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HomeMy WebLinkAboutOrd1956-261 RT HF 12-21-55 8 ORDINANCE NO. ~~ 1 AN ORDINANCE of the City of Seward, Alaska, confirming the result of a special election held therein on February 23, 1955 for the adoption of a plan authorizing the city to construct and install certain additions and improvements to and extensions of its electric utility system and to issue its electric utility revenue bonds in the principal sum of not to exceed $3,500,000 to pay the cost thereof, authorizing the issuance of $300,000 of such bonds to provide funds to carry out part of said plan of improvements and to pay costs incidental thereto, fixing the date, form, terms and maturities of said bonds to be issued, creating a fund for the payment of the principal thereof and interest thereon and a Reserve Account, adopting certain covenants and protective features safeguarding the payment of such principal and interest, and confirming the sale of said bonds. 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 utility revenue bonds of the city in the total principal sum of not to exceed $3,500,000 for the purpose of providing funds to pay the cost of constructing and installing certain additions and improvements to and extensions of the electric utility system of the city; and WHEREAS, it is deemed necessary and advisable that the city now issue $300,000 of said bonds so authorized in order to provide funds to construct and install certain distribution line extensions, to carry out subsurface exploration work, to construct an access road or trails to Crescent Lake, and to pay certain engineering fees and costs; and .... "" ... WHEREAS, 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; and WHEREAS.. Ordinance No. 200 of the city, passed and approved February 6, 1950, provided that electric utility revenue bonds of the oity in addition to the $104,000 of electric utility revenue bonds dated March 1, 1950, authorized by and issued under the provisions of said Ordinanoe No. 20~could be issued on a parity with said revenue bonds issued under said Ordinance No. 200 and with other electric utility revenue bonds issued on a parity with the bonds issued under said Ordinance No. 200 if certain conditions as set forth in said ordinance were met; and WHEREAS, 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 of the city were issued under date of July 1, 1954, all of whioh bonds 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 appears to the Common Council that said conditions prescribed in said Ordinance No. 200 have been and will be met arothat $300,000 of the electric utility revenue bonds authorized by said Ordinance No. 253 and at said special election held on February 23, 1955 may now be issued on a parity with the outstanding electric utility revenue bonds of the city heretofore issued under dates of March 1, 1950, January 1, 1951, and July 1, 1954; 2. I r NOW, THEREFORE, BE IT ORDADtED by the Cormnon Council of the City of Seward, Alaska, as follows: Section 1. That the approval by the qualified voters of the city at a special election held therein on February 23, 1955 of a proposition providing for the issuance of electric utility revenue bonds of the city in the sum of not to exceed $3,500,000 to provide funds to acquire, construct and1nstall oertain additions and improve- ments to and extensions of the electric utility system of the city is hereby in all respects ratified and confirmed. Section 2. As used in this ordinanoe the following words and phrases have the meanings hereinafter set forth unless the context clearly indicates that another meaning is intended: (a) The words "Electric Utility Revenue Fund" mean the fund of that name oreated by Section 7 of Ordinance No. 200. (b) The words "the System" or the word "System" mean the existing e1eotric utility system of the oity as the same may be added to, improved and extended out of the proceeds of the sale of the bonds authorized herein, out of the proceeds of the sale of the balance of the bonds authorized for the purposes set forth in Ordinance No. 253, and as the same may be otherwise added to, improved or extended at any time for as long as any of the bonds authorized herein are out- standing. (c) The words "Presently Outstanding Bonda ~ mean the out- standing bonds of the following issues: (1) The electric utility revenue bonds, 1950 (herein- after called the "1950 Bonds"), dated March 1, 1950 and issued pursuant to Ordinanoe No. 200 of the city in the original amount of $104,000, and $89.000 of which are now outstanding. 