Bond to be signed by its Mayor" countersigned by its City Treasurer
and attested by its City Clerk (the signatures of said Mayor and City
Treasurer being by facsimile) and has caused the facsimile of the official
seal of the City to be printed hereon, and has caused the interest: coupons
hereto attached to be executed by the facsimile signature of said City
Treasurer, all as of this first day of September,1977.
Counte:rsigned:
(Facsimile Signature)
Mayor
(Facsimile Signature)
City Treasurer
Attest::
City Clerk
(FACSIMIBE SEAL)
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ORDINANCE 306
-y/
IS
(Form of Coupon)
Number
$
On the first day of " unless the hereinafter mentioned
Bond is then callable for ~edemption and has been so called and provision
for the redemption thereof duly made, the City of Meridian, Idao, will pay
to bearer the amount shown hereon in the manner and out at the funds des-
cribed in the Bond to which this coupon is attached, in lawful money of
the United States: of America, at The Idaho First National Bank, in the
City of Meridian, Idaho, being interest then due on its Water and Sewer
Revenue Refunding Bond dated September 1, 1977 and numbered ·
(Facsimile Signature)
01 ty Treasurer .
(Registration Certificate)
We, the undersigned City Clerk and City Treasurer of the City of Meridian,
Idaho, do hereby certify that the within Bond has been duly registered ih
permanent public record books kept in our respective offices for the
purpose of such registration, in full compliance with the provisions of
Title 57, Chapter 2, Idaho Code, and laws amendatory thereof, such
registration showing the number, date, amount of the Bond, rate of interest
thereon, the date of maturity, place of payment and the number and
denomination of the attached coupons, and the names of the purchasers and
date of the delivery of the Bond; and the undersigned City Treasurer does
hereby certify that before the delivery of this Bond he received the proper
consideration therefor. .
:." ,--
. .
IN WITNESS WHERlOC>Y, we nave subscribed our official hands.
(:lacsimile Signature)
City Treasurer
(Facsimile Signature)
City Clerk
(Form of Registration Certificate)
This Bond may be registered as to principal only, in the name of the holder,
on the books of the City Treasurer in the City of Meridimr, which registra-
tion shall be noted by the City Treasurer in the" blank below. Upon
presentation of this Bond by a registered holder or by a bank or trust
company authorized to do business in Idaho, with a written request that it
be registered in the name of another person or in the name of bearer, the
City Treasurer shall so register it. While registered in the name of a
holder th~ principal hereQ! shall be payable only to such registered
holder or his legal representative but after registration to bearer this
Bond"s~l again be transferable by delivery but may be again registered
as before. The registration of this Bond as to prinCipal shall nGt
affect the negotiability of the coupons hereto attached, which shall
continue to be transferable by delivery.
Date of Rerlstration
In Whose
Name Rerlstered
Signature"
of Redstrar
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ORDINANCE 306
ARTICL~ III
FLOW OF FUNDS:
3.01 That the City covenants and agrees .wi th the holders of the Bonds and
the coupons attached to the Bonds that it will not issue any further bonds
or ob1igations of any kind or nature payable from or enjoying a lien om
the Revenues of the System on a parity with the 1975 Bonds.
That 80 long as any of the 1975 Bonds remain outstanding,' all payments
required by Ordinance No. 283 to be made into the funds and accounts
established in Article III of Ordinance No. 283 shall continue to be ma~.
3.02 That the New Revenues are hereby pledged to the payment of' principal
Of"'"'and interest and redemption premiums on the Bonds, and, subject to the
rights of the holders of the 1975 Bonds pending their retirement pursuant
to stated maturity or call for redemption on October 1, 1985, from the
Escrow Fund, the Bonds shaJQ be secured by a prior and paramount lien on
and first pledge of the Net Revenues. All of the Bonds shall be equally
and ratably secured by said pledge and lien without priority one over
the other by reason of date of sale or delivery.
That the Bonds shall not be payable from or charged upon any funds of the
City other than the Revenues to be derived from the operation and owner-
ship of the System nor shall the City ever be subject to any liability
thereon, except that interest accruing on the Bonds on and prior to
October 1, 1985.shall be payable from inve~tment earnings on the proceeds
of the Bonds deposited into the Refunding Bond Redemption Fund hereinafter
created from the Escrow Fund. No holder or holders of any of the Bonds
shall ever have the right to compel any exercise of the taxing power of the
City to pay any of the B~nds or interest thereon or to enforce payment
thereof against any property of the Cityrari:dSl1Ch Bonds shall not consti...
tute a charge, lien or encumbrance, legal or equitable, upon any property
of the City, other than the Revenues received from the operation and
ownership of the- System, except that interest accruing on the Bonds on and
prior to October 1, 1985 shall be payable from investment earnings on the
proceeds of the Bonds deposited into the Refunding Bond Redemption Fund
hereinafter created from the Escrow Fund.
3.03 That there shall continue to be credited into the Income Account all
Revenues of the System as promptly as possible upon the receipt thereof.
