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HomeMy Public PortalAbout1475-1953 - Autorizing the Issuance of Revenue Bonds for Construction of the Electric Utility Systemw .., 4-.,.. .# ORDINANCE NO. An Ordinance, authorizing the issuance of revenue bonds to provide funds for application on the cost of construction and installation of additions, ex- tensions and improvements to the electric utility system owned and operated by the City of Richmond WHEREAS, the City of Richmond is the owner of and engaged in operating an electric utility system supplying said City and the in- habitants thereof, and the communities adjacent thereto, with elec- tricity for public, domestic and industrial uses, which system includes a generating plant, distribution system, and other equipment and appur- tenances; and WHEREAS, in order that the constantly growing needs .and re- quirements of the City,' its inhabitants and adjoining communities for a sufficient supply of electric current may be properly provided for, it has become urgently necessary to make certain additions, extensions and improvements in and to said electric utility system, the estimated cost of which is in the approximate amount of Six Million Five Hundred Thousand Dollars ($6, 500, 00.0. 00), based on the cost of property here- tofore acquired, contracts heretofore let, and engineers' estimates of contracts to be awarded; and WHEREAS, the Council has heretofore approved the making of said additions, extensions and improvements and now finds that the en- tire cost thereof cannot be met out of, the funds of said electric utility system now on hand -or revenues to be received prior to completion of the. project, and that a portion of the cost of said project should be pro- vided for by the issuance of revenue bonds in the amount of Six Mil- lion Dollars ($6, 000, 000. 00), which bonds shall be payable solely out of the revenues of the City's electric utility; and WHEREAS, the Council finds that it would not be wise or expe- dient to issue pledge orders payable out of the revenues of said elec- tric utility directly to, materialmen, manufacturers and contractors furnishing materials, equipment and labor for said additions, exten- sions and improvements on account of the excessive carrying charge and interest required to be paid on such pledge orders; that there is no applicable statute governing the financing of the cost of said improve- ment other than Chapter 178 of the Acts of 1943, relating to- the fixing of the interest rate, and sale of bonds for that purpose, and it is there- fore reasonable, necessary and proper, and within the inherent powers of the City, to issue bonds payable out of the revenues of said utility, and to sell the same in order to procure the funds necessary to meet the cost of said additions, extensions and improvements over and above the amount which can be provided out of funds of the utility now on hand or to be received prior to the completion of said additions, extensions and improvements; and WHEREAS, the electric utility system of the City has no encum- brance or lien of any kind whatsoever thereon, and the receipts and revenues from such system are not pledged or assigned for any pur- pose whatsoever, nor is there any charge or lien of any kind against such revenues or any part thereof, excepting only the provision made in the city budget for the year 1953 providing for the transfer of the - 2 - sum of Three Hundred Thousand Dollars ($300, 000.00) from such rev- enues to the general fund of the City in the year 1953; and WHEREAS, by reason of the foregoing facts which the Common Council now finds, determines and declares to be true, it is deemed necessary and advisable and for the best interests of the City of Rich- mond and its citizens to issue Electric Utility Revenue Bonds in the amount of Six Million Dollars ($6, 00.0, 00.0.00.) for the above mentioned purpose; tiow therefore, BE IT ORDAINED BY THE COMMON COUNCIL OF THE CITY OF RICHMOND: Section 1. That the City of Richmond (hereinafter sometimes referred to as the "City"), being the owner of and engaged in operating an unencumbered electric generating and distribution system supplying the City, the inhabitants thereof, and the communities adjacent thereto, with electric current for public, domestic and industrial uses, now pro- vide funds for the making of the additions, extensions and improvements herein referred to (hereinafter sometimes. referred to as the "improve- ments") over and above the amount available for the same out of funds on hand or current revenues of said electric utility. The terms "elec- tric utility, " "electric utility system, " "electric system, 'T and "system" and words of like import where used in this ordinance shall be construed to mean and include the existing electric generating and distribution sys- tern, and all real estate, machinery and equipment used in connection therewith and appurtenances thereto, and all extensions, additions and - 3 - improvements thereto and replacements thereof now or at any time hereafter constructed or acquired. Sec. 2. The additions, extensions and improvements herein referred to shall consist of the construction and installation of a com- plete new steam -electric generating station on the real estate hereto- fore acquired by the City for that purpose, including buildings, one 30, 000 k.w. turbo generator, with provision for the housing of a