8.4 Issue WS Bonds CITY OF SALINA
REQUEST FOR COMMI SS I ON ACT ION DATE T !ME
11/lq/1988
AGENDA SECTION: Administrotion ORIGINATING DEPARTMENT: APPROVED FOR
NO. 8 City Clerk AGENDA:
ITEM
BY: Robert K. Biles~;~i~ BY: ~'
First Reading Ordinance N~mber 88-9292, authorizing and directing the
issuance, sale and delivery of $3,000,000 principal amount of Combined Water
and Sewage System Revenue Bonds, Series 1988, of the City of Salina, Kansas
for the purpose of repairing, altering, extending reconstructing, enlarging
and improving the combined water and sewage system prescribing the form and
details of said revenue bonds, providing for the collection, segregation and
application of the revenues of said system for the purposes authorized by law,
including paying the cost of operation and maintenance of said utility, paying
the principal of and interest on the revenue bonds of said city issued against
said system and providing adequate reserve funds, making certain covenants
with respect to said bonds and approving a preliminary official statement and
official statement relating to said bonds.
This ordinance sets forth the terms and conditions under which the City of
Salina is issuing $3,000,000 of 20 year water and sewerage revenue bonds.
The ordinance specifies the maturity schedule for the bonds, the method of
payment, the form of the bonds and certain covenants of the City. Among the
covenants listed are dept coverage requirements, the 1988 reserve account
amount, operational and financial revenues and insurance requirements.
This document has been prepared by our bond counsel, Stinson, Mag and
Fizzell, and reviewed by City staff.
Prior to second reading, the interest rates accepted from the successful
bidder, as approved by the City Commission in Agenda Item 8.3, will be
inserted into the ordinance.
Recommended action
Introduce Ordinance Number 88-9292 for first reading.
COI~ISS ION ACTION
VlOTtON BY SECOND BY
TO:
CITY OF SALINA, KANSAS
ORDINANCE NO. 88-9292
$3,000,000
COMBINED WATER AND SEWAGE SYSTEM REVENUE BONDS
SERIES 1988
DATED: DECEMBER 1, 1988
ORDINANCE NO. 88~9292 OF THE CITY OF SALINA, KANSAS
PAGE
Recitals
Section 1. Definitions 3
Section 2. Authorization of and Security for the
1988 Bonds 7
Section 3. Description of the Bonds, Designation of
Paying Agent and Bond Registrar ......... 8
Section 4. Method and Place of Payment of Principal
of and Interest on the Bonds 8
Section 5. Execution, Authentication and Delivery
of the Bonds 10
Section 6. Registration, Transfer and Exchange of Bonds 10
Section 7. Persons Deemed Owners of Bonds 12
Section 8. Mutilated, Lost, Stolen or Destroyed Bonds- 12
Section 9. Cancellation and Destruction of Bonds
Upon Payment 12
Section 10. Redemption of Bonds Prior to Maturity ...... 12
Section 11. Form of Bonds 14
Section 12. Uncertificated Bonds 20
Section 13. Disposition of 1988 Bond Proceeds 20
Section 14. Water and Sewage Fund 20
Section 15. Ratification and Creation of Funds and
Accounts 21
Section 16. Application of Moneys in Funds and Accounts 22
Section 17. Deficiency in Payments or Credits into
Funds or Accounts 28
Section 18. Use of Other Accounts to Pay Bonds
and Interest ............ 28
Section 19. Investments 28
Section 20. Particular Covenants of the City .... 28
Section 21. Additional Bonds 31
Section 22. Tax Matters 33
Section 23. Amendments 34
Section 24. Acceleration in the Event of Default ....... 35
Section 25. Enforcement 35
Section 26. Defeasance 36
Section 27. Approval of Preliminary Official Statement
and Official Statement ...... 37
Section 28. Severability 37
Section 29. Effective Date 37
(PUBLISHED IN THE SALINA JOURNAL , 1988)
ORDINANCE NO. 88-9292
AN ORDINANCE AUTHORIZING AND DIRECTING THE ISSUANCE, SALE AND
DELIVERY OF $3,000,000 PRINCIPAL AMOUNT OF COMBINED WATER AND
SEWAGE SYSTEM REVENUE BONDS, SERIES 1988, OF THE CITY OF SALINA,
KANSAS, FOR THE PURPOSE OF REPAIRING, ALTERING, EXTENDING,
RECONSTRUCTING, ENLARGING AND IMPROVING THE COMBINED WATER AND
SEWAGE SYSTEM,~PRESCRIBING THE FORM AND DETAILS OF SAID REVENUE
BONDS, PROVIDING FOR THE COLLECTION, SEGREGATION AND APPLICATION
OF THE REVENUES OF SAID SYSTEM FOR THE PURPOSES AUTHORIZED BY
LAW, INCLUDING PAYING THE COST OF OPERATION AND MAINTENANCE OF
SAID UTILITY, PAYING THE PRINCIPAL OF AND INTEREST ON THE REVENUE
BONDS OF SAID CITY ISSUED AGAINST SAID SYSTEM AND PROVIDING
ADEQUATE RESERVE FUNDS, MAKING CERTAIN COVENANTS WITH RESPECT TO
SAID BONDS AND APPROVING A PRELIMINARY OFFICIAL STATEMENT AND
OFFICIAL STATEMENT RELATING TO SAID BONDS.
WHEREAS, the City of Salina, Kansas (the "City"),
pursuant to the provisions of K.S.A. 12-856 to 12-868, inclusive,
1959 Supplement to the General Statutes of Kansas, 1949, acting
through the governing body of the City, by Ordinance No. 6544,
passed June 27, 1961, has heretofore combined the waterworks
system and the sewage disposal system of said City, as said
systems are defined and referred to in said Sections 12-856 to
12-868, inclusive, and said combined water and sewage system (the
"Water and Sewage Utility" or the "combined water and sewage
system") has thenceforth been operated and financed in accordance
with the provisions of said statutes, and
WHEREAS, pursuant to the provisions of K.S.A. 12-856 to
12-869, inclusive, and all amendments thereto, the governing body
of the City heretofore caused to be published on October 21,
1988, in the official City newspaper a notice of the intention of
the City to repair, alter, extend, reconstruct, enlarge and
improve the combined water and sewage system of the CityA(the
"Project") at a total cost estimated to be $3~56~.~1~?, to be paid
for by the issuance of $~,000,000 principal ~o~ combined
water and sewage system revenue bonds of the City, and
WHEREAS, within fifteen (15) days after the publication
of the notice aforesaid, no written protest was filed with the
City Clerk of the City against the Project or against the
issuance of said revenue bonds, and the City is now authorized to
proceed with the Project and to issue its revenue bonds to pay
part of the cost thereof, and
WIqEREAS, the governing body of said City has caused a
report covering the Project and an estimate of the cost thereof,
to be made by the City's engineers, and said report and estimate
have been and hereby are accepted and approved and are now on
file in the office of the City Clerk, and
WHEREAS, it appears from the report and estimate of the
City's engineers, and the governing body of the City hereby finds
and determines, that the cost of the Project will be $3,000,000,
and that it is now necessary that the City proceed forthwith to
authorize and issue its Combined Water and Sewage System Revenue
Bonds in the amount of $3,000,000 for the purpose of paying the
cost of the Project, and
WHEREAS, the City has heretofore issued an issue of
Combined Water and Sewage System Revenue Bonds, Series of 1977,
in the original principal amount of $3,000,000 (the "1977
Bonds"), authorized by Ordinance No. 8546 of said City (the "1977
Ordinance"), and
WHEREAS, the City has heretofore issued its Combined
Waterworks and Sewer System Refunding Revenue Bonds, Series of
1978, in the original principal amount of $4,394,000 (the "1978
Bonds"), authorized by Ordinance No. 8635 of the City (the "1978
Ordinance"), for the purpose of refunding, among other bond
issues, the 1977 Bonds, but under the terms of the 1977
Ordinance, the 1977 Ordinance was not defeased by such refunding
and the 1977 Bonds were not deemed to be paid, and
WHEREAS, the City-has heretofore issued its Combined
Water and Sewage System Refunding Revenue Bonds, Series of 1984,
in the original principal amount of $2,770,000 (the "1984
Bonds"), authorized by Ordinance No. 84-9025 of the City (the
"1984 Ordinance"), for the purpose of refunding the 1978 Bonds,
and under the terms of the 1978 Ordinance, the 1978 Ordinance was
defeased by such refunding and the 1978 Bonds were deemed to be
paid, and
WHEREAS, the City has heretofore issued its Combined
Water and Sewage System Revenue Bonds, Series of 1987, in the
original principal amount of $2,650,000 (the "1987 Bonds"),
authorized by Ordinance No. 87-9202 of the City (the "1987
Ordinance"), for the purpose of repairing, altering, extending,
reconstructing, enlarging and improving the combined water and
sewage system of the City, including, but not limited to, the
reconstruction of the filter system which is part of the
waterworks system, and
WHEREAS, under the provisions of the 1977 Ordinance,
the City may issue additional bonds payable out of the revenues
of the Water and Sewage Utility which are junior and subordinate
to the 1977 Bonds provided the conditions set forth in Section 16
of the 1977 Ordinance are met, and
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WHEREAS, under the provisions of the 1984 Ordinance and
1987 Ordinance, the City may issue additional bonds payable out
of the revenues of the Water and Sewage Utility on a parity and
equality with the 1984 Bonds and the 1987 Bonds provided the
conditions set forth in the 1984 Ordinance and the 1987 Ordinance
are met, and
WHEREAS, the governing body of the City hereby finds
and determines that the issuance of the revenue bonds herein
authorized will conform and comply in all respects with the
conditions set forth in the 1977 Ordinance, the 1984 Ordinance
and the 1987 Ordinance.
NOW, THEREFORE, BE IT ORDAINED BY THE GOVERNING BODY OF
THE CITY OF SALINA, KANSAS:
Section 1. Definitions. In addition to the words and
terms otherwise defined herein, unless the context shall clearly
indicate some other meaning, the words and terms defined in this
Section shall for all purposes of this Ordinance have the
respective meanings specified in this Section, to wit:
"Aggregate Debt Service" means for any fiscal year as
of the date of calculation, the total aggregate amount of Debt
Service for such period with respect to all bonds payable from
the Revenues.
"Authorized Officer of the City" means the Mayor, City
Clerk or Superintendent or manager of the Water and Sewage
Utility or any officer of the City succeeding to the functions of
any of said officers.
"Bondholder" and "Holder" mean a Person in whose name a
Bond is registered in the Bond Register.
"Bond Register" means the register and all accompanying
records kept by the Bond Registrar evidencing the registration,
transfer and exchange of Bonds.
"Bond Registrar" means the Treasurer of the State of
Kansas, Topeka, Kansas, and its successors when acting in the
capacity as registrar and transfer agent for the registration,
transfer and exchange of Bonds, and any successors thereto.
"Bonds" or "1988 Bonds" means the Combined Water and
Sewage System Revenue Bonds, Series 1988, authorized by the this
Ordinance.
"City" means the City of Salina, Kansas.
