HomeMy Public PortalAboutORD 55_Issuance of a Water Revenue Bond_05131993ORDINANCE NO. 55
AN ORDINANCE OF THE CITY OF IONA, IDAHO, AUTHORIZING AND PROVIDING
FOR THE ISSUANCE OF A WATER REVENUE BOND, SERIES 1993, IN THE
PRINCIPAL AMOUNT OF $300,000; PROVIDING DEFINITIONS; DESCRIBING THE
WATER IMPROVEMENT PROJECT AND THE BOND; PROVIDING FOR THE SALE,
EXECUTION, PAYMENT, AND OTHER DETAILS OF THE BOND; PROVIDING FOR
THE COLLECTION AND DISPOSITION OF REVENUE; PLEDGING THE NET
REVENUES OF THE DOMESTIC WATER SYSTEM OF THE CITY FOR THE PAYMENT
OF THE PRINCIPAL OF AND INTEREST ON THE BOND; ESTABLISHING CERTAIN
FUNDS AND ACCOUNTS; PROVIDING COVENANTS; AND PROVIDING FOR OTHER
MATTERS RELATING TO THE ISSUANCE, SALE, AND DELIVERY OF AND
SECURITY FOR THE BOND
WHEREAS, the City of Iona, Bonneville County, Idaho (the
"City"), is a municipal corporation organized and existing under
the laws of Idaho; and
WHEREAS, the City is authorized and empowered by Idaho Code
Sections 50-1027 through 50-1042 (the "Revenue Bond Act") to issue
revenue bonds to finance all or part of the cost of installation,
construction, and acquisition of improvements and betterments to
the City's domestic water system; and
WHEREAS, the City Council (the "Council"), by adoption of
Ordinance No. 54 on October 3, 1992, ordered a special bond
election to be held within the City on October 27, 1992, for the
submission to the qualified electors of the City the question of
whether or not the City should be authorized to issue its revenue
bonds in the principal amount of not to exceed $300,000 in order to
provide funds for certain capital improvements to its domestic
water system; and
WHEREAS, the requisite majority of the qualified electors of
the City, at said special bond election of October 27, 1992,
authorized the issuance of revenue bonds in the amount of not to
exceed $300,000 for such purpose; and
WHEREAS, the Council has determined that the public health,
safety, and welfare will be furthered by the water improvement
project described hereinafter and has further determined to issue,
sell, and deliver water revenue bonds of the City, duly authorized
by the electors of the City at said election of October 27, 1992,
in the principal amount of $300,000; and
WHEREAS, Idaho Code Section 50-1036 authorizes the sale of
revenue bonds at private sale without advertising the same at
competitive bidding; and
Page 1
WHEREAS, the City has received an offer from West One Bank,
Idaho, to purchase the bonds of the City and has requested that the
bonds be issued in the form of a single, registered, amortized bond
payable in equal semiannual installments of principal and interest,
and the Council has determined to accept such offer.
NOW, THEREFORE, BE IT ORDAINED BY THE MAYOR AND COUNCIL OF THE
CITY OF IONA, IDAHO, as follows:
Section 1: DEFINITIONS
As used in this Ordinance, the following words shall have the
following meanings:
A. Acquisition or Acquire includes the opening, laying out,
establishment, purchase, construction, securing, installation,
reconstruction, lease, gift, grant from the Federal Government, the
State, any public body therein or any person or entity, the
condemnation, transfer, option to purchase, other contract, or
other acquirement, or any combination thereof.
B. Bond means the principal amount of $300,000 City of Iona
Water Revenue Bond, Series 1993, herein authorized to be issued in
the form of a single, fully registered, bond in amortized form.
C. Bond Fund means the "City of Iona Water Revenue Bond
Fund" created by Section 12 of this Ordinance.
D. Bond Register means the registration books on which are
maintained the name and address of the owner or nominee of the
owner of the Bond.
E. Bond Registrar, for the purpose of the Bond, means the
Treasurer.
F. City means the City of Iona, Bonneville County, Idaho.
G. City Clerk means the de facto or de jure Clerk of the
City, or other officer of the City who is the custodian of the seal
of the City and of the records of the proceedings of the City, or
his/her successor in functions, if any.
H. Construction Fund means the "City of Iona Water Project
Construction Fund" created by Section 10 of this Ordinance.
I. Cost of Project or any phrase of similar import, means
all or any part designated by the Council of the costs of the
Project, or interest therein, which costs, at the option of the
Council, may include all or any part of the incidental costs
pertaining to the Project, including, without limitation:
Page 2
(1) Preliminary expenses advanced by the City from funds
available for the use therefor, or advanced by the Federal
Government, or from any other source, with approval of the
Council, or any combination thereof;
(2) The costs of making surveys, audits, preliminary
plans, other plans, specifications, estimates of costs and
other preliminaries;
(3) The costs of appraising, printing, estimates,
advice, services of engineers, architects, financial
consultants, attorneys at law, clerical help, or other agents
or employees;
(4) The costs of contingencies;
(5) The costs of the issuance of the Bond;
(6) The costs of funding any short-term financing, bond
anticipation notes, and other temporary loans appertaining to
the Project and of the incidental expenses incurred in
connection with such loans;
(7) The costs of any properties, rights, easements, or
other interest in properties, or any licenses, privileges,
agreements and franchises; and
(8) All other expenses necessary or desirable and
appertaining to the Project, as estimated or otherwise
ascertained by the Council.