second unit, steam generator, coal, ash and water handling equipment, trans- mission lines, transformers, substations, railroad spur line to the plant and all necessary appurtenances and auxiliaries, as more particu- larly shown on the plans, specifications and estimates prepared by the consulting engineers employed by the City.. Said additions, extensions and improvements shall be constructed and installed in accordance with said plans, specifications and estimates approved by the City, and all contracts shall be let subject to the approval of the Common Council. All contracts, obligations and expenses incurred in connection with said project shall be payable solely out of the proceeds of the revenue bonds hereinafter authorized, or from the revenues of said electric utility system, and the interest on and principal of all .of the bonds issued pur- suant to this ordinance shall be paid solely and exclusively from the rev- enues of said electric utility system, and said contract obligations, ex- penses, bonds and interest shall not constitute in any respect a corporate obligation of the City within the provisions and limitations of the constitu- tion of the State of Indiana. Sec. 3. Foir the purpose of procuring funds with which to pay WIM the cost of said additions, extensions and improvements over and above the amount available for the payment of the same out of surplus rev- enues now on hand or current revenues of said electric utility, the City of Richmond shall issue its revenue bonds under and pursuant to the pro- visions of this ordinance, which bonds shall be payable out of the special fund hereinafter created and designated as the "Electric Utility Bond Fund, " and said bonds shall be designated as "Electric Utility Revenue Bonds of 1953. " Said bonds shall be in the principal amount of Six Million Dol- lars ($6, 000, 000.00), in the denomination of One Thousand Dollars ($1, 000. 00) each, numbered consecutively from 1 to 6000 both inclu- sive, dated as of the first day of the month in which the bonds are sold, and shall bear interest at a rate or rates not exceeding three and one- half per cent (3 -1 /2%) per annum (the exact rate or rates to be determined by bidding), which interest shall be payable semi-annually on January 1 and July 1 of each year, beginning on January 1, 1954, and shall be evi- denced by coupons attached to said bonds. Both bondsand interest cou- pons shall be payable in lawful money of the United- States of America at The Indiana National Bank of Indianapolis, in the City of Indianapolis, Indiana, or at the option of the holder at The First National Bank of Richmond, in the City of Richmond, Indiana, and the bonds shall mature serially in the amounts, and on the dates as follows: $100, 000. 00 on July 1, 1954, and $100, 000. 00 each six months thereafter to and including January 1, 1984. The bonds maturing on and after January 1, 1959, viz. bonds num- HME bered 901 to 6000 both inclusive, shall be redeemable in whole or in part at the option of the City on July 1, 1958, or any interest payment date thereafter, in their inverse numerical order, at the face value thereof, plus the following premiums; 5% if redeemed on July 1, 1958, or thereafter on or before .July 1, 1964; 40/o if. redeemed on January 1, before July 1, 1970; 30/o_if redeemed on January 1, before July 1, 1976; 216 if redeemed on January 1, to maturity; 1965, or thereafter on or 1971, or thereafter on or 1977, or thereafter prior plus in each case accrued interest to the date fixed for redemption. Notice of such redemption shall be given at least thirty (30.) days prior to the date fixed for such redemption by one publication in a news- paper of general circulation published in the City of Indianapolis, In- diana, by one publication in a newspaper or financial journal published in the City of Chicago, Illinois, and by one publication in a newspaper of general circulation published in the City of Richmond, Indiana. If any of the bonds so to be redeemed are registered, a copy of such notice shall also be mailed to the address of the registered holder .as shown on the registration records of the City. The notice shall specify the date and place of redemption and the numbers of the bonds called for redemption. The place of redemption may be the place of payment named in the bonds, or otherwise as determined by the City. Interest on the bonds so called for redemption shall cease on the date fixed in said no- tice, if funds are available at the place of redemption to pay the principal of and interest and call premium on the bonds so called for redemption on the date fixed in said notice, or thereafter when presented for pay- -6- ment. Coincidentally with the payment of the redemption price, the bonds so called for redemption shall be surrendered for cancellation, together with all unmatured interest coupons appurtenant thereto. Sec. 4. Said bonds shall be signed in the name of the City of Richmond by the Mayor, countersigned by the City Controller, and the seal of the City shall be affixed to each of said bonds and attested by the City Clerk. The coupons attached to the bonds shall be executed by placing thereon the facsimile signatures of the Mayor and City Con- troller, and said officials, by the signing of said bonds, shall adopt as and for their own proper signatures their facsimile signatures appearing on said coupons. In case any officer whose signature