HomeMy Public PortalAboutAB 03-90 Attachment BORDINANCE NO. 779
AN ORDINANCE OF THE CITY OF McCALL, IDAHO, AUTHORIZING AND PROVIDING FOR THE ISSUANCE OF WATER REVENUE REFUNDING BONDS, SERIES 2003, IN THE PRINCIPAL AMOUNT OF $5,650,000,
FOR THE PURPOSE OF CURRENTLY REFUNDING THE CITY’S OUTSTANDING WATER REVENUE BONDS, SERIES 1994, AND ITS PARITY LIEN WATER REVENUE BONDS, SERIES 1996; DESCRIBING THE BONDS; SPECIFYING
THE DATE, FORM, MATURITIES, REGISTRATION, AND AUTHENTICATION OF THE BONDS; FIXING THE RATES OF INTEREST ON THE BONDS; PROVIDING FOR THE APPLICATION OF BOND PROCEEDS; ESTABLISHING FUNDS
AND ACCOUNTS; PROVIDING FOR THE COLLECTION AND DISPOSITION OF REVENUES; PROVIDING COVENANTS RELATING TO THE BONDS AND TO THE TAX-EXEMPT STATUS OF THE INTEREST ON THE BONDS; PROVIDING
FOR THE SALE AND DELIVERY OF THE BONDS; PROVIDING FOR RELATED MATTERS; AND PROVIDING AN EFFECTIVE DATE
WHEREAS, the City of McCall, Valley County, Idaho (the "City"), is a municipal
corporation duly organized and operating under the laws of the State of Idaho; and
WHEREAS, the City now has outstanding a portion of its Water Revenue Bonds, Series 1994 (the "Series
1994 Bonds"), issued, pursuant to Ordinance No. 669, adopted on August 25, 1994, in the original principal amount of $5,000,000, the principal amount of $3,855,000 of which remains outstanding,
and a portion of its Parity Lien Water Revenue Bonds, Series 1996 (the "Series 1996 Bonds"), issued, pursuant to Ordinance No. 700, adopted on July 11, 1996, in the original principal
amount of $4,990,000, the principal amount of $4,050,000 of which remains outstanding; and
WHEREAS, the City is authorized by the Constitution and laws of Idaho to issue refunding
bonds to refund its outstanding bonds whenever the Mayor and Council determine that a savings or other beneficial public objective can be achieved thereby, without an approving vote
of the electors of the City, and to sell such refunding bonds at private sale; and
WHEREAS, Ordinance No. 669, pursuant to which the Series 1994 Bonds were issued, sold, and delivered,
reserves the right of the City to redeem the Series 1994 Bonds maturing on and after September 1, 2007, on any interest payment date on or after September 1, 2006, at a redemption price
of par plus accrued interest to the redemption date, and also reserves the right of the City to defease the Series 1994 Bonds prior to maturity in the manner provided in Ordinance No.
669; and
WHEREAS, Ordinance No. 700, pursuant to which the Series 1996 Bonds were issued, sold, and delivered,
reserves the right of the City to redeem the Series 1996 Bonds maturing on and after March 1, 2008, on any interest payment date on or after March 1, 2007, at a redemption price of par
plus accrued interest to the redemption date, and also reserves the right of the City to defease the Series 1996 Bonds prior to maturity in the manner provided in Ordinance No. 700;
and
WHEREAS, the Mayor and Council have determined that it is in the best interests of the City and its water ratepayers to advance refund its Series 1994 Bonds and its Series 1996
Bonds in order to achieve a beneficial public objective, and the Mayor and Council desire to issue the refunding bonds of the City for such purpose; and
WHEREAS, the City has received
an offer from Seattle-Northwest Securities Corporation to purchase the refunding bonds of the City, and the Mayor and Council have determined to sell the water revenue refunding bonds
of the City to Seattle-Northwest Securities Corporation in accordance with such offer.
NOW, THEREFORE, BE IT ORDAINED BY THE MAYOR AND COUNCIL OF THE CITY OF MCCALL, Valley County,
Idaho, as follows:
Section : DEFINITIONS
As used in this Ordinance, the following words shall have the following meanings:
Act means, collectively, Sections 50-1027 through 50-1042,
inclusive, Section 57-504, and Title 57, Chapter 9, Idaho Code.
Additional Bonds means any bonds issued pursuant to Section 16 of this Ordinance.
Annual Debt Service means the amount
required in a given fiscal year of the City for the payment of the principal of, premium, if any, and interest on the Bonds and any Additional Bonds, except interest to be paid from
the proceeds of the Additional Bonds.
Average Annual Debt Service means the average annual amount required over the term of the Bonds from the time of calculation for the payment of
the principal of, premium, if any, and interest on the Bonds and any Additional Bonds (except interest to be paid from the proceeds of the Additional Bonds).
Beneficial Owner(s) means
the owners of Bonds whose ownership is recorded under the Book-Entry-Only System maintained by the Depository.
Bonds means the principal amount of $5,545,000 "City of McCall Water Revenue Refunding Bonds, Series 2003," herein authorized to be issued, sold, and delivered.
Bond Fund means the
"City of McCall Water Revenue Bond Fund" described in Section 13 of this Ordinance.
Bond Purchase Agreement means the agreement between the City and the Underwriter for the purchase
of the Bonds.
Bond Register means the registration books on which are maintained the names and addresses of the owners or nominees of the owners of the Bonds.
Bond Registrar means
the Trustee, appointed and designated in Section 6 of this Ordinance.
Book-Entry-Only System means the system of recordation of ownership of the Bonds on the books of the Depository
pursuant to Section 3 of this Ordinance.
Business Day means a day, other than a Saturday or Sunday, on which banks located in the State of Idaho and in the state where the Trustee’s
Principal Corporate Trust Office is located are open for the purpose of conducting commercial banking business.
Cede means Cede & Co., the nominee of the Depository, and any successor
nominee of Depository with respect to the Bonds.
Certificated Bond(s) means a Bond or Bonds evidenced by a printed certificate in the event that the Book-Entry-Only System is discontinued.
City
means the City of McCall, Valley County, Idaho.
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.
Code means the Internal Revenue Code of 1986, as amended.
Cost of Issuance Fund means the fund created by
Section 11 (A) of this Ordinance for the payment of the costs of issuance of the Bonds.
Council means the City Council of the City.
Depository means The Depository Trust Company,
New York, New York, or its successors and assigns.
Escrow Fund means the Escrow Fund established by the Escrow Agreement.
Escrow Agent means U.S. Bank National Association as escrow agent under the Escrow Agreement.
Escrow Agreement
means the Escrow Deposit Agreement between the City and U.S. Bank National Association, as authorized in Section 11(C) of this Ordinance.
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.
Event of Default means one of the events enumerated in Section 23A of this Ordinance.
Insurer means ____________________________________, or any successor
thereto or assignee thereof.
Interest Payment Date(s) means the payment date(s) set forth in Section 3 of this Ordinance.
Investment Securities means investments in which a city
is authorized to invest its surplus funds under Section 50-1013, Idaho Code.
Maximum Annual Debt Service means an amount equal to the greatest Annual Debt Service with respect to the
Bonds and any Additional Bonds for the current or any future fiscal year of the City.
Mayor means the Mayor of the City, or his/her successor in functions, if any.
Net Revenues means
Revenue of the System after the deduction of Operation and Maintenance Expenses.
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 Bonds; 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 City directly relating and reasonably allocable to the administration of the System;
(2) Fidelity
bonds and property and liability insurance premiums pertaining to the System, or a reason ably 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 connec tion 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.
Ordinance or Bond Ordinance means this Ordinance No. 779, adopted on June 26, 2003.