"Consulting Engineers" means an independent consulting
engineer, or firm of engineers, appointed from time to time and
having a favorable reputatiOn for skill and experience in the
operation of water and sewer utilities retained by the City.
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'"Debt Service" for any year means, as of any date of
calculation and with respect to any bonds payable from Revenues,
an amount equal to the sum of (i) interest accruing during such
period on such bonds, except to the extent that such interest is
to be paid from moneys held in trust for the specific purpose of
making such payments, plus (ii) that portion of principal due for
such bonds during the current year excluding the year of final
maturity of any series of bonds, except to the extent that such
principal is to be paid from moneys held in trust for the
specific purpose of making such payments.
"Interest Payment Date" means the Stated Maturity of an
installment of interest on the Bonds.
"Maturity" with respect to any Bond means the date on
which the principal of such Bond becomes due and payable as
therein or herein provided, whether at the Stated Maturity of
such Bond or by declaration of acceleration, call for redemption
or otherwise.
"1961 Bonds" means the Combined Water and Sewage System
Revenue Bonds, Series of 1961, in the original principal amount
of $3,600,000, authorized by the 1961 Ordinance.
"1977 Bonds" means the Combined Water and Sewage System
Revenue Bonds, Series of 1977, in the original principal amount'
of $3,000,000, authorized by the 1977 Ordinance, all of which
were refunded with a portion of the proceeds of the 1978 Bonds.
"1978 Bonds" means the Combined Water and Sewage System
Refunding Revenue Bonds, Series of 1978, authorized by the 1978
Ordinance, all of which were refunded and deemed to be paid with
a portion of the proceeds of the 1984 Bonds.
"1984 Bonds" means the Combined Water and Sewage System
Refunding Revenue Bonds, Series of 1984, in the original
principal amount of $2,770,000.
"1987 Bonds" means the Combined Water and Sewage System
Revenue Bonds, Series of 1987, in the original principal amount
of $2,650,000.
"1961 Ordinance" means Ordinance No. 6546 of the City
authorizing the 1961 Bonds.
"1977 Ordinance" means Ordinance No. 8546 of the City
authorizing the 1977 Bonds.
"1978 Ordinance" means Ordinance No. 8635 of the City
authorizing the 1978 Bonds.
"1984 Ordinance" means Ordinance No. 84-9025 of the
City authorizing the 1984 Bonds.
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"1987 Ordinance" means Ordinance No. 87-9202 of the
City authorizing the 1987 Bonds.
"1988 Ordinance" or "this Ordinance" means this
Ordinance of the City authorizing the 1988 Bonds, as originally
executed or as it may be supplemented or amended from time to
time.
"Operating Expenses" shall mean the City's expenses of
operating and maintaining the Water and Sewage Utility and
keeping the same in good repair and working order, including all
costs due under any type of contractual arrangement with respect
to purchases of water, operation, maintenance, production,
transmission, distribution, repairs, replacements, engineering,
drilling wells, transportation, administrative and general,
audit, legal, financial, pension, retirement, health,
hospitalization, insurance, taxes and other expenses actually
paid or accrued, including without limitation any expenses of the
City applicable to the Water and Sewage Utility as recorded on
its books pursuant to standard accounting practices. Operating
Expenses shall not include any costs or expenses for extending or
enlarging the Water and Sewage Utility, charges for depreciation,
or payment of Debt Service on any bonds.
"Outstanding" when used with respect to Bonds means, as
of the date of determination, all Bonds theretofore executed,
authenticated and delivered under this Ordinance, except:
(i) Bonds theretofore cancelled by the Bond
Registrar or delivered to the Bond Registrar for
cancellation;
(ii) Bonds in exchange for or in lieu of which
other Bonds have been authenticated and delivered
pursuant to this Ordinance; and
(iii) Bonds that have been defeased in accordance
with Section 26 of this Ordinance.
"Paying Agent" means the Treasurer of the State of
Kansas, Topeka, Kansas, and its successors.
"Person" means any individual, corporation,
partnership, joint venture, association, joint-stock company,
trust, unincorporated organization or government or any agency or
political subdivision thereof.
"Project" means repairing, altering, extending,
reconstructing, enlarging and improving the combined water and
sewage syste~
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"Record Date" for the interest and principal payable on
any Interest Payment Date means the 15th day (whether or not a
business day) of the calendar month next preceding such Interest
Payment Date.
"Redemption Date" when used with respect to any Bond to
be redeemed means the date fixed for redemption by or pursuant to
this Ordinance.
"Redemption Price" when used with respect to any Bond
means the price at which it is to be redeemed pursuant to this
Ordinance.
"Revenues" shall mean (i) as long as any of the.1977
Bonds are outstanding, all revenues, income and rents accrued by
the City from the ownership and operation of the Water and Sewage
Utility and the proceeds of any insurance covering business
interruption loss relating to the Water and Sewage Utility
remaining after the City has provided for the credits and
deposits required by the 1977 Ordinance, (ii) after the 1977
Bonds are no longer outstanding, all revenues, income and rents
accrued by the City from the ownership and operation of the Water
and Sewage Utility and the proceeds of any insurance covering
business interruption loss relating to the Water and Sewage
Utility, and (iii) at all times interest received on any moneys
or securities held pursuant to the 1978 Ordinance including
Investment Income (as defined in the 1978 Ordinance), received
after February 15, 1991, and available for transfer into the
Principal and Interest Account (as defined in the 1978 Ordinance)
pursuant to Section 12(e) of the 1978 Ordinance but excluding
interest from the Escrow Account (as defined in the 1978
Ordinance).
"Revenues Available for Debt Service" for any fiscal
year or period of 12 consecutive calendar months shall mean the
sum of (i) Revenues, and (ii) the interest accrued on any moneys
or securities held pursuant to the 1977 Ordinance, the 1984
Ordinance, the 1987 Ordinance or this Ordinance (except any
income on the bond and the interest account and the reserve
account created by the 1977 Ordinance) less Operating Expenses
for such fiscal year or period.
"Special Record Date" for the payment of any Defaulted
Interest, as defined in Section 4 hereof, means a date fixed by
the Bond Registrar pursuant to Section 4.
"Stated Maturity" when used with respect to any Bond or
any installment of interest thereon means the date specified in
Section 3 of this Ordinance as the fixed date on which the
principal of such Bond or such installment of interest is due and
payable.
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"Underwriters" shall mean the initial purchasers of the
1988 Bonds or the manager or managers of any underwriting group
initially purchasing the 1988 Bonds.
"Water and Sewage Fund" means the fund by that name
established by Section 9 of the 1961 Ordinance.
"Water and Sewage Utility" or the "combined water and
sewage system" means the combined water and sewage system of the
City including all extensions, enlargements and improvements
thereto hereafter constructed or acquired by the City.
Section 2. Authorization of and Security for the 1988
Bonds. For the purpose of providing funds to pay the cost of the
Project, there is hereby authorized and directed to be issued a
series of Combined Water and Sewage System Revenue 3onds, Series
1988, of the City in the principal amount of $3,000,000.
The 1988 Bonds shall be special obligations of the
City, and the principal of, premium, if any, and interest on the
1988 Bonds shall be payable solely from the Revenues and not from
any other fund or source. The 1988 Bonds constitute a lien on
the Revenues. The taxing power of the City is not pledged to the
payment of the 1988 Bonds either as to principal or interest.
The 1988 Bonds shall not be or constitute a general obligation of
the City, nor shall they constitute an indebtedness of the City
within the meaning of any constitutional, statutory or charter
provision, limitation or restriction.
The 1988 Bonds shall be junior and subordinate with
respect to the payments of principal and interest out of the
Revenues of the Water and Sewage Utility of the City and in other
respects to the 1977 Bonds. In the event of any default in the
payment of either interest on or principal of any of the 1977
Bonds, the City shall make no payments of either principal of or
interest on the 1977 Bonds until such default be cured. The City
has duly provided for the payment of the 1977 Bonds in accordance
with the terms of an Escrow Trust Agreement dated as of May 1,
1978, between the City and the Escrow Trustee with the proceeds
of the Series 1978 Bonds.
The 1988 Bonds shall stand on a parity with respect to
the payment of principal, premium, if any, and interest from the
Revenues derived by the City from the operation of the Water and
Sewage Utility and in all other respects with the 1984 Bonds and
the 1987 Bonds. The 1988 Bonds shall not have any priority with
respect to the payment of principal or interest from the Revenues
or otherwise over the 1984 Bonds, over the 1987 Bonds nor over
any other combined water and sewage system revenue bonds of the
City hereafter issued in accordance with the provisions of this
Ordinance and standing on a parity with the 1988 Bonds, nor shall
the 1984 Bonds, the 1987 Bonds or any other combined water and
sewage system revenue bonds of the City hereafter issued have any
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with respect to the payment of principal, premium, if
interest from the Revenues or otherwise over the 1988
Section 3. Description of the Bonds, Designation of
Agent and Bond Registrar. The Bonds shall consist of
registered Bonds, without coupons, transferable to
owners only in the Bond Register maintained by the
Registrar as hereinafter provided. Each Bond shall be in
denomination of $5,000 or any integral multiple thereof not
the principal amount of Bonds becoming due on the
Maturity of such Bond, as specified by the Holder of such
Bonds shall be numbered in a manner determined by the
Registrar. The Bonds shall be dated December 1, 1988, shall
Stated Maturities, and shall bear interest at the rates
as follows:
MATURITY PRINCIPAL INTEREST
OCTOBER 1 AMOUNT RATE
1989 $ 65,000 %
1990 70,000 %
1991 75,000 %
.1992 85,000 %
1993 90,000 %
1994 95,000 %
1995 105,000 %
1996 110,000 %
1997 120,000 %
1998 130,000 %
1999 140,000
2000 155,000 %
2001 165,000 %
2002 180,000 %
2003 190,000 %
2004. 210,000 %
2005 225,000 %
2006 245,000 %
2007 260,000 %
2008 285,000 %
The Bonds shall bear interest from the most recent
Payment Date to which interest has been paid in full or,
interest has been paid, from December 1, 1988. Interest on
at the rates aforesaid shall be payable semiannually on
and October 1 in each year, beginning April 1, 1989 (the
Payment Date"). The Treasurer of the State of Kansas,
Kansas, is hereby designated as the Paying Agent and as
Registrar for the Bonds.
Section 4. Method and Place of Payment of Principal of
Interest on the Bonds. The principal of, redemption premium,
and interest (computed on the basis of a 360-day year of
30-day months) on the Bonds shall be payable in such coin
-8-
or currency of the United States of America as at the time of
payment is legal tender for the payment of public and private
debts. Payment of the interest on each Bond shall be made by the
Paying Agent on each Interest Payment Date to the Person
appearing as the Holder thereof in the Bond Register at the close
of business on the Record Date next preceding said Interest
Payment Date, by check or draft mailed to such ~older at the
Holder's address as it appears in the Bond Register. The
principal of and redemption premium, if any, for each Bond shall
be payable to the Holder thereof upon the presentation of such
Bond for payment and cancellation at its Maturity at the
principal office of the Paying Agent.
