HomeMy Public PortalAbout2511-1971 - Issuance of Revenue Bonds for the construction & additions to the Electical Utility SystemORDINANCE NO. 2511-1971
An Ordinance authorizing the issuance of
additional revenue bonds to provide fund
forft�littion
att}on !on the cost of, cbnstru.ction
and of additions, extensions
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 inhabitants thereof, and the communities adjacent thereto,
with electricity for public, domestic and industrial uses, which
system includes a generating plant, distribution system, and
other equipment and appurtenances; 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 pro-
vided 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 Thirteen Million Four Hundred Forty Thousand Dollars
($13,440,000), based on the cost of contracts heretofore let,
and engineers' estimates of contract to be awarded and expenses
incidental to said project; and
WHEREAS, the Council has heretofore approved the making
of said additions, extensions and improvements and now finds that
the entire cost thereof cannot be met out of the funds of said
electric utility now on hand or revenues to be received prior
to completion of the.project; that there are funds on hand in
the amount of Five Million Dollars ($5000,000) available for
application on the cost of the project, but that the balance of
the cost of said project should be provided for by the issuance
of revenue bonds in the amount of Eight Million Four Hundred
Forty Thousand Dollars ($8,440,000), which bonds shall be pay-
able solely out of the revenues of the City's electric utility;
and
WHEREAS, the Council finds that it would not be wise or
expedient to issue pledge orders payable out of the revenues
of said electric utility directly to materialmen, manufacturers
and contractors furnishing materials, equipment and labor for
said additions, extensions 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 improvement 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 therefore
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; and
WHEREAS, the electric utility system of the City has no
encumbrance or lien of any kind whatsoever thereon, and the
receipts and revenues from such system are not pledged or assigned
for any purpose whatsoever excepting only to the payment of the
principal of and interest on certain bonds designated "Electric
utility Revenue Bonds of 1953", dated September 1, 1953, now
outstanding in the amount of Two Million Two Hundred One Thousand
Dollars ($2,201,000), bearing interest at the rate of three per
cent (3%) per annum and three and one -quarter per cent (3-1/4%)
per annum, depending upon the maturities, and maturing semi-
annually over a period ending on January 1, 1984, which bonds
constitute a first charge against the net revenues of said
utility and maturities; 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
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City of Richmond and its citizens to issue additional Electric
Utility Revenue Bonds in the amount of Eight Million Four Hundred
Forty Thousand Dollars ($8,440,000) for the above mentioned pur-
pose; now therefore,
BE IT ORDAINED BY THE COMMON COUNCIL OF THE CITY OF
RICHMOND:
Section 1. That the City of Richmond (hereinafter some-
times 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 com-
munities adjacent thereto, with electric current for public,
domestic and industrial uses, now provide funds for the making
of the additions, extensions and improvements herein referred
to (hereinafter sometimes referred to as the "improvements")
over and above the amount available for the same out of funds
on hand or current revenues of said electric utility. The terms
"electric utility", "electric utility system", "electric system",
and "system", and words of like import where used in this ordi-
nance shall be construed to mean and include the existing electric
generating and distribution system, and all real estate, machin-
ery and equipment used in connection therewith and appurtenances
thereto, and all extensions, additions and improvements thereto
and replacements thereof now or at any time hereafter constructed
or acquired.
Section 2. The additions, extensions and improvements herein
referred to shall consist of one complete 60,000 KW nominal capa-
city steam turbine generator, with steam generator and accessories,
cooling tower, condenser and auxiliaries, transformers, precipita-
tors, pumps, compressors, heaters, deaerator, battery equipment,
controls, electrical equipment, together with such auxiliary and
accessory equipment, foundations and structures, mechanical and
electrical installations as required to control, protect and house
the foregoing equipment, and to interconnect same with the existing
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electrical system; all as more particularly shown on the plans,
specifications and estimates prepared by Black and Veatch, of
Kansas City, Missouri, the consulting engineers employed by the
City. Said additions, extensions and improvements shall be con-
structed and installed in accordance with said plans, specifica-
tions and estimates approved by the City. All contracts, obli-
gations 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 pursuant to this ordinance shall be paid solely and
exclusively from the revenues of said electric utility system,
and said contract obligations, expenses, bonds and interest shall
not constitute in any respect a corporate obligation of the City
within the provisions and limitations of the constitution of
the State of Indiana.
