HomeMy Public PortalAboutORD 285-01-23_Water Bond Closure_01172023 Instrument 11 1740277
Bonneville County, Idaho Falls, Idaho
01/20/2023 01:42:49 PM No. of Pages: 17
Recorded for: CITY OF JONA
Penny Manning Fee $0 00
Ex-Officio Recorder Deputy
Index to: ORDINANCE
ORDINANCE NO. 285-01-23
AN ORDINANCE OF THE CITY OF IONA, IDAHO, AUTHORIZING AND PROVIDING
FOR THE ISSUANCE OF A WATER REVENUE BOND, SERIES 2023, IN A PRINCIPAL
AMOUNT NOT TO EXCEED $3,900,000.00, FOR THE PURPOSE OF FINANCING THE
ACQUISITION, CONSTRUCTION AND INSTALLATION OF IMPROVEMENTS TO THE
DOMESTIC DRINKING WATER SYSTEM OF THE CITY OF IONA, BONNEVILLE
COUNTY, IDAHO; DESCRIBING THE BOND; PROVIDING FOR THE COLLECTION
AND DISPOSITION OF REVENUES; PROVIDING FOR THE PAYMENT OF THE
PRINCIPAL OF AND INTEREST ON THE BOND; ESTABLISHING FUNDS AND
ACCOUNTS; PROVIDING COVENANTS RELATING TO THE BOND; PROVIDING FOR
THE SALE OF THE BOND TO THE IDAHO DEPARTMENT OF ENVIRONMENTAL
QUALITY; PROVIDING FOR RELATED MATTERS; AND PROVIDING AN EFFECTIVE
DATE
WHEREAS, the City of Iona, Bonneville County, Idaho (the "City"), is a municipal
corporation organized and operating under the laws of the State of Idaho; and
WHEREAS, the City is authorized to own, operate, and maintain a domestic water
system; and
WHEREAS, the City is authorized by the Constitution and laws of Idaho to issue revenue
bonds to finance all or part of the cost of acquisition, construction, and installation of
improvements and betterments to the domestic water system of the City; and
WHEREAS, the City Council (the "Council") of the City, by adoption of Ordinance No.
213-08-17 on August 15, 2017, ordered a special bond election to be held within the City on
November 7, 2017, 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
not to exceed $3,900,000 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 the special
bond election of November 7, 2017, authorized the incurring of indebtedness and the issuance of
revenue bonds in an amount not to exceed$3,900,000; and
WHEREAS, the Council has determined that the public health, safety, and welfare will
be furthered by the domestic water system improvement project described hereinafter and has
further determined to issue water revenue bonds of the City, duly authorized by the electors of
the City at the special bond election of November 7, 2017, in an aggregate principal amount not
to exceed$3,900,000; and
WHEREAS, the City is authorized by law to sell water revenue bonds at private sale, and
the Council has determined to issue its water revenue obligations in the form of a single,
amortized water revenue bond in a principal amount not to exceed $3,900,000.00 to the State of
Idaho,Department of Environmental Quality.
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. Additional Bond means any bond issued pursuant to Section 15 of this Ordinance.
C. Bond means the "City of Iona Water Revenue Bond, Series 2023", herein
authorized to be issued, sold, and delivered in the form of a single, fully registered, amortized
revenue bond in a principal amount not to exceed$3,900,000.00.
D. Bond Fund means the "City of Iona Water Revenue Bond Fund" created by
Section 12 of this Ordinance.
E. Bond Register means the registration books on which are maintained the names
and addresses of the owners or nominees of the owners of the Bond.
F. Bond Registrar means the bond registrar, transfer agent, and authenticating and
paying agent appointed and designated in Section 6 of this Ordinance.
G. Capital Improvement Fund means the "City of Iona Water Project Capital
Improvement Fund"created by Section 10 of this Ordinance.
H. City means the City of Iona, Bonneville County, Idaho.
I. City Clerk means the Clerk of the City, or other officer of the City who is the
custodian of the seal of the City and of the records of the proceedings of the City, or his/her
successor in functions, if any.
J. 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:
(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;
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(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 pertaining 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 pertaining to the Project, as
estimated or otherwise ascertained by the Council.
K. Council means the City Council of the City.
L. Estimated Net Revenues means, for any year, the estimated Revenues of the
System for such year less the estimated Operation and Maintenance Expenses for such year,
based upon estimates prepared by the City Engineer or an independent engineer, or an
independent certified public accountant. In computing Estimated Net Revenues, Revenues of the
System may be adjusted as necessary to reflect any changed schedule of rates and charges.