Notwithstanding any of the foregoing provisions of this
Section to the contrary, any interest on the Bonds which is
payable, but is not punctually paid on any Interest Payment Date
(herein called "Defaulted Interest"), shall be payable to the
Persons in whose names the Bonds are registered at the close of
business on a Special Record Date. The Special Record Date shall
be fixed in the following manner: (1) the City shall notify the
Bond Registrar in writing of the amount of Defaulted Interest
proposed to be paid on the Bonds and the date of the proposed
payment, which proposed payment date shall be at least 30 days
after receipt by the Bond Registrar of such notice from the City;
(2) at the same time the City shall deposit with the Paying Agent
an amount of money equal to the aggregate amount to be paid in
respect of such Defaulted Interest or shall make arrangements
satisfactory to the Paying Agent for such deposit prior to the
date of the proposed payment; and (3) thereupon, the Bond
Registrar shall fix a Special Record Date for the payment of such
Defaulted Interest which shall not be more than 15 nor less than
10 days prior to the date of the proposed payment.
The Bond Registrar shall promptly notify the City of
such Special Record Date and, in the name and at the expense of
the City, shall cause notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor to be
mailed, first class postage prepaid, to the Holder of each Bond
at such Holder's address as it appears in the Bond Register, not
less than 10 days prior to such Special Record Date. Notice of
the proposed payment of such Defaulted Interest and the Special
Record Date therefor having been mailed as aforesaid, such
Defaulted Interest shall be paid to the Persons in whose names
the Bonds are registered at the close of business on such Special
Record Date.
Payment of principal of, redemption premium, if any,
and interest on a Bond may be made by such other method of
transferring funds as may be requested by the Holder of the Bond,
provided that the Paying Agent shall, first receive a written
request from such Holder (i) specifying the method and route for
transferring funds and (ii) providing for the Paying Agent to be
reimbursed by the Holder for all expenses incurred in connection
with such fund transfers.
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Subject to the foregoing provisions of this Section,
each Bond delivered under this Ordinance upon transfer of or in
exchange for or in lieu of any other Bond shall carry the rights
to interest accrued and unpaid, and to accrue, which were carried
by such other Bond.
Section 5. Execution, Authentication and Delivery of
the Bonds. The Bonds shall be executed on behalf of the City by
the facsimile signature .of the Mayor, attested by the facsimile
signature of the City Clerk, with the facsimile seal of the City
affixed. In the event any officer whose signature or facsimile
thereof appears on any Bond shall cease to be such officer before
the delivery of such Bond, such signature or facsimile thereof
shall nevertheless be valid and sufficient for all purposes, the
same as if such person had remained in office until delivery.
Any Bond may be executed by such persons as at the actual time of
the execution of such Bond shall be the proper officers to sign
such Bond although at the original date of such Bond such persons
may not have been such officers.
The Bonds shall have endorsed thereon a Certificate of
Authentication substantially in the form hereinafter set forth
and which shall have the date of registration inserted and shall
be manually executed by the Bond Registrar.
No Bond shall be entitled to any security or benefit
under this Resolution or shall be valid or obligatory for any
purpose unless and until such Certificate of Authentication shall
have been duly executed by the Bond Registrar by manual
signature. Such executed Certificate of Authentication upon any
Bond shall be conclusive evidence that such Bond has been duly
authenticated and delivered under this Resolution and that such
registered owner has been entered of record in the Bond Register
kept by the Bond Registrar. The Certificate of Authentication
shall be deemed to have been duly executed if signed and dated by
any authorized officer or employee of the Bond Registrar, but it
shall not be necessary that the same officer or employee sign the
Certificate of Authentication on all of the Bonds that may be
issued hereunder at any one time.
The Mayor and City Clerk are hereby authorized and
directed to prepare and execute the Bonds in the manner
hereinbefore specified, to register the Bonds in the office of
the City Clerk, and to cause the Bonds to be registered in the
office of the State Treasurer of Kansas as provided by law, and
when the Bonds have been duly registered with the Bond Registrar,
to deliver the Bonds to the Underwriter, upon the payment of the
purchase price of 100% of the principal amount of the Bonds plus
accrued interest to the date of payment and delivery together
with any premium.
Section 6. Reqistration, Transfer and Exchanqe of
Bonds. So long as any of the Bonds remain outstanding, the City
shall cause the Bond Register to be kept at the principal office
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of the Bond Registrar and all of the Bonds and transfers and/or
exchanges thereof shall be fully registered as to both principal
and interest in the name of the Holders in the Bond Register and
shall not be registered to bearer.
Bonds may be transferred in the Bond Register only upon
surrender thereof to the Bond Registrar duly endorsed for
transfer or accompanied by a written instrument of transfer duly
executed by the Holder thereof or his attorney or legal
representative in such form as shall be satisfactory to the Bond
Registrar. Upon any such transfer, the City shall execute and
the Bond Registrar shall authenticate and deliver in exchange for
such Bond a new Bond or Bonds, registered in the name of the
transferee, of any denomination or denominations authorized by
this Ordinance in an aggregate principal amount equal to the
principal amount of such Bond, of the same Stated Maturity and
bearing interest at the same rate.
Bonds, upon surrender thereof at the principal office
of the Bond Registrar, together with a written instrument of
transfer duly executed by the Holder thereof or his attorney or
legal representative in such form as shall be satisfactory to the
Bond Registrar, may, at the option of the Holder thereof, be
exchanged for an equal aggregate principal amount of Bonds of the
same Stated Maturity, of any denomination or denominations
authorized by this Ordinance, and bearing interest at the same
rate.
In all cases in which Bonds shall be exchanged or
transferred hereunder, the C.ity shall execute and the Bond
Registrar shall authenticate and deliver at the earliest
practicable time Bonds in accordance with' the provisions of this
Ordinance. All Bonds surrendered in any such exchange or
transfer shall forthwith be cancelled by the Bond Registrar. No
service charge shall be made to any Bondholder for registration,
transfer or exchange of Bonds, but the City or the Bond Registrar
may make a charge for every transfer or exchange of Bonds
sufficient to reimburse it or them for any tax or other
governmental charge required to be paid with respect to such
transfer or exchange, and such charges shall be paid before any
such transfer or exchange shall be completed.
The City and the Bond Registrar shall not be required
(i) to issue, transfer or exchange any Bond during a period
beginning at the opening of business 15 days preceding a mailing
of a notice of redemption for Bonds selected for redemption
pursuant to Section 10 and ending at the close of business on the
date of such mailing; (ii) to transfer or exchange any Bond so
selected for redemption in whole or in part, or (iii) to issue,
transfer or exchange any Bond during the period beginning at the
opening of business on the day after receiving written notice
from the City of its intent to pay Defaulted Interest and ending
at the close of business on the date fixed for the payment of
Defaulted Interest pursuant to Section 4 of this Ordinance.
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Section 7. Persons Deemed Owners of Bonds. The Person
in whose name any Bond shall be registered shall be deemed and
regarded by the City, the Bond Registrar and the Paying Agent as
the absolute owner thereof, whether such Bond shall be overdue or
not, for the purpose of receiving payment therefor or on account
thereof and for all purposes, and neither the City, the Bond
Registrar nor the Paying Agent shall be affected by notice to the
contrary. Payment of or on account of the principal of, premium,
if any, and interest on any Bond shall be made only to or upon
the order of the Holder thereof or his legal representative. All
such payments shall be valid and effectual to satisfy and
discharge the liability upon such Bond, including the interest
thereon, to the extent of the sum or sums so paid.
Section 8. Mutilated, Lost, Stolen or D~s~royed Bonds.
In the event any Bond shall become mutilated, or be lost, stolen
or destroyed, the City shall, if necessary, execute and the Bond
Registrar shall authenticate and shall deliver a new Bond of like
date and tenor as the Bond mutilated, lost, stolen or destroyed;
provided that, in the case of any mutilated Bond, such mutilated
Bond shall first be surrendered to the Bond Registrar, and in the
case of any lost, stolen or destroyed Bond, that the requirements
of K.S.A. 84-8-405 are met and that an indemnity bond and
affidavit of loss are provided to the Bond Registrar and the City
at the expense of the Holder. Such indemnity bond and affidavit
of loss must be sufficient, in the judgment of the Bond Registrar
and the City, to protect the Bond Registrar and the City from any
loss which either of them might suffer if the Bond is replaced.
In the event any such Bond shall have matured, instead of issuing
a substitute Bond the City may pay or authorize the payment of
the same without surrender thereof. Upon the issuance of any
substitute Bond, the City and the Bond Registrar may require the
payment of an amount sufficient to reimburse the City and the
Bond Registrar for any tax or other governmental charge that may
be imposed in relation thereto and any other reasonable fees and
expenses incurred in connection therewith. The provisions of
this Section are exclusive and shall preclude (to the extent
lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, lost, stolen or destroyed
Bonds.
Section 9. Cancellation and Destruction of Bonds Upon
payment. All Bonds surrendered for payment, transfer or exchange
shall be delivered to the Bond Registrar and, if not already
cancelled, the Bond Registrar shall cancel such Bonds and record
such cancellation in the Bond Register. Thereafter, such
cancelled Bonds shall be delivered to the City.
Section 10. Redemption of Bonds Prior to Maturity. At
the option of the City, Bonds maturing on October 1, 1999, and
thereafter may be called for redemption and payment prior to
maturity, as a whole or in part, in inverse order of Maturity on
October 1, 1998, or on any Interest Payment Date thereafter, at a
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Redemption Price equal to 100% of the principal amount of the
Bonds so redeemed and paid, plus accrued interest thereon to the
Redemption Date.
The Bond Registrar shall call Bonds for redemption and
payment as herein provided upon receipt by the Bond Registrar at
least 45 days prior to the Redemption Date of a written request
of the City. Such request shall specify the principal amount of
Bonds and their maturities to be called for redemption, the
applicable Redemption Price or Prices and the Redemption Date.
Bonds shall be redeemed in inverse order of maturity in
the principal amount of $5,000 or any integral multiple thereof.
In the case of a partial redemption of Bonds of the same maturity
the Bonds to be redeemed shall be selected by the Bond Registrar
from the Outstanding Bonds of that maturity by such method as the
Bond Registrar shall deem fair and appropriate and which may
provide for the selection for redemption of portions of the
principal of Outstanding Bonds of that maturity of a denomination
larger than $5,000. The portions of the principal of Outstanding
Bonds so selected for partial redemption shall be equal to $5,000
or integral multiples thereof. Any Bond which is to be redeemed
only in part shall be submitted to the Paying Agent and delivered
to the Bond Registrar, who-shall authenticate and deliver to the
Holder of such Bond, without service charge, a new Bond or Bonds,
of any authorized denomination as requested by such Holder in an
aggregate principal amount equal to and in exchange for the
unredeemed portion of the principal of the Bond so surrendered.
If the Holder of any such Bond of a denomination greater than
$5,000 shall fail to present, such Bond to the Paying Agent for
payment and exchange as aforesaid, such Bond shall, nevertheless,
become due and payable on the Redemption Date to the extent of
the principal amount of such Bond called for redemption (and to
that extent only).