appears on the bonds shall cease to be such officer before the delivery of the bonds, the signature of such officer shall nevertheless be valid and sufficient for all purposes the same as if such officer had remained in office until such delivery. Said bonds shall be transferable by delivery unless registered. On presentation of any of the bonds at the office of the City Controller in the City of Richmond, said Controller shall register said bonds as to the principal thereof without charge or expense to the holder. Such registration shall be noted on the bond after which no transfer thereof shall be valid unless made by the registered owner in person or by at- torney duly authorized and similarly noted on the bond, but said bond may be discharged from registration by being in like manner retrans-- ferred to bearer, after which it shall be transferable by delivery but may be again registered as before. The registration of any bond shall - 7 - not affect the negotiability of the interest coupons attached thereto, but such couponsshall continue to pass by delivery only and shall al- ways remain payable to bearer. Sec. 5. The form and tenor of said bonds, the interest cou- pons to be attached thereto, and the form of registry endorsement there- on shall be substantially as follows, all blanks to be filled in properly prior to delivery thereof, omitting references to call for redemption in the case of bondsnot subject to call: UNITED STATES OF AMERICA State of Indiana No. County of Wayne $1., 0.00. 00 CITY OF RICHMOND ELECTRIC UTILITY. REVENUE BOND OF. 1953 The City of Richmond, in Wayne County, State of Indi- ana, for value received, hereby promises to pay to the bearer hereof, or if this bond be registered then to the registered holder hereof, solely out of the special revenue fund herein- after referred to, the principal amount of ONE THOUSAND DOLLARS on the first day of , 19 (unless this bond be called for redemption prior to maturity as hereinafter pro- vided), and to pay interest thereon from the date hereof until the principal is paid, at the rate of per cent ( %) per annum, Ia yable semi-annually on the first days of January and July in each year, beginning on January 1, 1954, upon presentation and, surrender of the annexed interest coupons as they severally become due. If not paid at maturity, interest on this bond and the annexed coupons shall thereafter accrue at the legal rate until paid. Both principal and interest of this bond are payable in lawful money of the United -States of America at The Indiana Nati onal Bank of Indianapolis, in the City of Indianapolis, Indiana, or at the option of the holder at The First National Bank of Richmond, in the City of Richmond, Indiana. IMM This bond is one of an authorized issue of six thousand (6, 000) bonds of the City of Richmond of like denomination, .tenor and effect, except as to interest ratesand dates. of ma- turity, aggregating Six Million Dollars ($6, 000, 000..00), num- bered consecutively from 1 to 6000 inclusive, issued for the purpose of providing funds to pay the cost of certain additions, extensions and improvements to the municipally owned electric utility system of said City, pursuant to an ordinance pas-sed. by the Common Council of said City on the day of , 1953, entitled "An Ordinance authorizing the issuance of revenue bonds to provide funds for application on the cost of construction and installation of additions, ex- tensions and improvements to the electric utility system owned and operated by the City of Richmond, " and in accordance with the provisions of Chapter 178 of the Acts of 1943, the proceeds of which bonds are to be applied solely to the payment of the cost of said additions, extensions and improvements, including the incidental expenses incurred in connection therewith. The interest on and principal of the bonds, of this issue, together with the interest on and principal of any additional bonds which may hereafter be issued on a parity therewith under the provisions of the ordinance hereinabove referred to, are and will be equally and ratably secured by and con- stitute a first charge upon all of the net revenues of said elec- tric utility system as the same now exists. or may hereafter be improved or extended, and such net revenues are hereby irrev- ocably pledged to the payment of the interest on and principal. of all such bonds to the extent necessary for that purpose. The City covenants that it will, on or before the first day of each calendar month beginning as of the date of issuance of the bonds, set aside in a special fund designated as the "Electric Utility Bond Fund" duly created by said ordinance, one -twelfth (1/12) of the amount required to .pay interest on and principal of all outstanding bonds of this issue and all bonds on a parity there- with which are payable within the period of the then next suc- ceeding twelve .