The Income AccoUnt shall be maintained so long as any of the Bonds remain
outstanding in a bank or trust company which is a member of the Federal
Deposit Insurance Corporation, and the funds credited to said Income
Account shall be expended in the manner provided in Ordinance No. 283
until the call for redemption of the 1975 ffi'mds on October 1, 1985, from
the Escrow Fund, and thereafter in the manner herein specified.
3.04 That ther~ shall continue to be first paid from the Income Account
into the Operation and Main:le:.nance Fund9 on the,t'first day of each calendar
month, the amount necessary to pay the C-ost of Operation and MaiiJ.-t e',nance
of the System as the same become due and payable. The Superintendent or
Manager of the System may accumulate as a Cbst of Operation and Mairttep:-
ance equitable allowances for accruals and aCCUMulations of accruals of
amounts to COver the cost of periodic payments of operation and maintel'l';"-,
ance expenses', such as, insurance premiums and expend! tures for renewals,
replacements and repairs normallY'-classified as operation and mainten...-
ance expenditures.
Payments from the Operation and Maint~nance Fund shall be made by check
or draft signed by the Mayor, City Clerk and City Treasurer after such
officials shall have determined that the amounts of such payments are
properly_ due and owing.
3.05 That there is hereby established in the Depository for the purpose
of paying principal of and interest on the Bonds and such Parity Bonds
as may hereafter be issued on a parity therewith a special fund to be
kept separate and apart from ail ether funds of the City to be known as
the "City of Meridian, Idaho, Joint Water and Sewer Revenue Refunding
Bond Redemption Fund" (hereinafter sometimes called the -tlRefunding Bond
Redemption Fund").
3.06 That upon-the delivery of the Bonds that portion of the proceeds
thereof which represents accrued interest, if any, shall be paid into the
Escrow Fund. Interest accruing on the Bonds on and prior to October 1,.
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ORDINANCE 306
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1985, shall be paid from investment earnings deposited into the Refunding
Bond Redemption Fund from the Escrow Fund pursuant to the provisions of
the Escrow Agreement. Beginning on October 1, 1985 and in each Sinking
Fund Year eo long as any of the Bonde remain outst~ding, after there shall
have- been transferred from the Income Account in each calendar month into
the Operation and Maintenance Fund the amounts above required, the City'
shQIl, on the first day of each calendar month, transfer from the Income
Account to the Refunding ~nd Redemption Fund one-sixth of the amount of
the interest due on the Bonds on the next succeeding interest payment date
,andone-twe1fth of the amount of the -principal of the Bonds falling dUe
on the next succeeding principal payment date (except that prior to the
payment of the first maturing amount of principal and interest coming dUe
on the Bonds subsequent to October 1, 1985, such additional. or greater
transfers shall be made as may be necessary to assure the prompt payment
of interest on the Bonds on March 1, 1986 and principal and interest on _
the Bonds on Sept-ember 1, 1986.)
3.07 That there is hereby established in the Ref.unding Bond RedemptIon .....
Fund for the purpose of establishing a reserve for the purpose of paying
principal of and interest on the Bonds, a special fund to be kept separate
and apart from all other funds of the City, to be known as the "C1 ty of
Meridian, Idaho, Water and Sewer Revenue Refunding Bond Reserve Fund"
(hereinafter sometimes called the "Refunding Bond Reserve Fund")..
3.08 That upon the retirement of the 1975 Bonds pursuant to stated maturity
or call for redemption from funds in the Escrow F1Ji:1d on October 1, 1985,
moneys remainiilg in the City of Meridian, Idaho, Water and Sewer Revenue
Bond Reserve FUnd established in Section 3.06 of Ordinance No. 283 shall
be transferred by the City and deposited into the Refunding Bond Reserve
Fun~ To the extent that after such transfer there is on deposit in the
Refunding Bond Reserve Fund an amount in excess of the combined highest
annual principal and interest payments on all Bonds then outstanding
and payable from the Refunding Bond Redemption Fund, any such excess
money may be withdrawn from the Refunding Bond Reserve Fund and used by .
the City for any lawful corporate purpose. If at the time of the above
contemplated transfer into the He.funding Bond Reserve Fund the amount on
. deposit in the Refunding Bond Reserve Fun4, after such transfer, is less
than the amount currently required to be therein with respect to all Bonds
then outstanding and payable from the Refunding Bond Redemption Fund, after
there shall have been transferred from the Income Account in each calendar
month into the Operation and Maintenance Fund and into :the Refunding Bond
Resemption Fund the a$Ounts above required, moneys remaining in the Income
Account shall be trans~erred into the RefUnding Bond Reserve Fund until
there shall have been accumulated in the Refunding Bond Reserve Fund an
amount equal to the amount currently required to be therein with respect
to all Bonds then outstanding and payable from the Refunding Bond
Redemption Fund. Money in the Refunding Bond Reserve Fund shall be used
only to pay currently maturing principal of and interest on the Bonds when-
ever and to the extent necessary to prevent a default.