If and when the City shall call any of the Bonds for
redemption and payment prior to the maturity thereof, the Bond
Registrar shall give written notice in the name of the City of
its intention to redeem and pay such Bonds at the office of the
Paying Agent. Notice of Redemption shall be given by United
States registered or certified mail, postage prepaid, mailed not
less than 30 days prior to the Redemption Date, to each Holder of
Bonds to be redeemed, at his address appearing in the Bond
Register. All notices of redemption shall state:
(i) The Redemption Date;
(ii) The Redemption Price;
(iii) If less than all Outstanding Bonds are to be
redeemed, the identification (and, in the case of
partial redemption, the respective principal amounts)
of the Bonds to be redeemed;
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(iv) That on the Redemption Date, the Redemption
Price will become due and payable upon each such Bond,
and that interest thereon shall cease to accrue from
and after said date; and
(v) The place where such Bonds are to be
surrendered for payment of the Redemption Price (which
shall be the office of the Paying Agent).
The failure of the ~older of any Bond to be redeemed to
receive written notice mailed pursuant hereto shall not affect or
invalidate the redemption of said Bond. If any Bond is called
for redemption and payment as aforesaid, all interest on such
Bond shall cease from and after the date for which such call is
made, provided funds are made available to the Paying Agent for
its payment on the Redemption Date at the Redemption Price.
The Bond Registrar is also directed to comply with any
mandatory or voluntary standards for processing redemptions of
municipal securities established by the Securities and Exchange
Commission. Failure to comply with such standards shall not
affect or invalidate the redemption of said Bonds being redeemed.
Section 11. Form of Bonds. The Bonds issued in fully
registered form shall be substantially as follows:
REGISTERED REGISTERED
NUMBER $
UNITED STATES OF AMERICA
STATE OF KANSAS
COUNTY OF SALINE
CITY OF SALINA
COMBINED WATER AND SEWAGE SYSTEM REVENUE BOND
SERIES 1988
Interest Maturity Bond
Rate Date Date CUSIP
% December 1, 1988
REGISTERED HOLDER:
PRINCIPAL AMOUNT: DOLLARS
THE CITY OF SALINA, in the County of Saline, State of
Kansas (the "City"), for value received, hereby promises to pay
to the Registered Holder identified above, or registered assigns,
on the Maturity Date identified above, unless called'for
-14-
redemption prior to maturity, the Principal Amount identified
above and to pay interest thereon at the Interest Rate specified
above from the most recent Interest Payment Date to which
interest has been paid in full or, if no interest has been paid,
from December 1, 1988, said interest being payable semiannually
on April 1 and October 1 in each year, beginning April 1, 1989
(the "Interest Payment Dates").
AS PROVIDED in the Ordinance (the "Ordinance") of the
City authorizing the issuance of this Bond, interest on this Bond
will be paid on each Interest Payment Date by check or draft to
the person in whose name this Bond (or one or more preaece~'~or
Bonds) is registered in the hereinafter referred to Bond Register
at the close of business on the fifteenth day (whether or not a
business day) of the month next preceding each Interest Payment
Date (the "Record Date") to the registered owner hereof at such
person's address as it appears in the Bond Register. Interest
not punctually paid will be paid as otherwise provided in the
Ordinance. The principal of this Bond shall be payable by chec~
or draft to the Registered Holder upon presentation and surrender
hereo~ at the principal office of the Treasurer of the State of
Kansas in the City of Topeka, Kansas.
REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THIS
BOND SET FORTH ON THE REVERSE HEREOF. SUCH PROVISIONS SHALL FOR
ALL PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH HEREIN.
THIS BOND shall not be valid or become obligatory for
any purpose or be entitled to any security or benefit under the
Ordinance until the Certificate of Authentication hereon shall
have been dated and executed by the Bond Registrar.
IT IS HEREBY DECLARED AND CERTIFIED that all acts,
conditions and things required to be done and to exist precedent
to and in the issuance of the Bonds have been done and performed
and do exist in due and regular form and manner as required by
the constitution and laws of the State of Kansas.
IN WITNESS WHEREOF, the City has caused this Bond to be
executed by facsimile signatures of its Mayor and City Clerk and
a facsimile of its corporate seal to be hereto affixed and this
Bond to be dated December 1, 1988.
CITY OF SALINA, KANSAS
(facsimile)
Mayor
ATTEST:
(facsimile)
City Clerk
-15-
CERTIFICATE OF AUTHENTICATION
This Bond is one of the Bonds described in the within
mentioned Ordinance.
REGISTRATION DATE:
THE TREASURER OF THE STATE OF KANSAS
Bond Registrar and Paying Agent
By
[ON REVERSE SIDE]
FURTHER PROVISIONS
THIS BOND is one of an authorized series of Bonds of
the City designated "Combined Water and Sewage System Revenue
Bonds, Series 1988," aggregating the principal amount of
$3,000,000, issued for the purpose of repairing, altering,
extending, reconstructing, enlarging and improving the combined
water and sewage system,~y the authority of and in full
compliance with the provlsions,'restrictions and limitations of
the Constitution and statutes of the State of Kansas, including
K.S.A. 12-856 to 12-869, inclusive, and all amendments thereof
and all other provisions of the laws of said State applicable
thereto.
THIS BOND and all'interest hereon are special
obligations of the City to be paid by said City solely from the
revenues derived from the rates, fees or charges collected by
said City from the operation of its combined water and sewage
system as described in the Ordinance and not from any other fund
or source. The Bonds constitute a lien on such revenues. The
Bonds do not constitute general obligations of the City nor do
they constitute an indebtedness of the City within the meaning of
any constitutional or statutory provision, and the City is under
no obligation to levy any taxes to pay any of the principal of or
interest on the Bonds. The Bonds have been authorized and issued
under the provisions of the Ordinance to which reference is made
for a description of the covenants made by the City with respect
to the collection, segregation and application of the revenues of
the City's Water and Sewage Utility, the nature and extent of the
security of such Bonds, the rights, duties and obligations of the
City with respect thereto and the rights of the holders thereof.
The Bonds are junior and subordinate with respect to the payment
of principal and interest and in other respects to an issue of
Combined Water and Sewage System Revenue Bonds, Series of 1977,
dated April 1, 1977, in the original principal amount of
$3,000,000. The Bonds stand on a parity with respect-to the
payment of principal, redemption premium, if any, and interest
from the revenues of the City's combined water and sewage system
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and in all other respects with an issue of Combined Water and
Sewage System Refunding Revenue Bonds, Series of 1984, dated
June 15, 1984, in the original principal amount of $2,770,000,
and an issue of Combined Water and Sewage System Revenue Bonds,
Series of 1987, dated October 1, 1987, in the original principal
amount of $2,650,000. The City may issue additional bonds
payable from the net revenues produced from the combined water
and sewage system of the City as provided in and subject to the
restrictions of the Ordinance and may provide that any such
additional bonds shall enjoy equality of lien on said net
revenues with the Bonds.
THIS BOND has been duly registered in the office of the
City Clerk of the City of Salina, Kansas, and in the office of
the Treasurer of the State of Kansas.
THE BONDS maturing on October 1, 1999, and thereafter,
at the option of the City, may be called for redemption and
payment prior to maturity, as a whole or in part, on October 1,
1998, or on any Interest Payment Date thereafter, at a Redemption
Price equal to 100% of the principal amount of the bonds so
redeemed and paid, plus accrued interest thereon to the date
fixed for redemption and payment. Bonds to be redeemed and paid
pursuant to the provisions described above shall be redeemed in
inverse order of maturity, Bonds of less than a full maturity to
be selected by the Bond Registrar in such manner as it shall deem
fair and appropriate.
IN THE EVENT any of the Bonds are called for redemption
and payment as aforesaid, written notice thereof will be given by
United States registered or'certified mail mailed not less than
30 days prior to the date fixed for redemption and payment to
each holder of Bonds to be redeemed. All bonds so called for
redemption will cease to bear interest on the specified
redemption date, provided funds are deposited with the Paying
Agent on such redemption date, and will no longer be secured by
the Ordinance and will not be deemed to be outstanding under the
provisions of the Ordinance. The failure of the holder of an
Bond called for redem~tign to 'receive written notice mailed ~
ursuant to the above ~rgvisions will not invalidate or affeC~
he redemption o~ such Bond.
THE'PRINCIPAL of and interest (computed on the basis of
a 360-day year of twelve 30-day months) on this Bond are payable
in such coin or currency of the United States of ~erica as at
the time of payment is legal tender for the payment of public and
private debts.
THIS BOND is negotiable and is transferable, as
provided in the Ordinance, only in the Bond Register at the
office of the Bond Registrar upon surrender of this Bond to the
Bond Registrar duly endorsed for transfer or accompanied by a
written instrument of transfer satisfactory to the Bond Registrar
duly executed by the Registered Holder hereof or his attorney or
-17-
legal representative, and thereupon a new Bond or Bonds in the
same aggregate principal amount shall be issued to the transferee
in exchange therefor subject to the conditions provided in the
Ordinance. The Bonds for each maturity are issuable only in the
form of fully registered bonds, without coupons, in the
denomination of $5,000 or any integral multiple thereof. The
Registered Holder of any Bond or Bonds may surrender the same in
exchange for an equal aggregate principal amount of Bonds of any
authorized denomination in the manner and subject to the
conditions provided in the Ordinance. No service charge shall be
made for any such transfer or exchange, but, prior to any
transfer or exchange, the registered owner hereof shall pay to
the City or the Bond Registrar an amount sufficient to reimburse
it or them for any tax or other governmental charge required to
be paid with respect to such transfer or exchange. The City, the
Bond Registrar and the Paying Agent may deem and treat the person
in whose name this Bond is registered as the absolute owner
hereof for the purpose of receiving payment of, or on account of,
the principal hereof and interest due hereon and for all other
purposes. If the date for makin~ an~ ~a~ment of interest or
principal occurs on a Saturday, sun~ay or ~o±l~ay in the Ci~y of
TopeKa, Kansas, then SUCh ~a~ment ma~ De ma~e on the next
succeeding Dus~ness ~ay wit~ the same ~orce and effect.
(FORM OF ASSIGNMENT)
BOND ASSIGNMENT
FOR VALUE RECEIVED the undersigned does (do) hereby
sell, assign and transfer to
(Name and Address)
(Social Security or Taxpayer Identifying No.)
the bond to which this assignment is affixed in%the outstanding
principal amount of $ , standing in ~he na~e of the
undersigned on the books of the Treasurer of the State of Kansas,
Topeka, Kansas. The undersigned does (do) hereby revocably
constitute and appoint
attor.~ey to transfer the said bond, on the books of said
Treasurer of the State of Kansas, with full power of substitution
in the premises.
Dated
-18-
Signature
(Sign Here Exactly as Name or Names
Appear on the Face of the Certificate)
signature Guaranteed:
(Bank, Trust Company or Firm)
By
Authorized Officer
(FORM OF CITY CLERK'S CERTIFICATE)
STATE OF KANSAS )
) ss.