J. Council means the City Council of the City.
K. Improvement or Improve includes the extension, widening,
lengthening, betterment, alteration, reconstruction, or other major
improvement, or any combination thereof, of any properties
pertaining to the Project or an interest therein, but does not mean
general maintenance or repair.
L. Mayor means the de facto or de jure Mayor of the City, or
his/her successor in functions, if any.
M. Net Revenues means Revenue of the System after the
deduction of Operation and Maintenance Expenses.
N. Operation and Maintenance Expenses or any phrase of
similar import means all reasonable and necessary current expenses
of the City, paid or accrued, of operating, maintaining, and
repairing the System or of levying, collecting, and otherwise
administering the Net Revenues for the payment of the Bond; and the
Page 3
term includes (except as limited by contract or otherwise limited
by law) without limiting the generality of the foregoing:
(1) Engineering, auditing, reporting, legal, and other
overhead expenses of the various City departments directly
relating and reasonably allocable to the administration of the
System;
(2) Fidelity bonds and property and liability insurance
premiums appertaining to the System, or a reasonably allocable
share of a premium of any blanket bond or policy pertaining
thereto;
(3) Payments to pension, retirement, health, and
hospitalization funds and other insurance;
(4) Any taxes, assessments, excise taxes, or other
charges which may be lawfully imposed on the City, the System,
revenues therefrom, or any privilege in connection with their
operation;
(5) The reasonable charges of the bond registrar, fiscal
or paying agent, commercial bank, trust bank, or other
depository bank appertaining to the Bond issued by the City or
appertaining to the Project, if any;
(6) Contractual services, professional services,
salaries, other administrative expenses, and the cost of
materials, supplies, repairs, and labor, appertaining to the
issuance of the Bond and to the System; and
(7) A11 other administrative, general, and commercial
expenses.
O. Project means the domestic water system improvement
project described in Section 2 hereof and consisting generally of
the construction and acquisition of certain capital improvements
and betterments to the domestic water system of the City.
P. Registered Owner initially means West One Bank, Idaho,
its successors or assigns, and includes any subsequent transferee
or purchaser of the Bond.
Q. Reserve Fund means the "City of Iona Water Revenue Bond
Reserve Fund" created by Section 13 of this Ordinance.
R. Revenue Fund means the "City of Iona Water Revenue Fund,"
created by Section 11 of this Ordinance.
S. Revenue of the System means all revenues received by the
City from its System and may include, at the discretion of the
Page 4
City, moneys derived from one, all, or any combination of revenue
sources appertaining to the System, including, without limitation,
rates, charges, rents, fees, and any other income derived from the
operation or ownership of, the use of services of, or the
availability of or services appertaining to, or otherwise derived
in connection with, the System or all or any part of any property
appertaining to the System.
T. System means the domestic water system of the City, as it
now exists, including its assets, real and personal, tangible and
intangible, and as it may later be added to, extended, and
improved, and shall include buildings, structures, utilities, or
other income producing water facilities from the operation of or in
connection with which the revenues of the payment of the Bond to be
issued hereunder will be derived, and the lands appertaining
thereto, including, without limitation, any Improvement to be
acquired with the proceeds of the Bond.
U. Treasurer means the de facto or de jure Treasurer of the
City, or his/her successor in functions, if any.
Section 2: THE PROJECT
A. Project Description. The water system improvement
project consists generally of the acquisition, construction, and
installation of improvements and betterments to the City's domestic
water system, consisting generally of, but not limited to,
distribution system improvements and installation of a new well,
together with related improvements, engineering and legal fees,
administrative costs, and all other costs incidental thereto (the
"Project").
B. Project Changes. The Council may make changes in the
above -described plans prior to or in the course of actual
construction, provided such changes are found necessary and
desirable by the Council and that such changes do not substantially
affect or alter the plans or the cost of the Project.
C. Costs. $300,000 of the Cost of Project will be paid from
the issuance and sale of the Bond, hereinafter defined, authorized
to be issued at a special election held within said City on
October 27, 1992. The balance of the Cost of Project will be paid
from other legally available funds, including state and federal
grant funds.
Section 3: THE BOND
The Bond, designated "City of Iona Water Revenue Bond, Series
1993" (the "Bond"), shall consist of a single, amortized,
transferable revenue bond without coupons, shall be issued in fully
registered form, shall be dated as of the date of its delivery,
Page 5
shall mature fifteen (15) years from its date, shall be in the
total principal sum of $300,000, shall bear interest on the unpaid
balance from the date of the Bond until paid, at the rate of six
and thirty-eight hundredths percent (6.38%) per annum, and shall be
substantially in the form set forth in Exhibit "A" which is annexed
hereto and by reference made a part of this Ordinance.
The Bond shall be payable in equal semiannual installments of
principal and interest, with the first installment of principal and
interest being due six months from the date of delivery of the
Bond, and semiannually each six months thereafter until maturity.
The final semiannual installment may be in such greater or lesser
amount as is necessary to fully pay said Bond.
The Registered Owner of the Bond shall have the right, at its
expense, to convert the single Bond to fully registered serial
bonds representing the then -unpaid principal amount of the Bond,
which serial bonds shall bear interest at the rate of interest on
the Bond. Serial bonds shall be in such form as the City shall
designate by ordinance authorizing the issuance thereof, and may be
executed by either manual or facsimile signature.
