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HomeMy WebLinkAboutOrd1950-200 r -. 2-;:'-50 7 ORDINANCE NO. l ')"1 AN OHDINANCE of the City of Se",ard, Alaska, confirming the results of a special election held in said city on September 8, 19L9, for the adoption of a plan for makinG certain additions and betterments to the municipal electric utility system and issuing revenue bonds in the sum of $50,000 to pay therefor and to provide for the refunding of outstanding electric utility revenue bonds in the principal sum of $54,000 and providing for the issuance of electric utility revenue bonds in a like amount to refund said outstanding bonds, providing for combining said two issues of bonds in one issue and fixing the date, form, maturities, protective features and other details of said bonds, pledging the revenues of said electric utility system to the payment of said bonds, creating a special fund for the payment of the principal and interest of said bonds and a Reserve Account therein, providing certain other protective features safeguarding the pa,yment thereof, confirming the sale of said bonds, and declaring an emergency. viHEREAS, at a special election held in the City of Seward, Terri tory of Alaska, on September 8, 19h9, pursuant to Ordinance No. 197 of said city, passed and approved Au~ust 18, 1949, the qualified electors of said city duly authorizecl tae issuance of revenue -bonds in the total sum of $104,000 to pay for certain additions and betterments to the electric utility system of the city and to refund outstanding electric utility revenue bonds in the principal sum of $54,000; and WHEREAS, it is now necessary, in order for said city to make such additions and betterments to its electric utility system and to refund said $5L~,000 of outstanding electric utility revenue bonds, all as pro- vided by said Ordinance No. 197 of said city, that it now issue and sell its electric utility revenue bonds in the principal sum of $104,000; and WHEREAS, heretofore, on December 7, 1949, the City Council authorized the sale of said revenue bonds to Grande & Co., Inc. of Seattle, 1:fashing- ton, under the terms and conditions of its letter to the City Council dated August 15, 1949 as changed and amended in certain particulars by the City Council at its meeting duly held on December 7, 1949, and it is to the advantage of said city that said sale be now ratified and confirmed: 1. r NOW, THEREFORE, BS IT ORDAINED by the Common Council of the City of Seward, Territory of Alaska, as follows: Section 1. That the adoption by the qualified electors of the City of Seward, Alaska, at the special election held therein on September 8, 1949, of a proposition providing for making certain adcitions and betterments to the electric utility system of said city ~'nd the issuance of $50,000 of electric utility revenue bonds to pay therefor, and of a proposition to issue electric utility refunding revenue bonds in the principal sum of $54,000 for the purpose of refunding the city's outstanding electric utility revenue bonds in a like amount be and the same is hereby in all respects ratified and confirmed. $ection 2. That the officials of said city are hereby authorized and directed to ')roceed with acnuiring and constructing the additions and betterments to said electric utility system as provided by said Oro,ine.nce No. 197, all in accordance ~!i th the plans and specifications therefor as prepared by the engineer for said city, and for the purpose of naying therefor and refunoing said $54,00n of electric utility revenue bonds now outstanding, that there now be issued and sold, in one issue, electric utility revenue bonds in tne principal sum of $104,000. Said bo no s shall be dated Y.tarch 1, 1950, shall be numbered from 1 to 104 inclusive, shall be in denominations of $1,000 each, shall bear interest at the rate of 4 3/450 per annum payable semiannually, and shall mature in order of their number as follows: March 1, 1';'52 $3,000 March 1, 1962 $6,000 March 1, 1953 4,000 March 1, 1963 / 0,000 March 1, 1954 4,000 March 1, 1964 6,000 March 1, 1955 4,000 March 1, 1965 6,000 March 1, 1956 4,000 March 1, 1966 7,000 March 1, 1957 4,000 March 1, 1967 7,000 March 1, 1958 5,000 March 1, 1968 7,000 :/iIarch 1, 1959 5,000 March 1, 1969 8,000 Y.tarch 1, 1960 5,000 March 1, 1970 8,000 Ivls.rch 1, 1961 5,000 2. r- S~Q.l~Q.u. All of seid bonds shall be payable, both principal and interest, in lawful money of the United States of America at the ~.ain Office of the Seattle Trust and Savings Bank in the City of Seattle, Washington. Said