COUNTY OF SALINE )
I, the undersigned, City Clerk of the City of Salina,
Kansas, do hereby certify that this Bond has been duly registered
in my office according to law.
WITNESS my hand and official seal.
[FACSIMILE SEAL]
(facsimile)
City Clerk
(FORM OF STATE TREASURER'S CERTIFICATE)
OFFICE OF THE TREASURER, STATE OF KANSAS
I, JOAN FINNEY, Treasurer of the State of Kansas, do
hereby certify that a transcript of the proceedings leading up to
the issuance of this Bond has been filed in my office and that
this Bond was registered in my office according to law on
, 19 .
WITNESS my hand and official seal.
JOAN FINNEY
[FACSIMILE SEAL] Treasurer of the State of Kansas
By
Assistant State Treasurer
State Treasurer's Registration Number: 0322-085-120188-274
-19-
Section 12. Uncertificated Bonds. There will be no
uncertificated bonds.
Section 13. Disposition of 1988 Bond Proceeds. All
accrued interest and premium, if any, received from the sale of
the 1988 Bonds shall be credited to and deposited in the 1988
Principal and Interest Account hereinafter created by Section 15
of this Ordinance.
There shall next be deposited in the 1988 Reserve
Account hereinafter created by Section 13 of this Ordinaace, the
sum of $300,000 from the proceeds received from the sale of the
Bonds.
The remainder of the proceeds received from the sale of
the 1988 Bonds shall be deposited in a separate fund hereby
created in the treasury of the City to be known as the "Combined
Water and Sewage Utility Construction Fund of 1988" (herein
called the "Construction Fund") and shall be used by the City for
the sole purpose of paying the cost of the Project in accordance
with the plans and specifications therefor prepared by the City's
engineers heretofore approved by the governing body of the City
and on file in the office of the City Clerk, including any
alterations in or amendments to said plans and specifications
deemed advisable by the City's engineers and approved by the
governing body of the City.
Withdrawals from the Construction Fund shall be made
only on duly authorized and executed warrant or check therefor
accompanied by a certificate executed by the City's engineers
that such payment is being made for a purpose within the scope of
this Ordinance and that the amount of such payment represents
only the contract price of the property, equipment, labor,
materials or service being paid for, or if such payment is not
being made pursuant to an express contract, that such payment is
not in excess of the reasonable value thereof. Nothing
hereinbefore contained shall prevent the payment out of the
Construction Fund of all costs and expenses incident to the
issuance of the Bonds without a certificate from the City's
engineers.
Upon completion of the Project as hereinbefore
provided, any surplus remaining in the Construction Fund shall be
deposited in the 1988 Principal and Interest Account created by
Section 15 of this Ordinance.
Secti¢.n 14. Water and Sewaqe Fund. The City covenants
and agrees that so long as any of the 1988 Bonds remain
outstanding and unpaid all of the revenues derived by the City
from the operation of its Water and Sewage Utility, including all
revenues from improvements, extensions and enlargements in and to
the Water and Sewage Utility, will be paid and deposited in the
City's "Water and Sewage Fund" and that said revenues will not be
-20-
mingled with the other funds of the City and shall be
administered and used solely as hereinafter in this Ordinance
provided.
Section 15. Ratification and Creation of Funds and
Accounts. The establishment by the 1961 Ordinance of the City of
the two separate accounts known respectively as the
(a) "Combined Water and Sewage System Depreciation and
Emergency Replacement Account" (herein called the
"Depreciation and Emergency Replacement Account"),
and
(b) "Combined Water and Sewage System Extension and
Bond Retirement Account" (herein called the
"Extension and Bond Retirement Account")
be, and the same is, hereby ratified and confirmed, and in
addition to the accounts aforesaid there were created and
established by the 1977 Ordinance of the City two separate
accounts known respectively as the
(c) "Bond and Interest Account for Combined Water and
Sewage System Revenue Bonds, Series of 1977", and
(d) "Reserve Account for Combined Water and Sewage
System Revenue Bonds, Series of 1977"
and the same are hereby ratified and confirmed, and in addition
to the accounts aforesaid, there were created and established by
the 1984 Ordinance of the City two separate accounts known
respectively as the
(e) "Principal and Interest Account for Combined Water
and Sewage System Refunding Revenue Bonds, Series
of 1984"~ (the "1984 Principal and Interest
Account"), and
(f) "Reserve Account for Combined Water and Sewage
System Refunding Revenue Bonds, Series 1984" (the
"1984 Reserve Account")
and the same are hereby ratified and confirmed, and in addition
to the accounts aforesaid, there were created and established by
the 1987 Ordinance of the City two separate accounts known
respectively as the
(g) "Principal and Interest Account for Combined Water
and Sewage System Revenue Bonds, Series of 1987"
(the "1987 Principal and Interest Account"), and
(h) "Reserve Account for Combined Water and Sewage
System Revenue Bonds, Series of 1987" (the "1987
Reserve Account")
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and the same are hereby ratified and confirmed, and in addition
to the accounts aforesaid, there are hereby created and
established in the treasury of the City the following two
separate accounts
(i) "Principal and Interest Account for Combined Water
and Sewage System Revenue Bonds, Series 1988 (the
"1988 Principal and Interest Account"), and
(j) "Reserve Account for Combined Water and Sewage
System Revenue Bonds, Series 1988 (the "1988
Reserve Account").
The accounts referred in (a) and (b) aforesaid shall be
maintained and administered by the City in accordance with the
provisions of the 1977 Ordinance, the 1984 Ordinance, the 1987
Ordinance and this Ordinance so long as any of the 1977 Bonds,
1984 Bonds, the 1987 Bonds or the 1988 Bonds remain outstanding
and unpaid. The accounts referred to in paragraphs (c) and (d)
aforesaid shall be maintained and administered in compliance with
the provisions of the 1977 Ordinance so long as any of the 1977
Bonds remain outstanding and unpaid. The accounts referred to in
paragraphs (e) and (f) aforesaid shall be maintained and
administered in compliance with the provisions of the 1984
Ordinance so long as any of the 1984 Bonds remain outstanding and
unpaid. The accounts referred to in paragraphs (g) and (h)
aforesaid shall be maintained and administered in compliance with
the provisions of the 1987 Ordinance so long as any of the 1987
Bonds remain outstanding and unpaid. The accounts referred to in
paragraphs (i) and (j) aforesaid shall be maintained and
administered by the City as'hereinafter provided in this
Ordinance so long as any of the 1988 Bonds remain Outstanding.
Section 16. Application of Moneys in Funds and
Accounts. Moneys paid and deposited in the "Water and Sewage
Fund" heretofore established by the City and hereinbefore
referred to shall be administered and disposed of by the City so
long as any of the 1988 Bonds remain outstanding, in the
following order, to wit:
(a) The City each month shall pay or make provision
for the payment of the reasonable and proper Operating Expenses
for the current month. No moneys in the Water and Sewage Fund
shall be used for the purpose of extending or enlarging the
City's Water and Sewage Utility, except as provided in paragraph
(g) of this Section 16.
(b) After paying or making provision for the payment
each month of the reasonable and proper expenses of operating and
maintaining the City's combined water and sewage system for the
current month, the City shall next pay or credit from time to
time from the Water and Sewage Fund to the Bond and Interest
Account for Combined Water and Sewage System Revenue Bonds,
-22-
Series of 1977, so long as any of the 1977 Bonds remain
outstanding, amounts (if any) at the time required to be paid or
credited by the provisions of the 1977 Ordinance.
(c) After making.the payments and credits at the time
required to be made by the City under the provisions of
paragraphs (a) and (b) aforesaid the City shall pay or credit
from time to time from the Water and Sewage Fund to the Reserve
Account for Con~bined Water and Sewage System Revenue Bonds,
Series of 1977, so long as any of the 1977 Bonds remain
outstanding, any amounts at the time required to be paid or
credited by the provisions of the 1977 Ordinance.
(d) After making all payments and credits at the time
required to be made by the City under the provisions of
paragraphs (a), (b) and (c) aforesaid, the City shall next pay or
credit from the Water and Sewage Fund to the 1984 Principal and
Interest Account and the 1987 Principal and Interest Account any
amounts at the time required to be paid or credited to said
Account under the provisions of the 1984 Ordinance or the 1987
Ordinance, and at the same time such payments and credits are
made and on a parity therewith, the City shall pay or credit to
the 1988 Principal and Interest Account, to the extent necessary
to meet at the Stated Maturity thereof the interest on and
principal of the 1988 Bonds, the following amounts:
(i) Beginning on the first day of each month
from and after the delivery of the 1988 Bonds, and
continuing on the first day of each month thereafter
to and including March.l, 1989, an equal pro rata
portion of the amount of interest that will become due
on the 1988 Bonds on April 1, 1989, and beginning on
April 1, 1989, and continuing on the first day of each
month thereafter, an amount not less than one-sixth
(1/6) of the interest that will become due on the 1988
Bonds on the next succeeding Interest Payment Date;
and
(ii) Beginning on the first day of each month
from and after the delivery of the 1988 Bonds, and
continuing on the first day of each month thereafter
to and including September 1, 1989, an equal pro rata
portion of the principal amount of the 1988 Bonds that
will become due on October 1, 1989; and beginning on
October 1, 1989, and continuing on the first day of
each month thereafter, an amount not less than one-
twelfth (1/12) of the principal amount of the 1988
Bonds that will become due on the next succeeding
Stated Maturity; and
(iii) On the first day of each month preceding a
mon%h in which fees of the Bond Registrar and Paying
Agent are scheduled to become due, such amounts as may
be required to pay such fees.
-23-
Ail amounts paid and credited to the 1988 Principal and
Interest Account shall be used and expended by the City for the
sole purpose of paying the interest on and principal of the 1988
Bonds as and when the same become due and the fees of the Paying
Agent and Bond Registrar for acting hereunder.
If at any time the moneys in the Water and Sewage Fund
shall be insufficient to make in full the payments and credits at
the time required to be made by the City to the principal and
interest accounts established by the City to pay the principal of
and interest on the outstanding revenue bonds of the City,
including only the 1984 Bonds, the 1987 Bonds, the 1988 Bonds and
any other combined water and sewage system revenue bonds of the
City hereafter issued and standing on a parity with the 1988
Bonds, the available moneys in the Water and Sewage Fund shall be
divided among such principal and interest accounts in proportion
to the respective principal amounts of said series of combined
water and sewage system revenue bonds of the City at the time
outstanding which are payable from the moneys in said principal
and interest accounts.
(e) Prior to or concurrently with the issuance and
delivery of the 1988 Bonds, there shall be paid and credited to
the 1988 Reserve Account, fromAproceeds received from the sale o,f
the Bonds as provided in Sectibh ±3 o~ this Or~inance~ the sum of
$j300,000 (the "Reserve Requirement").
All amounts paid or credited to the 1988 Reserve
Account shall be used and expended solely to prevent any default
in the payment of interest on or principal of the Outstanding
1988 Bonds of the City if the moneys in the 1988 principal and
Interest Account hereinbefore created are insufficient to pay the
interest on or principal of the 1988 Bonds as they become due.