The Treasurer is hereby appointed as the Bond Registrar,
transfer agent, and paying agent for the Bond. The ownership of
the Bond shall be entered in the Bond Register maintained by the
Treasurer, and the City may treat the person listed as owner in the
Bond Register as the owner of the Bond for all purposes. The Bond
may be transferred or exchanged only upon said bond register by
surrender thereof to the Treasurer with written instructions
satisfactory to the Treasurer, signed by the Registered Owner or
his attorney in fact and guaranteed or witnessed in a manner
satisfactory to the Treasurer, and a new fully registered Bond in
a denomination representing the unpaid principal amount of the Bond
shall be executed by the City and registered in the manner
hereinafter provided, and delivered to the new Registered Owner.
No Bond not so executed, registered, and delivered shall be
entitled to any rights under this Ordinance. This paragraph is
intended to provide the system of registration required by Chapter
9, Title 57, Idaho Code.
Section 4: EXECUTION
The Bond shall be executed in the name of the City, shall be
signed by the manual signature of the Mayor, countersigned by the
manual signature of the Treasurer, attested by the manual signature
of the Clerk, and authenticated by the seal of the City affixed
thereto.
In case any of the officers who shall have signed or counter-
signed the Bond shall cease to be such officer or officers of the
City before the Bond so signed or countersigned shall have been
Page 6
authenticated, delivered, or issued by the City, the Bond may
nevertheless be authenticated, delivered, and issued and, upon such
authentication, delivery, and issue, shall be as binding upon the
City as though those who signed and countersigned the same had
continued to be such officers of the City. The Bond may also be
signed and countersigned on behalf of the City by such persons as
at the actual date of execution of the Bond shall be the proper
officers of the City although at the original date of the Bond any
such person shall not have been such officer of the City.
Section 5: PLACE AND MANNER OF PAYMENT
Principal of the Bond and interest thereon shall be payable in
lawful money of the United States of America, to the Registered
Owner thereof, at the address of such Registered Owner as shown on
the registration records of the City, or at such other address as
designated in writing to the City by the Registered Owner.
Section 6: PREPAYMENT
The City hereby reserves the right, with the prior written
approval of the Registered Owner, to prepay, on any payment date,
the principal amount outstanding, in whole or, in the manner
hereinafter provided, in part, at any time while the single
registered Bond is held by the Registered Owner.
Prepayments shall be made on any interest payment date, and
partial prepayments shall be in the amount of $1,000.00 or
multiples thereof. No partial prepayment shall extend or postpone
the due date of any subsequent installment. Any prepayment shall
be made without penalty, additional interest, or charges.
Notice of any such intended prepayment shall be mailed by
certified mail to the Registered Owner of the Bond at its address
appearing on the registration records of the City, or at such other
address as designated in writing to the City by the Registered
Owner for the payment of regular installments, at least thirty (30)
days prior to the prepayment date.
If the Bond is converted to fully registered serial bonds, the
City reserves the right to call and redeem said serial bonds, in
whole or, at the discretion of the City, in part, at par plus
accrued interest to the date of redemption, on any interest payment
date.
Section 7: DEFEASANCE
In the event that money and/or government obligations,
maturing or having guaranteed redemption prices at the option of
the owner at such time or times and bearing interest to be earned
thereon in such amounts as are sufficient (together with any
Page 7
resulting cash balances) to redeem and retire part or all of the
Bond in accordance with its terms, are hereafter irrevocably set
aside in a special account and pledged to effect such redemption
and retirement, then no further payments need be made into the Bond
Fund or Reserve Fund for the payment of the principal of and
interest on the Bond so provided for, and the Bond and interest
accrued thereon shall then cease to be entitled to any lien,
benefit, or security of this Ordinance, except the right to receive
the funds so set aside and pledged, and the Bond and interest
accrued thereon shall no longer be deemed to be outstanding
hereunder.
Section 8: CHARGES
The City has established, may from time to time revise, and
shall maintain and collect water rates and charges for furnishing
the services of the System to its customers, which rates and
charges are, and shall continue to be, uniform as to all persons or
properties which are of the same class, which rates and charges
shall be collected from the users thereof.
Section 9: PLEDGE OF REVENUES
The Net Revenues of the System are hereby pledged for the
payment of the Bond, and shall be used and applied in the order of
priority provided in Section 11 of this Ordinance.
The City shall establish, revise, maintain, and collect
charges sufficient, together with other net revenues of the City's
domestic watersystem and other revenues received, after taking
into consideration anticipated delinquencies, to provide Net
Revenues equal to not less than 1.2 times the sum of the combined
aggregate amount of the principal of and interest on the Bond which
shall become due the next succeeding fiscal year.
Section 10: THE CONSTRUCTION FUND
There is hereby created a special fund and account known as
the "City of Iona Water Project Construction Fund" (the
"Construction Fund"), into which shall be deposited all of the
proceeds of the sale of the Bond, to be used and applied for the
payment of a portion of the cost and expense of the construction
and installation of the Project, in accordance with the Loan
Agreement, including the payment of the principal of and interest
on all outstanding bond anticipation notes or other interim
financing, if any. Any interest earnings on moneys invested from
the Construction Fund shall remain in and be used for the purposes
of the Construction Fund. The City's share of any liquidated
damages or other moneys paid by defaulting contractors or their
sureties will be deposited into the Construction Fund to assure the
completion of the Project.
