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HomeMy WebLinkAboutOrd1957-275 r- ORDINANCE NO. 27'5 AN ORDINANCE of the City of Seward, Alaska, confirming the result of a special election held therein on April 16, 1957 wherein a proposition of whether or not the maximum interest rate that could be borne by $3,200,000 of electric utility revenue bonds of the city be increased from 5% to 67;; authorizing the issuance of $400,000 of electric utility revenue bonds of the city out of $3,500,000 of such bonds heretofore authorized to provide funds to carry out part of the plan of improvements for which such bonds were authorized; fixing the date, form, terms and maturities of said $400,000 of bonds to je issued; creating a fund for the payment of the principal thereof and interest thereon and a Reserve Account; providing and adopting certain covenants and protective features safeguarding the payment of such principal and interest; confirming the sale of said bonds; and declaring an emergency. WHEREAS, at a special election held in the City of Seward, Alaska, on February 23, 1955, pursuant to Ordinance No. 253 of the city, passed and approved January 24, 1955, the qualified electors of the city duly authorized the issuance of electric utili ty revenue ')onds of the city in the total principal sum of not to exceed $3,500,000 and to :)ear interest at a rate of not to exceed 5~0 per annum for the purpose of providing funds to pay the cost of constructing and installing certain additions and improvements to and e;:tensions of the electric utility system of the city; and WHEREAS, pursuant to Ordinance No. 261 of the city, passed and approved February 6, 1956, $300,000 of such bonds so authorized were issued under date of February 1, 1956; and \fHEREAS, it is deemed necessary and advisable that the city now issue an additional $400,000 of said bonds so authorized in order to provide funds to construct and install certain additions and improvements to and extensions of such system; and vlHEREAS, at a special election held in the city on April 16, 1957, pursuant to Ordinance No. 272, passed and ap- proved March 26, 1957, the qualified electors of the city adopted a proposition whereby the maximum interest that might be borne by the $3,200,000 of such electric utility revenue bonds remaining unissued was increased to not to exceed 6% per annum; and WHEREAS, Ordinance No. 200 of the city, passed and approved February 6, 1950, provided that electric utility revenue bonds of the city in addition to the $104,000 of electric utility revenue bonds dated March 1, 1950 authorized by and issued under the provisions of said Ordinance No. 200 could be issued on a parity with such revenue bonds issued under said Ordinance No. 200 and with other parity bonds issued thereunder if certain conditions as set forth in said ordinance were met; and iiHEREAS, pursuant to Ordinance No. 211 of the city $200,000 of electric utility revenue bonds were issued under date of January 1, 1951 and pursuant to Ordinance No. 248 of the city an additional $200,000 of electric utility revenue bonds were issued under date of July 1, 1954, all of which bonds, in- cluding the $300,000 of electric utility revenue bonds issued under date of February 1, 1956 pursuant to Ordinance No. 261, were issued on a parity with the outstanding electric utility revenue bonds of the city issued pursuant to said Ordinance No. 200; and WHEREAS, it is to the best interest of the city and its inhabitants that the electric utility revenue bonds authorized herein be issued on a parity with said outstanding electric utility revenue bonds, and it appears to the Common Council, and the Council does hereby find, that the conditions required in said Ordinance No. 200 have been and at the time of the issuance of the bonds 2. r authorized herein will be met and that such $400,000 of electric utility revenue bonds may now be issued on a parity with the out- standing electric utility revenue bonds of the city heretofore issued under dates of March 1, 1950, January 1, 1951, July 1, 1954 and February 1, 1956; and ~rlliREAS, the city has heretofore accepted the offer of Grande & Co., Inc. of Seattle, Washington, to purchase said bonds at par and under the terms thereof as fixed in this ordinance; NOW, THEREFORE, BE IT ORDAINED by the Common Council of the City of Seward, Alaska, as follows: Section 1. That the result of the special election held within the city on April 16, 1957, wherein the qualified electors of the city approved a proposition providing that the maximum in- terest rate that the $3,200,000 of electric utility revenue bonds of the city remaining unissued out of the $3,500,000 