Section 3. For the purpose of procuring funds to be applied
on the cost of said additions, extensions and improvements, over
and above the amount available for the payment of the same out
of funds now on hand available for use on the costs of said addi-
tion, the City of Richmond shall issue its revenue bonds under
and pursuant to the provisions of this ordianance, which bonds
shall be payable out of the special fund heretofore created by
Ordinance No. 1475-1953, adopted May 18, 1953, and designated
as the "Electric Utility Bond Fund", and said bonds shall be desig-
nated as "Electric Utility Revenue Bonds of 1971." Any other
provision of this ordinance to the contrary notwithstanding, the
revenue bonds herein authorized to be issued shall be junior and
subordinate in all respects to the outstanding Electric Utility
Revenue Bonds of 1953, issued under date of September 1, 1953,
pursuant to the provisions of said ordinance No. 1475-1953,
now outstanding in the amount of Two Million Two Hundred One
Thousand Dollars ($2,201,000).
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Said bonds shall be in the principal amount of Eight
Million Four Hundred Forty Thousand Dollars ($8,440,000), in
the denomination of Five Thousand Dollars ($5,000) each, num-
bered consecutively from 1 to 1688 both inclusive, 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 seven and one-half
per cent (7-1/2%) per annum (the exact rate or rates to be deter-
mined by bidding), which interest shall be payable semi-annually
on January 1 and July l of each year, beginning on January 1,
1972, and shall be evidenced by coupons attached to said bonds.
Both bonds and interest coupons shall be payable in lawful money
of the United States of America at The First National Bank of
Richmond, in the City of Richmond, Indiana, or at The Second
National Bank of Richmond, in the City of Richmond, Indiana, or
at the option of the holder, at The Indiana National Bank, in the
City of Indianapolis, Indiana, or the Continental Illinois National
Bank and Trust Company of Chicago, in the City of Chicago, Illinois,
and said bonds shall mature serially on January 1 in the years
and amounts as follows:
$ 45,000 January 1, 1973
150,000 January 1, 1974
160,000 January 1, 1975
160,000 January 1, 1976
170,000 January 1, 1977
185,000 January 1, 1978
295,000 January 1, 1979
225,000 January 1, 1980
280,000 January 1, 1981
355,000 January 1, 1982
$315,000 January 1, 1983
375,000 January 1, 1984
560,000 January 1, 1985
600,000 January 1, 1986
640,000 January 1, 1987
685,000 January 11 1988
735,000 January 1, 1989
785,000 January 11 1990
840,000 January 1, 1991
880,000 January 1, 1992
The bonds maturing on January 1, 1981, and thereafter, shall
be redeemable in whole or in part at the option of the City, on
July 1, 1980, or any interest payment date thereafter, in inverse
order of maturity and by lot within a maturity, at the face value
thereof, plus the following premiums:
5% if redeemed on July 1, 1980, or thereafter on or before
January 1, 1984;
3% if redeemed on July 1, 1984, or thereafter on or before
January 1, 1988;
1% if redeemed on July 1, 1988, or thereafter prior to
maturity;
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plus in each case accrued interest to the date fixed for redemp-
tion. 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 newspaper of general circulation published in
the City of Indianapolis, Indiana, by one publication in The Bond
Buyer, or if such financial journal should cease publication, then
in another financial journal published in the City and State of
New York, and by one publication in a newspaper of general circu-
lation 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 notice, 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, and thereafter when presented for payment. Coin-
cidentally with the payment of the redemption price, the bonds so
called for redemption shall be surrendered for cancellation, to-
gether with all unmatured interest coupons appurtenant thereto.
Section 4. Said bonds shall be signed in the name of the
City of Richmond by the Mayor, countersigned by the City Con-
troller, 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 Controller and said officials,
by the signing of said bonds, shall adopt as and for their own
proper signatures the 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
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sufficient for all purposes the same as if such officer had re-
mained in office until such delivery.
Said bonds shall be transferable by delivery, unless regis-
tered. 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 attorney duly author-
ized and similarly noted on the bond, but said bond may be dis-
charged from registration by being in like manner retransferred
to bearer, after which it.shall be transferable by delivery but
may be again registered as before. The registration of any bond
shall not affect the negotiability of the interest coupons attached
thereto, but such coupons shall continue to pass by delivery only
and shall always remain payable to bearer.