Page 8
When the Project has been completed and all costs related
thereto have been paid in full, any balance remaining in the
Construction Fund shall be deposited into the Bond Fund described
in Section 12 of this Ordinance.
Section 11: THE REVENUE FUND
There is hereby created a fund known as the "City of Iona
Water Revenue Fund" (the "Revenue Fund"), which shall be maintained
by the Treasurer and into which the Revenue of the System shall be
deposited forthwith upon its receipt.
A. Use of Revenues. The Revenue of the System shall be used
for payment of the following obligations in the following order of
priority:
(1) First Charge and Lien: the costs of Operation and
Maintenance Expenses.
(2) Second Charge and Lien: the principal of and
interest on the Bond by payment into the Bond Fund.
(3) Third Charge and Lien: to maintain the Reserve Fund
as provided in Section 13 of this Ordinance; and
(4) To administer surplus funds.
B. Surplus Funds: Funds remaining in the Revenue Fund,
after having been applied to the purposes provided in this Section,
shall constitute surplus funds and may be used for the purposes set
forth in Section 14 of this Ordinance.
Section 12: THE BOND FUND
There is hereby created a special fund known as the "City of
Iona Water Revenue Bond Fund" (the "Bond Fund"), into which shall
be deposited, from Net Revenues of the System, the following
amounts:
A. Such amounts, in approximately equal monthly installments
from the Revenue Fund, as will cause to be accumulated, not less
than ten (10) days prior to each semiannual payment date, the
amount sufficient to make each semiannual principal and interest
payment on the Bond as the same becomes due. The moneys herein
allocated shall be used solely to pay currently maturing
installments of principal of and interest on the Bond.
B. If the City for any reason shall fail to accumulate
within the Bond Fund sufficient moneys to make the required semi-
annual principal and interest payment on the Bond as the same
becomes due, then an amount equal to the deficiency shall be
Page 9
deposited into the Bond Fund, not less than ten (10) days prior to
such payment date, from the Reserve Fund, described hereinafter.
Section 13: RESERVE FUND
A. Deposits. There is hereby created a special fund and
account, separate from all other funds and accounts of the City, to
be known as the "City of Iona Water Revenue Bond Reserve Fund" or
other similar designation (the "Reserve Fund"), which shall be
maintained by the Treasurer as a debt service reserve fund for the
Bond. There shall be accumulated in the Reserve Fund within five
(5) years from the date of the Bond, in approximately equal annual
deposits, an amount equal to one year's principal and interest
requirements on the Bond. The sum so accumulated shall be
maintained as a debt service reserve fund for the Bond, until the
Bond has been paid in full. No proceeds of the Bond shall be
deposited into the Reserve Fund.
B. Deficiencies or Withdrawals. Whenever any moneys are
withdrawn from the Reserve Fund to pay the principal of or interest
on the Bond, or if a deficiency exists therein, the amount so
withdrawn or the amount of such deficiency shall be restored within
a period of one (1) year from the date of such deficiency by
deposits from Net Revenues until there has been restored therein
the gross amount provided heretofore in subdivision A of this
Section.
C. Refunding. In the event refunding bonds are ever issued,
the amount set aside into the Reserve Fund to secure the payment of
the Bond may be used to retire bonds or may be held in the Reserve
Fund to secure payment of the refunding bonds issued, to refund the
outstanding refunding bonds, or may be held in the Reserve Fund to
secure the payment of any other issue or series of bonds payable
out of the Bond Fund and issued on a parity with the Bond.
D. Investments. A11 moneys in the Reserve Fund may be kept
in cash or deposited in institutions permitted by law in an amount
in each institution not greater than the amount insured by any
department or agency of the United States Government, or may be
invested and reinvested in any legal investment permitted for City
moneys maturing not later than the last maturity date of any
outstanding bonds.
Section 14: SURPLUS FUNDS
Funds remaining in the Revenue Fund after having been applied
to or designated funds for the purposes provided in Section 11A of
this Ordinance shall constitute surplus funds and may be used for
any of the following purposes:
Page 10
A. To pay the costs of unusual or extraordinary maintenance
of or repair to the System;
B. To pay the principal of and interest on any subordinate
lien obligations which may have been issued to provide water
facilities in or for the City;
C. To improve, extend, enlarge, or replace any water
facilities;
D. To acquire or construct additional water facilities in or
for the City;