of such oonds authorized by the qualified electors of the city at the special election held therein on February 23, 1955 may bear be changed from not to exceed 550 per annum to not to exceed the legal rate of 6% per annum, is hereby in all respects ratified and confirmed. Section 2. As used in this ordinance the following words shall have the meanings hereinafter set forth: (a) The word "Bondsll shall mean the $400,000 of electric utility revenue bonds of the city authorized in this ordinance for the uses and purposes herein set forth. (b) The word "System" shall mean the existing electric utility system of the city as the same may be added to, improved and extended out of the proceeds of the sale of the Bonds and as it may later be added to, improved and extended for as long as any 3. 1" of the Bonds are outstanding. (c) The words "Presently outstanding Bonds" shall mean the outstanding bonds of the following issues: (1) The Electric Utility Revenue Bonds, 1950 issued pur- suant to Ordinance No. 200 in the original amount of $104,000, under date of March 1, 1950, $81,000 of which are now oUBtanding; (2) The Electric Utility Revenue Bonds, 1951 issued pur- suant to Ordinance No. 211 in the original amount of $200,000, under date of January 1, 1951, $177,000 of which are now out- standing; (3) The Electric Utility Revenue Bonds, 1954 issued pur- suant to Ordinance No. 248 in the original amount of $200,000, under date of July 1, 1954, $185,000 of which will be out- standing on and after July 1, 1957; (4) The Electric Utility Revenue Bonds, 1956-A issued pursuant to Ordinance No. 261 in the original amount of $300,000, under date of February 1, 1956, all of which are now outstanding. The Presently Outstanding Bonds are the only revenue bonds of the city outstanding at this time with the principal thereof and interest thereon being payable out of the Electric Utility Revenue Fund of the city. (d) The words "Electric Utility Revenue Fund" shall mean the fund of the city heretofore created by Section 7 of Ordinance No. 200, into which all gross earnings and revenue of the System must be paid as collected. Section 3. The Common Council hereby finds and determines, as required by Section 11 of Ordinance No. 200 of the city and as also required by Sections 9, 10 and 11 of Ordinances numbered 211, 248 and 261 respectively of the city, as follows: 4. r~ First, that the Bonds are issued for the purpose of constructing and installing economically sound additions and improvements to and extensions of the System. Second, that at the time of the adoption of this ordinance and at the time of the issuance and delivery of the Bonds there is not nor will there be any deficiency in the bond redemption funds and reserve accounts created by Ordinances Nos. 200, 211, 248 and 261 for the purpose of paying and guaranteeing the payment of the principal of and interest on the Presently Outstanding Bonds. That the city has not issued nor does it have outstanding any electric utility revenue bonds other than the Presently Outstanding Bonds. Third, that Howard T. Harstad of Howard T. Harstad & Associates, consulting engineers, Seattle, Washington, a professional engineer licensed to practice his profession in the State of Washington and Territory of Alaska, whose selection has been approved by Grande & Co., Inc. of Seattle, Vlashington, has prepared and filed with the Common Council and delivered to Grande & Co., Inc. a certificate which sets forth an estimate of the cost of the additions and improve- ments to and extensions of the System authorized herein and of the earnings thereof, and which shows that he is reason- ably certain that the earnings of the System, including such proposed additions, improvements and extensions, less costs of maintenance and operation, will be 1.5 times the amounts necessary for the debt service on the Presently Outstanding Bonds and the Bonds. The conditions contained in Sections 11, 9, 10 and 11 of Ordinances Nos. 200, 211, 248 and 261, respectively, for the ). r~ issuance of the Bonds on a parity with the Presently Outstanding Bonds having been complied with, the payments into the Bond Re- demption Fund and Reserve Account created in this ordinance for the payment of and to guarantee the payment of the principal of and interest on the Bonds required by this ordinance shall con- stitute a lien and charge upon the money in the Electric Utility Revenue Fund equal in rank with the lien and charge on the money in such Fund for the payments required to be made into the bond redemption funds and reserve accounts created by said Ordinances Nos. 200, 211, 248 and 261 for the payment of the principal of and interest