Section 5. The form and tenor of said bonds, the interest
coupons to be attached thereto, and the form of registry endorse-
ment thereon shall be substantially as follows, all blanks to be
filled in properly prior to delivery thereof:
UNITED STATES OF AMERICA
State of Indiana County of Wayne
No. $5,000
CITY OF RICHMOND
ELECTRIC UTILITY REVENUE BOND OF 1971
The City of Richmond in Wayne County, State of Indiana, 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 hereinafter referred to, the princi-
pal amount of
FIVE THOUSAND DOLLARS
on the first day of January, 19 (unless this bond be subject to
and 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, payable semi-annua ly on the first -days of
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January and July in each year, beginning on January 1, 1972, upon
presentation and surrender of the annexed interest coupons as they
severally become due.
Both principal and interest of this bond are payable in lawful
money of the United States of America, at The First National Bank
of Richmond, in the City of Richmond, Indiana, or at The Second
National Bank of Richmond, in the City of Richmond, Indiana, or,
at the option of the holder, at The Indiana National Bank, in the
City of Indianapolis, Indiana, or the Continental Illinois National
Bank and Trust Company of Chicago, in the City of Chicago, Illinois.
This bond is one of an authorized issued of one thousand six
hundred eighty-eight (1,688) bonds of the City of Richmond, of like
denomination, tenor and effect, except as to interest rates and
dates of maturity, aggregating Eight Million Four Hundred Forty
Thousand Dollars ($8,440,000), numbered consecutively from 1 to
1688 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 passed by the Common Council of said City on the
day of 1971, entitled "An Ordinance
authorizing the issuance of additional revenue bonds to provide funds
for application on the cost of construction and installation of addi-
tions, extensions 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, and
the interest on and principal of any additional bonds which may
hereafter be issued on a parity therewith, are and will be equally
and ratably secured.by and constitute a charge upon all of the net
revenues of said electric utility system as the same now exists or
may hereafter be improved or extended, 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 pur-
pose; subject, however, to the prior payment, in accordance with
the terms thereof, of the principal of and interest on the out-
standing Electric Utility Revenue Bonds of 1953, in the amount of
Two Million Two Hundred One Thousand Dollars ($2,201,000), issued
under date of September 1, 1953, bearing interest at the rate of
three per cent (3%) per annum and three and one -quarter per cent
(3-1/4%) per annum, depending upon the maturities, maturing seri-
ally over a period ending January 1, 1984, authorized by Ordinance
No. 1475-1953, adopted on May 18, 1953. The City covenants that
it will, .on or before the first day of each calendar month, begin-
ning as of the date of issuance of this bond and the bonds of the
issue of which it is a part, set aside in a special fund designated
as "Electric Utility Bond Fund", created by Ordinance No. 1475-1953,
one -twelfth (1/12) of the amount required to pay the interest on
and principal of the bonds of said prior issue hereinbefore referred
to and to pay the interest on and principal of all outstanding
bonds of this issue which are payable within the period of the then
next succeeding twelve (12) months, and that the funds so set aside,
together with certain additional amounts to be set aside in said
Fund as a debt reserve, to the extent necessary, 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 which 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.
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The City covenants that its electric utility system is free
and clear of all liens and encumbrances; that, except as herein
stated, 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 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 services 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 all bonds
which by their terms are payable from said special fund. 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 provided in said
ordinance, but unless registered shall pass by delivery. The inter-
est coupons attached hereto shall at all times pass by delivery.
The bonds of this issue maturing on January 1, 1981, and there-
after, are redeemable in whole or in part at the option of the City,
on July 1, 1980, or any interest payment date thereafter, in inverse
order of maturity and by lot within a maturity, at face value, to-
gether with the following premiums:
5% if redeemed on July 1, 1980, or thereafter on or before
January 1, 1984;
3% if redeemed on July 1, 1984, or thereafter on or before
January 1, 1988;
1% if redeemed on July 1, 1988, or thereafter prior to
maturity;
plus in each case accrued interest to the date fixed for redemp-
tion; provided 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 newspaper of general circulation published
in the City of Indianapolis, Indiana, by one publication in The
Bond Buyer, or if•such financial journal should cease publication,
then in another financial journal published in the City and State
of New York, and a newspaper of general circulation 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 redemption 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, and thereafter when
presented for payment. Upon the payment of the redemption price,
the bonds redeemed prior to maturity shall be surrendered for can-
cellation, together with the unmatured interest 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 Richmond,
Richmond, Indiana, or The Second National Bank of Richmond,
Richmond, Indiana, an amount sufficient to pay such bond or inter-
est 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 either of said banks for payment and neither the City
nor its electric utility shall have any further obligation or lia-
bility in respect thereto.