3.09 That except as above provided beginning on October 1, 1985, the
~hly payments so made into the Refunding Bond Redemption Fund on the
first day of each calendar month shall be only those hereinabov'e required
to meet interest on the Bonds payable from the Refunding Bond Redemption
Fund dUe on the next interest payment date and the principal due wi thin
the next succeeding twelve month period and the quarterly payments 60 made
into the Refunding Bond Reserve Fund on the first day of each March, June,
September and December shall be onl;y those hereinabove required to- maintain
the Refunding Bond- Reserve Fund in the requared amount if money shall ever
be paid out of the Refunding Bond Reserve Fund for the purpose for which
it was created. Whenever Parity Bonds are issued, the proceedings
authorizing the issuance therof shallcprovide that the monthly deposits.
into the Refunding Bond Redemption Fund shall be increased by an amount
equaling at least one-half of the interest falling due on such additional
Bonds on the next succeeding interest payment date and one-twelfth of the
principal of such additional Bonds matUring during the next succeeding
twelve month period, if any, and shall provide that the quarterly deposits
into the Refunding Bond Reserve Fund shall be increased by an amount equal
to one-twentieth of the highest annual principal and interest requirements
of Buch additional Bonds until the funds and investments in the Refunding
Bond Reserve Fund equal the combined highest annual principal and interest
payments on all Bonds then outstanding and payable froin the Refunding BOnd
Redemption Fund, to be held as a reserve.
Whenever there is a deficiency in payments into the Refunding Bond Reserve
Fund or, whenever after the ini tia:l accumulation of the full amount required
ORDINANCE 306
tobEf- accumulated therein, the amount in said Refunding Bond Reserve Fund
falls below such required accumulation, such deficiency shall be made up
from the money in the Income Account whenever and to ,the extent such money
is not needed fo~ payment of the Cost of Operation and Maintenance and for
current -principal and interest reqUirements, regardless of the foregoing
limitation on quarterly payments.
The money in the Refunding Bond Redemption Fund, and the money in the
Refunding Bond Reserve Fund when necessary, shall be applied to the payment
of currently maturing principal and interest without further instructions.
The Depository and any successor Depository shall make such arrangement
with the paying agent bank as Will assure prompt payment of maturing Bonds
and interest coupons 'when due ~o the .extent of available funds..
3.10 That all money remaining in the Jncome Account each Sinking Fund
"Y'e"ar after all payments'hereinabove required to be made in such year have
been made and after all deficiencies existing from previous years have been 1_ "
remedied shall be regarded as surplus and may be used by the City for the
making of improvements, or additions to the System, for the creation of a
special fund to be accumulated and ,applied to such purpose, for the pay-
ment of principal of and interest -falling due on general obligation ponds
of the City issued for wat-er or sewer purposes, for the payment of
principal,o interest and redemption premiums on junior lien bonds issued
for the making of improvements and extensions to the System, for the
retirement of Bonds payable from the Refunding Bond Redemption Fund in
advance of maturity or for any other lawful corporate purpose. Any such
retirements so made prior xo maturity may be made either through the
purchase of ~onds on the open market at the best price or prices obtainable
not in excess of the lowest price at which any Bond payable from the
Refunding Bond Redemption Fund are then redeemable under their terms,- or
through the calling of Bonds for redemption pursuant to the right therein
reserved.
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3.11 That all money held by the Depository in the Refunding Bond Redemption
Fund, <~incl uding'- the' Refunding" BOnd_:Re$er"'~ F'un:d - aboie-'~;feaf~d'~::sltilT-be~-
"held as sp-e'ci~,-anci not general deposits, and all money held in the
Refunding :Bond Redemption Fund" including the Refunding Bond Reserve Fund,
shall be held as a special trust fund, the beneficial interest in which
shall- be in the holders from ti.me to time of the Bonds outstanding. All
money so held in excess of the amount guaranteed by the Federal Deposit
Insurance Corporation shall be secured either (a) by lodging with the
trust departinent of the Depository or wi. th some other depository approved
by the City, as collateral security, direct obligations of or obligations,
the principal and interest of which are unconditionally guaranteed by the
United States of America, having- a market value-Cexclusive of accrued
interest) at least equal to the amount of such deposit, or (b) in such
manner as may then be required by aI!l applicable state or Federal laws
and regulations regarding the aecuri ty for ar granting preference in the
case of the deposit of trust funds.
Money in the Refunding Bond Redemption Fund required forfue payment of
principal and interest shall at the request of the City be invested in
direct obligations of the United States of America maturing at lea.at ten
days prior to the date as of which principal or interest falls due.
Money held in the Refunding Bond Reserve Fund portion of the Refunding
Bond Redemption Fund shall at the request of the City be invested in
~irect. obligations of the United States or any of its agencies, or in
obligations the principal of and interest on which are guaranteed by the
United States. It shall not be necessary- for the Depository to give
security for the deposit of any money which is so invested. Obligations
so purchased shall be deemed at all times to be a part of the fund for
which'the obligati,C)ns were purchased. Interest accruing thereon and any
profit realized from such investments shall be paid into the Income
Account~ The Depository shall sell at prevailing market prices or shall
present for redemption any obligations so purchaSed whenever it shall be
necessary so to :do in order to provide money to meet any payment due from
the Refunding Bond Redemption Fund, including the Refunding Bond Reserv.e
Fund.