E. To prepay the principal, interest, and any costs of the
Bond; and
F. For any other lawful purpose.
Section 15: ADDITIONAL BONDS OR OTHER OBLIGATIONS
A. Limitation Upon Issuance of Parity Obligations. Nothing
contained in this Ordinance shall be construed in such a manner as
to prevent the issuance by the City of additional bonds or other
additional obligations payable from the Net Revenues on a parity
with, but neither prior nor superior to, the lien of the Bond
herein authorized; provided, however, that before any such
additional parity bonds or other additional parity obligations are
authorized or actually issued:
(1) The City is not, and has not been, in default as to
any payments required by the provisions of this Ordinance for
a period of not less than twelve (12) months immediately
preceding the issuance of such additional parity bonds or
other additional parity obligations;
(2) The Net Revenues of the domestic water system for
the past twelve (12) consecutive months immediately preceding
the year of the issuance of such additional parity obligations
shall have been sufficient to pay the Operation and
Maintenance Expenses of the domestic water system for said
past twelve (12) months, and, in addition, sufficient so that
the Net Revenues for such preceding year equal an amount
representing 120% of the annual principal and interest
requirements of the outstanding Bond and any other obligations
of the City payable from the Net Revenues of the domestic
water system, plus the average annual principal and interest
requirements of the bonds or other obligations proposed to be
issued; provided, that this limitation may be waived or
modified by the written consent of the Registered Owners of
75% of the principal amount of the Bond; and provided,
further, that in determining the sufficiency of the Net
Page 11
Revenues for the prior 12 months, the engineer may take into
account the effect of any approved prospective increase in
water fees, rates, and charges, and calculate Net Revenues as
if such increased fees, rates, and charges had been in effect
during the prior 12 months;
(3) A written certification by the City's accountant or
an independent accountant, if requested, that the 120% Net
Revenue requirement of subsection (2) above has been
satisfied, shall be obtained and filed with the City, which
certification shall be conclusively presumed to be accurate in
determining the right of the City to authorize, issue, sell,
and deliver said additional bonds or other additional
obligations on a parity with the Bond authorized herein.
B. Parity Bonds to Complete Project. In the event grant
funds, plus the proceeds of the Bond provided for in this
Ordinance, are insufficient to complete the Project, then parity
bonds may be issued to complete the Project, and the restrictions
set forth in this Section pertaining to the issuance of parity
bonds shall not apply.
C. Subordinate Lien Bonds. No provision of this Ordinance
or of any instrument appertaining thereto shall be deemed to limit
or restrict the power of the City to issue bonds, notes or
warrants, or to make pledges of the revenues which shall be
subordinate as to the lien of the Bond and which shall provide for
compliance with the current provisions hereof prior to the
application of any funds to said subordinate purpose.
D. Refunding. The restrictions with respect to the issuance
of parity obligations shall not apply if such additional parity
bonds proposed to be issued are for the sole purpose of refunding
outstanding water revenue bonds.
Section 16: INVESTMENTS
Surplus funds in any of the Funds set forth in this Ordinance
may be invested in investments as permitted by law.
Section 17: GENERAL COVENANTS
For the protection and security of the Bond, it is covenanted
and agreed to and with the Registered Owner of the Bond from time
to time, that the City will perform the following covenants:
A. Maintain Corporate Status. The City will maintain its
identity as a municipal corporation and will make no attempt to
cause its corporate status to be abolished.
B. Budget Laws. The City will comply with applicable state
budget laws in preparing its annual budget and in keeping accounts
and records.
Page 12
C. Complete Project. It will complete the construction of
the Project with all practical dispatch and in a sound and
economical manner.
D. Operate System. It will operate the System in an
efficient and economical manner and prescribe, revise, and collect
such charges in connection therewith so that the services,
facilities, and properties of the System may be furnished at the
lowest possible cost consistent with sound economy and prudent
management.
E. Good Repair. It will operate, maintain, preserve, and
keep the System and every part hereof in good repair, working
order, and condition.
F. Preserve Security. It will preserve and protect the
security of the Bond and the rights of the Registered Owner
thereof.
G. Collect Revenues. It will collect and hold in trust the
revenues and other funds pledged to the payment of the Bond and
apply such revenue or other funds only as provided in this
Ordinance.
H. Service Bond. It will pay and cause to be paid
punctually the principal of the Bond and the interest thereon on
the date or dates and at the place or places and in the manner
mentioned in the Bond, and in accordance with this Ordinance.
I. Pay Claims. It will pay and discharge any and all lawful
claims for labor, materials, and supplies which, if unpaid, might
by law become a lien or charge upon the Revenue of the System, or
any part of said Revenue of the System, or any funds in the hands
of the Treasurer, prior or superior to the lien of the Bond or
which might impair the security of the Bond, to the end that the
priority and security of the Bond shall be fully preserved and
protected.
J. Encumbrances. It will not mortgage or otherwise
encumber, sell, lease, or dispose of the System or any part
thereof, nor enter into any lease or agreement which would impair
or impede the operation of the System or any part thereof necessary
to secure adequate revenues for the payment of the principal of and
interest on the Bond, nor which would otherwise impair or impede
the rights of the Registered Owner of the Bond with respect to such
revenues of the operation of the System without provisions for the
retirement of the Bond then outstanding from the proceeds thereof.
K. Insurance. It will procure and keep in force insurance
upon all buildings and structures of the System and the machinery
and equipment therein, which are usually insured by entities
operating like property, in good and responsible insurance
companies. The amount of the insurance shall be not less than the
full replacement cost thereof and shall be such as may be required
Page 13
to adequately protect it and the Registered Owner of the Bond from
loss due to any casualty, and in the event of any such loss, the
proceeds shall be used to repair or restore the System or for the
payment of the Bond issued under this Ordinance.
L. Fidelity Bonds. It will procure suitable fidelity bonds
covering all of its officers and other employees charged with the
collection and disbursement of revenues from the System.