(12) months, and that the funds so. set aside shall be used for no other purpose whatsoever.. The City shall not be obligated to pay this bond or the interest hereon except from said special fund, and neither this bond nor the issue of v`hi.ch it is a part shall in any respect constitute a corporate indebtedness of the City within the provisions and limitations of the constitution of the State of Indiana. The City covenants that its electric utility system is free and clear of all liens and encumbrances; that the revenues. of said electric utility system herein pledged have not previously been pledged or assigned, and that no transfers of the funds of said utility shall be made for the general purposes of the City T r T r -r _ ^ ' T T" T T ^ TC -T - ^ T which will in any wise interfere with the payment of the principal and interest of this bond; that it will fix, maintain and collect an aggregate of rates and charges for the ser- vices.rendered by said electric utility system which.will be sufficient to pay all costs of operation and maintenance of said system, to provide for adequate depreciation, and to create and maintain the special fund required for the payment of this issue of bonds and all other bonds on a parity therewith. The holder of this bond shall retain a lien upon the moneys paid therefor until such moneys shall be applied to the. purposes for which this bond is issued. This bond may be registered as to the principal thereof in the name of the owner in the manner and with the effect pro- vided in said ordinance, but unless registered shall pass by delivery. The interest coupons attached heretoshall at all times pass by delivery. This bond is subject to the .condition, and every holder hereof by accepting the same agrees with the obligor and every subsequent holder hereof, that (a) the de- livery of this bond to any transferee if not registered, or if it be registered and the last registered transfer be to bearer, shall vest title in this bond and the interest represented thereby in such transferee to the same extent for all purposes as would the delivery under like circumstances of any negotiable instru- ment payable to bearer; (b) the obligor and any agent of the obligor may treat the bearer of this bond, or if it be registered in the name of a holder, the registered holder of this bond, asthe absolute owner hereof for all purposes and shall not be affected by any notice to the contrary; (c) the principal of and the interest on this bond will be paid, and this bond and each of the coupons appertaining thereto are transferable, free from and without regard to any equities between the ob- ligor and the original or any intermediate holder hereof or any set-offsor cross -claims; and (d) the surrender to the obligor or any agent of the obligor of this bond if not registered, or if it be registered and the last registered transfer be to bearer, or the receipt of the registered holder for the principal hereof if this bond be registered in the name of a holder, shall be a good discharge to the obligor for the same. The bonds of this issue maturing on and after January 1, 1959, viz. bonds numbered from 901 to 6000 both inclusive, are redeemable in whole or in part at the option of the City on July 1, 1958, or any interest payment date thereafter, in inverse numerical order, at face value, together with the following premiums; five per cent (5%) if redeemed on July 1, 1958, or thereafter on or before July 1, 1964; four per cent (40/6) if redeemed on January 1, 1965, or thereafter on or before - 10 - - - �� .. _ . - - - � - - - - - _ � � T . - - - - � - _ - :. � - - _ � � - - _. � -. 1 � \ _ .. _ . . - � .- ) .. _ 1 � \ ' _ . T - - - � - - - � T- _ .. _ _ .. _ .. - - - - -' / _ T T -. _ � i 1 - _ •• _ ._ . T - ., --- - � -- - - o r c _. , - - - -r - _. _ _ _ ._ - - - July 1, 1970; three per cent (31o) if redeemed on January 1, 1971, or thereafter on or before July 1; 1976; two per cent (2a%a) if redeemed on January 1, 1977, or thereafter prior to maturity; plus in each case accrued interest to the date fixed for redemption; provided notice of such redemp- tion shall be. given at least thirty (30) days prior tothe date fixed for such redemption, by one publication in a newspaper of general circulation published in the City of Indianapolis, Indiana, a newspaper or financial journal published in the City of Chicago, Illinois, and.a newspaper of general circu- lation published in the City of Richmond, Indiana, and a like notice be sent by mail to the holders of such bonds as are then registered. Interest on the bonds so called for redemp- tion shall cease on the redemption -date fixed in said notice, if funds .are available at the place of redemption to pay the principal, premium and interest of the bonds so called for redemption on the date so named; or thereafter when pre- sented for payment. Upon the payment of the redemption price the bonds redeemed prior to maturity shall be sur- rendered for cancellation, together with the unmatured in- terest coupons appurtenant thereto. If any bond or interest coupon,,. shall not be presented for payment or redemption on the date fixed therefor the City may deposit in trust with The First National Bank of Rich- mond, in the City of Richmond, Indiana, an amount sufficient to pay such bond or interest coupon or the redemption price thereof, as the case may be, and thereafter the holder shall look only to the funds so ,deposited in trust with said bank for payment and neither the City nor its electric utility shall have any further obligation, or liability in respect thereto. It is hereby certified and recited that all. acts, condi- tions and things required to be done precedent to and in the execution, issuance and delivery of this bond have been done and performed in regular and. due form as provided by law. IN WITNESS WHEREOF, the City of Richmond, in Wayne County, Indiana, has caused this bond to be signed in its corporate name by its Mayor, countersigned by its City Controller, its corporate seal to be hereunto affixed and attested by its City Clerk, and the interest coupons hereto attached to be executed by placing thereon the fac- simile signatures of said Mayor and City Controller, as of the first day of , 1953. - � � _ � � r � _ - -- - _ - _ _ . r - - - -, \. � - _ - -- - -- - � - - a T � � - - - - - - - - - - -- - - � - .