Outstanding, when used with reference to the Bonds, as of any
particular date, means Bonds, the principal of and interest on which have not been paid pursuant to this Ordinance or which have not been replaced pursuant to Section 7 of this Ordinance.
Owner
means a Registered Owner or a Beneficial Owner of any Bond.
Participants means those broker-dealers, banks, and other financial institutions for which the Depository holds Bonds as
securities depository.
Payment Date means any scheduled interest payment date or principal payment date on the Bonds.
Policy means the municipal bond insurance policy issued by the
Insurer insuring the payment of the Bonds.
Principal Corporate Trust Office means, with respect to the Trustee, the office of the Trustee at Salt Lake City, Utah; provided, however, that with respect to payments on the Bonds
and any exchange, transfer, or surrender of the Bonds, Principal Corporate Trust Office shall mean the office of the Trustee at U.S. Bank National Association, 180 East 5th Street, St.
Paul, MN 55101 or such other or additional offices as may be specified by the Trustee.
Record Date means, in the case of an interest payment date, the fifteenth day next preceding such
interest payment date.
Refunded Bonds means, collectively, the outstanding Series 1994 Bonds maturing on and after September 1, 2003, and the outstanding Series 1996 Bonds maturing
on and after March 1, 2004.
Registered Owner(s) means the person or persons in whose name or names the Bonds shall be registered in the Bond Register maintained by the Trustee.
Representation
Letter means the representation letter from the City to the Depository, as authorized in Section 3 of this Ordinance.
Reserve Fund means the City of McCall Water Revenue Bonds Debt
Service Reserve Fund created by Ordinance No. 669 of the City, adopted on August 25, 1994, and referred to in Section 14 of this Ordinance.
Reserve Requirement means the lesser of
(i) the Maximum Annual Debt Service on the Bonds or (ii) 125% of the Average Annual Debt Service on the Bonds, not to exceed 10% of the proceeds of the Bonds as provided in Section 148(d)
of the Internal Revenue Code of 1986, as amended.
Revenue Fund, also known as the Water Fund, means the "City of McCall Water Revenue Fund," created by Ordinance No. 669, adopted on
August 25, 1994, and referred to in Sections 11 and 12 of this Ordinance.
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 other wise derived in connection with, the System or all or any
part of any property pertaining to the System.
Series 1994 Bonds means the City of McCall Water Revenue Bonds, Series 1994, dated September 1, 1994, issued pursuant to Ordinance No. 669, adopted on August 25, 1994.
Series 1996
Bonds means the City of McCall Parity Lien Water Revenue Bonds, Series 1996, dated August 1, 1996, issued pursuant to Ordinance No. 700, adopted on July 11, 1996.
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, utilities, or other income producing water facilities from the operation of or in connection with which the revenues
for the payment of the Bonds to be issued here under will be derived, and the lands pertaining thereto.
Treasurer means the Treasurer of the City, or his/her successor in functions,
if any.
Trustee means the Corporate Trust Department of U.S. Bank National Association as trustee, bond registrar, transfer agent, and authenticating and paying agent for the Bonds,
appointed and designated in Section 6 of this Ordinance.
Underwriter means Seattle-Northwest Securities Corporation, Boise, Idaho.
Section : FINDINGS
The Mayor and Council hereby
find, determine, and declare:
A. That the City’s Refunded Bonds can be refunded to the benefit of the City and its water ratepayers; that it is desirable and necessary for the benefit
of the City and its water ratepayers to refund the Refunded Bonds of the City for the purpose of achieving certain beneficial public objectives; and that the net proceeds of the Bonds,
together with other lawfully available moneys of the City, shall be used to advance refund the Refunded Bonds.
B. That it is the intent of the Mayor and Council to issue the Bonds for
the purpose of providing funds in an amount sufficient, together with other lawfully available funds of the City to advance refund and defease the Refunded Bonds.
Section : THE BONDS
A. Authorization. Fully registered water revenue refunding bonds of the City, designated "City of McCall Water Revenue Refunding Bonds, Series 2003" (the "Bonds"),
in the aggregate principal amount of $5,650,000, are hereby authorized to be issued, sold, and delivered pursuant to the Act.
B. Description of the Bonds. The Bonds shall be issued
in accordance with the Book-Entry-Only System described in this Section 3, shall be dated July 15, 2003, shall be issued in fully registered form in denominations of $5,000 each or integral
multiples thereof (provided that no Bond shall represent more than one maturity), shall mature in the years 2003 through 2018, and shall bear interest from their date, or from the most
recent date to which interest has been paid or duly provided, at the rates set forth below, payable commencing September 1, 2003, and semiannually thereafter on each March 1 and September
1 until their respective dates of maturity or prior redemption, and shall mature on September 1 in the following years and principal amounts:
Maturity Date Principal Amount
Interest Rate
September 1, 2003
September 1, 2004
September 1, 2005
September 1, 2006
September 1, 2007
September 1, 2008
September 1, 2009
September 1, 2010
September 1, 2011
September
1, 2012
September 1, 2013
September 1, 2014
September 1, 2015
September 1, 2016
September 1, 2017
September 1, 2018
Interest shall be computed on the basis of a twelve-month, 360-day
year.
The Bonds shall be numbered separately in the manner and with any additional designation as the Trustee shall deem necessary for the purposes of identification. After execution,
as hereinafter provided, the Bonds shall be authenticated by the Trustee.
C. The Book-Entry-Only System. The Bonds shall be issued in book-entry-only form, with no Bonds being made
available to Beneficial Owners thereof unless the Book-Entry-Only System is discontinued. So long as the Bonds are issued in book-entry-only form, the City and the Trustee shall recognize
the Depository or its nominee as the Registered Owner of the Bonds for all purposes. Beneficial ownership interests in the Bonds will be available to Beneficial Owners in book-entry-only
form, in accordance with the book-entry-only practices of the Depository.
The Bonds shall be issued in the form of one Bond representing each maturity of the Bonds, in conformance with
the book-entry-only practices of the Depository. Each Bond shall be substantially in the form set forth in Exhibit "A" attached hereto and incorporated herein by reference. Each Bond
shall be executed by the manual signatures of the Mayor and Treasurer and attested by the manual signature of the Clerk, shall have the official seal of the City impressed thereon, and
shall be manually authenticated by the Trustee. Each Bond shall be registered in the name of Cede & Co. as nominee of the Depository and shall be lodged with the Depository until maturity
of the Bonds. The Bond Registrar shall remit each payment of interest, or principal and interest, and redemption premium, if applicable, directly to the Depository for distribution
to the Beneficial Owners by recorded entry on the books of the Depository in accordance with the book-entry-only practices of the Depository, and the City and the Bond Registrar shall
have no liability therefor. Such payment shall be valid and effective fully to satisfy and discharge the City's obligation to each Beneficial Owner with respect to the payment thereof
to the extent of the sums so paid.
With respect to the Bonds registered in the name of Cede & Co. as nominee for the Depository, neither the City nor the Bond Registrar shall have any
responsibility to any Beneficial Owner with respect to:
(i) the sending of transaction statements, or maintenance, supervision, or review of records of the Depository;
(ii) the accuracy
of the records of the Depository or its nominee with respect to any ownership interest in the Bonds;
(iii) the payment to any Beneficial Owner, or any other person other than the Depository,
of any amount with respect to principal of, interest on, or redemption premium, if any, on the Bonds;
(iv) any consent given or other action taken by the Depository or its nominee as owner of the Bonds.
In the event that either the City or the Depository shall determine to discontinue
the Book-Entry-Only System as to the Bonds, and the City elects not to designate a substitute depository, then the City will cause its Certificated Bonds to be issued to the Beneficial
Owners in accordance with Section 5 of this Ordinance.