1
~ Whenever there is sufficient available money in the Refunding Bond
Redemption Fund, including the Refunding Bond Reserve Fund, to retire all
Bonds then outstanding on the next interest payment date, or to pay
principal and interest to maturity, or applicable redemption date, together
wi th applicable redemption premi UIJli;., on all Bonds payable from the Refund-
ing Bond Redemption Fund remaining outstanding, the money in the Refunding
Bond Redemption Fund, including the Refunding Bond Reserve Fund, shall be
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ORDIN~CE 306
1'5
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used for such purpose and no additional payments need be made into ~he
Refunding Bond Redemption Fund or the Refunding Bond Reserve Fund unless
necessary to replace moneys lost or otherwise dissipated.
3.13 Each monthly or quarterly payment required to be made pursuant to
Sections 3.06 and 3.Q8 hereof shall be made on the first day of each
calendar month, except when the first day of a month shall1:e a SUnday or
a legal holiday, in which event the payinent shall be made on the next
succeeding secular day.
ARTICLE IV
COVENANTS AND UNDERTAKINGS
The City covenants and agrees with the successive holders from time to time
of the Bonds and the co~pons representing interest thereon, that so. long
as any of the Bonds remain outstanding and unpaid as to either principal or
interest::
!!.:.2!. That the Ci t~ will maintain the System in good repair and working
order and will opetate it efficiently and will faithfully and punctually
perform all duties with reference to the System required by the Gbnstitution
and laws of the State of Idaho, and that it will make and collect sufficient
rates and charges for water and sewer service furnished by the System and
will segregate and apply the Revenues derived therefrom in the manner pro-
vided in this ordinance.
~ That the City will fix-and collect rates, fees and charges for all
water and sewer service supplied by the System fully sufficient, after
making due allowance for delinquencies in collection, to provide for the
payment of the Cost of Operation and Maintenance, to provide for the pay_
ment of interest on and principal of all obligations payable from the
Net Revenues of the System, including the Bonds herein authorized, as and
when the same become due, and to. establish the Refunding Bond Redemption
Fund, including the Refunding Bond Reserve Fund therefor hereinabove
required.
4.03 That in order to assure adequate Revenues to effect maximum security
~he Bonds herein authorized and thereby reduce the rate of interest at
which such Bonds may be sold, so far as it-may legally do so, the City
will fix and collect rates, fees and charges for all water and sewer-service
supplied by the System which will be fully adequate and sufficient to-make
possible the prompt making of all payments herein required to 1:e made and
will produce in each Sinking Fund Year Net. Revenues' available for principal
and.-interest equal to not less than 1.25 times the amount required to be
paid into the Refunding Bond Redemption Fund for the payment of principal
of and interest on all Bonds payable therefrom in such Sinking Fund Year.
4.04 That the City will not permit free use or free water or sewer service
from the System to be given to the City or any department thereof or to
any person, firm or corporation, public or private, or to any public agency
or instrumentality.
The reasonable cost and value' of all vater and sewer service rendered to the
City, and its various departments, by the System shall be charged against
the City and will be paid for a~ the service accrues from current funds of
the City. All payments so made 'shall be considered Revenues of the System
and shall be applied in the manner herinabove provided for the application
of the Revenues of the System.
4.05 That the City will cause to be kept proper books of records and
account, separate and apart from all other records and accounts of the City,
in which there shall be made full and correct entries of all transactions
relating to the System. Such books shall be kept in accordance with
standard accoUnting practices and procedures customarily used for Systems
of similar nature. The C1 ty will cause such books to be audited annually .
by an independant certified public accountant or firm of public accountants
and will annually within one hundred twenty (120) days after the close of
each Fiscal Year file with the Depository, a sufficient numb~r, but not less
than ten, copies of said report accompained by a certificate by said accountant
or firm. Each such audit, in addition to whatever other matters m~y be thought
proper by the accountant to be included therein, shall include the following:
1. A statement in detail of the income and expenditures of the
System for such Fiscal Year.
ORDINANCE. 306
A. balance sheet as of the end of such Fiscal. Year.
The accountant., s comments regarding the manner in which
the City has carried out the requirements of this ordinance
and the accoun.tant's recommendations for any changes or
improvements in the operation of the System. -
A. list of insurance policies and fidelity bonds in force
at the end of the Fiscal Year, setting out. as to each
policy and bond the amount of the policy, the risks
covered, the name of the insurer and the expiration date.
5;~ The number of metered water customers of the System and
the number of unmetered water customers, if any.
2.
3.
4.
6. The number of sewer customers of the City.
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7.
The amount of money in each of the funds and accounts
enumerated in Article III hereof at the beginning and at
the end of the Fiscal Year and the amount of money paid
into and expended from each of said' funds during such
Fiscal Year.
8. The total dollar amount billed for water and~wer service
during the Fiscal Year and the average monthly billing
per customer for each class of service.
9. All schedules of rates and charges in effect during
such Fiscal Year.
10. The number of gallons of water passing through the master
meter in such year, the number of gallGns of water used
_ for fluahingmains and fighting fires and the number of
gallons of water unaccounted for.
11. A. general statement concerning any events or circumstances
which might affect the financial status of the System.