City of Seward hereby reserves the right to redeem any or all of said bonds in inverse numerical order on any interest uayment date on and after ten years from date of bonds by payment at par and accrued interest to date of redemption. Notice of such redemption shall be given by <mblication thereof in a news- paper of general circulation printed in the City of Seward, Alaska, and in a similar newspaper printed in the City of Seattle, Washington, once a week for tHO successive weeks, the date of first "Qublication to be not less than thirty days nor more than forty-five days prior to said redemption date. Interest on any bond so called for redemption shall cease to accrue from and after the date fixed for redemption unless the city shall default in the payment of the bonds so called for redemution. Sectionji. Said bonds shall be in substantially the following form: NO. P9" $1,000 UNITED STATES OF AMERICA TERRITORY OF ALASKA, CITY OF SEWARD ELECTRIC UTILITY REV~NUE BOND, 1950 KNOW ALL MEN BY THESE .PRESEnTS: Ths,t 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 March, 19__, the principal sum of ONE THOUSAIJD DOLLARS with interest tnereon at the rate of 4 3/4% payable semiannually on the first days of March and September of each year, as eVi- denced by and upon presentation and surrender of the attached interest coupon~ as-they severally become due. Both principal and interest v.re uayable in lawful money of the United Sta,tes of America at the Main Office of the Seattle Trust and Savings Bank in the Oi ty of See,ttle, Washington. 3. I Said city has reserved the right to redeem, in inverse numerical order, any or all of the bonds of this issue, at per nlus accrued interest, on any interest payment date on and after ten years from date of bonds. Notice of such in- tended redemption shell be given by publication thereof in a newspaper of general circulation printed in the City of Seward, Alaska, and in a similar newspaper printed in the City of Seattle, Washin~ton, once a week for two successive weeks, the date of first publication to be not less than t,,"irty days nor more thfln forty-five days prior to said redemntir;n date. This bond is one of an issue of bonds in the nrincinal sum of $104,000 of like date, tenure and amount issued for the purDose of providing funds to pay for certain additions and betterments to the municipal electric utility system and to refund outstanding electric utility revenue bonds in the principal sum of $54,000. This bond is payable out of the Bond Rederrmtion Fund created by Ordinance No. ---.:. of seid ci ty named II Seward Electric Utility Revenue Bond Redemption Fund, 1950.11 By the terms of said ordinance said city Das irrevocably pledged itself to set aside and pay into said Bond Redemption Fund out of the gross revenues of s2id electric utility system amounts sufficient to pay the principal and interest of said bonds as the same shall accrue, and to maintain a Reserve Account in said Bond Redemntion Fund. Said amounts so pledged are hereby declared to be a prior lien and charge upon the gross revenues of si,id electric utility syEtem, including all additions and improvements thereto, superior to all other charges of any kind or nature except the nec- essary cost of maintaining and onerating said electric utility system; provided, that the city may issue additional electric utility revenue bonds on a parity with the bonds of this issue, provided that such bonds can only be issued under the conditions and subject to the limitations set forth in said Ordinance No. of said city. It is hereby certified and declared that this bond is issued in strict comnliance with the laws of the United States of America. and the Territory of Alaska and the duly adopted ordinances and resolutions of the City of Seward, Alaska. It is hereby further certified that all acts, conditions and thin~s required to be done precedent to and in the issuance of this bond have been properly done and nerformed as required by law. IN WITNESS WHEREOF, the City of Seward, Alaska, has caused this bond to be signed by its Mayor and attested by its Clerk and has caused its corporate seal to be hereto affixed, end the interest cou9ons attached to be signed with the facsimile signatures of said officers, this first day of March, 1950. CITY OF SEWARD, ALASKA By Mayor AT'l'EST: Oi ty Clerk 4. r The interest coupons to be attacned to said bonds shall be in substantially the following form: NO. $23.75 On tIle fir,st day of ____ __ __' 19_, the City of Seward, Alaska, for value received, will pay to bearer