The Representation Letter dated August 1, 1996, a copy of which is annexed hereto as Exhibit "B," is hereby authorized for use
in connection with the Bonds.
Section : PLACE AND MANNER OF PAYMENT
Both principal of and interest on the Bonds shall be payable in lawful money of the United States of America to
the Registered Owner thereof whose name and address appear on the Bond Register maintained by the Bond Registrar.
Payment of each installment of interest on the Bonds shall be made
on its semiannual due date to the Registered Owner whose name appears on the Bond Register on the 15th day next preceding the interest payment date, at the address appearing on the Bond
Register, and shall be paid by check or draft of the Bond Registrar mailed to such Registered Owner on the due date at such address, or at such other address as may be furnished in writing
by such Registered Owner to the Bond Registrar.
Principal of the Bonds shall be payable to the Registered Owner upon presentation and surrender of the Bonds on the date of maturity
or prior redemption, at the office of the Bond Registrar.
Section : EXECUTION OF CERTIFICATED BONDS
In the event that the Book-Entry-Only System is discontinued with respect to
the Bonds, the City shall cause Certificated Bonds to be prepared, executed, authenticated, and delivered. The Certificated Bonds shall be substantially in the form set forth in Exhibit
"C" which is annexed hereto and by reference made a part hereof. The Certificated Bonds shall be numbered separately in the manner and with such additional designation as the Bond Registrar
shall deem necessary for purposes of identification. The Certificated Bonds shall be lithographed or printed with engraved or lithographed borders. The Certificated Bonds shall be
signed by the Mayor, countersigned by the Treasurer, and attested by the City Clerk (any of which signatures may be manual or by facsimile), and the seal of the City shall be impressed
thereon or the facsimile seal of the City shall be imprinted thereon. The Certificated Bonds shall then be delivered to the Bond Registrar for authentication.
In case any of the officers
who shall have signed or countersigned any of the Certificated Bonds shall cease to be such officer or officers of the City before the Certificated Bonds so signed or countersigned shall
have been authenticated or delivered by the Bond Registrar, or issued by the City, such Certificated Bonds 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. Any Certificated Bond may
also be signed and countersigned on behalf of the City by such persons as at the actual date of execution of such Certificated Bonds shall be the proper officers of the City although
at the original date of such Certificated Bond any such person shall not have been such officer of the City.
Only such of the Certificated Bonds as shall bear thereon a certificate
of authentication in the form set forth in Exhibit "C," manually executed by the Bond Registrar, shall be valid or obligatory for any purpose or entitled to the benefits of this Ordinance,
and such certificate of authentication shall be conclusive evidence that the Certificated Bonds so authenticated have been duly executed, authenticated, and delivered hereunder and are
entitled to the benefits of this Ordinance.
Section : THE TRUSTEE
A. Trustee: Acceptance of Duties. The Corporate Trust Department of U.S. Bank National Association is hereby
appointed as Trustee and shall also act as bond registrar, authenticating agent, paying agent, and transfer agent with respect to the Bonds, subject to the terms and conditions set forth
in this Ordinance. The Trustee shall signify its acceptance of the duties and obligations imposed upon it by this Ordinance by executing and delivering to the City a written acceptance
thereof, and upon executing such acceptance the Trustee shall be deemed to have accepted the duties and obligations with respect to all of the Bonds thereafter to be issued, but only,
however, upon the terms and conditions set forth in this Ordinance.
B. Duties and Responsibilities of Trustee.
(1) Prior to the occurrence of an Event of Default of which it
has or is deemed to have notice hereunder, and after the curing or waiver of any Event of Default which may have occurred:
(a) the Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Ordinance, and no implied covenants or obligations shall be read into
this Ordinance against the Trustee; and
(b) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions furnished to the Trustee that conform to the requirements of this Ordinance: but the Trustee
is under a duty to examine such certificates and opinions to determine whether they conform to the requirements of this Ordinance.
(2) In case an Event
of Default of which the Trustee has or is deemed to have notice hereunder has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by
this Ordinance, and use the same degree of care and skill in their exercise, as a prudent person would exercise or use in the conduct of such person’s own affairs.
(3) No provision
of this Ordinance shall be construed to relieve the Trustee from liability for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that:
(a) this
subsection shall not be construed to limit the effect of subsection (A) of this Section;
(b) the Trustee is not liable for any error of judgment made in good faith, unless
it is proven that the Trustee was negligent in ascertaining the pertinent facts;
(c) the Trustee is not liable with respect to any action it takes or omits to
be taken by it in good faith in accordance with the direction of the Owners under any provision of this Ordinance relating to the time, method and place of conducting
any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee under this Ordinance; and
(d) no provision of
this Ordinance shall require the Trustee to expend or risk its own funds or otherwise incur any liability in the performance of any of its duties hereunder, or in
the exercise of any of its rights or powers, if it has reasonable grounds for believing that the repayment of such funds or adequate indemnity against such risk or liability
is not reasonably assured to it.
(4) The Trustee shall maintain records of all investments and disbursements of proceeds in the funds and accounts established pursuant to this
Ordinance through the date ending six (6) years following the date on which all the Bonds and Additional Bonds have been retired.
(5) Whether or not expressly so provided, every
provision of this Ordinance relating to the conduct or affecting the liability of or affording protection to the Trustee is subject to the provisions of this Section.
C. Certain
Rights of Trustee. Except as otherwise provided in Section B above:
(1) the Trustee may rely and is protected in acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction, consent, order, approval, bond, debenture or other paper or document believed by it to be genuine and to have been
signed or presented by the proper party or parties;
(2) any request, direction, order or demand of the City under this Ordinance shall be sufficiently evidenced by a Written Certificate
(unless other evidence thereof is specifically prescribed).
(3) whenever in the administration of this Ordinance the Trustee deems it desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder, the Trustee (unless other evidence thereof is specifically prescribed) may, in the absence of bad faith on its part, rely
upon a Written Certificate of the City.
(4) the Trustee is under no obligation to exercise any of the rights or powers vested in it by this Ordinance at the request or direction
of any of the Registered Owners or Beneficial Owners unless such owners have offered to the Trustee security or indemnity satisfactory to the Trustee as to its terms, coverage, duration,
amount and otherwise with respect to the costs, expenses and liabilities which may be incurred by it in compliance with such request or direction, and the provision of such indemnity
shall be mandatory for any remedy taken upon direction of
the owners of a majority in aggregate principal amount of the Bonds.
D. Trustee Not Responsible for Recitals. The recitals contained in this Ordinance and in the Bonds (other than
the certificate of authentication on the Bonds) are statements of the City, and the Trustee assumes no responsibility for their correctness. The Trustee makes no representations as
to the value, condition, or sufficiency of any assets pledged or assigned as security for the Bonds, the right, title or interest of the City therein, the security provided thereby or
by this Ordinance, the compliance of the Ordinance with the Act, or the tax-exempt status of the Bonds. The Trustee is not accountable for the use or application by the City of any
of the Bonds or the proceeds of the Bonds, or for the use or application of any moneys paid over by the Trustee in accordance with any provision of this Ordinance.