4.06 That all expenses incurred in the making of the audits required
'herein shall be regarded and paid as a Cost of Operation and Maintenance.
The aity further agrees to furnish a copy of each such audit to the.
original purchasers of the Bonds and to the" holder of any of the Bonds
who shall request the same in writing, and that any Buch holder of the
Bonds shall have the right to discuss with the accountant making the
audit the contents of the audit and to ask for. such additional informa-
tion'as he may reasonably require. Said books of.record and account shall
be open at all reasonable times for inspection by the holder or holders
of any of the Bonds or the duly authorized attorney or agent for said
bondholder during normal business hours.
4.07 That the City agrees to procure or cause to be procured, and maintain,
Elc)l[ong as any of the Bonds or Parity Bonds are outstanding, fire and ex-
tended coverage insurance on all physical properties of the System normally
insured by public utility companies engaged in the operation of a Water and
Sewerage System, in amounts sufficient to provide for not less than full I
recovery whenever the loss from causes covered by insurance does not exceed
eighty per cent (80%) of the full insurable value of the damaged facility.
In the event of any damage to, or the destruction of any building or
facility constituting part of the System, the City Council shall forthwith
reconstruct the damaged or destroyed portion thereof, or shall replace any such
building or facility with like facilities of equal or greater capacity, and
shall arrange for the application of the proceeds of the insurance "for that
purpose.
The City also agrees to procure or cause to be procured, and maintain,
so long as any of the Bonds or Parity Bonds are outstanding, public liability
insurance with limitations of not less than $lOO~OOO for cone person and $300,000
for more than one person involved in one accident to protect the City from
claims for bodily injury and death, or both, which may arise from the operations
of the System, or any other facilities owned by the City the Revenues of which
are pledged to the payment of the Bonds.
The City also agrees to procure or cause to be procured and maintain, so
long as any of the Bonds or Parity Bonds are outstanding, vehicular public
liability insurance with limits of not less than $100,000 for one person and
$300,000 for more than one person involved in one accident to protect the City
from claims for bodily injury and death, or both, which may arise from the
operation by the city employees of vehicles owned by the City and non-owned
vehicles opeated for the benefit of the City.
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ORDINANCE 306
4~08 That the City shall not sell, lease, encumber, alienate or in any manner
d1spose of the System or any substantial part thereof until all of the Bonds
have been paid in full as to both principal and interest; provided, that this
covenant shall not be construed to prevent the disposal by the City of pro-
perty which in its judgment has become inexpedient to use in connection with
the System, when other property of equal value is substituted therefor.
4.09 That the City will complete the construction of the improvements and
extensions to the combined municipal Water System and municipal Sewerage System
for which the 1975 Bonds were authorized with all practical dispatch and will
Cause all construction to be effected in sound and economical manner.
~ That the Ci ty will from time to time duly pay and discharge or cause to
be paid and'discharged all taxes, assessments and other governmental charges,
if any, lawfully imposed upon the System or any part thereof or upon the Revenues,
as well as any lawful claims for labor, materials or supplies which if unpaid
might by law become a lien or charge upon the System or the Revenues or any part
thereof or which might impair the s~curity of the Bonds.
~ That the City will not hereafter permit nor grant a franchise for the
operation of any competing Water System or any competing Sewerage System in the
City.
4.12 That the City in order to assure the efficient management and operation of
the System and to assure the holders from time to time_ of the Bonds that same
will be operated on sound business principles, will employ competent and ex-
perienced management for the System, will use its best efforts to see that the
System is at all times operated and maintained in first class repair and condi-
tion and in such manner that the operating efficiency thereof shall be of the
highest character, and will use its best efforts to see that the cost of such
operation and maintenance is at no time in excess of the Revenues reasonably
,available for the payment thereof.
4.13 That the holders of the Bonds from time to time shall be entitled to
exercise all rights and powers for which provision is made in the Revenue Bond
Act, including specifically, if any of the Bonds shall be permitted to default
as to principal or interest, the right to apply to a court of competent juris-
diction to appoint a receiver for the System who may enter and take possession
of the System, operate and maintain the System, and prescribe charges and collect,
receive and apply the Revenues arising therefrom in such manner as the court may
direct and as will assure the carrying out of all the covenants contained in
this ordinance. Such receiver shall be appointed only when request for such
appointment shall have been made by the holders of not less than forty per cent
in principal amount of the Bonds which are then outstanding, or by a trustee
acting in behalf of the holders of such percentage of Bonds, and such request
shall be represented by a written instrument or concurrent written instruments
signed by such holders and filed with the application for the appointment of
such receiver.
4.14 That, subject to the rights of the holders of the 1975 Bonds pending the
~rement of the 1975 Bonds pursuant to stated maturity or call for redemption
from funds in the Escrow Fund on October 1, 1985, the Bonds shall enjoy complete
priority of lien on the Revenues and that the City will issue no other Bonds or
obligations of any kind or nature payable from OJ:' enjoying a lien on the
Revenues unless such other bonds or obligations are made subordinate to the Bonds
herein authorized; provided, however, that additional Parity Bonds may be
authorized by ordinance of the City Council and issued on a parity with the Bonds
herein authorized if all of the followihg conditions are met:
A. (l~ The City Clerk files a certificate with the Depository certifying
that the City is in full compliance with all of the covenants and under-
takings in connection with all Bonds and Parity Bonds of the City then
outstanding and payable from the Net Revenues of the System or any portion
thereof.