M. Mayor means the Mayor of the City, or his/her successor in functions, if any.
N. Net Revenues means Revenue of the System after the deduction of Operation and
Maintenance Expenses.
O. 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 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;
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(2) Fidelity bonds and property and liability insurance premiums pertaining 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 of the System;
(4) Any taxes, assessments, excise taxes, or other charges which may be
lawfully imposed on the City, the System, revenues therefrom, or any privilege in
connection with their operation;
(5) The reasonable charges of the bond registrar, fiscal or paying agent,
commercial bank, trust bank, or other depository bank pertaining to the Bond issued by
the City or pertaining to the Project, if any;
(6) Contractual services, professional services, salaries, other administrative
expenses, and the cost of materials, supplies, repairs, and labor, pertaining to the issuance
of the Bond and to the ordinary operation of the System; and
(7) All other administrative, general, and commercial expenses of the System.
P. Ordinance means this Ordinance No. 285-01-23, adopted on January 17, 2023.
Q. Project means the domestic water system improvement project described in
Section 2 of this Ordinance.
R. Registered Owner means the purchaser of the Bond and any subsequent transferee
or purchaser of the Bond.
S. Reserve Fund means the "City of Iona Water Revenue Bond Debt Service
Reserve Fund" created by Section 13 of this Ordinance.
T. Revenue Fund means the "City of Iona Water Revenue Fund" created by Section
11 of this Ordinance.
U. Revenue of the System means all revenues received by the City from its System
and may include, at the discretion of the City, moneys derived from one, all, or any combination
of revenue sources pertaining to the System, including, without limitation, rates, charges, rents,
fees, and any other income derived from the operation or ownership of, the use of services of, or
the availability of or services pertaining to, or otherwise derived in connection with, the System
or all or any part of any property pertaining to the System.
V. System, for purposes of this Ordinance, means the domestic water system of the
City, as the same now exists, including its assets, real and personal, tangible and intangible, and
as it may later be added to, extended, and improved, and shall include buildings, structures,
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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 pertaining thereto.
W. Treasurer means the Treasurer of the City, or his/her successor in functions, if
any.
Section 2: THE PROJECT
A. Project Description. The domestic water system improvement project consists of
the acquisition and construction of certain capital improvements and betterments to the System,
consisting generally of, but not limited to, a 1.0 million gallon storage tank, a new well, well
pump station, generator, and transmission lines to connect the tank to the existing city
distribution system, together with related improvements and costs of engineering, legal, and
other services incidental thereto, including the costs of issuance of the revenue bond therefor(the
"Project").
B. Project Changes. The Council may make changes in the Project 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. An amount not to exceed $3,900,000.00 of the cost and expenses of
construction and installation of the Project will be paid from the issuance and sale of the Bond.
Section 3: THE BOND
The Bond, designated "City of Iona Water Revenue Bond, Series 2023" (the "2023
Bond"), in a principal amount not to exceed $3,900,000.00, is hereby authorized to be issued,
sold, and delivered pursuant to the Revenue Bond Act of the State of Idaho, the same being
Sections 50-1027 through 50-1042, Idaho Code, and pursuant to Section 57-227 and Title 57,
Chapter 9, Idaho Code.
The Bond shall consist of one single, transferable, amortized revenue bond, substantially
in the form annexed hereto as Exhibit"A," shall be issued in fully registered form, shall be dated
as of the date of its delivery, and shall bear interest on the unpaid balance, at the rate charged by
the State of Idaho Department of Environmental Quality.
The Bond shall be payable in equal biannual 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 biannually thereafter until maturity. The final biannual installment may be in such
greater or lesser amount as is necessary to fully pay said Bond. The principal of and interest on
the Bond shall be fully paid within thirty(30)years from its date.
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The sale of the Bond to the State of Idaho Department of Environmental Quality
(hereinafter the"Registered Owner"), is hereby authorized and approved. The Registered Owner
thereof shall have the right, at its expense, to convert said single bond to fully registered serial
bonds, without coupons.
In the event that the Bond is purchased by the State of Idaho, Department of
Environmental Quality, the City hereby agrees to comply with the requirements of the State of
Idaho, Department of Environmental Quality as contained in the Loan Contract entitled"State of
Idaho Department of Environmental Quality Loan Offer, Acceptance and Agreement"pertaining
to the Project.