E. Compensation and
Expenses of the Trustee. The City has covenanted and agree, pursuant to this Ordinance:
(1) to pay to the Trustee compensation for all services rendered by it hereunder and under
the other agreements relating to the Bonds to which the Trustee is a party in accordance with terms agreed to from time to time, and, subsequent to default, in accordance with the
Trustee’s then-current fee schedule for default administration (the entirety of which compensation shall not be limited by any provision of law regarding compensation of a trustee
of an express trust);
(2) to reimburse the Trustee upon its request for all reasonable expenses, disbursements and advances incurred or made by the Trustee in accordance with any
provision of this Ordinance, any other agreement relating to the Bonds to which it is a party or in complying with any request by the City or any rating service with respect to the
Bonds, including the reasonable compensation, expenses and disbursements of its agents and counsel, except any such expense, disbursement or advance attributable to the Trustee’s
negligence or bad faith; and
(3) to indemnify, defend and hold the Trustee harmless from and against any loss, liability or expense incurred without negligence or bad faith on its
part, arising out of or in connection with the acceptance or administration of the office of Trustee under this Ordinance, including the costs of defending itself against any claim
or liability in connection with the exercise or performance of any of its powers or duties hereunder or thereunder.
In the event the Trustee incurs expenses or renders services in any proceedings under bankruptcy law relating to the City, the expenses so incurred and compensation for services so rendered
are intended to constitute expenses of administration under bankruptcy law.
The obligations of the City to make the payments described in this Section shall survive discharge of this
Ordinance, the resignation or removal of the Trustee and payment in full of the Bonds.
F. Qualifications of Trustee. There shall at all times be a trustee hereunder which shall be a
corporation or banking association organized and doing business under the laws of the United States of America or of any state, authorized under such laws to exercise corporate trust
powers, which has a combined capital and surplus of at least $20,000,000, or is an affiliate of, or has a contractual relationship with, a corporation or banking association meeting
such capital and surplus requirement which guarantees the obligations and liabilities of the proposed trustee, and which is subject to supervision or examination by federal or state
banking authority. If such corporation or banking association publishes reports of condition at least annually, pursuant to law or the requirements of any supervising or examining authority
above referred to, then for purposes of this Section, the combined capital and surplus of such corporation or banking association shall be deemed to be its combined capital and surplus
as set forth in its most recent report of condition so published. If at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section, it shall resign
promptly in the manner and with the effect specified in this Section.
G. Resignation or Removal of Trustee.
(1) No resignation or removal of the Trustee and no appointment of a successor
Trustee pursuant to this Section shall become effective until the acceptance of appointment by the successor Trustee under Section 6 (H).
(2) The Trustee may resign at any time
by giving written notice to the City. Upon receiving such notice of resignation, the City shall promptly appoint a Successor Trustee by an instrument in writing. If an instrument
of acceptance has not been delivered to the resigning Trustee within 30 days after the giving of such notice of resignation, the resigning Trustee may petition a court of competent
jurisdiction for the appointment of a successor Trustee.
(3) Prior to the occurrence and continuance of an Event of Default hereunder, or after the curing or waiver of any such Event of Default, the Issuer, the Owners of a majority in
aggregate principal amount of the Outstanding Bonds may remove the Trustee and shall appoint a successor Trustee. In the event there shall have occurred and be continuing an Event
of Default hereunder, the Owners of a majority in aggregate principal amount of the Outstanding Bonds may remove the Trustee and shall appoint a successor Trustee.
H. Successor Trustee.
1. Appoi
ntment of Successor Trustee.
(a) In case at any time the Trustee shall resign or shall be removed or shall become incapable of acting, or shall be adjudged a bankrupt or insolvent,
or if a receiver, liquidator or conservator of the Trustee, or of its property shall be appointed, or if any public officer shall take charge or control of the trust or of its property
or affairs, a successor shall be appointed by the City.
(b) If in a proper case no appointment of a successor Trustee shall be made pursuant to the foregoing provisions of this
Section within 30 days after the Trustee shall have given to the City written notice or after a vacancy in the office of the Trustee shall have occurred by reason of its inability
to act, the Trustee shall apply to any court of competent jurisdiction to appoint a successor Trustee. Said court may thereupon, after such notice, if any, as such court may deem
proper, appoint a successor Trustee.
(c) Any Trustee appointed under the provisions of this subsection (A) in succession to the Trustee shall be a bank or trust company or national
banking association or subsidiary thereof doing business or qualified to do business in the State of Idaho, and having capital stock and surplus aggregating at least $20,000,000,
if there be such bank or trust company or national banking association willing and able to accept the office on reasonable customary terms and authorized by law to perform all the
duties imposed upon it by this Ordinance.
2. Transfer of Rights and Property to Successor Trustee. Any successor Trustee appointed under this Ordinance shall execute, acknowledge
and deliver to its predecessor Trustee, and also to the City, an instrument accepting such appointment, and thereupon such successor Trustee, without any further act, shall become fully
vested
with all rights, powers, duties, and obligations of such predecessor Trustee, with like effect as if originally named as Trustee; but the Trustee, ceasing to act shall, nevertheless,
on the written request of the City, or of the successor Trustee, execute, acknowledge and deliver such instrument of conveyance and further assurance and do such other things as may
reasonably be required for more fully and certainly vesting and confirming in such successor Trustee all the right, title and interest of the predecessor Trustee in and to any property
held by it under this Ordinance, and shall pay over, assign, and deliver to the successor Trustee any money or other property subject to the trusts and conditions herein set forth.
Should any deed, conveyance, or instrument in writing from the City be required by such successor Trustee for more fully and certainly vesting in and confirming to such successor Trustee
any such estates, rights, power and duties, any and all such deeds, conveyances and instruments in writing shall, on request, and so far as may be authorized by law, be executed, acknowledged
and delivered by the City.
3. Merger or Consolidation. Any company into which the Trustee may be merged or converted or with which it may be consolidated or any company resulting from
any merger, conversion or consolidation to which it shall be a party or any company to which the Trustee may sell or transfer all or substantially all of its corporate trust business,
provided such company shall be a bank or trust company organized under the laws of any state of the United States or a national banking association and shall be authorized by law to
perform all the duties imposed upon it by this Ordinance, shall be the successor to the Trustee without the execution or filing of any paper or the performance of any further act.
Section
: TRANSFER AND EXCHANGE OF BONDS
A. Transfer of Bonds.
(1) Any Bond may, in accordance with its terms, be transferred, upon the registration books kept by the Trustee pursuant
to Paragraph C of this Section 7, by the Registered Owner, in person or by his duly authorized attorney, upon surrender of such Bond for cancellation, accompanied by delivery of a
written instrument of transfer in a form approved by the Trustee, duly executed. No transfer shall be effective until entered on the registration books kept by the Trustee. The
City and the Trustee may treat and consider the Registered Owner as the absolute owner thereof for the purpose of receiving payment of, or on account of, the principal, if any, or
redemption price thereof and interest due thereon and for all other purposes whatsoever.
(2) Whenever any Bond or Bonds shall be surrendered for transfer, the Trustee shall authenticate and deliver a new fully registered Bond or Bonds of the same series, designation,
maturity, or due date, as applicable, and interest rate and of authorized denominations duly executed by the City, for a like aggregate principal amount or interest amount, as applicable.
The Trustee shall require the payment by the Registered Owner requesting such transfer of any tax or other governmental charge required to be paid with respect to such transfer.
With respect to each Bond, no such transfer shall be required to be made after the Record Date with respect to any interest payment date to and including such interest payment date.
B. Exchange
of Bonds. Bonds may be exchanged at the Principal Corporate Trust Office of the Trustee for a like aggregate principal amount of fully registered Bonds of the same series, designation,
maturity, or due date, as applicable, and interest rate of other authorized denominations or amounts, as applicable. The Trustee shall require the payment by the Registered Owner requesting
such exchange of any tax or other governmental charge required to be paid with respect to such exchange. With respect to each Bond, no such exchange shall be required to be made after
the Record Date with respect to any interest payment date of and including such interest payment date.