(2) The Net Revenues of the System for the last complete Fiscal Year
next preceding the adoption by the City Council of the City u-_ of
the ordinance authorizing the issuance and confirming the sale of the
additional Parity Bonds, as shown by an audit rendered by an independent
public accountant employed by the City, when added to the estimated amount
of the increase in the Net Revenues for the first full Fiscal Year in
which the improvements, extensions, additions or betterments to the System
to be acquired with the proceeds of the additional Parity Bonds will be in
operation (such estimate to be evidenced by a certificate of an independent
consulting engineer of recognized skill and experience in the field of
waterworks and sanitary engineering, which certificate shall be approved
by the Mayor and by resolution of the City Council), are equal to at least
1.25 times the highest annual debt service on all Bonds then outstanding
and payable from the Refunding Bond Redemption Fund and on the additional
Parity Bonds then proposed to be issued.
47
48
ORDINANCE 306
(3) Such additional Parity Bonds may be issued only for the
purpose of improving the System, or for the purpose of acquiring,
constructing or providing extensions, additions or betterments to the
System.
(4) The ordinance authorizing the issuance of such additional
Parity Bonds shall provide that the last maturity date of the additional
Parity Bonds shall not be earlier than the last maturity date of any
Bonds theretofore issued and then outstanding payable from the Bond Fund
and shall provide for fixed serial maturities or mandatory minimum sink-
ing fund payments or any combination thereof, in such amounts as will be
sufficient to provide for the payment' or retirement of all such add~tiona1
Parity Bonds on or before their respective maturity dates.
(5) The payments required to be made into the various funds and
accounts provided in Article III hereof must be current and, pending the
application of the proceeds of the Bonds in the Escrow Fund to the call
for redemptioh on October 1, 1985, of the 1975 Bonds which mature on and I
after October 1, 1986, that the Escrow Funds is in existence and th~ full
amount required to be in the Escrow Fund as of such date i5 on deposit in
the Escrow Fund.
(6) The additional Parity Bonds must be payable as to principal on
September 1 of each year in which principal and interest falls due 'and
payable as to interest on March 1 and September 1 of each year.
(7) The proceedings authorizing the issuance of the additional
Parity Bonds must provide that the amount to which the Refunding Bond
Reserve Fund is to be accumulated be increased to an amount at least
equal to the combined highest annual principal and interest payments on
all Bonds then outstanding and payable from the Refunding Bond Redemption
Fund, including the additional Pari~y Bonds so proposed to be issued,
within five years from and after the delivery of the additional Parity Bonds.
B. The Bonds (including Parity Bonds) or any part thereof may be
refunded with the consent of the holders thereof (except that as to maturing
Bonds or Bonds which are then optional for redemption and have been properly
called for redemption, such consent shall not be necessary) and the refund-
ing bonds 50 issued shall enjoy complete equality of lien with the portion
. of the Bonds which is not refunded, if any there be, and the refunding
bonds shall continue to enjoy whatever priority of lien over subsequent
issues that may have been enjoyed by the Bonds refunded, but rro refunding
bond may mature on a date earlier or bear interest at a rate higher than
the corresponding Bond refunded thereby without the consent of the holders
of theunrefunded portion of the Bonds then outstanding.
4.15 That the City shall bill each customer receiving both water and
sewer -service from the City in a single bill, will refuse to, accept payment for
either service unless payment for the other service is also made, and if
payment for either service is permitted to become delinquent and remain so for
a period of sixty days, will discontinue the service of water to any premises
the owner or occupant of .whichshall be so delinquent, and will not recommence
the supply of water to such premises until all delinquent charges with penalties
shall have been paid in full. The City will do all things and exercise all
remedies legally available to assure the prompt payment of charges for all
service supplied by the System.
4.16 That the City will require the owner, tenant or occupant of each lot
or parcel of land in the City upon which a building shall have been constructed I.
for residential, commercial or .industrial use within 300 feet, measured along
an accessible route, of any sanitary sewer line to connect such building with
the sewage collection system of said City and to cease to use any other method
for the disposal of sanitary or industrial sewage. If within a period of
15 days after the owner of any such lot or parcel shall have been notified to
make such sewer connection, such connection is not made, the City will dis-
continue the service of water to such lot or parcel and will not recommence
supplying water thereto until such sewer connection shall have been made.
4.17 That in addition to all other rights enjoyed by the holders of the
Bonds, such holders shall have the right by mandamus or other appropriate suit
or action in any court or competent jurisdiction to enforce his or their rights
against the City, the governing body thereof, and any officers, officials and
agents thereof, including, but without limitation, the right to require the City
and its governing body to fix and collect rates and charges fully adequate to
carry out all of the provisions and agreements contained in this ordinance.
4.18 That all payments faliing due on the Bonds for principal and interest
shall be made to the holders thereof at par and all charges made by the
Depository and any paying agent bank shall be paid by the City. -
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ORDINANCE .2Q&.