Section 4: EXECUTION
The Bond shall be executed by the manual signature of the Mayor, countersigned by the
manual signature of the Treasurer, and attested by the manual signature of the City Clerk, and the
seal of the City shall be impressed thereon.
Section 5: PLACE AND MANNER OF PAYMENT
Both principal of and interest on the Bond shall be payable in lawful money of the United
States of America to the Registered Owner thereof, at the address of such Registered Owner as
shown on the registration records of the City, or at such other address as shall be designated in
writing to the City by the Registered Owner.
Section 6: BOND REGISTRAR
The Treasurer is hereby appointed as bond registrar, transfer agent and paying agent, and
is herein referred to as the"Bond Registrar." The Bond Registrar shall keep, or cause to be kept,
sufficient books for the registration and transfer of the Bond. The Bond Registrar is authorized,
on behalf of the City, to carry out all of the Bond Registrar's powers and duties under this
Ordinance.
The Bond may be transferred only upon the books for the registration and transfer of
bond (the "Bond Register"), upon the surrender thereof to the Bond Registrar, together with a
form of transfer duly executed by the Registered Owner or its attorney duly authorized in
writing. Upon the transfer of the Bond, there shall be issued in the name of the transferee or
transferees a new fully registered bond or bonds of any authorized denomination or
denominations and of the same maturity and interest rate, and of the same aggregate principal
amount, as the surrendered bond. The new bond or bonds shall bear the same date as the date of
the surrendered bond, but shall bear interest from the immediately preceding interest payment
date to which interest has been paid or fully provided for.
This Section is intended to provide the system of registration required by Chapter 9, Title
57, Idaho Code.
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Section 7: PREPAYMENT;NO DEFEASANCE
The City reserves the right, at its option, to prepay, on any principal payment date, the
principal amount outstanding on the Bond, in whole or in part. Partial prepayments shall be
made in the amount of $1,000 or multiples thereof. No partial prepayment shall extend or
postpone the due date of any subsequent installment. Prepayments shall be made without
penalty. Notice of any intended prepayment shall be mailed by certified mail to the Registered
Owner of the Bond at its address appearing on the Bond Register, at least thirty(30)days prior to
the prepayment date.
So long as the Bond is held by the Idaho Department of Environmental Quality,the Bond
shall not be subject to defeasance prior to maturity, in whole or in part.
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, with other
revenues received, after taking into consideration anticipated delinquencies, to provide Net
Revenues equal to not less than 1.1 times the average annual debt service on the Bond.
Section 10: THE CAPITAL IMPROVEMENT FUND
There is hereby created a special fund and account known as the "City of Iona Water
Project Capital Improvement Fund" (the "Capital Improvement 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, including the
payment of the principal of and interest on all outstanding bond anticipation notes or other
interim financing. Any interest earnings on moneys invested from the Capital Improvement
Fund shall remain in and be used for the purposes of the Capital Improvement Fund. The City's
share of any liquidated damages or other moneys paid by defaulting contractors or their sureties
will be deposited into said Capital Improvement Fund to assure the completion of the Project.
When the Project has been completed and all costs related thereto have been paid in full,
any balance remaining in the Capital Improvement Fund shall be deposited into the Bond Fund
described in Section 12 of this Ordinance.
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Section 11: THE REVENUE FUND
There is hereby created a special fund, designated 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 immediately upon its receipt.
A. Use of Revenues. The Revenue of the System shall be used for the payment of
the following obligations in the following order of priority:
(1) First Charge and Lien: The costs of Operation and Maintenance
Expenses.
(2) Second Charge and Lien: The principal of and interest on the Bond, and
any other outstanding parity bonds, by payment into the Bond Fund, as provided in
Section 12 of this Ordinance.
(3) Third Charge and Lien: To maintain the Reserve Fund created by Section
13 of this Ordinance; and
(4) To administer surplus funds.
B. Interest Earnings. Interest earnings on deposits in the Water Revenue Fund shall
remain in and be used for the purposes of the Water Revenue Fund.