C. Bond Registration Books. This Ordinance shall constitute a system of registration
within the meaning and for all purposes of the Registered Public Obligations Act of Idaho, Chapter 9 of Title 57, Idaho Code. The Trustee shall keep or cause to be kept, at its Principal
Corporate Trust Office, sufficient books for the registration and transfer of the Bonds, which shall at all times be open to inspection by the City, and, upon presentation for such purpose,
the Trustee shall, under such reasonable regulations as it may prescribe, register or transfer or cause to be registered or transferred, on said books, Bonds as herein provided.
D. Duties
of Bond Registrar. If requested by the Trustee, the Mayor is authorized to execute the Trustee’s standard form of agreement between the City and the Trustee with respect to the compensation,
obligations, and duties of the Trustee hereunder which may include the following:
(1) to act as bond registrar, authenticating agent, paying agent, and transfer agent as provided
herein;
(2) to maintain a list of Registered Owners and to furnish such list to the City upon request, but otherwise to keep such list confidential;
(3) to give notice of redemption of
Bonds as provided herein;
(4) to cancel and/or destroy Bonds which have been paid at maturity or upon earlier redemption or submitted for exchange or transfer;
(5) to furnish
the City at least annually a certificate with respect to Bonds canceled and/or destroyed;
(6) to furnish the City at least annually an audit confirmation of Bonds paid, Bonds outstanding
and payments made with respect to interest on the Bonds; and
(7) to comply with all applicable provisions of the Representation Letter, as called for in Section 3(C) hereof.
Section
8: REDEMPTION PRIOR TO MATURITY; DEFEASANCE
A. Optional Redemption. Bonds maturing on or before September 1, 2013 shall not be subject to call or redemption prior to their stated
dates of maturity. On any interest payment date on or after September 1, 2013, at the option of the City, the Bonds maturing on or after September 1, 2014, shall be subject to redemption,
in whole or in part, at the discretion of the City (and by lot selected by the Bond Registrar within a maturity), at a price of 100% of the principal amount of the Bond being redeemed,
plus accrued interest to the redemption date, upon notice as hereinafter provided.
B. Redemption Provisions Portions of any Bond of a denomination of more than $5,000 may be redeemed.
The portion of any Bond of a denomination of more than $5,000 to be redeemed shall be in the principal amount of $5,000 or any integral multiple of $5,000, and in selecting portions
of such Bonds for redemption the Bond Registrar will treat each such Bond as representing that number of Bonds of $5,000 denomination which is obtained by dividing the principal amount
of such Bond by $5,000.
Notice of redemption of any Bonds shall be given by mailing of notice by the Bond Registrar to the registered owner of any Bond being called for redemption
not less than thirty nor more than sixty days prior to the redemption date by first class mail, postage prepaid, at the address appearing on the Bond Register, or at such other address
as
may be furnished in writing by such registered owner to the Bond Registrar. The foregoing requirements shall be deemed to be complied with when notice is mailed as provided herein,
regardless of whether or not it is actually received by the owner of such Bond. The notice shall specify the Bonds to be redeemed, the date and place of redemption, and shall provide
that the Bonds so called for redemption shall cease to accrue interest on the specified redemption date, provided funds for such redemption are on deposit at the place of payment at
such time, and shall not be deemed to be outstanding as of such redemption date.
C. 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 resulting cash balances)
to redeem and retire part or all of the Bonds in accordance with their 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 Bonds so provided for, and such Bonds 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 such Bonds and interest
accrued thereon shall no longer be deemed to be outstanding hereunder.
Section 9: CHARGES AND RATE COVENANT
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.
The City hereby covenants and agrees with the Registered Owners and Beneficial Owners
that it will establish, revise as necessary, maintain, and collect charges sufficient, together with other revenues received, after taking into consideration anticipated delinquencies,
to provide Net Revenues for each fiscal year equal to not less than 1.20 times the required Annual Debt Service payments on the Bonds and any Additional Bonds then outstanding. The
City further covenants that the Revenue of the System will at all times be sufficient to pay Operation and Maintenance Expenses, to make all payments required to be made on account of
the Bonds and any Additional Bonds as and when the same shall become due and payable, and all other payments which the City is obligated
to make pursuant to this Ordinance, and to pay all governmental charges lawfully imposed on the System and all other amounts which the City may now be or hereafter become obligated to
pay from the Revenue of the System.
Section 10: PLEDGE OF REVENUES
The Net Revenues of the System are hereby pledged for the payment of the Bonds and shall be used and applied in
the order of priority provided in Section 12 of this Ordinance.
Section 11: FUNDS AND ACCOUNTS – REDEMPTION OF REFUNDED BONDS
A. Establishment of Funds and Accounts. The
following funds and accounts are created or confirmed with respect to the Bonds.
(1) Revenue Fund, to be held by the City.
(2) Bond Fund, to be held by the Trustee.
(3) Reserve
Fund, to be held by the Trustee.
(4) Escrow Fund, to be held by the Trustee.
(5) Cost of Issuance Fund, to be held by the Trustee.
B. Delivery of Bonds; Application of Proceeds.
The Treasurer of the City is hereby instructed to make delivery of the Bonds to the Underwriter and to receive payment therefore in accordance with the terms of the Bond Purchase Agreement
and to deposit the proceeds of sale (after deduction of Underwriter’s discount) as follows:
(1) A portion of the proceeds of sale of the Bonds shall be deposited in the Cost of Issuance
Fund to be used as described in Section 11(E).
(2) Accrued interest on the Bonds from their date to their date of delivery shall be deposited into the Bond Fund and utilized to
make a portion of the first interest payment on the Bonds on September 1, 2003.
(3) The remaining proceeds of sale of the Bonds shall be deposited into the Escrow Fund, together
with other funds of the City in an amount sufficient to defease the Refunded Bonds, to be used as described in Sections 11(C) and 11(D) of this Ordinance.
C. Approval of Escrow Agreement; Deposits into Escrow Fund.
(1) The Escrow Agreement, in substantially the form set forth in Exhibit "D" which is annexed hereto and by reference
incorporated herein, with such changes, omissions, insertions, and revisions as the Mayor shall approve, is hereby authorized, and the Mayor and Clerk shall sign such Escrow Agreement,
which signature shall evidence such approval. The Mayor and the Clerk are, and each of them is, hereby authorized to do or perform all such acts as may be necessary or advisable
to comply with the Escrow Agreement and to carry the same into effect.
(2) The portion of the proceeds of the sale of the Bonds specified in Section 11(B)(3) hereof, together with
other funds of the City as shall be specified in a Written Certificate to be filed with the Trustee at the time of the delivery of the Bonds, if any, shall, simultaneously with the
delivery of the Bonds be invested or reinvested (except for any amount to be retained as cash) and the obligations in which such moneys are so invested and any remaining cash shall
be deposited in trust with the Trustee in accordance with the provisions of the Escrow Agreement.
D. Redemption of Refunded Bonds; Pledge, Etc. of Escrow Fund.
(1) The Series 1994
Bonds maturing on and after September 1, 2007, are hereby irrevocably called for redemption on September 1, 2006. Notice of such redemption shall be given as provided in Ordinance
No. 669, adopted on August 25, 1994, pursuant to which the Series 1994 Bonds were issued. The Series 1994 Bonds are being redeemed at a redemption price of par plus accrued interest
to the date of redemption.
(2) The Series 1996 Bonds maturing on and after March 1, 2008, are hereby irrevocably called for redemption on March 1, 2007. Notice of such redemption
shall be given as provided in Ordinance No. 700, adopted on July 11, 1996, pursuant to which the Series 1996 Bonds were issued. The Series 1996 Bonds are being redeemed at a redemption
price of par plus accrued interest to the date of redemption.