- - .. - _ � � -. _ - � __ _ - � . _ _ _ - - � - - CITY OF RICHMOND By Countersigned: Atte st: City Clerk (Interest Coupon) Coupon No. Mayor City Controller On 1, 19 , (unless the bond herein mentioned shall have been called for previous redemption) the City of Richmond, Indiana, will pay to bearer at The Indiana National Bank of Indianap- olis, Indiana, or at the option of the holder at The First National Bank of Richmond, Indiana, out of its "Electric Utility Bond Fund" Dollars in lawful money of the United States of America, being the interest then due on its Electric Utility Revenue Bond of 1953, dated 1, 1953, No. CITY OF RICHMO.ND By (Facsimile) Mayor (Fac simile) City Controller REGISTRATION ENDORSEMENT This bond can be registered only at the office of the City Controller of the City of Richmond, Indiana. No writing hereon except by the City Controller. Date of Registry In Whose Name City Controller Registered Sec. 6. The City Controller is hereby authorized and directed to have said bonds and couponsprepared, and the Mayor, City Controller - 12 - and City Clerk are hereby authorized and directed to execute said bonds in the form and manner herein provided. The bonds shall be sold by the City Controller, and the Treasurer of the City is hereby authorized and directed to deliver said bonds to the purchaser thereof in accordance with the award made by the Controller, provided that at the time of such delivery the Treasurer. shall collect the full amount the purchaser has agreed to pay therefor which shall not be less than the face value of said bonds, plus accrued interest from the date thereof to the date of delivery. The bonds herein authorized, when fully paid for and delivered to the purchaser, shall be the valid and binding special revenue obliga- tions of the City payable out of the revenues of the City's electric utility to be set aside into the Electric Utility Bond Fund as herein provided, and the proceeds derived from the sale of said bonds shall be and are hereby set aside for application on the cost of construction and installa- tion of the additions, extensions and improvements hereinbefore referred to and the expenses necessarily incurred in connection therewith. The proper officers of the City are hereby directed to draw all proper and necessary warrants and to do whatever acts and things may be neces- sary to carry out the provisions of this ordinance. Sec. 7. Prior to the sale of said bonds the Controller shall cause to be published a notice of such sale once each weekfor two weeks in the Richmond Palladium -Item, the only newspaper published in the City, also one time in The Indianapolis Commercial and such other publication as he shall deem advisable, the last publication to be at least seven (7) - 13 - days prior to the date fixed for said sale. The bond sale notice shall state the time and place of sale, the total amount of bonds, the maximum rate of interest thereon, the ma- turities thereof., the purpose for which the bonds are being issued, the terms and conditions on which bids will be received and the sale made, and shall set out such other information as the Controller, acting on the advice of the City Attorney and bond counsel, shall deem necessary. All -bids. for said bonds shall be sealed and shall be presented to the Controller at his office. Bidders will be required to name the rate or rates of interest which the bonds are to bear, not exceeding three and one-half per cent (3-1/20/o)-per annum. Such interest rate or rates shall be in multiples of one -eighth (1/8). of one per cent (1%) and not more than four (4) different interest rates shall be named by each bidder. Bids specifying two or more interest rates shall, also specify the amount and maturities of the bonds bearing each rate, but all bonds maturing on the same date shall bear the same rate. The Controller shall award the bonds to the highest qualified bidder. The highest bidder shall be the one who offers the lowest net interest cost to the City on said issue as a whole, to be determined by computing the total interest on the bonds to their maturities at the rate or rates named in the bid and deducting therefrom the premium bid, if any. No bid for less than the face value of said bonds, plus accrued interest to the date of delivery, computed at the rate or rates named in the bid., shall be considered. Each bid shall be accompanied by a certified or cashier's check payable to the City of Richmond in the amount of Thirty Thousand Dollars ($30, 000. 