M. Engineers. It will employ consulting engineers of
acknowledged reputation, skill, and experience in the improvement
and operation of the System for any unusual or extraordinary items
of maintenance, repair, or betterments as shall be required from
time to time, all reports, estimates, and recommendations of such
consulting engineers to be filed with the Clerk and furnished to
the Registered Owner of the Bond issued hereunder, upon request.
N. Accounts. It will establish and maintain proper methods
of accounting and bookkeeping, keep proper and separate accounts
and records in which complete and separate entries shall be made of
all transactions relating to the System, and furnish complete
operating and income statements to the Registered Owner upon
request.
O. Delinquencies. It will not furnish water service to any
customer whatsoever free of charge, and it shall not later than
sixty (60) days after the end of each calendar year, take such
legal action as may be reasonable to enforce collection of all
collectible delinquent accounts.
Section 18: SPECIAL COVENANTS
The City further covenants and agrees:
A. In accordance with Section 149(a) of the Internal Revenue
Code of 1986, as amended (the "Code"), the Bond, and any serial
bonds to which it may be converted, shall be issued and remain in
fully registered form in order that interest thereon be excluded
from gross income of the owner or owners for federal income tax
purposes. The City covenants and agrees that it will take no
action to permit the Bond, or any serial bonds to which it may be
converted, to be issued in or converted to bearer or coupon form.
B. The Bond is a "qualified tax-exempt obligation" within
the meaning and for the purposes of Section 265(b)(3) of the Code,
and the City will not designate more than $10,000,000, including
the Bond, as qualified tax-exempt obligations during the calendar
year in which the Bond is issued.
C. None of the proceeds of the Bond will be used, directly
or indirectly, (i) to make or finance loans to persons or (ii) in
any trade or business carried on by any person (other than as a
Page 14
member of the general public). For purposes of the preceding
sentence, the term "person" does not include a government unit
other than the United States or any agency or instrumentality
thereof, and the term "trade or business" means any activity
carried on by a person other than a natural person. The City
further covenants and agrees to take no action which would cause
the Bond to be a "private activity bond," nor will it omit to take
any action necessary to prevent the Bond from becoming a "private
activity bond," within the meaning of Section 141 of the Code.
D. The City has general taxing powers. The Bond is not a
"private activity bond" within the meaning of Section 141 of the
Code. 95% or more of the net proceeds of the Bond are to be used
for the local governmental activities of the City. The City has no
subordinate entities. The City has not issued, and will not issue,
tax-exempt obligations in the calendar year in which the Bond is
issued in a face amount which exceeds $5,000,000. Accordingly,
under Section 148(f) (4) (C) of the Code, the City is not required to
pay rebates to the United States under Section 148(f) of the Code.
E. The Mayor, Clerk, and Treasurer, and other appropriate
officials of the City, or any one or more of such officials, as may
be appropriate, are each hereby authorized and directed to execute,
on behalf of the City, such certificate or certificates as shall be
necessary to establish that the Bond is not an "arbitrage bond"
within the meaning of Section 148 of the Code and the Treasury
Regulations promulgated thereunder, and to establish that interest
on the Bond is not and will not become includable in the gross
income of the owner(s) of the Bond under the Code and applicable
regulations. The City covenants and agrees that no use will be
made of the proceeds of the Bond, or any funds of the City which
may, pursuant to Section 148 of the Code and applicable
regulations, be deemed to be proceeds of the Bond, which would
cause the Bond to be an "arbitrage bond" within the meaning of
Section 148 of the Code. The City further covenants to comply
throughout the term of the Bond with the requirements of Section
148 of the Code and the regulations promulgated thereunder in order
to prevent the Bond from becoming an "arbitrage bond."
F. The City will comply with the information reporting
requirements of Section 149(e) of the Code.
Section 19: AMENDMENTS
A. The City from time to time and at any time may adopt an
ordinance or ordinances supplemental hereto, which ordinance or
ordinances thereafter shall become a part of this Ordinance, for
any one or more of all of the following purposes:
(1) To add to the covenants and agreements of the City
in this Ordinance, other covenants and agreements thereafter
to be observed, which shall not adversely affect the interest
Page 15
of the Registered Owner of the Bond, or to surrender any right
or power herein reserved.
(2) To make such provisions for the purpose of curing
any ambiguities or of curing, correcting, or supplementing any
defective provisions contained in this Ordinance, or any
ordinance authorizing future bonds in regard to matters or
questions arising under such ordinances as the Council may
deem necessary or desirable and not inconsistent with such
ordinances and which shall not adversely affect, in any
material respect, the interest of the Registered Owner of the
Bond.
Any such supplemental ordinance may be adopted without
the consent of the Registered Owner of the Bond at any time
outstanding, notwithstanding any of the provisions of
subsection B of this Section.
B. With the consent of the Registered Owner of not less than
75% in aggregate principal amount of the Bond at the time
outstanding, the Council may adopt an ordinance or ordinances
supplemental hereto for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this
Ordinance or of any supplemental ordinance; provided, however, that
no such supplemental ordinance shall:
(1) Extend the fixed maturity of the Bond, or reduce the
rate of interest thereon, or extend the time of payments of
interest from their due date, or reduce the amount of the
principal thereof, or reduce any premium payable on the
redemption thereof, if applicable, without the consent of the
Registered Owner of the Bond so affected; or
(2) Reduce the aforesaid percentage of the Registered
Owner required to approve any such supplemental ordinance,
without the consent of the Registered Owner of the Bond then
outstanding.