(3) Moneys in the Escrow Fund shall be utilized exclusively for the purpose of (i) paying the interest on the Refunded
Bonds as the same falls due; (ii) paying the maturing principal of the Series 1994 Bonds, as the same falls due, through September 1,
2005, and, on September 1, 2006, paying and redeeming the outstanding Series 1994 Bonds in full, principal and interest; and (iii) paying the maturing principal of the Series 1996
Bonds, as the same falls due, through March 1, 2006, and, on March 1, 2007, paying and redeeming the outstanding Series 1996 Bonds in full, principal and interest.
(4) Moneys in
the Escrow Fund shall be invested, until needed for the purposes of the Escrow Fund, in cash and Government Obligations, as permitted in the Escrow Agreement. It is hereby found
and determined by the City, pursuant to Section 57-504, Idaho Code, that moneys in the Escrow Fund, together with other funds of the City pledged to the payment of the Refunded Bonds,
will be sufficient to pay, when due, pursuant to stated maturity or call for redemption, the principal of and interest due and to become due on the Refunded Bonds, and provision has
been made in the Escrow Agreement for the refunding of the Refunded Bonds.
(5) Any moneys remaining in the Escrow Fund and not needed for refunding of the Refunded Bonds shall be
applied to pay any costs of issuance of the Bonds that remain unpaid, if any, and any moneys remaining thereafter may be used by the City for any lawful purpose.
(6) It is hereby
found and determined that, upon compliance by the City and the Trustee with the foregoing provisions of this Section 11(D), adequate provision shall have been made for the payment
of the Refunded Bonds.
E. Cost of Issuance Fund. There is hereby established in the hands of the Trustee a separate account designated as the "Cost of Issuance Fund." At the time
of the delivery of the Bonds, the Trustee shall deposit into the Cost of Issuance Fund such amount as shall be required to pay the reasonable and necessary costs of issuance of the Bonds.
Moneys in the Cost of Issuance Fund shall be used for the payment of costs of issuance of the Bonds. Any moneys remaining in the Cost of Issuance Fund on the date of the full and final
payment of all costs of issuance of the Bonds shall be transferred into the Bond Fund.
Section 12: THE REVENUE FUND
There has heretofore been created a special fund known as the
"City of McCall Water Revenue Fund," also known as the "City of McCall Water 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 Bonds by payment
into the Bond Fund; and
(3) Third Charge and Lien: To maintain the Debt Service Reserve Fund, and to provide for any deficiency in the Debt Service Reserve Fund.
(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 16 of this Ordinance.
Section 13: THE BOND FUND
A. There is hereby created a special fund, to be held by the Trustee, known as the "City
of McCall Water Revenue Refunding Bond Fund" (the "Bond Fund"), into which shall be deposited by the City, from Net Revenues, monthly, by the third Tuesday of each month, an amount equal
to one-twelfth (1/12) of the next principal payment coming due on the Bonds and an amount equal to one-sixth (1/6) of the next interest payment accruing on the Bonds; provided, that
the first interest payment falling due on September 1, 2003, shall be deposited in approximately equal payments on or before July 15 and August 15, 2003.
B. If the City for any reason
shall fail to make such required deposits from the Revenue Fund by the third day prior to a payment date on the Bonds, then an amount equal to the deficiency shall be deposited into
the Bond Fund out of the Reserve Fund.
C. From the amounts so paid into the Bond Fund, the Trustee shall pay (i) on or before each interest payment date for any of the Bonds, the
amount required for the interest payable on such date; and (ii) on or before any redemp tion date for the Bonds, the amount required for the payment of principal of and interest on the
Bonds then to be redeemed.
D. Amounts in the Bond Fund shall be invested at the written direction of the City by the Trustee in Investment Securities until needed for the purposes of the Bond Fund. Earnings on
deposits in the Bond Fund shall remain in the Bond Fund to be used for the purposes of the Bond Fund. Revenue deposits described in Section 13A may be reduced by earnings on deposits
in the Bond Fund.
Section 14: DEBT SERVICE RESERVE FUND
A. Deposits. There is hereby created a separate fund, known as the "City of McCall Water Revenue Refunding Bonds Debt Service
Reserve Fund" (the "Reserve Fund"), which shall be maintained by the Trustee. It is the intention of the City to fund the Reserve Fund with a policy of municipal bond insurance pursuant
to Section 14(D) of this Ordinance. If a policy of municipal bond insurance is not obtained, then, simultaneously with the issuance of the Bonds, there shall be transferred from the
debt service reserve fund established for the Refunded Bonds and, to the extent necessary to achieve the Reserve Requirement, from other lawfully available moneys of the City, to the
Reserve Fund an amount equal to the Reserve Requirement, which sum shall be maintained as a debt service reserve fund for the Bonds until the Bonds have been paid in full. Moneys in
the Reserve Fund may be applied by the City to the payment of the final maturity of principal of and interest on the Bonds. So long as the amount on deposit in the Reserve Fund equals
the Reserve Requirement, earnings on amounts in the Reserve Fund shall be deposited as received into the Bond Fund. In no event shall the amount accumulated in the Reserve Fund exceed
the Reserve Requirement.
B. Deficiencies or Withdrawals. Whenever any moneys are withdrawn from the Reserve Fund to pay the principal of or interest on the Bonds, or if a deficiency
exists in such Fund, the amount so withdrawn or the amount of such deficiency shall be restored within one year of the date of such withdrawal 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 Bonds 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 Revenue Fund and issued on a parity
with the Bonds.
D. Reserve Equivalent. The City may, at any time, elect to fund the Reserve Fund with an insurance policy
issued by a municipal bond insurance company having a long-term debt credit rating, at the time the insurance policy is issued, in one of the two highest rating categories of Moody’s
Investors Services, Inc., or Standard & Poor’s Corporation, in which the insurance company agrees unconditionally to provide the City with funds in the amount of the Reserve Requirement.
Section
15: INVESTMENT OR DEPOSIT OF FUNDS
Moneys on deposit in the funds established pursuant to Section 11 shall be invested and reinvested by the Trustee as follows:
(a) All moneys on
deposit in funds shall be invested in Investment Securities which shall mature, or be subject to repurchase, withdrawal without penalty or redemption at the option of the holder on
or before the dates on which the amounts invested are reasonably expected to be needed for the purposes hereof.
(b) All purchases or sales of Investment Securities shall be made
at the direction of the City (given in writing or orally, confirmed in writing), or, in the absence of such direction, by the Trustee.
(c) (1) Any securities or investments held
by the Trustee may be transferred by the Trustee, if required in writing by the City, from any of the funds or accounts mentioned in Section 11 and held by the Trustee to any other
City fund or account mentioned in Section 11 at the then current market value thereof without having to be sold and purchased or repurchased; provided, however, that after any such
transfer or transfers, the investments in each such fund or account shall be in accordance with the provisions as stated in this Ordinance; and (2) whenever any other transfer or
payment is required to be made from any particular fund, such transfer or payment shall be made from such combination of maturing principal, redemption premiums, liquidation proceeds
and withdrawals of principal as the Trustee deems appropriate for such purpose.
(d) Neither the City nor the Trustee shall be accountable for any depreciation in the value of Investment
Securities or for any losses incurred upon any authorized disposition thereof.
(e) The City acknowledges that to the extent regulations of the Comptroller of the Currency or any
other regulatory entity grant the City the right to receive brokerage confirmations of the security
transactions as they occur, the City specifically waives receipt of such confirmations to the extent permitted by law. The Trustee will furnish the City periodic cash transaction
statements which include the detail for all investment transactions made by the Trustee hereunder.