3. (2) The electric utility revenue bonds, 1951 (herein- after called the "1951 Bonds"), dated January 1, 1951 and issued pursuant to Ordinance No. 211 of the city in the original amount of $200,000, and $182,000 of which are now outstanding. (3) The electric utility revenue bonds, 1954 (herein- after called the "1954 Bonds"), dated July 1, 1954 and issued pursuant to Ordinance No. 248 of the city in the original amount of $200,000, and $195,000 of which are now outstanding. (d) The word "Bonds" or the words "the Bonds" mean the $300,000 of electric utility revenue bonds of the city authorized in this ordinance for the uses and purposes herein mentioned. Section 3. The Council hereby finds and determines, as required by Section 11 of Ordinance No. 200 of the city and as also required by Sections 9 and 10 of Ordinances Nos. 211 and 248, re- spectively, of the city, as follows: (a) That the Bonds are issued for the purpose of con- structing and installing economically sound additions and improve- ments to and extensions of the existing electric utility system of the city. (b) 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 and 248 for the payment of the principal of and interest on the Pres&ntly OUtstanding Bonds. That the city has not issued nor does it have outstanding any electric revenue bonds of the city other than the Presently Outstanding Bonds. 4. ~, (c) That Howard T. Harstad of Howard T. Harstad & Associates, 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, Washington, has prepared and filed with the Common Council, and delivered a copy to Grande & Co., Inc., a certificate which shows that he is reasonably certain that the earnings of the existing electric utility system, including additions, improvements and extensions to be made thereto out of the proceeds of the sale of the Bonds, less costs of maintenance and operation, will be 1.5 times the amounts necessary each calendar year for debt service on I I [I ! ,I i I I t! ,I II II i' I I i i I I I I I i the Presently Outstanding Bonds and all of the Bonds. The conditions contained in Sections 11, 9 and 10 of Ordinances Nos. 200, 211 and 248, respectively, for the issuance of parity electric utility revenue bonds being complied with in the issuance of the Bonds, the payments into the Bond Redemption Fund and Reserve Account created in this ordinance shall constitute 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 and 248 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 distribution line extensions to the electric utility system on the Seward-Anchorage Highway between Seward and Mile Eight, together with distribution line extensions on Nash Road and other side roads leading from said highway, to carry out 5. ". ~ ..~ subsurface exploration work, to construct an access road or trails to Crescent Lake, to pay certain engineering fees and costs for engineering services rendered, to pay certain engineering fees and costs for engineering services to be rendered in preparing plans necessary to carry out the rest of the plan of additions and improvements to and extensions of the electric utility system of the city as provided in said Ordinance No. 253, and to fund those warrants that have been or may be drawn on the Electric Utility Construction Fund of the city created by Ordinance No. 258 to provide funds to pay for any of the above purposes, the city shall now issue $300,000 of its electric utility revenue bonds (herein called the "Bonds") out of the $3,500,000 of such bonds authorized 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 February 1, 1956, shall be in denominations of $1,000 each, shall bear interest payable semi- annually on the first days of February and August of each year as evidenced by coupons to be attached to said bonds, and shall be numbered and mature in order of their number as follows: Bond Nos. 1-15 16-55 56-95 96-140 141-185 186-230 231-280 281-300 Maturity Date February 1, 1975 February 1, 1976 February 1, 1977 February 1, 1978 February 1, 1979 February 1, 1980 February 1, 1981 February 1, 1982 Amount Int. Rate $15,000 40,000 40,000 45,000 45,000 45,000 50,000 20,000 4 3/4d 4 3/4% 4 3/4% 4 3/4% 4 3/4% 4 3/4% 4 3/4% 4 3/4%. In addition to the interest rate fixed above, all of the Bonds shall bear an additional interest rate of 1/4% per annum until February 1, 1966, which 1/4% interest shall be evidenced by coupons 6. r payable on February first of each year from 1957 to and including 1966, and which shall be detached from said bonds. Both principal and interest of the Bonds shall be payable in lawful money of the United States of America at the main office of the SeaUie Trust and Savings 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 ou~anding Bonds at par plus accrued interest, in inverse numerical order, on any interest payment date on and after ten years from date of issue; provided, however, that if any or all of the Bonds are retired by refunding, it shall be at the follow- ing times and prices: On February 1 and August On February 1 and August On February 1 and August On February 1 and August On February 1, 1970, and 1, 1966, at il02.00 per ilOO par value 1, 1967, at 101.50 per 100 par value 1, 1968, at 101.00 per 100 par value 1, 1969, at 100.50 per 100 par value 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 con- secutive weeks, the date of each first publication to 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 fom: 7. (. ,-. UNITED STATES OF AMERICA NO. $1,000 TERRITORY OF ALASKA CITY OF SEWARD ELECTRIC UTILITY REVENUE BOND, 1956-A lCNOW 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 February, 19__, the principal sum of ONE THOUSAND DOLLARS together with interest thereon at the rate of 5% per annum to February 1, 1966, and thereafter at the rate of 4 3/4% per annum (said 5% interest to be evidenced by coupons for semiannual interest attached hereto at 4 3/4% per annum from date of issue to date of