It shall not be necessary for the consent of the Registered Owner
under this subsection B to approve the particular form of any
proposed supplemental ordinance, but it shall be sufficient if such
consent shall approve the substance thereof.
C. Upon the adoption of any supplemental ordinance pursuant
to the provisions of this Section, this Ordinance shall be deemed
to be modified and amended in accordance therewith, and the
respective rights, duties, and obligations of the City under this
Ordinance and the Registered Owner of the Bond outstanding
hereunder shall thereafter be determined, exercised, and enforced
thereunder, subject in all respects to such modification and
amendments, and all terms and conditions of any such supplemental
Page 16
ordinance shall be deemed to be part of the terms and conditions of
this Ordinance for any and all purposes.
D. Any Bond executed and delivered after the execution of
any supplemental ordinance adopted pursuant to the provisions of
this Section may have a notation as to any matter provided for in
such supplemental ordinance, and if such supplemental ordinance
shall so provide, new bonds so modified as to conform, in the
opinion of the Council, to any modification of this Ordinance
contained in any such supplemental ordinance, may be prepared and
delivered without cost to the Registered Owner of any affected Bond
then outstanding, upon surrender for cancellation of such Bond.
Section 20: VALIDITY OF ISSUANCE
The Bond is issued pursuant to the Idaho Revenue Bond Act,
being Idaho Code Sections 50-1027 through 50-1042. This recital is
conclusive evidence of the validity of the Bond and the regularity
of its issuance.
Section 21: REGISTERED OWNER'S REMEDIES - RECEIVER
By action or suit in equity, the Registered Owner or
subsequent owners of the Bond may, in the event of a material
violation of any of the foregoing covenants, cause the appointment
of a receiver, which receiver may enter and take possession of the
System and any Net Revenues for the payment of the Bond, prescribe
fees to be derived from the System, and collect, receive, and apply
all Net Revenues of other moneys pledged for the payment of the
bond in the same manner as the City might do in accordance with the
obligations of the City.
Section 22: ORDINANCE A CONTRACT
The provisions of this Ordinance shall constitute a contract
between the City and the Registered Owner so long as the Bond
hereby authorized remains unpaid.
Section 23: SALE OF BOND
The sale of the Bond to West One Bank, Idaho, as Registered
Owner, upon the terms and conditions set forth in the offer to
purchase presented to the City at this meeting, is hereby accepted.
The fully executed Bond shall be delivered to the Registered Owner
upon receipt of the purchase price by the City.
Section 24: DETERMINATION
The Council does hereby find, determine, and declare that it
is essential to the public interest, welfare, and convenience of
the City and the inhabitants thereof to undertake the Project and
to construct the improvements, with said Project being paid for in
Page 17
part by the issuance of the Bond in conformity with the Idaho
Code.
Section 25: FURTHER AUTHORITY
The Mayor and City Clerk -Treasurer, or either of them, as may
be appropriate to the document being executed, are hereby
authorized to execute the Bond and all other documents as may be
necessary or appropriate to effect the sale and delivery of the
Bonds.
Section 26: SEVERABILITY
If any one or more of the covenants or agreements provided in
this Ordinance to be performed on the part of the City shall be
declared by any court of competent jurisdiction to be contrary to
law, then such covenant or covenants, agreement or agreements,
shall be null and void and shall be deemed separable from the
remaining covenants and agreements in this Ordinance and shall in
no way affect the validity of the other provisions of this
Ordinance or of the Bond.
Section 27: REPEALER
A11 prior ordinances inconsistent herewith are hereby repealed
and shall, to the extent of such inconsistency, have no further
force or effect.
Section 28: PUBLICATION
This Ordinance, or a summary thereof in compliance with
Section 50-901A, Idaho Code, shall be published once in the
official newspaper of the City, and shall take effect immediately
upon its passage, approval, and publication.
DATED this 6th day of May, 1993.
CITY OF IONA
Bonnevill County, Idaho
Mayor
ATTEST:
f l LL`�a►�
City Clerk
( S E A L )
Page 18
Registered
No. ONE
[Face of Bond)
UNITED STATES OF AMERICA
STATE OF IDAHO
County of Bonneville
CITY OF IONA
WATER REVENUE BOND, SERIES 1993
Registered
$300,000.00
KNOW ALL MEN BY THESE PRESENTS: That the City of Iona,
Bonneville County, Idaho, for value received, hereby promises to
pay from the special fund hereinafter described and in the manner
hereinafter set forth, and not otherwise, to WEST ONE BANK, IDAHO,
the registered owner hereof, the principal sum of
THREE HUNDRED THOUSAND DOLLARS
($300,000.00), together with interest on the unpaid balance at the
rate of six and thirty-eight hundredths percent (6.38%) per annum.
Said principal and interest shall be paid in the following
installments on the following dates: Principal and interest in the
amount of $15,684.07 shall be due on the 13th day of November,
1993, and semiannually on each May 13 and November 13 thereafter
for a period of fifteen (15) years from the date of the Bond. The
final installment may be in such greater or lesser amount as is
necessary to pay the balance of principal and interest then due.