at the Main Office of the Seattle Trust and Savings Bank in the City of Seattle, Washington, the sum of TiVENTY-THREE AND 75/100 DOLLARS in lawful money of the United States of America, said sum being the semiannual interest due that day on its Electric Utility Revenue Bond dated March I, 1950, and numbered ____' CITY OF SEWARD, ALASKA By_ }1jayor ATTEST: City Clerk ~ection 5. Said bonds Shall be signed by the Mayor and attested by the City Clerk under the seal of said city, and each of the interest couDons shall be Signed ..7ith tile facsimile signatures of said officials. Section 6. The City of Seward does nereby appoint the Seattle Trust and Savings Bank ,Main Office_ at Seattle, Washington, its fiscal agent, where said bonds and interest coupons shall be presented for payment. Section 7. There is hereby created a special fund known as "Electric Utility Revenue Fund ", into which shall be Daid all the gross earnings 8,nd revenues of said electric utility system as the same are collected. All such revenues as collected shall be deDosited in the Bank of Seward, Alaska, as the depositary for said town, which bank she,ll furnish such security for such deposi ts as the statutes of the Territory of Alaska and the City Council may require. There shall first be paid out of said Fund the necessE.ry cost of maintaining and operating said system. 5. r= SectiQ..n 8. There is hereby created in the office of the City Treasurer a speci81 fund to be known as "Seward Electric Utility Revenue Bond Redemntion Fund, 195011, which fund shall be drawn upon for the sole nurpose of paying the principal and interest of said bonds. Said city hereby obligates imd binds itself to rY9.y into said Bond Redemntion Fund out of the gross revenues of its electric utility so denosited in the Electric Utility Revenue Fund the fixed amounts necessary to pay the principal and interest on all the outstanding bond s of s2..id issue as they accrue, and the amounts provided herein to be paid into the Reserve Account hereinafter created, at the times and in the amounts following: (a) On or before the twentieth day of each month commencing with April, 1950, and continuing as long as any of said bonds are outstand- ing, an equal amount each month so that there will be in said Fund thirty days prior to the next interest payment date an amount sufficient to make such interest payments on the outstanding bonds. (b) On or before the twentieth day of each month beginning with the month of March, 1951, and continuing as long as any of said bonds are outstanding, an equal amount each month so that there will be in said Fund thirty days prior to the next principal payment date an amount sufficient to make such principe.l payments on the bonds ma,turing on such date. There is hereby created a Reserve Accouht in said Bond Redemption Fund, and after payment of the sums above required to be paid into said Bond Redemntion Fund, said city agrees to transfer from said Electric Utility Revenue Fund into said Reserve Account the first available not later than March 1, 1952, qurplus funds until/there is at least $9,000 in said Reserve Account. Said city further agrees that once said sum has been naid into said Reserve Acc~unt, it will at all times maintain the same therein until 6. r- there is a sufficient amount in the Bond Redemption Fund and Reserve Account to pay the principe!l and interest to maturity of all of the outstanding bonds of said issue. In the event tJ:-:ere shall be a deficiency in the Bond Redemution Fund to meet maturing installments of either principal or interest, such deficiency snaIl be made up by 1'11 tho.rawals of cash from the Reserve Account. Any deficiency created in the Reserve Account by reason of any such wi thdrD,'\oTals shall be made up from moneys in the Electric Utility Revenue Fund first available after making necessary provision for the rEquired payments ir:to said Bond Redemption Fund. Said city shall not use any of the moneys in said Reserve Account for any Durpose exceDt to make good any deficiency in the Bond Redemntion Fund. Said amounts 80 pledged for payment into said Bond Redemption Fund and Reserve Account are hereby declared to be a 1)1'101' lien and charge upon the gross revenues of said electric utility and all addi- tions and imnrovements thereto superior to all other charges of any kind or nc;ture excent the necessary cost of maintenance and operation ordinance. of said electric utility, and except a8 provided in Section 11 of tni~/ All money in the Reserve Account above nrovided for may be kept in cash or invested in United States Government obligations maturing not later than t"rel ve years from dEte of ))urchase. Interest esrned on any such investments shall be deposited in and become a part of the Bond Redemption Fund. Said city further covenants to transfer from said Bond Redemption Fund to the Main Office of the Seattle Trust and Savings Bank in Seattle, Wl'tshington, its paying agent, at least thirty days before any installment of nrincipel or interest may become due upon said bonds, amounts sufficient to pay each of such installments. 