C. Surplus Funds. Funds remaining in the Revenue Fund after having been applied
to designated funds for 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, designated the "City of Iona Water Revenue Bond
Fund" (the "Bond Fund"), which shall be maintained by the Treasurer into which shall be
deposited, from the Net Revenues of the System, the following amounts:
A. Each biannual installment of principal and interest payable on the Bond shall be
payable into the Bond Fund from the Revenue Fund not less than ten (10) days prior to each
payment date, and paid from the Bond Fund to the Registered Owner on or before each payment
date. In the event that a single Bond is converted into fully registered serial bonds, as provided
in Section 3 of this Ordinance, then there shall be deposited into the Bond Fund from the
Revenue Fund on or before the 10th day prior to any interest or principal and interest payment
date the amount of interest or principal and interest then falling due on the Bond. The moneys
herein allocated shall be used solely to pay currently maturing installments of principal of and
interest on the Bond or any serial bonds to which a Bond may be converted.
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B. If the City for any reason shall fail to make such deposit, then an amount equal to
the deficiency shall be deposited into the Bond Fund from the Reserve Fund, described
hereinafter.
Section 13: DEBT SERVICE RESERVE FUND
A. Deposits. There is hereby created a special fund known as the "City of Iona
Water Revenue Bond Debt Service Reserve Fund" (the "Reserve Fund"), which shall be
maintained by the Treasurer so long as the Bond remains outstanding. There shall be deposited
into the Reserve Fund, within one year from the date of issuance of the Bond, from Net
Revenues, an amount equal to one-tenth of an annual payment of principal and interest on the
Bond, and a like sum shall be deposited therein from Net Revenues on each anniversary date of
the Bond thereafter, for a period of ten years, or until such time as the amount in the Reserve
Fund equals at least one average annual bond payment for the Bond. The sum so accumulated
shall be maintained as a debt service reserve fund for the Bond, or any serial bonds to which a
Bond may be converted, until the Bond or serial bonds have been paid in full. The City shall
establish such subaccounts within the Reserve Fund, and shall comply with such restrictions on
the investment of moneys in such subaccounts, as may be required by the Tax Certificate
executed by the City at the time of the delivery of the Bond.
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 by monthly 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 bond or may be
held in the Reserve Fund to secure payment of the refunding bonds issued, to refund the
outstanding refunding bond, 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. All 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. Interest earned on any such investment shall be
deposited, directly as earned, into the Bond Fund.
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:
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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 domestic water facilities in or for the City;
C. To improve, extend, enlarge, or replace any domestic water facilities;
D. To acquire or construct additional domestic water facilities in or for the City;
E. To call or redeem prior to their fixed dates of maturity any bond, parity bond, or
subordinate lien obligations issued to provide domestic water facilities for the City; and
F. For any other lawful System 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 Bonds or other additional parity obligations are authorized or
actually issued:
(1) Any consent required by the Loan referred to in Section 3 of this
Ordinance shall have been obtained.
(2) The City is not, and has not been, in default as to any payments required
by the provisions of this Ordinance for a period of not less than twelve (12) months
immediately preceding the issuance of such Additional Bonds or other additional parity
obligations.
(3) The Net Revenues of the System for the past twelve (12) consecutive
months immediately preceding the year of the issuance of such Additional Bonds shall
have been sufficient to pay the Operation and Maintenance Expenses of the 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 at least 110% of the
annual principal and interest requirements of the outstanding Bond, and any other obliga-
tions of the City payable from the Net Revenues of the System.
(4) The Estimated Net Revenues of the System for the twelve-month period
immediately succeeding the issuance of the bond or other obligations proposed to be
issued will be not less than 110% of the annual principal and interest requirements of the
Bond and any other obligations of the City payable from the Net Revenues of the System,
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plus the average annual principal and interest requirements of the Additional Bonds or
other obligations proposed to be issued.
(5) A written certification by an independent certified public accountant that
the 110%Net Revenue requirement of subsection(3) above, and the 110% Estimated Net
Revenues requirement of subsection (4) above have 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.
(6) The foregoing limitations, or any of them, may be waived or modified by
the written consent of the Registered Owner of not less than 75% of the principal amount
of the Bond then outstanding.
B. Parity Bond 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 or other obligations 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 Bond. No provision of this Ordinance shall be deemed to limit
or restrict the power of the City to issue bonds, notes or warrants, or to make pledges of the
revenues which shall be subordinate as to the lien of the Bond and which shall provide for
compliance with the current provisions hereof prior to the application of any funds to said
subordinate purpose, provided that any consent required by the Loan Approval referred to in
Section 3 of this Ordinance shall have been obtained.
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 securities
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. Complete Project. It will complete the construction of the Project with all
practical dispatch and in a sound and economical manner.
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B. 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.