It is hereby certified and recited that all acts, conditions
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.
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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 facsimile signatures of said Mayor and City Controller,
as of the first day of , 1971.
CITY OF RICHMOND
By:
Mayor
COUNTERSIGNED:
By:
City Controller
Attest:
City Clerk
(Interest Coupon)
Coupon No.
On 1, 19 (unless the bond herein
mentioned shall be subject to and shall have been called for
previous redemption), the City of Richmond, Indiana, will pay
to bearer at The First National Bank of Richmond, in the City
of Richmond, Indiana, or at The Second National Bank of Richmond,
in the City of Richmond, Indiana, or, at the option of the holder,
at The Indiana National Bank, in the City of Indianapolis, Indiana,
or the Continental Illinois National Bank and Trust Company of
Chicago, in the City of Chicago, Illinois, 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 1971, dated
1, 1971, No..
CITY OF RICHMOND
By. (Facsimile)
Mayor
COUNTERSIGNED
By;. (Facsimile)
City Controller
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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.
In Whose Name
Date of Registry Registered City Controller
Section 6. The City Controller is hereby authorized and dir-
ected to have said bonds and coupons prepared, and the Mayor, City
Controller 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
obligations 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 installation 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 which may
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be necessary to carry out the provisions of this ordinance.
Section 7. Prior to the sale of said bonds, the Controller
shall cause to be published a notice of such sale once each week
for two weeks in the Richmond Palladium -Item, the only newspaper
published in the City, also one time in The Indianapolis Commer-
cial and such other publication as he shall deem advisable, the
last publication to be at least seven (7) 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 maturities 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 informa-
tion 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 seven and one-half per cent (7-,1/2%) per annum. Such
interest rate or rates shall be in multiples of one -eighth (1/8)
or one -tenth (1/10) of one per cent (1%), and not more than six
(6) different interest rates shall be named by each bidder. A rate
may be repeated without being considered a different rate. 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
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named in the bid, shall be considered. Each bid shall be accom-
panied by a certified or cashier's check payable to the City of
Richmond in the amount of Eighty-five Thousand Dollars ($85,000),
as a guaranty of the good faith of the bidder. In the event the
successful bidder shall fail or refuse to accept delivery of said
bonds in accordance with his bid and the notice of sale, then
said check and the proceeds 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 satisfactory 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 (3.0) days without readvertisement, but during such contin-
uation 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 notice.
Prior to the delivery of the bonds, the Controller shall
obtain legal opinion as to the validity of the bonds from Ice
Miller Donadio & Ryan, acting as bond counsel for the City,
and shall furnish such opinion to the purchaser 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.
Section 8. All accrued interest and premium, if any, re-
ceived at the time of the delivery of the bonds shall be placed
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in the Electric Utility Bond Fund hereinafter referred to. 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 or invested in
accordance with the laws of the State of Indiana relating to the
depositing, holding and securing or investing of public funds;
provided, however, that such investments shall be made only in
such obligations as the income therefrom shall accrue to such
Construction Account. The funds in said special account or ac-
counts shall be expended only for 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.
Subject to the approval of the Common Council of the City
of Richmond, Indiana, serving as a committee in charge of the
operation of Richmond Power & Light, the municipal electric utility,
the Controller shall be authorized to invest in direct obligations
of the United States Government such portion of the funds in said
Construction Account as shall not be required for immediate use,
provided that no such investment shall be made at a cost in excess
of the par value of the securities purchased, and that none of the
funds shall be invested in any securities the maturity date of
which is later than the time when such funds are required to be
available for the purposes thereof, or if the time when such funds
will be required for use cannot be determined, such investment
shall be made only in securities having a maturity date of one
(1) year or less from the date of purchase. Such investment shall
be made in strict accordance with the provisions of Chapter 9 of
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the Acts of the Indiana General Assembly for the year 1945, and
any acts amendatory thereof or supplemental thereto, and any
interest or other accretions derived from any such investments
shall become a part of the funds invested.