maturity of this bond and by detached coupons for annual interest at 1/4% per annum from date of issue to February 1, 1966) payable semiannually on the first days of February and August of each year as evidenced by and upon presentation and surrender 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, SOlely out of the special fund of the city known as "Seward 1956-A Electric Utility Revenue Bond Redemption Fund" created by Ordinance No. '2' 1 of the city. The city has reserved the right to redeem any or all of the outstanding bonds of this issue at par plus accrued in- terest, in inverse numerical order, on any interest payment 8. r , date on and after ten years from date hereof; provided, however, that if any or all of said bonds are retired by refunding, it shall be at the following times and prices: On February 1 and August 1, 1966, at 1102.00 per 1100 par value On February 1 and August 1, 1967, at 101.50 per 100 par value On February 1 and August 1, 1968, at 101.00 per 100 par value On February 1 and August 1, 1969, at 100.50 per 100 par value On February 1, 1970, 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 first publioation 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 $300,000 and part of an authorized issue of such bonds of $3,500,000, and is issued pursuant to duly and regularly adopted ordinances of the city and a vote of the qualified electors thereof. Said $300,000 of bonds are issued for the purpose of providing funds to pay the cost of con- structing and installing certain additions and improvements to and extensions of the electric utility system of the ci ty and paying certain costs incidental thereto, and are payable solely out of the gross revenue of said system. The city hereby covenants and agrees with the holder of this bond that it will keep and perform all the covenants of this bond and of Ordinanoes No. 253 and No. ~'1 to be by it kept and performed. The city does hereby pledge and bind itself to set aside 9. ,.... from the Electric utility Revenue Fund of the city created by Ordinance No. 200, into which it has pledged shall be paid all the gross earnings and revenue of said electric utility system 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 Ordinance No. :2 '1 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 opera- tion 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 issued under dates of March 1, 1950, January 1, 1951, and July 1, 1954. The city has further bound itself to maintain said system in good condition and repair, to operate the same in an ef- ficient manner and at a reasonable cost, and to establish, 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 on the bonds of the issue of which this is one after neces- sary costs of maintenance and operation of said system have been paid but before depreciation. 10. t '" It is hereby certified and declared that said bonds are issued pursuant to and in strict compliance with the laws of the United States of America and the Territory of Alaska and the duly adopted ordinances 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 perfo:nned. IN WITNESS WHEREOP, the City of Seward has caused this bond to be signed by its Mayor, 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 faatmile signatures of said officials, this first day of February, 1956. CITY OF SEWARD, ALASKA By Mayor ATTEST: City Clerk The interest coupons to be attached to said bonds shall be in substantially the following fo:nn: (Semiannual Coupons to Maturity) NO. $23.75 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, Washington, the sum of TWENTY-THREE AND 15/100 DOLLARS in lawful money of the United States of America out of the special fund of 11. the city known as "Seward 1956-A Electric UtllJcf Revenue Bond Redemption Fund," said sum being semi- annual interest due that day on its electric utility revenue bond dated February 1, 1956, and numbered . CITY OF SEWARD, ALASKA By Mayor ATTEST: City Clerk The interest coupons to be detached from said bonds shall be in substantially the following form: (Additional Detached Annual Coupons to and including February 1, 1966) NO. $2.50 On the first day of February, 19__, the City of Seward, Alaska, will pay to bearer at the main office of the Seattle Trust and Savings Bank in Seattle, Washington, the sum of TWO AND 50/100 DOLLARS in lawful money of the United States of America out of the special fund of the city known as "Seward 1956-A Electric Utility Revenue Bond Redemption Fund," said sum being annual interest due that day on its electric utility revenue bond dated February 1, 1956, and numbered . CITY OF SEWARD, ALASKA By Mayor ATTEST: City Clerk 12. ~ '~ \1 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 inter- est coupons provided for herein shall be signed with the facsimile signatures of said officials. Section 8. That there be and is hereby created in the office of the City Treasurer a special fund of the city to be known as "Seward 1956-A Electric utility Revenue Bond Redemption Fund" (hereinafter called the "Bond Redemption Fund"), which Fund is to be drawn upon for the sole purpose of paying the principal of and interest on the Bonds. The city hereby obligates and binds itself to set aside and pay into the Bond Redemption Fund out of the money in the Electric Utility Revenue Fund certain fixed amounts neces- sary 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 Bond Redemption Fund on or before the twentieth day of each month in the amounts hereinafter specified: (a) Beginning with the month of February, 1956, and continuing as long as any of the Bonds are outstanding and unpaid, an amount equal to at least one-sixth of the 4 3/4% interest to become due and payable at the end of the next ensuing six-month period on all of the Bonds then outstanding. (b) Beginning with the month of February, 1956, and continuing as long as any of the 1/4% 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 at the end of the next ensuing twelve-month period. 