7. r= Section 9. The corporate authorities of said City of Seward hereby declare that in fixing the amounts to be paid into said Bond Redeml)tion Fund and Reserve Account they have exercised due regard to the COf't of mB_intenance and operation of said electric utility and have not obligated said city to set aside and pay into said Bond Redemntion Fund and Reserve Account a greater amount or proportion of the gross revenues of said utility than in their judgment will be available over and above said cost of maintenance and operation thereof. Section 10. Said city hereby agrees that it will not use any of the gross revenues of said electric utility so to be deposited in said fund for any other -cmrpose than paying the necessary cost of maintain- ing and operating said utility and making the payments into said Bond Redemption Fund and Reserve Account as herein provided; provided, however, that if there she,ll be surplus funds in said Electric Utility Revenue Fund, said city shall only use such surplus funds to pay the cost of economically sound additions and improvements to said electric utility and payment of other legitimate claims incident to operation of sr-id utility. Said city shall also have the right to use any of such surplus funds to pay any of the outstanding bonds in accordance with the option granted to the city to retire said bonds before maturity date, or to Durchase in the open merket bonds of any maturities prior to the oution call date. Section ll. As long as any of the bonds of this issue are out- standing and unpaid, said city shall not issue any additional bonds payable from the gross revenues of said electric utility and any ad- ditions and improvements tnereto excepting that it shall have the right to issue such additional revenue bonds on a parity with this issue to pay the cost of economically sound additions and improvements, pro- vided in each case that (a) there is no deficiency in the Bond 8. r Redemption Fund or Reserve Account, and (b) that net income (gross income less cost of maintenance and operation but not including reserve for depreciaticn) for the twenty-fov_r months next preceding the issuance of the additional bonds has been and is 1.5 times the debt service on these bonds and the estimated debt service on the additional bonds to be issued; or if a license professional engineer approved by Grande & Co., Inc. has Drepared and filed with the City Council, with a CODY to Grllnde & Co,) Inc., an estimate of the cost of tl1e Dro~)osed additions and improvements to the utility and of the eo,r!1i:lg'S thereof, which snOvlS that he is reasonably certain that the earninvs of the electric utility, including the proDosed additions and oDeration and improvements less maintenanc~/costs, will be 1.5 times the amounts necessary for the debt service of the outstanding bonds together with those DroDosed to be issued to nay for such additions and betterments. Section 12. The City of Seward hereby covenants and agrees with the nolders of these bonds as follows: (a) Said city will establish, maintain and collect rates and charges for light and Dower and all other services furnished by said electric utility during the Dcriod of time that any of the bonds of this issue or any other bonds issued on a parity with this issue of bonds::,re outstanding that will make availDble for the payment of the principal and interest thereof as the same s.all accrue an amount equivalent to 1.5 times the average annual amount due for the Dayment of such nrinci-oE\l and interest. The amount "available for the Dayment of the nrincinal and interest thereof as tee same shall accrue" is hereby defined as lithe gross revenue of said electric utility less expenses of maintenance and oYjeration but before de:precia tion. II 9. (b) Said city vrill at all times maintain, preserve and keen or cause to be maintained, nreserved and kept, the said electric utility and every part and narcel thereof in good repair, working order and condition, and will from time to time make or cause to