00.) - 14 - as a guaranty of the good faith of the bidder. In the event the success- ful bidder shall fail or refuse to accept delivery of said bonds in accor- dance with his bid and the notice of sale, then said check and the pro - seeds thereof shall be the property of the City and shall be considered as its liquidated damages on account of such default. The Controller shall have the right to reject any and all bids, and in the event no satis- factory bid is received on the date fixed in the notice, the Controller shall be authorized to continue the sale from day to day for a period of not to exceed thirty (30)- days without readvertisement, but'during such continuation of the sale no bid shall be accepted which is lower than the highest bid received at the time fixed for such sale in the bond sale no- tice. Prior to the sale of the bonds the Controller shall obtain a legal opinion as to the validity of the bonds from Ross McCord Ice & Miller, acting as bond counsel for the City, and shall furnish such opinion to the purchasers of the bonds., The cost of obtaining said opinion shall be considered as. a part of the cost of the project on account of which the bonds are issued, and shall be paid out of the proceeds of the bonds or out of the revenues of the electric utility system. In the event it shall be determined hereafter that it is not necessary to issue all of the bonds authorized by this ordinance, or the Public Service Commission shall not approve the issuance of said total amount of bonds, the Controller shall be authorized to sell and deliver a lesser amount of bonds than herein authorized, in which case the bonds not sold or delivered shall be of the last maturity or maturities, - 15 - FA Sec. ,8. All accrued interest and. premium, if any, received at the time of the delivery of the bonds shall be placed in the Electric Utility Bond Fund hereinafter created. The remaining proceeds from the sale of said bonds shall be deposited in a bank or banks which are legally designated depositories for the funds of the City, in a special account or accounts to be designated as "'City of Richmond, Electric Utility Construction Account." All funds so deposited in said special account or accounts shall be deposited, held and secured in accordance with the laws of the State of Indiana relating to the depositing, holding and securing of public funds. The funds in said special account or ac- counts shall be expended onlyfor the purpose of paying the cost of said improvements to the City's electric utility, including the incidental expenses incurred in connection therewith or in connection with the issuance of the bonds herein authorized. Any balance remaining shall be placed in the Electric Utility Bond Fund. Sec,, 9, The City shall keep proper records and books of ac- count, separate from all of its other records and accounts, in which complete and correct entries shall be made showing all revenues re- ceived on account of the operation of said electric utility and all dis- bursements made therefrom and all transactions relating to said utility. There shall be prepared and furnished to the original purchaser of the bonds, and upon request to any holder of the bonds, an annual report setting out complete operating, income and financial statements of said utility, in reasonable detail, covering the preceding fiscal year. Such report shall be prepared and furnished within ninety (90) days - 16 - after the close of each fiscal year, and shall.be certified by the Con- troller or an auditor employed for that purpose. Copies of all such statements and reports shall be kept on file in the office of the Con- troller. Any holder of the bonds shall have the right at all reasonable times to inspect said electric utility system and the records, accounts and data of the City relating thereto. All funds of said electric utility, including the Electric Utility Bond Fund, shall be segregated and kept separate and apart from all other funds of the City, and shall be deposited in lawful depositories of the City and continuously held and secured as provided by the laws of the State of Indiana relating to the depositing, securing and holding of public funds. Sec. 10. The interest on and the principal of the bonds issued pursuant to the provisions of this ordinance, and any bonds of equal priority payable out of the revenues. of the City's electric utility here- after issued under the provisions of ,Sec. 13 of this ordinance, shall constitute a first charge on all the net revenuesof the City's electric utility, and such net revenues. are hereby irrevocably pledged to the payment of the interest on and principal of all such bonds, to the extent necessary for that purpose. The term '..'net revenues" as used in this section shall be construed to mean the revenues remaining after the reasonable cost of operation and maintenance has been paid or provided for. There is hereby created a special fund for the payment of the in- terest on and the principal of bonds payable out of the revenues of the City's electric utility, which fund shall be designated as the "Electric - 17 - Utility Bond Fund." There shall be deposited in said fund on or before the first day of each calendar month, beginning as of the date of issuance of the bonds authorized by this ordinance, a. sufficient amount of the net revenues of the City's electric utility to pay not less than one -twelfth (1/12) of the interest on and principal of the then outstanding bonds pay- able from the revenues of the City's electric utility during the period of the then next succeeding twelve (12) -calendar months. Such monthly deposits shall continue until such time as said fund contains an amount sufficient to pay all outstanding bonds, together with the interest thereon to the dates of maturity thereof. Said Electric Utility Bond Fund shall be applied to the payment of the interest on and principal of the bonds payable from said fund, in