on the Presently Outstanding Bonds. Section 4. That for the purpose of providing funds to construct and install a 69,000-volt transmission line from Mile 7 1/2 to Mile 25 along the Seward-Anchorage Highway, which line will be used temporarily for electrical distribution, to install customer services along said entire line, and to purchase necessary equip- ment and materials for further development of the System, the city shall now issue the Bonds out of the $3,500,000 of such bonds au- thorized by Ordinance No. 253 and by the qualified electors of the city at the special election held therein on February 23, 1955. The Bonds shall be dated July 1, 1957, shall be in denominations of $1,000 each, and shall be numbered, mature, and bear interest payable semiannually on the first days of January and July of each year as evidenced by coupons to be attached to said Bonds, as follows: Interest Bond Nos. Maturity Date Amount Rate 1-2 July 1, 1973 $ 2,000 5 1/2% 3-5 JUly 1, 1974 3,000 '" 1/276 --' 6-9 July 1, 1975 4,000 5 1/2i6 10-12 July 1, 1976 3,000 5 1/2% 13-17 July 1, 1977 5,000 5 1/2% r o. r- Interest Bond Nos. Maturity Date Amount Rate 18-20 July 1, 1978 $ 3,000 5 1 /20'~ I I' 21-25 July 1, 1979 5,000 5 1 i 2'!t I I' 2'-)-32 July 1, 1980 7,000 5 1/2% 33-37 July 1, 1981 5,000 5 1/2% 38-74 July 1, 1982 37,000 ? 1/2% 75-134 July 1, 1983 60,000 5 1/2% 135-197 July 1, 1984 63,000 5 1 /C!& I I 198-263 JUly 1, 1985 66,000 5 1/2% 264-333 July 1, 1986 70,000 5 ' , 1/2;'0 334-400 July 1, 1987 67,000 5 1/2;"; . In addition to the interest rate fixed above, all of the Bonds shall bear an additional interest rate of 1/2% per annum until July 1, 1972, which 1/2% interest shall be evidenced by cou- pons payable on July 1 of each year from 1958 to and including 1972, and which coupons shall be detached from said Bonds. Both principal of and interest on the Bonds shall be payable in lawful money of the United States of America at the main office of the Seattle Trust and S~vings Bank in the City of Seattle, Washington, and shall be obligations only against the special Bond Redemption Fund created by this ordinance. Section 5. The city hereby reserves the right to redeem any or all of the Bonds outstanding at par plus accrued interest to date of redemption, in inverse numerical order, on any interest pay- ment date on and after July 1, 1972; provided, however, that if any or all of the Bonds are retired by refunding, it shall be at the following times and prices: On July 1, 1972 and January 1, 1973, at ~102.00 per ;100 par value On July 1, 1973 and January 1, 1974, at ~101.50 per 100 par value On July 1, 1974 and January 1, 1975, at $101.00 per $100 par value On July 1, 19i'''i and January 1, 1976, at $100.50 per $100 par value ,)., On July 1, 1976 and any interest payment date thereafter, at par. " ~~' Notice of any such intended redemption shall be given by publication thereof in newspapers of general circulation in the cities of Seward, Alaska, and Seattle, vlashington, once a week for two consecutive weeks, the date of each such first publication to 7. r- be not more than forty-five nor less than thirty days prior to said redemption date. Interest on any Bond or Bonds so called for redemption shall cease on such redemption date unless the same are not redeemed upon presentation made pursuant to such call. Section 6. The Bonds shall be in substantially the following form: UNITED STATES OF AMERICA NO. $1,000 TERRITORY OF ALASKA CITY OF SEWARD ELECTRIC UTILITY REVENUE BOND, 1957 KNOvl ALL MEN BY THESE PRESENTS: That the City of Seward, a municipal corporation of the Territory of Alaska, for value received hereby promises to pay to bearer on the first day of July, 19__, the principal sum of ONE THOUSAND DOLLARS together with interest thereon at the rate of ~~ per annum to July 1, 1972 and thereafter at the rate of 5 l/~j, per annum (said ~0 interest to be evidenced by coupons for semiannual interest attached hereto at 5 1/~0 per annum from date of issue to date of maturity of this bond and by detached coupons for annual interest at l/~b per annum from date of issue to and including July 1, 1972), as evidenced by and upon presentation and sur- render of such interest coupons as they severally become due. Both principal and interest are payable in lawful money of the United States of America at the main office of the Seattle Trust and Savings Bank in Seattle, Washington, 8. r~ solely out of the special fund of the city known as IlSeward 1957 Electric Utility Revenue Bond Redemption Fundll created b;y Ordinance No. 275 of the city. The city has reserved the right to redeem any or all of the bonds of this issue at par plus accrued