49
4.19 That the existing schedule or rates and charges to be imposed for
water and sewer services rendered by the System shall be considered a minimum
while any of the Bonds remain outstanding, and shall be subject to such in-
crease from time to time as may be necessary to permit full compliance with
all of the provisions and requirements of this ordinance, but shall be subject
to reduction only when and to the extent that the Revenues available for p~_
ment into the Refunding Bond Redemption Fund in each of the two immediately
preceding Fiscal Years shall have exceeded one and one-half times the total
principal and interest payable from said fund during each such respective
preceding Fiscal Year.
ARTICLE V
SALE OF BONDS AND APPLICATION OF PROCEEDS
~ That the sale of the Bonds to Bosworth Sullivan & Company, Inc.,
of Denver, Colorado, at the price of par and accrued interest to the date of
delivery is hereby in all respects ~atified and confirmed. Said Bonds shall be
printed and executed as soon as may be and thereupon shall be delivered to the
aforementioned purchaser upon receipt by the Tr~asurer of the City of the
agreed purchase price.
5.02 That so much of the proceeds of the sale of the Bonds as represents
accrued interest shall be paid into Escrow Fund. After the payment of the costs
of issuance of the Bonds the remaining principal proceeds of the Bonds, together
with $50,350~2e from legally available sources shall be deposited in escrow with
the Escrow Agent to be held, invested and applied to the payment of interest on
the Bonds to and including October 1, 1985, and to the retirement of $2,040,000
of th~ 1975 Bonds, fogether with applicable redemption premium, in accordance
wi th the Escrow Agreement which the Mayor and City Clerk shall execute and
deli ver substantially in the form which is before the Mayor and Council at the
meeting at which this ordinance is adopted. The Escrow Agreement shall provide
that the proceeds of the Bonds plus $50,359.22 in other legally available funds
shall be held, invested and paid out in a manner which will achieve payment of
interest accruing on the Bonds on or prior to October 1, 1985, and to pay
principal and applicable redemption premium on the 1975 Bonds falling due as to
principal on and after October 1, 1986, pursuant to call for redemption on
October 1, 1985. The obligations in which the proceeds of the Bonds are in-
vested pursuant to the Escrow Agreement shall comply in all respects with the
provisions of Section 57-504, Idaho Code. The Mayor and City Clerk are hereby
authorized to enter into the Escrow Agreement with the Escrow Agent in the form
to be authorized and approved by resolution to be adopted by the City Council.
On and after October 1, 1985,. after all the 1975 Bonds shall have become due and
payable pursuant to stated maturity or call for redemption, and after interest
on the Bonds accruing on and prior to October 1, 1985, shall have been paid into
the Refunding Bond Redemption Fund, any investment remaining in the Escrow
Account shall be liquidated and any proceeds of liquidation over and above the
amount necessary to be retained for the payment of any interest coupons on the
Bonds not yet presented for payment or for the payment of any 1975 Bonds not
yet presented for payment, including redemption premiums thereon due and payable,
shall be paid into the Refunding Bond Redemption Fund.
5.03 The City recognizes that the purchasers and holders of the Bonds will
have accepted them on, and paid therefor. a price which reflects, the understand-
ing that interest thereon is exempt from' federal income taxation under laws in
force at the time the Bonds shall have been delivered. The City agrees that it
shall take no action which may render the interest on any of the Bonds subject
to federal income taxation, including particularly any investment of Bond pro-
ceeds in,. or purchase with Bond proceeds of, any securities or obligations of a
type and under circumstances which would render any of the Bonds "Arbitrage
Bonds" within the meaning of Section l03(c) of the Internal Revenue Code, as
amended~ The Mayor and City Clerk are hereby authorized to execute such docu-
ments as may be necessary to assure the purchasers and holders of the Bonds
that the proceeds of the Bonds are not expected to be used in a manner which
would or might result in the Bonds being "Arbitrage Bonds" under the regulations
of the United states Treasury Department currently in effect or proposed.
Such document or documents shall be a representation and certification of the
City and the statements therein shall take precedence over and control all in-
vestments of the proceeds of the Bonds, despite any conflicting use or invest-
ment of Bond proceeds which may have heretofore or may hereafter be provided by
the City Council. "Bond proceeds" as used above means proceeds of the Bonds
and of the 1975 Bonds.
ARI'ICLE VI
MODIFICATION
6.01 That the provisions of this ordinance shall constitute a contract
between-the City and the holders from time to time of the Bonds (including
Parity Bonds) and after the issuance of any of the Bonds, no change, variation
or alteration of any kindc.in the provisions in this ordinance may be made
except as follows.
50
ORDINANCE 306
6.02 That the holders of seventy-five per cent in principal ~ount of
the B~ at any time outstanding (not including in any case any Bonds which
may then be held or owned by or ,for the account of the City, but including
such refunding bonds as may be issued for the purpose of refunding any of the
Bonds and':are not owed by the City) shall have the right from time to time to
consent to and approve the adoption by the City of an ordinance or ordinances
modifying or amending any of the terms or provisions contained in this ordinance;
provided, however, that this ordinance may not be so modified or amended in such
manner as to:
(a) Make any change in the maturity of the Bon~s.