No part of said 1988 Reserve Account shall ever be expended or
used by the City to call any 1988 Bonds for payment prior to
their ultimate maturity unless all of the Outstanding 1988 Bonds
be called for payment and funds are available to pay the same
according to their terms. So long as the amount on hand in the
1988 Reserve Account aggregates the Reserve Requirement, no
further payments into the 1988 Reserve Account shall be' required,
but if the City shall ever be compelled to use and expend any
part of the 1988 Reserve Account for the purpose of paying the
interest on or principal of 1988 Bonds of the City and such
expenditure shall reduce the amount of the 1988 Reserve ~ccount
below the Reserve Requirement, then the City, after making all
payments or credits at the time required to be made by the City
under the provisions of paragraphs (a), (b), (c) and (d) hereof,
will thereafter, each month, pay or credit on the first day of
each month from the Water and Sewage Fund to the 1984 Reserve
Account and the 1987 Reserve Account any amounts at the time
required to be paid or credited to said Accounts under the
provisions of the 1984 Ordinance and the 1987 Ordinance, and, at
the same time such payments or credits are made and on a parity
-24-
therewith, the City shall pay or credit from the Water and Sewage
Fund to the 1988 Reserve Account the sum of $10, r000 each month
until the Reserve Account aggregates the Reserve Requirement.
At no time shall the balance of monies on hand in the
1988 Bond Reserve Account exceed the sum of $218,000.
If at any time the moneys in the Water and Sewage Fund
shall be insufficient to make in full the payments and credits at
the time required to be made by the City to the bond reserve
accounts established by the City to protect the payment of the
outstanding combined water and sewage system revenue bonds of the
City, including only the 1984 Bonds, the 1987 Bonds, the 1988
Bonds and any other combined water and sewage system revenue
bonds of the City hereafter issued and standing on a parity with
the 1988 Bonds, the available moneys in the Water and Sewage Fund
shall be divided among such bond reserve accounts in proportion
to the respective principal amounts of said series of combined
water and sewage system revenue bonds of the City at the time
outstanding which are payable from the moneys in such bond
reserve accounts.
(f) The Combined Water and Sewage System Depreciation
and Emergency Replacement AccountAshall be maintained and
administered by the City so long ~% any of the City's 1988 Bonds
remain outstanding. After making all payments and credits at the
time required to be made by the City under the provisions of
paragraphs (a), (b), (c), (d) and (e) aforesaid, the City shall
next pay or credit from the Water and Sewage Fund to said
Depreciation and Emergency Replacement Account on the first day
of each month, a sum not less than $2,500 until said account
shall aggregate in cash and securities not less than the sum of
$350,000 (including any amounts required pursuant to the
provisions of the 1984 Ordinance). Except as hereinafter
provided, all amounts credited to said account shall be used by
the City, if no other funds are available therefor, for the
purpose of making emergency maintenance, repairs and improvements
in and to the City's Water and Sewage Utility and keeping the
same in good repair and working order so that the Water and
Sewage Utility may continue in effective and efficient operation.
If~o other funds are available therefor, moneys in said account
may'be used to pay the cost of operating and maintaining the
City's Water and Sewage Utility and for the purpose of making
major extensions or enlargements of said system.
So long as said Depreciation and Emergency Replacement
Account aggregates not less than $350,000 (including any amounts
required pursuant to the provisions of the 1984 Ordinance), no
further payments into said account shall be required, but if the
City be compelled to use and expend any part of said account for
the purpose specified in the last preceding paragraph hereof, and
such use shall reduce the amount of said account below the sum of
$350,000 (including any amounts required pursuant to the
provisions of the 1984 Ordinance), then the City, after making
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all payments or credits at the time required to be made by the
City under the provisions of paragraphs (a), (b), (c), (d) and
(e) hereof, will thereafter pay or credit from the Water and
Sewage Fund to said Depreciation and Emergency Replacement
Account all sums in said Water and Sewage Fund until said
Depreciation and Emergency Replacement Account aggregates
$350,000 (including any amounts required pursuant to the
provisions of the 1984 Ordinance).
(g) After all amounts required at the time to be paid
or credited by the City from the Water and Sewage Fund to the
accounts hereinbefore named in paragraphs (a) (b), (c), (d), (e)
and (f) of this Section shall have been so paid or credited, and
if at the time the City shall not be in default in the
performance of any covenant or agreement contained in this
Ordinance, all moneys remaining in the Water and Sewage Fund
shall be credited monthly to the Extension and Bond Retirement
Account. Except as hereinafter provided, moneys in the Extension
and Bond Retirement Account shall be used solely for the
following purposes as determined from time to time by the
governing body of the City:
(i) Paying the cost of operation, maintenance and
repair of the. City's'Water and Sewage Utility to
the extent that may be necessary after the
application of the moneys held in the "Water and
Sewage Fund" under the provisions of paragraph (a)
of this Section.
(ii) Anticipating payments into or increasing the
amounts of the accounts referred to in paragraphs
(b), (c), (d) and (f) of this Section, or any of
them, or establishing or increasing the amount of
any principal and interest account or principal
reserve account created by the City for the
payment of any combined water and sewage system
revenue bonds of the City hereafter issued under
the conditions hereinafter specified.
(iii) Paying the cost of improving, extending or
enlarging the City's Water and Sewage Utility as
hereinafter in this Section 16(g) provided.
(iv) Redeeming or paying prior to maturity combined
water and sewage system revenue bonds of the City
but only as hereinafter in this Section 16(g)
provided.
The City covenants and agrees that it will not expend
or permit the expenditure of any moneys in the Extension and Bond
Retirement Account for any extensions, improvements or
enlargements of the City's combined water and sewage system which
are not economically sound or which will not properly and
advantageously contribute to the efficient and economical conduct
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of the operation and business of said system as evidenced by a
written report and recommendation of the superintendent or
manager of said system, nor will it make any such extension,
improvement or enlargement costing in excess of $100,000 for any
single purchase or improvement without securing from the City's
Consulting Engineers a report and recommendation with respect
thereto, nor will it make such purchase or improvement except in
accordance with such report and recommendation.
At least once in every two years the City's Consulting
Engineers hereinafter referred to in Section 20(d) of this
Ordinance, after making their examination and report on the
condition, operation and needs of the City's Water and Sewage
Utility as provided in said Section 20(d), shall, by written
instrument filed in the office of the City Clerk, and sent by
such engineers by United States registered mail to the
Underwriters, certify whether or not in their opinion the moneys
in the Extension and Bond Retirement Account are in excess of the
amount reasonably required to be maintained in such account for
extending, improving or enlarging the City's Water and Sewage
Utility, and, if so, the amount of such excess; provided,
however, the aforesaid report of the Clt~ s Consu£t~ng Engineers
snail not De requ~re~ rro~ an~ atter the time that ale o~ the '
1977 BondS, the-1978 Bonds or the 1984 Bonds are either defeased
or no Longer outstan~.lnq.
,~If such engineers shall certify that in their opinion
there is an excess in said account, such excess moneys in the
Extension and Bond Retirement Account shall be used by the City
from time to time for the purpose of redeeming and paying prior
to maturity any of the Bonds of the City herein authorized if any
of such Bonds be subje'ct to redemption, or, at the option of the
City, for ~urchasin~ an escrow comprised entirely of direct
obligations of the ~nlted States G~vernment to provide ~or
payment or the BonGs or ~Or purchasing any of the Bonds herein
authorized in the open market at the lowest price at which such
bonds may be purchased not exceeding the call price, or, if none
of the Bonds herein authorized is at the time subject to
redemption, then for the purpose of purchasing such Bonds in the
open market at the lowest price at which such bonds may be
purchased; provided, however, that if the City in conformity with
the provisions hereinafter contained shall hereafter issue one or
more series of its combined water and sewage system revenue bonds
which stand on a parity with the bonds herein authorized, moneys
in the Extension and Bond Retirement Account available for the
redemption or purchase of bonds shall be divided among and
applied to the redemption or purchase of bonds of the respective
series of combined water and sewage system revenue bonds at the
time outstanding in proportion to the total principal amount of
bonds of said respective series then outstanding, whether or not
the bonds of any series are at the time subject to redemption.
Bonds so redeemed or purchased shall be cancelled.
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Section 17. Deficiency in Payments or Credits into
Funds or Accounts. If at any time the revenues derived by the
City from the operation of its Water and Sewage Utility shall be
insufficient to make any payment or credit on the date or dates
hereinbefore specified, the City shall make good the amount of
such deficiency by making payments or credits out of the first
available revenues thereafter received by the City from the
operation of its Water and Sewage Utility, such payments and
credits being made and applied in the order hereinbefore
specified in Section 16 hereof.
Section 18. Use of Other Accounts to Pay Bonds and
Interest. If at any time the moneys in the 1988 Principal and
Interest Account and in the 1988 Reserve Account are not
sufficient to pay the principal of and interest on the Bonds as
and when the same become due, then the amount of such deficiency
shall be made up by transfer of moneys from other funds and
accounts hereinbefore referred to in the following order: First,
from the Extension and Bond Retirement Account, secondly from the
Depreciation and Emergency Replacement Account, and thirdly from
moneys held in the Water and Sewage Fund, provided, however, that
there shall always remain in the Water and Sewage Fund an amount
sufficient to pay the reasonable and proper expenses of operating
and maintaining the City's Water and Sewage Utility during the
next succeeding period of thirty days.
Section 19. Investments. Any moneys held in any fund
or account which are not immediately needed for the purposes of
such fund or account may be invested by the City in direct
obligations of the United States Government or in any other
investment permitted by law; provided, however, that no such
investment shall be made for a period extending longer than to
the date when the moneys invested may be needed for the purpose
for which such fund or account was created. Cash moneys in each
of the funds and accounts herein created or established shall be
deposited in a bank or banks in the City of Salina, Kansas, which
are members of the Federal Deposit Insurance Corporation, and all
such bank deposits shall be adequately secured by the banks
holding such deposits. Except as to interest accumulated in the
Bond and Interest Account and in the Reserve Account relating to
the 1977 Bonds, which interest shall be deposited in the escrow
account for the 1977 Bonds, all interest on any investments held
in any fund or account created by or referred to in this
Ordinance shall accrue to and become a part of such fund or
account, except that interest on investments in the 1988 Reserve
Account and interest on investments in the Depreciation and
Emergency Replacement Account if the City shall not be in default
in making any payment into said accounts at the time required to
be made by the provisions of Section 16, shall immediately be
paid and credited to the Water and Sewage Fund and used and
applied for the purposes and in the order hereinbefore specified
in Section 16 of this Ordinance. In determining the amount held
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in any fund or account under any of the provisions of this
Ordinance, obligations in which moneys are invested shall be
valued at the market value thereof.