accordance with the terms of said bonds, and to no other purpose whatsoever; provided, however, that any moneys in said fund in excess of the amount required to pay the interest on and principal of the bonds payable within the next succeeding twelve (12) months may be applied to the redemption of bonds prior to maturity in accordance with the redemption provisions of the ordinance authorizing the issuance of -the bonds; or, if first approved by the Council, such excess funds may be applied to the purchase for cancellation of bonds payable from the revenues of the City's electric utility, provided that such purchase can be made at a price less than the then applicable call rate., No part of the net revenues of the City's electric utility shall be transferred to the general fund or to any other fund of the City which will interfere with the requirements of said Electric Utility Bond Fund. Sec. 11. So long as any bonds payable out of the revenues of the City's electric utility are outstanding, the City shall maintain a "Depreciation Fund" for the benefit of its electric utility. The Depre- ciation Reserve Fund heretofore accumulated'out of the revenues of the electric utility, whether the same be represented by cash or invest- ments, shall be credited to and become a part of the Depreciation Fund upon adoption of this ordinance. There shall be deposited in said fund on or before the first day of each calendar month, beginning on the first day of the calendar month following the adoption of this ordinance, not less than the sum of Twenty Thousand Dollars ($20, 000. 00). Beginning with the first day of the calendar month next following the placing in operation of the new generating station hereinbefore referred to, the amount to be deposited in said fund on or before the first day of each calendar month shall be increased to a sum not less than Thirty-six Thousand Dollars ($3.6, 000.00). Said Depreciation Fund shall be ex- pended in making good depreciation in the property of said electric utility, or applied on the cost of the improvements herein referred to or future extensions, additions and improvements to such property. Said fund shall not be used for any other purpose whatsoever. Any accumulations in the Depreciation Fund not required for immediate use may be invested in obligations of the United States Government to the extent permitted by law, and any income from such investment shall accrue to the Depreciation Fund. The monthly payments into the Depreciation Fund may be omitted only and to the extent necessary to provide for -the reasonable cost of operation and maintenance of the - 19 - electric utility and to meet the requirements of the Electric Utility Bond Fund. No part of the net revenues of the City's electric utility shall be transferred to the General Fund or any other fund of the City which will interfere with the requirements of the Depreciation Fund. Sec. 12. The City shall establish, maintain and collect reason- able and just rates and charges for the facilities and services to be ren- dered by such electric utility which will provide. revenues at all times at least sufficient to pay the reasonable and proper cost of the operation and maintenance of the system, to meet the requirements of the Electric Utility Bond Fund, and Depreciation Fund created by the provisions of this ordinance, and to meet any other obligations required. to be met out of said revenues. So long as any of the bonds herein authorized are outstanding, none of theifacilities or services afforded or rendered by said system shall be furnished: without a reasonable and just charge being made therefor. Any bondholder shall have the right to require that the reasonable value of any facility or service rendered to the City or to any department, agency or instrumentality thereof, including the use of electric current for street lighting and other purposes, shall be charged against the City and shall be paid for as the charges accrue, if neces- sary to meet the requirements of the Electric Utility Bond Fund, and the revenues s.o received shall be deemed to be revenue derived from operation of the system and shall be used and accounted for in the same manner as other revenues derived from said system. Sec. 13. The City reserves the right to authorize and issue ad- ditional bonds payable out of the revenues of its electric utility of equal - 20 priority with the bonds authorized by this ordinance, for the purpose of financing the cost of future additions, extensions and improvements, to its electric utility, subject to the following conditions; (a) No bonds of equal priority with the bonds authorized by this ordinance shall be hereafter authorized or issued in an amount exceed- ing Four Million Dollars ($4, 000, 000. 