Section 16: SURPLUS FUNDS
Funds remaining in the Revenue Fund after having been
applied to or designated funds for the purposes provided in Section 12A of this Ordinance shall constitute surplus funds and may be used for any of the following purposes:
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 Bonds; and
F. For any other lawful purpose.
Section 17: 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 Bonds herein authorized; provided, however, that before any such Additional
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 Bonds or other additional parity obliga tions, and there is no deficiency
in the Bond Fund or Reserve Fund.
(2) The principal of and interest on the Additional Bonds shall be payable from the Bond Fund
and further secured by the Reserve Fund, and the Reserve Requirement shall be increased in proportion to the Additional Bonds being issued.
(3) Prior to the delivery of any Additional
Bonds, the City shall have on file at the office of the City Clerk a certificate of a licensed professional engineer, who may be the City Engineer, or a certificate of an independent
certified public accountant, dated prior to the authorization of such Additional Bonds, showing that the Estimated Net Revenues, determined and adjusted as hereafter provided, for each
fiscal year after the issuance of such Additional Bonds, will equal at least 1.20 times the amount required for the payment of the average annual principal of and interest on the Certificates,
the Bonds, and any Additional Bonds then outstanding, plus the Additional Bonds proposed to be issued.
(4) In determining Estimated Net Revenues, the Net Revenues for the past twelve
(12) consecutive months immediately preceding the year of the proposed Additional Bonds shall be adjusted by such engineer or accountant to take into consideration changes in Net Revenues
estimated to occur under one or more of the following conditions for each year after delivery of the Additional Bonds for so long as the Bond and any Additional Bonds, including the
Additional Bonds to be issued, shall be outstanding:
a. any increase or decrease in Net Revenues which would result if any change in rates or charges adopted prior to the date of such
certificate and subsequent to the beginning of such twelve (12) month period had been in force during the full twelve (12) month period;
b. any increase or decrease in Net Revenues
estimated by such engineer or accountant to result from any additions, betterments, and improvements to and extension of any facilities of the System which (i) become fully operational
during such twelve (12) month period, (ii) were under construction at the time of such certificate, or (iii) will be constructed from the proceeds of the Additional Bonds to be issued;
and/or
c. the additional Net Revenue which would have been received if any customers added to the System prior to the date of such certificate and subsequent to the beginning of such
twelve (12) month period were customers for the entire period.
(5) The foregoing limitations, or any of them, may be waived or modified by the written consent of the Registered Owners
of the Bonds.
Such engineer or accountant shall base his or her certificate upon, and his certificate shall have attached thereto, audited financial statements of the water System
(unless such an audit is not available within such twelve-month period) showing income and expenses for the period upon which the same is based.
B. Subordinate Lien Bonds. No provision
of this Ordinance or of any instrument pertaining 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 Bonds and which shall provide for compliance with the current provisions hereof prior to the application of any funds to said subordinate
purpose.
C. 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 or obligations.
D. Complete Project. The foregoing restrictions with respect to the issuance of parity obligations shall not apply to
obligations issued to fund the completion of the water system improvement project under construction at the time of the issuance of the Bonds.
Section 18: GENERAL COVENANTS
For the
protection and security of the Bonds, it is covenanted and agreed to and with the Registered Owners of the Bonds 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.
C. 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.
D. Good Repair. It will operate,
maintain, preserve, and keep the System and every part hereof in good repair, working order, and condition.
E. Preserve Security. It will preserve and protect the security of the
Bonds and the rights of the Registered Owners thereof.
F. Collect Revenues. It will collect and hold in trust the revenues and other funds pledged to the payment of the Bonds and
apply such revenue or other funds only as provided in this Ordinance.
G. Service Bonds. It will pay and cause to be paid punctually the principal of the Bonds and the interest thereon
on the date or dates and at the place or places and in the manner mentioned in the Bonds, 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 Bonds or which might impair the security of the Bonds, to the end that the priority and security of the
Bonds 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 Bonds, nor which would otherwise impair or impede the rights of the Registered Owner of the Bonds with respect to such revenues of the operation of the System without provisions
for the retirement of the Bonds 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 Trustee shall be named as an
additional loss payee on any policy, and the City shall cause proof of such insurance to be filed with the Trustee. The amount of the insurance shall be not less than the full replacement
cost thereof and shall be such as
may be required to adequately protect it and the Owners of the Bonds 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 Bonds issued under this Ordinance.
K. Fidelity Bonds. It will procure suitable fidelity bonds covering all of its officers and other employees
charged with the collection and disburse ment of revenues from the System.
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
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.
N. 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 19: 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 Bonds shall be issued and remain in fully registered form in order that interest thereon be excluded from gross income of the Registered Owners for federal income tax
purposes. The City covenants and agrees that it will take no action to permit the Bonds to be issued in or converted to bearer or coupon form.
B. The Bonds are hereby designated
as "qualified tax-exempt obligations" 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 Bonds, as qualified tax-exempt obligations during the calendar year 2003.
C. None of the proceeds of the Bonds 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
use 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 Bonds to be "private activity bonds," nor will it omit to take any action necessary to prevent the Bonds from becoming "private activity bonds," within the meaning of Section
141 of the Code.
D. 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 Bonds are not "arbitrage bonds" within the meaning of Section
148 of the Code and the Treasury Regulations promulgated thereunder, and to establish that interest on the Bonds is not and will not become includable in the gross income of the owners
of the Bonds under the Code and applicable regulations. The City covenants and agrees that no use will be made of the proceeds of the Bonds, 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 Bonds, which would cause the Bonds to be "arbitrage bonds" within the meaning of Section 148 of
the Code. The City further covenants to comply throughout the term of the Bonds with the requirements of Section 148 of the Code and the regulations promulgated thereunder in order
to prevent the Bonds from becoming "arbitrage bonds."
E. The City will comply with the information reporting requirements of Section 149(e) of the Code.
F. 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.
G. The City will comply with the requirements of SEC Rule
15c2-12(b)5 with respect to the continuous disclosure of financial information and operating data and of certain material events with respect to the Bonds, as set forth in the Information
Reporting Agreement which is annexed hereto as Exhibit "E." The Trustee, or its successor entity, is
hereby designated as agent of the City for purposes of Rule 15c2-12(b)5.
Section 20: SALE OF BONDS
The sale of the Bonds to, and the execution of a Bond Purchase Agreement for the
purchase of the Bonds by, Seattle-Northwest Securities Corporation, as Underwriter, are hereby approved, and the Mayor and City Clerk are authorized to execute the Bond Purchase Agreement,
substantially in the form annexed hereto as Exhibit (G,( on behalf of the City.
Section 21: AMENDMENTS
A. Without the consent of the Registered Owners, 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 there after to be observed, which shall not adversely
affect the interest of the Beneficial Owners of the Bonds, 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 incon sistent with such ordinances and which shall not adversely affect, in any material respect, the interest
of the Beneficial Owners of the Bonds.
Any such supplemental ordinance may be adopted without the consent of the Registered Owners of the Bonds at any time outstanding, notwithstanding
any of the provisions of subsection B of this Section.
B. With the consent of the Registered Owners of not less than 75% in aggregate principal amount of the Bonds 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 Bonds, 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 applic able, without the consent of the Registered Owners of the Bonds so affected; or
(2) Reduce the aforesaid
percentage of the Registered Owners required to approve any such supplemental ordinance, without the consent of the Registered Owners of the Bonds then outstanding.
It shall not be
necessary for the consent of the Registered Owners 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 Owners of the Bonds 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. The City shall notify the Trustee of the adoption of any supplemental ordinance.
The Trustee shall notify the Registered Owners of the adoption of any supplemental ordinance.