Section 9. The City shall keep proper records and books of
account separate from all of its other records and accounts, in
which complete and correct entries shall be made showing all
revenues received on account of the operation of said electric
utility and all disbursements 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 oper-
ating, 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
after the close of each fiscal year, and shall be certified by
the Controller or shall be prepared by an independent certified
public accountant employed for that purpose. Copies of all such
statements and report shall be kept on file in the office of the
Controller. 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 or
invested as provided by the laws of the State of Indiana relating
to the depositing, securing and holding or investing of public
funds, including particularly Chapter 9 of the Acts of the
Indiana General Assembly for the year 1945; provided, however,
that any such investments shall only be made in such obligations
as the income therefrom shall accrue to the funds of the electric
utility so invested.
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Section 10. The interest on and principal of the bonds
issued pursuant to the provisions of this ordinance shall con-
stitute a charge on all the net revenues of the City's electric
utility, and such net revenues are hereby irrevocably pledged to
the payment of the interest on and principal of such bonds, to
the extent necessary for that purpose; subject, however, to the
prior payment, in accordance with the terms thereof, of the inter-
est on and principal of the outstanding Electric Utility Revenue
Bonds of 1953, issued under date of September 1, 1953, pursuant
to Ordinance No. 1475-1953, adopted May 18, 1953, said outstanding
bonds being a first charge against said net revenues to the extent
required to provide for the payment of the interest and principal
thereof. 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, ex-
cluding depreciation and interest on bonds. The special fund
designated as the "Electric Utility Bond Fund", created by Ordi-
nance No. 1475-1953 for the payment of the interest on and the
principal of the revenue bonds issued pursuant to said ordinance,
is hereby designated as the special fund from which the bonds
issued pursuant to this ordinance shall be paid. There shall
be deposited in said fund on or before the first day of each cal-
endar 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 all the then
outstanding bonds payable 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 Electric Utility Bond Fund contains an amount suf-
ficient to pay all outstanding bonds, together with the interest
thereon to the dates of maturity thereof. In addition to the
deposit of said monthly payments, there shall also be deposited
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monthly in said Electric Utility Bond Fund, beginning as of the
first day of the month following delivery of the bonds herein
authorized, an amount not less than Forty Thousand Dollars ($40,000)
until the sum of such additional deposits and any income from the
investment of funds in said Electric Utility Bond Fund, as herein-
after provided, shall be equal to the average annual principal and
interest requirements of all outstanding bonds payable from the
Electric Utility Bond Fund. The sum of such additional monthly
payments shall be maintained as a debt reserve for protection
against default in said Electric Utility Bond Fund. In the event
of application of such debt reserve to the payment of interest on
or principal of bonds, then the deficiency resulting from such
application shall be made up from the first available net revenues
remaining after making the monthly deposits hereinbefore provided.
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 pur-
pose whatsoever; provided, however, that any moneys in said Fund
in excess of the sum of the debt reserve hereinabove referred to
and the amount required to pay the interest on and principal of
the outstanding 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 ordi-
nance 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 redemption price; and provided
further that funds in said Electric Utility Bond 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 Electric Utility Bond
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Fund. 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 Elec-
tric Utility Bond Fund.
Section 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 Depreciation Fund heretofore established pursuant
to Ordinance No. 1475-1953, adopted May 18, 1953, is hereby desig-
nated as the Depreciation Fund referred to in this ordinance, and
commencing with the first day of the month after the bonds herein
authorized are sold, there shall be deposited monthly in said
Depreciation Fund not less than Fifty-seven Thousand Dollars
($57,000) from the net revenues remaining after making the re-
quired deposits in the Electric Utility Bond Fund. Commencing
with the first day of the month next following the completion
and placing in operation of the additions, extensions and improve-
ments being financed by the issuance of the bonds pursuant to this
ordinance, 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 Ninety-one Thousand Dollars ($91,000). Said Depre-
ciation Fund shall be expended 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. All or any portion of the
moneys in said Depreciation Fund shall be transferred to the
Electric Utility Bond Fund if necessary to prevent a default in
the payment of principal of or interest on bonds payable from
said Electric Utility Bond Fund. Said fund shall not be used
for any other purpose whatsoever. Any accumulations in the De-
preciation Fund not required for immediate use may be invested
in obligations of the United States Government to the extent per-
mitted by law, and any income from such investment shall accrue
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to the Depreciation Fund. The monthly payments into the Depre-
ciation Fund may be omitted only and to the extent necessary to
provide for the reasonable cost of operation and maintenance of
the 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.