Section 20. Particular Covenants of the City. The
City covenants with each of the purchasers and owners of any of
the Bonds that so long as any of said Bonds remain outstanding
and unpaid:
(a) Rates. The City will fix, establish and maintain
rates, fees and other charges for the sale of water and sewage
services and commodities of the Water and Sewage Utility as shall
be required to provide Revenues at least sufficient in each
fiscal year to pay: (i) Operating Expenses during such fiscal
year, including reserves, if any, provided for in the annual
budget for such fiscal year; (ii) an amount equal to at least
125% of the Aggregate Debt Service for such fiscal year; (iii) an
amount, if any, to be paid during such fiscal year into the 1988
Reserve Account; (iv) to the extent not otherwise provided for,
an amount equal to debt service on the 1977 Bonds for such fiscal
year; (v) an amount, if any, to be paid into the reserve account
for the 1977 Bonds and into the Depreciation and Emergency
Replacement Account during such fiscal year; and (vi) any and all
charges or liens whatsoever payable out of Revenues during such
fiscal year.
(b) No Free Service; Service to City. None of the
facilities or services afforded by the Water and Sewage Utility
will be furnished to any user withOut a reasonable charge being
made therefor. The City will require the prompt payment of
accounts and will discontinue water and sewage service to any
customer delinquent in the payment of his account for a period
which shall not exceed sixty (60) days. The City will pay
monthly into the Water and Sewage Fund for the water and sewage
service furnished the City in accordance with effective
applicable rates, fees and charges.
(c) Good Repair. The City will maintain in good
repair and working order the City's Water and Sewage Utility and
will operate the same in an efficient manner and at reasonable
cost.
(d) Enqineerinq Report. At least once in every two
years the City will employ Consulting Engineers and will cause
such Consulting Engineers to make an examination and report on
the condition and operation of the City's Water and Sewage
Utility, such report to include recommendations as to any changes
in such operation deemed desirable. Such report shall also make
reference to any unusual or extraordinary items of maintenance
and repair and any extensions or improvements that may be needed
in the ensuing year. A copy of each such report will be filed in
the office of the City Clerk and duplicate copies thereof shall
be mailed promptly to the Underwriters.
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(e) Disposal of Property. The City will not mortgage,
pledge or otherwise encumber the Water and Sewage Utility or any
part thereof or any improvement, extension or enlargement
thereof, nor will they sell, lease or otherwise dispose of said
Water and Sewage Utility or any material part thereof, provided,
however, that the City may dispose of any property which has
become obsolete, nonproductive or otherwise unusable to the
advantage of the City. Any cash proceeds derived from the sale
of such property shall be used by the City to improve, extend or
enlarge the City's Water and Sewage Utility.
(f) Insurance. The City will carry and maintain a
reasonable amount of all-risk insurance upon the properties
forming a part of the Water and Sewage Utility insofar as they
are of an insurable nature, the amount of such insurance being
such amount as would normally be insured by a private corporation
engaged in a similar type of business. In the event of loss or
damage, the City, with all reasonable dispatch, will use the
proceeds of such insurance in reconstructing and replacing the
property damaged or destroyed, or, if such reconstruction or
replacement be unnecessary, then in redeeming or purchasing
outstanding bonds of the City, such redemption or purchase being
made in accordance with the provisions of the Ordinance
authorizing the issuance of the bonds. The City in operating the
Water and Sewage Utility will carry and maintain public liability
and workmen's compensation insurance in such amounts as would
normally be maintained by a private corporation engaged in a
similar type of business, and the proceeds derived from any such
policies shall be used in paying the claims on account of which
such proceeds were received,-provided, however, that the City may
elect to accept the provisions of the Workmen's Compensation Act
of the State of Kansas as authorized by K.S.A. 44-505 and any
amendments thereto hereafter enacted, and, in such event, may
elect to carry its own risk in accordance with the provisions of
the statutes of the State of Kansas. The cost of all insurance
referred to in this paragraph (f) shall be paid as an Operating
Expense out of the revenues of the City's Water and Sewage
Utility.
(g) Books and Records; Annual Audit. The City will
install and maintain proper books, records and accounts (entirely
separate from all other records and accounts of the City) in
which complete and correct entries will be made of all dealings
and transactions of or in relation to the properties, business
and affairs of the Water and Sewage Utility of the City. Such
accounts shall show the amount of revenue received from said
Water and Sewage Utility, the application of such revenue, and
all financial transactions in connection therewith. Said books
shall be kept by the City according to standard accounting
practices as applicable to the operation of water and sewage
utilities. The City will operate the Water and Sewage Utility on
the basis of a fiscal year beginning on January 1st and ending on
December 31st. Annually, as soon as possible following the close
of each fiscal year, the City will cause an audit to be made by a
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competent firm of certified public accountants experienced in
public utility accounting of the accounts of its Water and Sewage
Utility for the preceding fiscal year. In addition to such
matters as are customarily included in the audit report, the
accountants shall, without limiting the generality of the
foregoing, furnish to the City separately a compiled statement of
the number of customers served, the amount and character of all
insurance carried and a statement and summary of the accountants'
recommendations as to the City's practices and procedures of
water and sewage system operations. Within thirty (30) days
after the completion of each such audit, said accountants shall
file a copy thereof in the office of the City Clerk and shall
forward copies of such audit to the Underwriters.
If such audit shall disclose that proper provision has
not been made for all of the requirements of the law under which
the Bonds herein authorized are issued, and of this Ordinance,
the City covenants and agrees that it will promptly proceed to
cause to be charged for the services rendered by the City'~ Water
and Sewage Utility rates which will adequately provide for such
requirements.
(h) Riqht to Inspect. The Holder of any of the Bonds
of the City herein authorized sh~ll have the right at all
reasonable times to inspect the Water and Sewage Utility and all
records, accounts and data relating thereto, and any such Holder
shall be furnished by the City all such information concerning
said Water and Sewage Utility and the operation thereof which he
may reasonably request.
(i) Operation and Maintenance. The City will
punctually perform all duties and obligations with respect to the
operation and maintenance of the Water and Sewage Utility,
including all improvements, extensions and enlargements thereof,
now or hereafter imposed upon the City and by the Constitution
and laws of the State of Kansas, and by the provisions of this
Ordinance.
Section 21. Additional Bonds. The City of Salina,
Kansas, hereby covenants and agrees that so long as any of the
Bonds herein authorized remain outstanding and unpaid, s~id City
will not issue any additional bonds or other obligations payable
out of the Revenues of its Water and Sewage Utility which have a
claim on Revenues superior to the Bonds and that it will not
issue any such additional bonds or obligations which stand on a
parity or equality with the Bonds herein authorized unless all of
the following conditions are met:
(a) The issuance of the additional bonds shall be
authorized or permitted under the laws of the State of Kansas.
(b) Either (i) Revenues Available for Debt Service of
any 12 consecutive calendar months out of the 24 calendar months
next preceding the issuance of such additional bonds are not less
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than 1.25 times the maximum Aggregate Debt Service for any
succeeding fiscal year (excluding the year of final maturity of
any series of bonds) on all bonds which will be outstanding
immediately after the issuance of the proposed additional bonds
or (ii) the estimated Revenues Available for Debt Service for the
fiscal year immediately following the year in which the project,
the cost of construction of which is being financed by such
additional bonds, is to be in commercial operation are not less
than 1.25 times the maximum Aggregate Debt Service for any
succeeding fiscal year (excluding the year of final maturity of
any series of bonds) on all bonds which are outstanding in such
fiscal year.
Prior to the issuance of any additional bonds the City
shall obtain a certificate of an Authorized Officer evidencing
full compliance with the provisions of clause (i) of paragraph
(b) of this Section or a certificate of the Consulting Engineers
evidencing full compliance with the provisions of clause (ii) of
paragraph (b) of this Section, as the case may be.
In determining the amount of Revenues Available for
Debt Service for the purposes of (i) above, the Authorized
Officer of the City may adjust the Revenues Available for Debt
Service by adding thereto, in the event any adjustment of rates
with respect to the Water and Sewage Utility shall have become
effective subsequent to the beginning of the 12-month period
selected pursuant to (i) above, an estimate made by an Authorized
Officer of the City of such additional Revenues Available for
Debt Service for such 12-month period which would have resulted
had such rate adjustment been in effect for the entire period.
In determining the amount of estimated Revenues
Available for Debt Service for the purpose of (ii) above, the
Consulting Engineers may adjust the estimated Revenues Available
for Debt Service by adding thereto any estimated increase in
revenue resulting from any increase in water and sewer rates
which, in the opiniOn of the Consulting Engineers, are
economically feasible and reasonably considered necessary based
on projected operations of the Water and Sewage Utility.
Notwithstanding the restrictions upon the issuance of
additional bonds set out above, additional bonds may be issued if
it is necessary in the opinion of the Consulting Engineers to
repair any damage or loss to the Water and Sewage Utility if the
Water and Sewage Utility has been destroyed or damaged by
disaster to such an extent that it cannot be operated or if it is
necessary to keep the Water and Sewage Utility in good operating
condition.
(c) The City shall not be in default in making any
payments at the time required to be made by it into the
respective funds and accounts created or established by this
Ordinance.
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Additional bonds of the City issued under the
conditions hereinbefore in this section set forth shall stand on
a parity with the Bonds herein authorized and shall enjoy
complete equality of lien on and claim against the Revenues of
the City's Water and Sewage Utility with the Bonds herein
authorized, and the City may make equal provision for paying said
Bonds and the interest thereon out of the Water and Sewage Fund
and may likewise provide for the creation of reasonable reserve
accounts out of moneys in said Water and Sewage Fund.
Nothing in this section contained shall prohibit or
restrict the right of the City to issue additional water and
sewage system revenue bonds or other revenue obligations for the
purpose of reconstructing, altering, repairing, improving,
extending or enlarging the City's Water and Sewage Utility and to
provide that the principal of and interest on said revenue bonds
or obligations shall be payable out of the revenues of the City's
Water and Sewage Utility, provided that such additional revenue
bonds or obligations shall be junior and subordinate to the Bonds
so that if at any time the City shall be in default in paying
either interest on or principal of the Bonds the City shall make
no payments of either principal of or interest on said junior and
subordinate revenue bonds or obligations until said default or
defaults be cured. In the event of the issuance of any such
junior and subordinate revenue bonds or obligations, the City,
subject to the provisions aforesaid, may make provision for
paying the principal of and interest on said revenue bonds or
other revenue obligations out of moneys in the Water and Sewage
Fund.
Section 22. Tax Matters. The City will comply with
all applicable provisions of the Internal Revenue Code of 1986
(the "Code"), including Section 103 thereof, and the regulations
of the Treasury Department thereunder, from time to time proposed
or in effect, in order to maintain the exclusion from gross
income for purposes of federal income taxation of the interest on
the Bonds.
The City covenants and agrees that it will use the
proceeds of the Bonds as soon as practicable and with all
reasonable dispatch for the purpose for which the Bonds are
issued as hereinbefore set forth, and that no part of the
proceeds of the Bonds shall be invested in any securities,
obligations or other investments except for the temporary period
pending such use nor used, at any time, directly or indirectly,
in'a manner which, if such use had been reasonably anticipated on
the date of issuance of the Bonds, would have caused any of the
Bonds to be or become "arbitrage bonds" within the meaning of
Section 103(b)(2) or Section 148 of the Code and the regulations
of the Treasury Department thereunder proposed or in effect at
the time of such use and applicable to obligations issued on the
date of issuance of the Bonds.