D. Any Bonds 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 Owners of any affected Bonds then outstanding, upon surrender for cancellation of such Bonds.
Section 22: VALIDITY OF ISSUANCE
The Bonds are 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 Bonds and the regularity of their
issuance.
Section 23: EVENTS OF DEFAULT AND REMEDIES
A. Events of Default.
If one or more of the following events occur, it is hereby declared to constitute and Event of Default under this
Ordinance.
1. Failure to make any payment of interest or principal on the Bonds as the same shall become due; or
2. Filing by the City, or any successor or assignee of the City, while
in possession of the System, of a petition in bankruptcy or insolvency, or for reorganization under any bankruptcy act, or the making of an assignment for the benefit of creditors; or
3. Any other default by the City under this Ordinance, and failure to remedy the same for a period of sixty days after written notice thereof, as set forth in paragraph B below, specifying
such failure and requiring the same to be remedied, shall have been given to the City by the Trustee, or to the City and the Trustee by the Owners of not less than twenty-five percent
in aggregate principal amount of the Bonds at the time outstanding.
B. Remedies upon Event of Default.
1. Remedies. Upon the occurrence of an Event of Default, the Trustee may, in
its discretion (or, as provided hereinafter, at the direction of the Owners of not less than twenty-five percent in aggregate principal amount of the Bonds at the time outstanding, shall),
take one or more of the following actions:
a. Bring action at law or in equity for payment of any Net Revenue duly appropriated by the City for the then-current Fiscal year and not
yet paid to the Trustee.
b. Take any other action for which provision is made in this Section 23, including, without limitation, application of the funds under the control of the
Trustee.
2. Declaration of Event of Default. Prior to taking any such action, the Trustee shall cause written notice, declaring an Event of Default to have occurred and specifying
the Event of Default complained of, to be given the City. If, within sixty (60) days of the mailing or delivery of such written notice, such Event of Default specified in the written
notice shall have been cured, and the reasonable and proper charges of the Trustee shall be paid to the Trustee, then in such case the Owners of not less than fifty percent in aggregate
principal amount of
the Bonds at the time outstanding, by written notice to the City and the Trustee, may rescind such declaration and annul such Event of Default in its entirety, or, if the Trustee shall
have acted without a direction of the Owners of not less than twenty-five percent in aggregate principal amount of the Bonds outstanding at the time of the written direction, and if
there shall not have been theretofore delivered to the Trustee written direction to the contrary by the Owners of not less than fifty percent in aggregate principal amount of the Bonds
then outstanding, then any such declaration shall ipso facto be deemed to be annulled. No such rescission and annulment shall affect any subsequent Event of Default.
The Trustee
shall, within 30 days after receipt of notice of the occurrence thereof, give written notice by first class mail to Registered Owners of all Events of Default known to the Trustee and
send a copy of such notice to the City, unless such Events of Default have been remedied. The Trustee shall not be deemed to have notice of any Events of Default unless it has actual
knowledge thereof or has been notified in writing of such Events of Default by the Owners of at least 25% in principal amount of the Bonds then outstanding.
C. Accounting and Examination
of Records after Event of Default.
The City covenants that if an Event of Default shall have occurred and shall not have been remedied, the books of record and accounts of the City
shall at all times be subject to the inspection and use of the Trustee and of its agents and attorneys.
D. Application of Revenues and other Moneys after Event of Default.
1. During
the continuance of an Event of Default, the Trustee shall apply the Net Revenues and such moneys, securi ties and funds and the income therefrom as follows and in the following order:
(a) to the payment of the reasonable and proper charges and expenses of the Trustee and the reasonable fees and disbursements of its counsel;
(b) to the payment of the Bonds, first
to interest and then to principal.
2. If and whenever all overdue sums payable by the City under this Ordinance, shall be paid by or for the account of the City, and all defaults under
this Ordinance or the Bonds shall be made good or secured to the satisfac tion of the Trustee, the City and the Trustee shall
thereupon be restored, respectively, to their former positions and rights under this Ordinance.
E. Rights and Remedies of Bond Owners.
1. No Owner of any Bond shall have any right
to institute any proceeding, judicial or otherwise, with respect to this Ordinance, or for any other remedy hereunder, unless
(a) such Owner has previously given written notice to
the Trustee of a continuing Event of Default;
(b) the Owners of not less than twenty five percent (25%) in principal amount of the Bonds shall have made written request to the Trustee
to institute proceedings in respect of such Event of Default in its own name as Trustee hereunder;
(c) such Owners have provided to the Trustee reasonable indemnity against the costs,
expenses and liabilities to be incurred in compliance with such request;
(d) the Trustee for sixty (60) days after its receipt of such notice, request and offer of indemnity has failed
to institute any such proceedings; and
(e) no direction inconsistent with such written request has been given to the Trustee during such sixty day period by the Owners of a majority
in principal amount of the Bonds; it being understood and intended that no one or more Owners of Bonds shall have any right in any manner whatever by virtue of, or by availing of, any
provision of this Ordinance to affect, disturb or prejudice the rights of any other Owner of Bonds, or to obtain or to seek to obtain priority or preference over any other Owner or to
enforce any right under this Ordinance, except in the manner herein and therein provided and for the equal and ratable benefit of all the Owners of Bonds.
2. The Owners of a majority
in principal amount of the Outstanding Bonds shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on the Trustee, provided that
(a) such direction shall not be in conflict with any rule of law or this Ordinance,
(b) the Trustee shall not determine that the action so directed would be unjustly prejudicial to the Owners not taking part in such direction, and
(c) the Trustee may take any other
action deemed proper by the Trustee which is not inconsistent with such direction.
F. Waiver of Trustee.
The Trustee may, in its discretion, waive any Event of Default, provided there
has been no default in any scheduled payment of interest on or principal of the Bonds. The Owners shall have no rights under this Section 23 if the Trustee waives an Event of Default.
The Trustee may consult with counsel, who may be counsel to the City, with regard to legal questions arising under this Ordinance, and the opinion of such counsel shall be full and
complete authorization and protection with respect to any action or non-action taken in good faith hereunder.
Section 24: ORDINANCE A CONTRACT
The provisions of this Ordinance shall
constitute a contract between the City and the Owners so long as the Bonds hereby authorized remain unpaid.
Section 25: 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 Bonds.
Section 26: REPEALER
All prior ordinances inconsistent herewith are to the extent of such inconsistency, hereby repealed and shall,
to the extent of such inconsistency, have no further force or effect.
Section 27: BOND INSURANCE
The City has obtained a policy of municipal bond insurance (the "Policy") from the
Insurer, insuring the timely payment of the principal of and interest on the Bonds. A statement of insurance in the form required by the Insurer shall appear on each Bond. The Mayor
and City Clerk are hereby authorized to execute any additional
agreements or other documents, on behalf of the City, as may be required by the Insurer to insure the payment of the Bonds.
Section 28: FURTHER AUTHORIZATION
The Mayor, Clerk, and
Treasurer, or any one of such officers, as may be appropriate, are hereby authorized to execute, on behalf of the City, all such additional certificates and other documents as may be
necessary or appropriate to effect the sale and delivery of the Bonds in accordance with this Ordinance.
Section 29: PUBLICATION
This Ordinance, or a summary thereof in compliance
with Section 50 901A, Idaho Code, substantially in the form annexed hereto as Exhibit "F," shall be published once in the official newspaper of the City, and shall take effect immediately
upon its passage, approval, and publication.
DATED this 26th day of June, 2003.
CITY OF McCALL
Valley County, Idaho
By_____________________________
Mayor
ATTEST:
__________________________
__
City Clerk
( S E A L )