0.0). (b) No bonds of equal priority with the bonds authorized by this ordinance shall be dated or issued during the period of five (5) years following the date of issuance of the bonds authorized by this. ordinance. (c) All required payments into the Electric Utility Bond. Fund shall have been made in accordance with the provisions of this. ordi- nance and the interest on and principal of the bonds of the issue au- thorized by this ordinance shall have been paid in accordance with the terms thereof. (d) The average net earnings of the City's electric utility for the three years immediately preceding the issuance of any such addi- tional bonds shall not be less than one hundred fifteen per cent (1150/0) of the average interest and principal requirements of the outstanding bonds authorized by this ordinance and the additional equal priority bonds to be issued. The term "net earnings" as used in this section shall be construed to mean the gross revenues of the electric utility less the reasonable cost of operation and maintenance thereof, exclud- ing interest on bonds. (e) The issuance of the additional equal priority bonds shall have been approved by the Public Service Commission of Indiana. Sec.. 1.4. For the purpose of further safeguarding the interests of the holders_ of the bonds herein authorized, it is hereby .specifically provided as follows: (a) The balance of the cost of the additions, extensions and im- provements to said electric utility referred to in Sec. 2 of this ordinance, over and above the amount to be paid from the proceeds of the revenue bonds herein authorized, shall be paid out of the funds of said electric utility now an hand, or the revenues to be received prior to completion of the same, and no transfer of the funds. of said electric utility shall be made to the City's general fund, or to any other fund of the City which will interfere with, such payment. (b) So long as. any of the bondsherein authorized are outstand- ing, the City shall at all times maintain said electric utility system in good condition, and operate the same in an efficient manner and at a reasonable cost. (c) So long as any of the bonds herein authorized are outstand- ing, the City shall maintain insurance on the insurable, parts of the sys- tern,. of a, kind and in an amount such a.s is usually carried by private corporations engaged in a similar type of business. All insurance shall be placed with responsible insurance companies qualified to do business under the laws of the State of Indiana, and insurance proceeds shall be used either in replacing or restoring the property destroyed or damaged, or shall be deposited in the Electric Utility Bond Fund. ,(d) So long as any of the bonds herein authorized are outstand- ing, the City shall not mortgage, pledge or otherwise encumber its electric utility system, or any part thereof, and shall, not sell, lease or otherwise dispose of any part of the same, excepting only such ma- chinery, equipment or other property as. may be replaced, or shall no longer be necessary for use in connection with said utility. (e) Except as otherwise specifically provided in Sec. 13 of this ordinance, so long as any of the bonds herein authorized are out- standing no additional bonds or other obligation pledging any portion of the revenues of the, system shall be authorized, issued or executed by the City, except such as shall be made junior and subordinate in all respects to, the bonds herein authorized, unless all of the bonds herein authorized are redeemed and retired coincidentally with the delivery of such additional bonds or other obligations. (f) -The provisions of this ordinance shall constitute a contract by and between the City and the holders of the bonds. herein authorized, all the terms of which shall be enforceable by any bondholder by any and all appropriate proceedings in law or in equity; and in the event the failure or refusal of the City to comply with the terms of this ordi- nance shall result in a default in the payment of any of the bonds or coupons issued pursuant to this ordinance, the holder of any of such defaulted bonds or coupons shall have the right to have a receiver ap- pointed to administer said electric utility system until such time as all provisions of this ordinance have been complied with, or for such time as the court appointing such receiver shall determine. After the issuance of said bonds this ordinance shall not be repealed, amended or modified in any respect which will adversely affect the rights or o -23- i V interests of the holders of said bonds, nor shall the Common Council or any other body of the City, adopt any law, ordinance or resolution in any way adversely affecting the rights of the bondholders so long as any of said bonds, or the interest thereon, remains outstanding or un- paid. (g) The provisions of this ordinance shall be construed to create a trust in the proceeds derived from the sale of the bonds herein, au- thorized, for the usesand purposes herein s.et forth, and so long as any of the bonds are outstanding, the provisions of this ordinance shall also be construed to create a trust in the portion of the revenues of said electric utility system herein directed to be set apart into the Electric Utility Bond Fund, for the uses and purposes of said fund, as in this ordinance set forth. (h) None of the provisions of this ordinance shall be construed as requiring the expenditure of any funds of the City derived from any sources other than the proceeds of said bonds and the operation of said electric utility system. Sec. 15.. All ordinances and parts of ordinances in conflict herewith are hereby repealed. Sec. 16. This ordinance shall be in full force and effect from and after its passage and signing by the Mayor. - 24 - 9 , f Passed and adopted by the Common Council of the City of Presented by me to the Mayor of the City of Richmond on the /�. day of `YY1G 1953, at the hour of -1,,go o'clock M. (CST). y Clerk This ordinance approved and signed me on the /8 day of 1953, at the h o f 7'�C) o' clock M. (CST). GL�Mayor -25-