(b) Make any change in the rate of interest borne by any of the Bonds.
(c) Reduce the amount of the principal or redemption premiums payable on
the Bt!Jnds.
-Cd) Modify the terms of payment of principal or of interest or of redemp-
tion premiums on the Bonds:'or any of them or impose any conditions
with respect to such payment.
(e) Affect the rights of the holders of fewer than all of the Bonds
then outstanding.
(f) Amend this Article.
6.03 That whenever the City shall propose to amend or modify this ordi-
nance under the provisions of this Article, it shall cause notice of the
proposed amendment to be published one time in a financial newspaper or journal
published in the City of New York" New York, San Francisco, California, or
Chicago, Illinois, and on or before the date of such publication the City shall
cause to be mailed a copy of such notice to the registered holders of any of
the Bonds and Parity Bonds which are then registered as to principal. Such
notice shall briefly set forth the nature of the proposed amendment and shall
state that a copy of the proposed amendatory ordinance is on file in the
office of the City Clerk for public inspection.
6.04 That whenever at any time within one year from the date of the pub-
lica~ of said notice there shall be filed in the office o~ said Clerk an
instrument or instruments executed by the holders of at, least seventy-five per
cent in aggregate principal amount of the Bonds then outstanding as in this
Article defined, which instrument or instruments shall refer to the proposed
amendatory ordinance described in said notice and shall specifically consent
to and approve the adoption thereof, thereupon, but not otherwise, the City
Council may adopt such amendatory- ordinance and such ordinance shall become
effective.
If the holders of at least seventy-five per cent in aggregate
principal amount of the Bonds as in this Article defined, at the time of the
adoption of such amend~tory ordinance, or the predecessors in title of such
holders, shall have consented to and approved the adoption thereof as herein
provided, no holder of any Bond whether or not such holder shall have consented
to or shall have revoked any consent as in this Article provided shall have
any right or interest to object to the adoption of such amendatory ordinance
or to object to any of the terms or provisions therein contained or to the
operation thereof or to enjoin or restrain the City from taking any action
pursuant to the provisions thereof.
6.05 That any consent given by the holder of a Bond pursuant to the pro-
visions of' this Article shall be irrevocable for a period of six months from
the date of the publication of the notice above provided for and shall be con-
clusi ve and binding upon all future holders of the same Bond during such
period. Such consent may be revoked at any time after six months from the
date of the publication of such notice by the holder who gave such consent
or by a successor in title by filing notice of such revocation with said
City Clerk, but such revocation shall not be effective if the holders of
seventy-five per cent in aggregate principal amount of the Bonds outstanding
as in this Article defined have prior to the attempted revocation consented
to and approved the amendatory ordinance referred to in such revocation.
The fact and date of the execution of any instrument under the pro-
visions of this Article may be proved by the certificate of any officer in any
jurisdiction who by laws thereof is authorized to take acknowledgements of
deeds within such jurisdiction, that the person signing such instrument acknow-
ledged before him the execution thereof, or may be proved by any affidavit of
a witness to such execution sworn to before such officer. As to any Bonds
registered as to principal, the ownership thereof for purposes of this Article
shall be established by the Registrar's registration books. As to any Bonds
not 60 registered, the amount and numbers of the Bonds held by any person
executing such instrument and the date of his holding the same may be proved
by a certificate executed by any responsible bank or trust company showing
that on the date therein mentioned such person had on deposit with such bank
or trust company the bonds described in such certificate.
I
I
ORDINANCE NO. 306
ARTICLE VII
MISGELLANIDUS
51
I
~ That immediately after the issuance of the Bonds herein authorized,
a certified copy of this ordinance shall be filed by the City Clerk with the
Depository, together with the certificate by the City Clerk that such Bonds
have been so issued and are outstanding.
7.02 That if anyone or more provisions, clauses, paragraphs, sections
or arTICIes of this ordinance or the application thereof to any set of circum-
stances shall be held to be invalid for any reason, such holding shall not
affect the validity or enforceability of the remaining provisions, clauses,
paragraphs, sections and articles hereof, nor the application thereof to other
sets of circumstances.
7.03 That the Mayor and City 'Council and 'the, City, in consideration of
the purchase of said Bonds by the aforesaid purch~er~'f,hereby covenant and
agree with the holders of the Bonds from time to time, that neither the City
nor the Mayor and City Council of the City will 'ever waive, or agree to waive,
as to the July 5, 1977 bond election, the time limitation provisions of sub-
section B of Section-34~200lA of the Idaho Code.
7.04 That all -ordinances or parts thereof in conflict herewith are to the
exten~ such conflict hereby repealed, and that this ordinance shall be pub-
lished in one issue-cf--the Valley News~Times ~ the official journal of said
City, and shal:E take- effect and be in- -full force immediately upon its passage,
approval and publication.
7.05 That an emergency existing therefor, which emergency is hereby
declared to exist, this ordinance shall be in full force and effect immediately
upon its adoption and approval.
PASSED AND APPROVED This 1st day of August, 1977.
/....
APPROVED :
MAy~m A~
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