in- terest to date of redemption, in inverse numerical order, on any interest payment date on and after July 1, 1972; provided, however, that if any or all of the bonds are retired by refunding, it shall be at the following times and prices: On July 1, 1972 and January 1, 1973, at ;"02.00 per 1"00 par value On July 1, 1973 and January 1, 1974, at 101.50 per 100 par value On July 1, 1974 and January 1, 1975, at ;101.00 per 100 par value On July 1, 1975 and January 1, 1976, at 100.50 per ~100 par value ". On July 1, 197(5 and any interest payment date thereafter, at par. \~ Notice of any such intended redemption shall be given by publication thereof in newspapers of general circulation in the cities of Seward, Alaska, and Seattle, Washington, once a week for two consecutive weeks, the date of each such first publica- tion to be not more than forty-five nor less than thirty days prior to said redemption date. This bond is one of an issue of electric utility revenue bonds of like amount, date and tenor in the total principal sum of $400,000, and part of an authorized issue of such bonds of $3,500,000 ($300,000 of which have been heretofore issued under date of February 1, 1956), and is issued pursuant to duly and regularly adopted ordinances of the city and a vote of the qualified electors thereof. Said $400,000 of bonds are issued for the purpose of providing funds to pay the cost of constructing and installing certain additions and improve- ments to and extensions of the electric utility system of the city, and are payable solely out of the gross revenue of such system. 9. r The city hereby covenants and agrees with the owner and holder of this bond that it will keep and perform all the covenants of this bond and of Ordinances Nos. 253, 261, and 275 to be by it kept and performed. The city does hereby pledge and bind itself to set aside from the Electric Utility Revenue Fund of the city created by Ordinance No. 200, into which it has pledged that all of the gross earnings and revenue of said electric utility system shall be paid as the same are collected, and to pay into said Bond Redemption Fund and the Reserve Account created therein, the various amounts required by said Ordi- nance No. 275 to be paid into and maintained in said Fund and Account, all within the times provided by said ordinance. Said amounts so pledged are hereby declared to be a prior lien and charge upon the money in said Electric Utility Revenue Fund superior to all other charges of any kind or nature except the necessary cost of maintenance and operation of said system, and equal in rank to the charges upon said Fund for the payment of the principal of and interest on the outstanding electric utility revenue bonds of the city. The city has further bound itself to maintain said system in good condition and repair, to operate the same in an efficient manner and at a reasonable cost, and to estab- lish, maintain and collect rates and charges for light and power and all other services furnished by said utility that will provide revenue equal to 1.5 times the amounts necessary to pay the average annual prinCipal and interest due on the outstanding electric utility revenue bonds of the city and the bonds of this issue after necessary costs of maintenance and operation of said system have been paid but before depreciation. 10. r- It is hereby certified and declared that the bonds of this issue are issued pursuant to and in strict com- pliance with the laws of the United States of America and the Territory of Alaska and the duly adopted ordi- nances of the City of Seward, and that all acts, conditions and things required to be done precedent to and in the issuance of this bond have happened, been done and per- formed. IN WITNESS WHEREOF the City of Seward has caused this bond to be signed by its Mayor, to be attested by its Clerk, the corporate seal of the city to be impressed hereon, and the interest coupons attached hereto to be signed with the facsimile signatures of said officials, this first day of July, 1957. CITY OF Sm-IARD, ALASKA By 9~~~. 