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The City represents and warrants that (i) it is a
governmental unit under Kansas law with general taxing powers,
(ii) none of the Bonds is a private activity bond as defined in
Section 141 of the Code, (iii) 95% or more of the net proceeds of
the Bonds will be used for local governmental activities of the
City and (iv) the aggregate face amount of all tax-exempt bonds
(other than private activity bonds and current refundings of
outstanding obligations) issued by the City (and all subordinate
entities thereof) during the calendar year 1988 is not reasonably
expected to exceed $5,000,000. The City hereby covenants that
the City and all its subordinate entities will not issue in
excess of $5,000,000 of tax-exempt bonds (including the Bonds but
excluding private act%vity bonds and current refunding of
outstanding obligations) during the calendar year 1988 without
first obtaining an opinion of nationally recognized counsel in
the area of municipal finance that the excludability of the
interest on the Bonds from gross income for federal tax purposes
will not be adversely affected.
The City hereby designates the Bonds as "qualified
tax-exempt obligations" as defined in Section 265(b)(3)(B) of the
Code. The aggregate face amount of all tax-exempt obligations
(excluding private activity bonds other than qualified 501(c)(3)
bonds) issued or to be issued by the City (and all subordinate
entities thereof) during calendar year 1988 is not reasonably
expected to exceed $10,000,000. The City hereby covenants that
the City and all its subordinate entities will not issue in
excess of $10,000,000 of qualified tax-exempt obligations
(including the Bonds but excluding private activity bonds other
than qualified 501(c)(3) bonds) during the calendar year 1988
without first obtaining an opinion of nationally recognized
counsel in the area of municipal finance that the designation of
the Bonds as "qualified tax-exempt obligations" will not be
adversely affected.
Section 23. Amendments. The provisions of the Bonds
authorized by this Ordinance and the provisions of this Ordinance
may be modified at any time by the City with the written consent
of the Holders of not less than sixty-six and two-thirds percent
(66 2/3%) in aggregate principal amount of the Bonds at the time
Outstanding; provided, however, that no such modification or
amendment shall permit or be construed as perr[~itting (a) the
extension of the maturity or the principal of any of the Bonds,
or the extension of the maturity of any interest on any Bonds, or
(b) a reduction in the principal amount of any Bonds or the rate
of interest thereon, or (c) a reduction in the aggregate
principal amount of Bonds the consent of the Holders of which is
required for any such amendment or modification. Any provision
of the Bonds or of this Ordinance may, however, be modified or
amended in any respect with the written consent of the Holders of
all of the Bonds then Outstanding. Amendments to this Ordinance
which correct errors or which add to or supplement the security
of the Holders of the Bonds may be adopted by the City without
the consent of such Holders. Every amendment or modification of
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a provision of the Bonds or of this Ordinance to which the
written consent of the Holders is given as above provided shall
be expressed in an ordinance and shall be deemed to be a part of
this Ordinance. It shall not be necessary to note on any of the
Outstanding Bonds any reference to such amendment or
modification, if any. A certified copy of every such amendatory
or supplemental ordinance, if any, and a certified copy of this
Ordinance shall always be kept on file in the office of the City
Clerk and shall be made available for inspection by the Holder of
any Bond or prospective purchaser or Holder of any Bond
authorized by this Ordinance, and upon payment of the reasonable
cost of preparing the same, a certified copy of any such
amendatory or supplemental ordinance or of this Ordinance will be
sent by the City Clerk to any such Holder or prospective
bondholder.
Section 24. Acceleration in the Event of Default. The
City agrees that it shall default in the payment of the principal
of or interest on any of its Bonds as the same shall become due
and such default shall continue for a period of thirty (30) days,
or if the City or its governing body or any of the officers,
agents or employees thereof shall fail or refuse to comply with
any of the provisions of this Ordinance or of the statutes of the
State of Kansas, then, at any time thereafter and while such
default shall continue, the Holders of twenty-five percent (25%)
of the amount of the Bonds then Outstanding may, by written
notice to the City filed in the office of the City Clerk or
delivered in person to said City Clerk, declare the principal of
all Bonds then Outstanding to be due and payable immediately, and
upon any such declaration given as aforesaid, all of said Bonds
shall become and be immediately due and payable, anything in this
Ordinance or in said Bonds contained to the contrary
notwithstanding. This provision, however, is subject to the
condition that if at any time after the principal of said Bonds
shall have been so declared to be due and payable, all arrears of
interest upon all of said Outstanding Bonds, except interest
accrued but not yet due on such Bonds, and all arrears of
principal upon all of said Bonds shall have been paid in full,
and all other defaults, if any, by the City under the provisions
of this Ordinance and under the provisions of the statutes of the
State of Kansas shall have been cured, then, and in every such
case, the Holders of a majority in amount of the Bonds then
Outstanding, by written notice to the City given as hereinbefore
specified, may rescind and annul such declaration and its
consequences, but no such rescission or annulment shall extend to
or affect any subsequent default or impair any rights consequent
thereon.
Section 25. Enforcement. The provisions of this
Ordinance, including the covenants and agreements hereinbefore
contained, shall constitute a contract between the City and the
Holders of the Bonds, and the Holder or Holders of not less than
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ten percent (10%) of the Bonds at the time Outstanding shall have
the right, for the equal benefit and protection of all Holders of
Bonds similarly situated:
(a) By mandamus or other suit, action or proceeding at
law or in equity to enforce his or their rights against the City
and its officers, agents and employees, and to require and compel
the City and its officers, agents and employees to perform all
duties and obligations required by the provisions of this
Ordinance or by the Constitution and laws of the State of Kansas.
(b) By suit, action or other proceeding in equity or
at law to require the City, its officers, agents and employees to
account as if they were the trustees of an express trust.
(c) By suit, action or other proceeding in equity or
at law to enjoin any acts or things which may be unlawful or in
violation of the rights of the Holders of the Bonds.
Nothing contained in this Ordinance, however, shall be
construed as imposing on the City any duty or obligation to levy
any taxes either to meet any obligations incurred herein or to
pay the principal of or interest on the Bonds.
No remedy conferred hereby upon any holder of the Bonds
herein authorized is intended to be exclusive of any other
remedy, but each such remedy is cumulative and in addition to
every other remedy and may be exercised without exhausting and
without regard to any other remedy conferred hereby. No waiver
of any default or breach of'duty or contract by the Holder of any
Bond shall extend to or affect any subsequent default or breach
of duty or contract or shall impair any rights or remedies
thereon. No delay or omission of the Holder to exercise any
right or power accruing upon any default shall impair any such
right or power or shall be construed to be a waiver of any such
default or acquiescence therein. Every substantive right and
every remedy conferred upon the Holders of the Bonds may be
enforced and exercised from time to time and as often as may be
deemed expedient. In case any suit, action or proceeding to
enforce any right or exercise any remedy shall be brought or
taken and then discontinued or abandoned, or shall be determined
adversely to the Holders of the Bonds, then, and in every such
case, the City and the Holders of the Bonds shall be restored to
their former positions and rights and remedies as if no such
suit, action or other proceeding had been brought or taken.
Section 26. Defeasance. When all of the 1988 Bonds
shall have been paid and discharged, then the requirements
contained herein and the pledge of Revenues made hereunder and
all other rights granted hereby shall cease and determine.
Series 1988 Bonds shall be deeme~ to have been paid and
discharged within'the meaning of this Ordinance if there shall
have been deposited with the Paying Agent, or with a Kansas bank
having full trust powers, at or prior to the maturity or
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redemption date of such 1988 Bonds, in trust for and irrevocably
appropriated thereto, moneys and/or direct obligations of, or
obligations the principal of and interest on which are guaranteed
by, the United States of America, which, together with the
interest to be earned on such investments, will be sufficient for
the payment of the principal of such 1988 Bonds, the redemption
premium thereon, if any there be, and interest accrued to the
date of maturity or redemption, as the case may be, or if default
in such payment shall have occurred on such date, then to the
date of the tender of such payments; provided, however, always
that if any such 1988 Bonds shall be redeemed prior to the
maturity thereof, the City shall have elected to redeem such 1988
Bonds and notice of such redemption shall have been given. Any
moneys and obligations which at any time shall be deposited with
said Paying Agent or Kansas bank by or on behalf of the City, for
the purpose of paying and discharging any of the 1988 Bonds,
shall be and are hereby assigned, transferred and set over to
such Paying Agent or Kansas bank in trust for the respective
Holders of the 1988 Bonds, and such moneys shall be and are
hereby irrevocably appropriated to the payment and discharge
thereof. All moneys deposited with said Paying Agent or bank
shall be deemed to be deposited in accordance with and subject to
all the provisions contained in this Ordinance.
Section 27. Approval of Preliminary Official Statement
and Official Statement. The Preliminary Official Statement dated
__, 1988, a copy of which has been submitted to and
reviewed by the Governing Body of the City on the date hereof and
is attached hereto as Exhibit "A", and the final Official
Statement, in substantially 'the form of the Preliminary Official
Statement, and the public distribution of the same by the
Underwriters is hereby approved. The Mayor of the City is hereby
authorized and directed to execute and deliver said final
Official Statement on behalf of the City with such changes
therein or amendments or supplements thereto as shall be approved
by the Mayor, the Mayor's execution thereof to be conclusive
evidence of said representative's approval thereof.
Section 28. Severability. If any part of this
Ordinance, whether large or small, shall be held invalid, the
invalidity thereof shall not affect the other provisions of this
Ordinance.
Section 29. Effective Date. This Ordinance shall take
effect and be in full force from and after its passage and
publication once in the official City newspaper.
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PASSED by the governing body of the City of Salina,
Kansas, this day of November, 1988.
ATTEST: Mayor
City Clerk
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INDEX
PAGE
Section 1. ~Definitions 3
Section 2. Authorization of and Security for the Bonds 4
Section 3. Description of the Bonds, Designation of
Paying Agent and Bond Registrar 5
Section 4. Redemption of Bonds Prior to Maturity 5
Section 5. Method and Place of Payment of Principal of
and Interest on the Bonds 5
Section 6. Execution, Authentication and Delivery of
the Bonds 6
Section 7. Registration, Transfer and Exchange of Bonds 7
Section 8. Persons Deemed Owners of Bonds 8
Section 9. Mutilated, Lost, Stolen or Destroyed Bonds 8
Section 10. Cancellation and Destruction of Bonds
Upon Payment 9
Section 11. Form of Bonds 9
Section 12. Disposition of Bond Proceeds 14
Section 13. Levy and Collection of Annual Taxes 14
Section 14. Transfer of Funds to Paying Agent and the
Bond Registrar 14
Section 15. Authorization of Agreement Between the
City and the Bond Registrar 15
Section 16. Federal Tax Matters 15
Section 17. Defeasance 16
Section 18. Severability 16
Section 19. Effective Date 16