13. (c) Beginning with the month of February, 1974, and continuing as long as any of the Bonds are outstanding and unpaid, an amount equal to at least one-twelfth of the principal of the Bonds to become due and payable on the next principal payment date. The city further covenants that it will transfer from the Bond Redemption Fund to the main office of the Seattle Trust and Savings Bank in Seattle, Washington, at least ten days before 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 Bond Redemption Fund and the Reserve Account hereinafter created to redeem and retire all of the Bonds and to pay interest due to such retirement date, then no further payments need be made into the Bond Redemption Fund. Said amounts so pledged to be paid into the Bond Redemption Fund and into the Reserve Account hereinafter created 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 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 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, the sum of at least $416.67 per month, commencing with the month of February, 1956, until the total amount of $15,000 has been paid therein, and that it will 14. ~, then pay into said Reserve Account the sum of at least $203.13 per month for the next one hundred ninety-two months until the total amount of $54,000 has been paid therein. The city further agrees, when said sum of $54,000 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 Bond Redemption .Fund and Reserve Account to redeem and retire all the Bonds outstanding. In the event there shall be a deficiency in the 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 payments into the 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 avail- able, then in United states Government obligations maturing not later than twelve years from date of purchase and in no event later than the last maturity of the Bonds. Interest earned on any such investments shall be deposited in and become a part of the Bond Redemption Fund. Section 10. The corporate authorities of the city hereby declare, in fixing the amounts to be. paid into the Bond Redemption 15. r Fund and Reserve Account as aforesaidl 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 I 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 so previously pledged. 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 No. 2001 No. 2111 No. 248 and this ordinance constitute the only charges which have been made upon the Electric Utility Revenue FundI and that it will not hereafter create any bond redemption fund or reserve account for the payment of additional electric utility revenue bondsl warrantsl or other obligationsl 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 Bond Redemption Fund and Reserve Account created hereinl 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 of fixed amounts sufficient to pay the principal of and interest on ~uch additional bonds and to maintain adequate , re~erves therefor which such payments may rank equally with the 16. r payments pledged to be made into the bond redemption funds and reserve accounts created by Ordinances No. 200, No. 211, No. 248 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 No. 200, No. 211 and No. 248 equally and ratably with the Presently Out- standing Bonds. All the terms, provisions and covenants of Sections 10 and 12 of said Ordinance No. 200 shall apply to the Bonds and the Bond Redemption Fund and Reserve Account created herein for the payment of the principal of and interest on the Bonds, to the same extent and effect as they do to the Presently Outstanding Bonds and the bond redemption funds and reserve accounts created by said Ordinances No. 200, No. 211 and No. 248 for their payment. Section 13. The action of the Common Council on September 9, 1955 in accepting the written offer of Grande & Co., Inc. dated July 8, 1955 and the addendum thereto dated August 30, 1955 to purchase the Bonds at par and under the terms thereof as set forth herein is hereby in all respects ratified and confirmed. Section 14. This ordinance shall become effective upon its final passage by the Common Council and approval by the Mayor and upon its being posted or pUblished as required by Ordinance No. 86 of the city as amended. 17. held on INTRODUCED AND READ at a regular meeting of the Council the 3M day of ~ ' 1956. READ the second and third times and PASSED by the Cormnon Council and approved by the Mayor at a regular meeting of the Cormnon Council held on the "ti. day of ~ ' 1956. :r; J4jJ;J !t~ ATTEST: ~k/~ y Clerk 18.