C. Good Repair. It will operate, maintain, preserve, and keep the System and every
part hereof in good repair,working order, and condition.
D. Corporate Status. It will maintain its status as a municipal corporation of the
State of Idaho and will take no steps to disincorporate or otherwise change its corporate status.
E. Preserve Security. It will preserve and protect the security of the Bond and the
rights of the Registered Owner thereof.
F. 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.
G. 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.
H. 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.
I. 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.
J. Insurance. It will procure and keep in force insurance upon all buildings and
structures of the System and the machinery and equipment therein, which are usually insured by
entities operating like property, in good and responsible insurance companies. The amount of
the insurance shall be such as may be required to adequately protect it and the Registered Owner
of the Bond from loss due to any casualty, and in the event of any such loss, the proceeds shall
be used to repair or restore the System or for the payment of the Bond issued under this
Ordinance.
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K. Fidelity Bond. It will procure suitable fidelity bonds covering all of its officers
and other employees charged with the operation of the System and the collection and
disbursement of revenues therefrom.
L. 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.
M. Accounts. It will keep proper and separate accounts and records in which
complete and separate entries shall be made of all transactions relating to the System, and it will
furnish complete operating and income statements upon request.
N. Delinquencies. It will not furnish domestic water service to any customer
whatsoever free of charge, and it shall not later than sixty (60) days after an account becomes
delinquent, take such legal action as may be reasonable to enforce collection of any collectible
delinquent account.
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 are hereby designated as a"qualified tax-exempt obligation"within the
meaning and for the purposes of Section 265(b)(3) of the Code, and the City does not reasonably
anticipate that it will 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 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.
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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 does not reasonably anticipate that it will 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)(D) 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.
G. None of the proceeds of the Bond will be used to reimburse the City for capital
expenditures made prior to the date of delivery of the Bond unless the City, not later than 60
days after the payment of such expenditure, shall have adopted an official intent resolution as
provided by Section 1.150-2 of the Treasury Regulations.
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 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 bond in regard to matters or questions
arising under such ordinances as the Council may deem necessary or desirable and not
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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 maturities of the Bond, or reduce the rate of interest
thereon, or extend the time of payments of interest from their due date, or reduce the
amount of the principal thereof, or reduce any premium payable on the redemption
thereof, if 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.
It shall not be necessary for the consent of the Registered Owner under this subsection B
to approve the particular form of any proposed supplemental ordinance, but it shall be sufficient
if such consent shall approve the substance thereof.
C. Upon the adoption of any supplemental ordinance pursuant to the provisions of
this Section, this Ordinance shall be deemed to be modified and amended in accordance
therewith, and the respective rights, duties, and obligations of the City under this Ordinance and
the Registered Owner of the Bond outstanding hereunder shall thereafter be determined,
exercised, and enforced thereunder, subject in all respects to such modification and amendments,
and all terms and conditions of any such supplemental ordinance shall be deemed to be part of
the terms and conditions of this Ordinance for any and all purposes.
D. Any Bond executed and delivered after the execution of any supplemental
ordinance adopted pursuant to the provisions of this Section may have a notation as to any matter
provided for in such supplemental ordinance, and if such supplemental ordinance shall so
provide, new bond so modified as to conform, in the opinion of the Council, to any modification
of this Ordinance contained in any such supplemental ordinance, may be prepared and delivered
without cost to the Registered Owner of the Bond then outstanding, upon surrender for
cancellation of the Bond.
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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: 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 24: REPEALER
All prior ordinances or parts thereof, to the extent inconsistent herewith, are hereby
repealed and shall,to the extent of such inconsistency,have no further force or effect.
Section 255: AUTHORIZATION
The Mayor, City Clerk, and City Treasurer, or any one of such officers, as may be
appropriate to the circumstances, are hereby authorized to execute, on behalf of the City, all such
additional documents as may be necessary to effect the sale and delivery of the Bond.
Section 266: PUBLICATION AND EFFECTIVE DATE
This Ordinance, or a summary thereof in compliance with Section 50-901A, Idaho Code,
shall be published once in the official newspaper of the City, and shall take effect immediately
upon passage, approval, and publication.
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PASSED BY THE COUNCIL AND APPROVED BY THE MAYOR this 17th day of
January, 2023.
CITY OF IONA
Bonneville County, Idaho
By:
Dan Gubler, Mayor
ATTEST:
By: Will�
eri West, City Clerk
(SEAL)
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