4/~r' ayor ATTEST: ~~~k The interest coupons to be attached to the Bonds shall be in substantially the following form (semiannual coupons to maturity): NO. $27.50 On the first day of , 19__, the City of Seward, Alaska, will pay to bearer at the main office of the Seattle Trust and Savings Bank in Seattle, Wash- ington, the sum of TWENTY-SEVEN AND 50/100 DOLLARS in lawful money of the United States of America out of the special fund of the city known as "Seward 1957 Electric Utility Revenue Bond Redemption Fund,1l said sum being semiannual interest due that day on its electric utility 11. r '- revenue bond dated July 1, 1957 and numbered CITY OF SE\vARD, ALASKA By Q~ o. J..rd.L~ ' ayor ATTEST: ~~.iv2j City Clerk The interest coupons to be detached from the Bonds shall be in substantially the following form (additional detached annual coupons to and including July 1, 1972): $:).00 NO. On the first day of July, 19____, the City of Seward, Alaska, will pay to bearer at the main office of the Seattle Trust and Savings Bank in Seattle, 'vJashington, the sum of FIVE AND NO/lOa DOLLARS in lawful money of the United States of America out of the special fund of the city known as "Seward 1957 Electric Utility Revenue Bond Redemption Fund," said sum being annual interest due that day on its electric utility revenue bond dated July 1, 1957 and numbered CITY OF SEWARD, ALASKA By <9~ il-l~~ . ayor ATl'EST: ~~~I City Clerk Section 7. The Bonds shall be signed on behalf of the city by its Mayor, shall be attested by the City Clerk, and shall have the corporate seal of the city impressed thereon. The interest coupons provided for herein shall be signed with the facsimile signatures of said officials. 12. r- Section 8. That there be and is hereby created in the office of the City Treasurer a special fund of the city to be knovm as ltSeward 1957 Electric utility Revenue Bond Redemption Fund!! (hereinafter called the "1957 Bond Redemption Fund"), which Fund is to be drawn upon for the sole purpose of paying the prin- cipal of and interest on the Bonds. The city hereby obligates and binds itself to set aside and pay into the 1957 Bond Redemption Fund out of the money in the Electric Utility Revenue Fund certain fixed amounts necessary to pay the principal of and interest on the Bonds as the same respectively become due and payable. Such payments shall be made into the 1957 Bond Redemption Fund on or before the twentieth day of each month in the amounts hereinafter specified: (a) Beginning with the month of July, 1957, and continuing as long as any of the Bonds are outstanding and unpaid, an amount equal to at least one-sixth of the 5 l/qd interest to become due and payable at the end of the next ensuing 6-month period on all of the Bonds then outstanding. (b) Beginning with the month of July, 1957, and continuing as long as any of the l/~d coupons are outstanding and unpaid, an amount equal to at least one-twelfth of the interest represented by such coupons to become due and payable on July first of each of the succeeding years, to and including 1972. (c) Beginning with the month of July, 1972, and continuing as long as any of the Bonds are outstanding and unpaid, an amount equal to at least one-twelfth of the principal to become due and payable on the next principal payment date. The city further covenants that it will transfer from the 1957 Bond Redemption Fund to the main office of the Seattle Trust and Savings Bank in Seattle, Washington, at least ten days before 13. r any installment of interest or principal and interest may become due on any of the Bonds, an amount sufficient to pay each such installment. When there is sufficient money in the 1957 Bond Re- demption Fund and the Reserve Account therein hereinafter created to redeem and retire all of the Bonds and to pay the premium, if any, and interest due to such retirement date, then no further payments need be made into the 1957 Bond Redemption Fund. Said amounts so pledged to be paid into the 1957 Bond Redemption Fund and into such Reserve Account therein are hereby declared to be a prior lien and charge upon the money in the Electric Utility Revenue Fund superior to all other charges of any kind or nature except the necessary cost of maintenance and operation of the System, and equal in rank to the charges upon such Electric utility Revenue Fund for the payment of the principal of and interest on the Presently outstanding Bonds. Section 9. There is hereby created a Reserve Account in said 1957 Bond Redemption Fund, and the city hereby agrees that it will set aside and pay into said Reserve Account out of the money in the Electric Utility Revenue Fund, and out of any other funds which it may have on hand and available for such purposes, the sum of at least $400 a month commencing with the month of July, 1957, until the total amount of $24,000 has been paid therein, and that it will then pay into said Reserve Account the sum of at least $215 per month until the total amount of $78,000 has been paid therein. The city further agrees, when said sum of $78,000 has been paid into said Reserve Account, that it will at all times maintain that amount therein until there is a sufficient amount in the 1957 Bond Redemption Fund and Reserve Account to redeem and retire all the Bonds outstanding. 