This Bond shall be registered as to principal and interest in
the name of the original owner and any subsequent owners in a
registration book in the office of the City Treasurer, who shall be
the Bond Registrar. This Bond is transferable only upon said book,
by notation thereon, by the registered owner hereof in person or by
its attorney duly authorized in writing.
Both principal of and interest on this Bond shall be payable
in lawful money of the United States of America, to the registered
owner. Any owner of this Bond subsequent to its original owner is
hereby placed on notice of all payment of both principal of and
interest on this Bond prior to its transfer to him and all
subsequent owners hereof hereby acknowledge that they have
ascertained the actual unpaid principal amount of this Bond as of
the date of transfer to them and hereby release the City from all
obligations as to all principal and interest paid by the City prior
to such date.
The City has reserved the right, with the prior written
approval of the Registered Owner, to prepay the principal amount
Page 1 - EXHIBIT "A"
outstanding, in whole or, in the manner hereinafter provided, in
part, on any payment date. Prepayments shall be made on the date,
at the place, and in the manner provided herein for making
regularly scheduled installments, and partial prepayments shall be
in the amount of $1,000.00 or multiples thereof. No partial
prepayment shall extend or postpone the due date of any subsequent
installment. Any such prepayment shall be made without penalty,
additional interest, or charges.
Notice of any such intended prepayment shall be mailed by
certified mail to the registered owner of the Bond at the address
appearing on the registration records of the City, or at such other
address as designated in writing to the City by the registered
owner, at least thirty (30) days prior to the prepayment date.
Interest on this Bond shall cease to accrue as to the amount of
principal being prepaid after the date fixed for prepayment if
notice has been properly given and funds equal to the amount of
prepayment have been deposited at the place of payment at that
time.
This Bond may, upon the surrender hereof at the office of the
City Treasurer, at the option of the registered owner and at its
expense, be exchanged for fully registered serial bonds in the
aggregate principal amount of the Bond then unpaid, having the same
interest rate as the Bond, maturing annually in each of the
remaining years of the original term of this Bond on such date as
the City, by ordinance, shall prescribe.
This Bond is issued for the purpose of paying a portion of the
cost of the construction and installation of improvements and
betterments to the City's domestic water system (the "Project"),
pursuant to the Idaho Revenue Bond Act (being Idaho Code Sections
50-1027 through 50-1042), and the Municipal Bond Law of the State
of Idaho (being Idaho Code, Title 57, Chapter 2) and also pursuant
to Ordinance No. 55, adopted on May 6, 1993 (the "Bond Ordinance"),
and a special election held within the City on October 27, 1992.
This Bond creates a lien and charge upon the Net Revenues of
the City's domestic water System (as said capitalized terms are
defined in the Bond Ordinance) as defined in the Bond Ordinance,
superior to all other charges of any kind and nature, except the
charges necessary to pay the principal of and interest on any
future parity bonds. This Bond is a limited obligation of the City
and is payable as to principal and interest solely from a special
fund, designated the "City of Iona Water Revenue Bond Fund" (the
"Bond Fund"), which Bond Fund was created by the Bond Ordinance.
For a more particular description of said Bond Fund, the revenues
to be deposited therein, and the nature and extent of the security
afforded thereby, reference is made to the provisions of the Bond
Ordinance pursuant to which this Bond is issued, and such Bond Fund
will be maintained.
Page 2 - EXHIBIT "A"
This Bond does not now and shall never constitute an
indebtedness of the City within the meaning of any State
Constitutional provision or statutory limitation, nor a charge
against the general credit or taxing powers of the City.
The City has covenanted with the registered owner of the Bond
to keep and perform all covenants and agreements contained in the
Bond Ordinance, and the City will establish, maintain, collect, and
account for rates and charges for service furnished by or through
the System, including all extensions and improvements thereto
hereafter constructed or acquired by the City, sufficient to pay
the principal of and interest on the Bond as they fall due,
provided such rates must be reasonable rates for the type, kind,
and character of the services rendered.
IT IS HEREBY CERTIFIED, RECITED, and DECLARED that all
conditions, acts, and things essential to the validity of this Bond
do exist, have happened, and have been done, and that every
requirement of law affecting the issue hereof has been duly
complied with; that the Net Revenues to be derived from the
operation of the System, including any future improvements,
additions, or extensions thereto, have been and are hereby pledged
and will be set aside into the Bond Fund, in amounts sufficient for
the payment of principal of and interest on this Bond.
IN WITNESS WHEREOF, the City of Iona, Bonneville County,
Idaho, under its corporate seal, has caused this Bond to be signed
in its corporate name by its Mayor, countersigned by the Treasurer
thereof, and attested by the City Clerk, as of the 13th day of May,
1993.
CITY OF IONA
Bonneville County, Idaho
4:71&tf
Mayor
Arrvi,di‘ 4
Treasurer
ATTEST:
ZI„a//9/
City Clerk
( S E A L )
Page 3 - EXHIBIT "A"
* * * * * * * * *
REGISTRATION CERTIFICATE
(No writing to be placed herein except by the Bond Registrar)
This Bond shall be payable only to the order of the registered
owner or its legal representative.
Date of Name and Address of Signature of
Registration Registered Owner Bond Registrar
May 13, 1993 West One Bank, Idaho
101 S. Capitol Boulevard
Boise, Idaho 83702
Page 4 - EXHIBIT "A"