Section 12. The City shall establish, maintain and collect
reasonable and just rates and charges for the facilities and ser-
vices to be rendered 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 hereinbefore referred to, 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 the facilities 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 necessary to meet the require-
ments of the Electric Utility Bond Fund, and the revenues so re-
ceived 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.
Section 13. The City reserves the right to authorize and
issue additional bonds payable out of the revenues of its electric
utility ranking on a parity with the bonds authorized by this ordi-
nance, for the purpose of financing the cost of future additions,
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extensions and improvements to its electric utility, subject to
the following conditions:
(a) All required payments into the Electric Utility Bond
Fund shall have been made in accordance with the provisions of
this ordinance, and the interest on and principal of the Electric
Utility Revenue Bonds of 1953, and the bonds of the issue authorized
by this ordinance shall have been paid in accordance with the terms
thereof.
(b) All required deposits into the Depreciation Fund
shall have been made to date.
(c) The net revenues of the electric utility in the
fiscal year immediately preceding the issuance of any such bonds
ranking on a parity with the bonds authorized by this ordinance
shall be not less than one hundred twenty-five per cent (125%)
of the maximum annual interest and principal requirements of
the then outstanding bonds and the additional parity bonds pro-
posed to be issued; or, prior to the issuance of said additional
parity bonds, the rates and charges shall be increased sufficiently
so that said increased rates and charges applied to the previous
fiscal year's operations would have produced net revenues for
said year equal to not less than one hundred twenty-five per cent
(125%) of the maximum annual interest and principal requirements
of the then outstanding bonds and the additional parity bonds
proposed to be issued. 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, excluding depreciation and interest on bonds.
For purposes of this subsection, the records of the electric
utility shall be analyzed and all showings shall be prepared
by a certified public accountant employed by the city for that
purpose, who shall certify that he has no pecuniary interest in
the improvement project or the financing thereof other than to
make such analysis and prepare such showings.
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(d) To the extent required by law, any increase in
rates and charges shall have been approved by the Public Service
Commission of Indiana, or any successor agency or body, prior to
the issuance of the additional parity bonds.
(e) The interest on the additional parity bonds shall
be payable semi-annually on the first days of January and July
in the years in which interest is payable, and the principal of
said bonds shall be payable annually on the first day of January
in the years in which principal is payable.
Section 14. 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, if any, of the cost of the additions,
extensions and improvements to said electric utility referred to
in Section 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 on
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 bonds herein authorized are
outstanding, 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 outstanding, the City shall maintain insurance on the insur-
able parts of the system, of a kind and in an amount such as is
usually carried by private corporations engaged in a similar type
of business. All insurance shall be placed with responsible in-
surance companies qualified to do business under the laws of the
State of Indiana, and insurance proceeds shall be used either in
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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
outstanding, the City shall not mortgage, pledge or otherwise en-
cumber 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 machinery, equipment or other property as
may be replaced, or shall no longer be necessary for use in con-
nection with said utility.
(e) Except as otherwise specifically provided in Sec-
tion 13 of this ordinance, so long as any of the bonds herein
authorized are outstanding, no additional bonds or other obliga-
tions 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 ad-
ditional 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. 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 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 ad-
versely affecting the rights of the bondholders so long as any
of said bonds, or the interest thereon, remain outstanding or
unpaid.
(g) The provisions of this ordinance shall be construed
to create a trust in the proceeds derived from the sale of the
bonds herein authorized, for the uses and purposes herein set
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forth, and so long as any of the bonds are outstanding, the pro-
visions 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.
Section 15. All ordinances and parts of ordinances in
conflict herewith are hereby repealed.
Section 16. This ordinance shall be in full force and
effect from and after its passage and signing by the Mayor.
Passed and adopted by the Common Council of the City of
Richmond on the day of 1971.
?esi9din?0fricer
Attest:
City Clerk
Presented by me to the Mayor of the City of Richmond on the
day of '��nnA;u4JA�LA/" 1971, at the hour of
o'clock P.M. (EST).
City Clerk
This ordinance approved and signed by me on the RZ, day
Of , 1971, at the hour of jj:n o'clock
P.M. (EST).
s
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