14. r" In the event there shall be a deficiency in the 1957 Bond Redemption Fund to meet maturing installments of either interest on or principal of and interest on the Bonds, such deficiency shall be made up from the Reserve Account by the withdrawal of cash therefrom. Any deficiency created in the Reserve Account by reason of any such withdrawal shall then be made up from the money in the Electric Utility Revenue Fund first available after making necessary provision for the required pay- ments into the 1957 Bond Redemption Fund. All money in the Reserve Account above provided for may be kept in cash or invested in United States Government obligations having a guaranteed market, or if such obligations are not available, then in United States Government obligations maturing not later than twelve years from date of purchase and in no event maturing later than the last maturity of the Bonds then outstanding. Interest earned on any such investments shall be deposited in and become a part of the 1957 Bond Redemption Fund. Section 10. The corporate authorities of the city hereby declare, in fixing the amounts to be paid into the 1957 Bond Re- demption Fund and Reserve Account as aforesaid, that they have had due regard to the cost of maintenance and operation of the System and to the amount of the revenue thereof previously pledged for the payment of the principal of and interest on the Presently Outstanding Bonds, and have not obligated the city to set aside and pay into said Fund and Account a greater amount of the revenue of the System than in their judgment will be available over and above such cost of maintenance and operation and the amount of the revenue previously so pledged. 15. r Section 11. The city covenants and agrees with the owners and holders of the Bonds that the payments into the bond redemption funds and reserve accounts created by Ordinances Nos. 200, 211, 248, 261 and this ordinance constitute the only charges which have been made upon the Electric utility Revenue Fund, and that it will not hereafter create any bond redemption fund or re- serve account for the payment of additional electric utility revenue bonds, warrants or other obligations, or issue any such obligations or create any additional indebtedness which will rank on a parity with or have any priority over the payments into the 1957 Bond Redemption Fund and Reserve Account created herein, except that it reserves the right to issue additional bonds payable from the gross revenues of the System and to create special funds for the payment of the principal thereof and interest thereon into which funds payments may be made from the Electric utility Revenue Fund sufficient to pay the principal of and interest on such additional bonds and to maintain adequate reserves therefor, which such payments may rank equally with the payments pledged to be made into the bond redemption funds and reserve accounts created by said Ordinances Nos. 200, 211, 248, 261 and this ordinance provided that it does so in the manner and subject to the conditions and limitations set forth in Section 11 of said Ordinance No. 200. Section 12. The Bonds shall be entitled to all benefits, rights, privileges and security afforded by Ordinances Nos. 200, 211, 248 and 261, equally and ratably with the Presently Outstanding Bonds. All the terms, provisions and covenants of Sections 10 and 12 of said Ordinance No. 200 shall apply to the Bonds, and the 1957 ----'---- ----~..__..._,"-,_.,- Bond Redemption Fund and Reserve Account created herein for the payment of the principal of and interest on the Bonds, to the same e:ctent and effect as they do to the Presently Outstanding Bonds and 16. I- I i bond redemption funds and reserve accounts created by said ordinances for their payment. Section 13. The sale of the Bonds to Grande & Co., Inc. of Seattle, Washington, at par plus accrued interest to date of delivery and under the terms and conditions of said Bonds as set forth herein, is hereby in all respects ratified and confirmed. Section 14. This ordinance is declared to be one neces- sary for the immediate preservation of the public peace, property, health and safety of the people of Seward, Alaska. An emergency is hereby declared to exist, and this ordinance shall take effect immediately upon its passage, approval and execution and its pub- 1ication by the posting of a copy thereof in three public places in the city, one of which shall be the City Hall, or by pUblication in one issue of a newspaper of general circulation published within the c:l1y". PASSED and APPROVED this .z/4a.ay of ~, 1957. CITY OF SEWARD, AL~KA By .Q1~g --lr~;.MaYOr ATTEST: ~/ - ..~ City Clerk 17.