be made all necessary and proper repairs, renewals and renlacements, so that at all times the business carried on in connection therewith may be properly and advcwtageously conducted, and will at all times operate said electric utility in an efficient manner and at a reasonable cost. (c) Said city will at all times carry adequate fire, public liability and any other insurance which a private company usually carries on such a utility. If and when the United States or some agency thereof shall provide for war risk insurance, then and in such case, said city further asrees to take out and maintain war risk in- surance on said utility in an amount to adequately cover the value thereof. In the event of any loss covered by any policies of in- surance, any amount collected on such insurance policies shall be used by said city for the repair or reconstruction of said utility, and in case such insurance money shall not be used for said rlUrposes, it shall be naid into the Bond Redemption Fund or Reserve Account and used for the retirement of the outstanding bonds. (d) Said city will keep proper books and accounts covering the opera,tion of said utility and shall cause such books and accounts to be audited annually by competent :oublic accountants and copies of such audits, as soon as made, shall be delivered to Grande & Co., Inc. in Seattle, Washington. Said audits shall show whether or not said city has comn1ied with the covenants set forth in this ordinance, including payments into the Bond Redemption Fund and Reserve Account as herein provided. (e: All employees or agents of the city collecting or handling money in connection with the management and operation of said utility shall be bonded in a resnonsible surety company in amounts sufficient to nrotect the city from loss. 10. "","'..~ r-' (f) Said city will not sell or otherwise disnose of said utility unless, contemporaneously with such sale or disposal, there shall be paid into the Bond ~edemption Fund a sum sufficient to redeem all bonds then outstanding. (gl Said city agrees during the life of tl~S bond issue not to grant a franchise to anyone for the maintenance and operation of any competing electric utility with the realm of their jurisdiction. (h) Said city agrees not to furnish any free service from said electric utility, and agrees that all service rates shall be fair and non-discrimine,tory as regards users of the sa.me general class. Said ci ty also agrees th,-.t it "Till Drovide by resolution or ordinance rules and regulations for the levy and collection of all service charges, which rules will provide for the right of the city to dis- continue service for the non-payment of any such serVice charges. (i) At least once during eacr.. five-year period, beginning March 1, 1950, said city will have made a comprehensive survey and report of the operation of its electric utility by an independent consulting engineer or engineering firm acceptable to Grande & Co., Inc., and if such reDort shall show that said uti~ity has not been maintained in ~ood renair and sound onerating condition, said city agrees to promptly place such utility in good repair and operating condition. Section_l1. That the sale of the $104,000 of said revenue bonds herein authorized to be issued to Grande & Co., Inc. of Seattle, Washington, under the terwS and conditions of its letter to the City Council dated August 15, 1949, as changed and amended in certain particulars by the City Council at its meeting duly held on December 7, 1949, is hereby in all respects ratified and confirmed, and the officials of said city are hereby autnorized and directed to do everything necessary to provide for the payment and retirement of 11. r the outstanding $54,000 of electric utility revenue bonds and the making of the improvements to said electric utility as provided by Ordinance No. 197 of said city, and to issue and deliver said bonds to said lmrchaser. Thet the sum of $50,000 of the proceeds of the sale of said bonds ShBll be used for the purpose of T)aying for such additions and betterments to the electric utility system, and the remainder of said sum, to wit: $54,000, shall be used to T)ay and retire the outstanding revenue of said city in the same sum. Section 14. An emergency having been declared, tnis ordinance shall take effect immediately upon its passage and approval. PASSED by the Common Council of the City of Seward, Alaska, / and a:~)T)roved by its Mayor on this -.!J:___ day of February, 1950. /. I ' . / z.'_ t. ( CI (. _ \~L- r.:~.,;. ~ - , / ! Mayor ATTEST: / City Clerk 1.:::.