87-9202 W & S Bondsfl
CITY OF SALINA, KANSAS
ORDINANCE NO. �7" F204
$2,650,000 COMBINED WATER AND SEWAGE SYSTEM
REVENUE BONDS,
SERIES OF 1987
DATED: OCTOBER 1, 1987
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ORDINANCE NO. 87-9202 OF THE CITY OF SALINA, KANSAS
Recitals
Section 1.
Section 2.
Section 3.
Section 4.
Section 5.
Section 6.
Section 7.
Section 8.
Section 9.
Section 10.
Section 11.
Section 12.
Section 13.
Section 14.
Section 15.
Section 16.
Section 17.
Section 18.
Section 19.
Section 20.
Section 21.
Section 22.
Section 23.
Section 24.
Section 25.
Section 26.
Section 27.
Section 28.
Section 29.
Section 30.
Definitions -----------------------------------
Authorization of and Security for the
1987 Bonds ------------------------------------
Description of the Bonds, Designation of
Paying Agent and Bond Registrar ---------------
Method and Place of Payment of Principal
of and Interest on the Bonds ------------------
Execution, Authentication and Delivery
of the Bonds ----------------------------------
Registration, Transfer and Exchange of
Bonds-----------------------------------------
Persons Deemed Owners of Bonds ----------------
Mutilated, Lost, Stolen or Destroyed
Bonds-----------------------------------------
Cancellation and Destruction of Bonds
Upon Payment ----------------------------------
Redemption of Bonds Prior to Maturity ---------
Form of Bonds ---------------------------------
Uncertificated Bonds --------------------------
Disposition of 1987 Bond Proceeds -------------
Water and Sewage Fund -------------------------
Ratification and Creation of Funds and
Accounts--------------------------------------
Application of Moneys in Funds and Accounts ---
Deficiency in Payments or Credits into
Funds or Accounts -----------------------------
Use of Other Accounts to Pay
Bonds and Interest----------------------------
Investments-----------------------------------
Particular Covenants of the City --------------
Additional Bonds ------------------------------
Tax Matters-----------------------------------
Amendments------------------------------------
Acceleration in the Event of Default----------
Enforcement-----------------------------------
Defeasance------------------------------------
Approval of Preliminary Official
Statement and Official Statement --------------
Amended to Ordinance No. 84-9025--------------
Severability----------------------------------
Effective Date --------------------------------
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( PUBLISHED IN THE SALINA JOURNAL Qc fO ZCr / , 1 987 )
ORDINANCE NO. 87- 9202
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 of Salina, Kansas (hereinafter sometimes called the
"City"), heretofore caused to be published on May 22, 1987, 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 said City, including, but not
limited to, the reconstruction of the filter system which is part
of the waterworks system (the "Project") at a total cost estimated
to be $2,650,000, to be paid for by the issuance of $2,650,000
principal amount of 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
WHEREAS, 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 $2,650,000,
and that it is now necessary that the City proceed forthwith to
authorize and issue its Combined Water and Sewage System Revenue
AN ORDINANCE AUTHORIZING AND DIRECTING THE ISSUANCE, SALE AND
DELIVERY OF $2,650,000 PRINCIPAL AMOUNT OF COMBINED WATER AND
SEWAGE SYSTEM REVENUE BONDS, SERIES OF 1987, OF THE CITY OF SALINA,
KANSAS, FOR THE PURPOSE OF REPAIRING, ALTERING, EXTENDING,
RECONSTRUCTING, ENLARGING AND IMPROVING THE COMBINED WATER AND
SEWAGE SYSTEM, INCLUDING, BUT NOT LIMITED TO, THE RECONSTRUCTION OF
THE FILTER SYSTEM WHICH IS PART OF THE WATERWORKS 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, APPROVING A
PRELIMINARY OFFICIAL STATEMENT AND OFFICIAL STATEMENT RELATING TO
SAID BONDS AND AMENDING ORDINANCE NO. 84-9025 ADOPTED AND APPROVED
ON MAY 23, 1984.
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 of Salina, Kansas (hereinafter sometimes called the
"City"), heretofore caused to be published on May 22, 1987, 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 said City, including, but not
limited to, the reconstruction of the filter system which is part
of the waterworks system (the "Project") at a total cost estimated
to be $2,650,000, to be paid for by the issuance of $2,650,000
principal amount of 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
WHEREAS, 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 $2,650,000,
and that it is now necessary that the City proceed forthwith to
authorize and issue its Combined Water and Sewage System Revenue
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Bonds in the amount of $2,650,000 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 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, 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
WHEREAS, under the provisions of the 1984 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 provided the conditions set forth in Section 23 of the 1984
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, including the provisions of Section 16
thereof, and the 1984 Ordinance, including the provisions of
Section 23 thereof,
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.
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"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 First National Bond and Trust
Company of Salina, Salina, 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 "1987 Bonds" means the Combined Water and
Sewage System Revenue Bonds, Series of 1987, 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.
"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.
"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.
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"1984 Ordinance" means Ordinance No. 84-9025 of the City
authorizing the 1984 Bonds.
"1987 Ordinance" or "this Ordinance" means this Ordinance
of the City authorizing the 1987 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 First National Bank and Trust
Company of Salina, Salina, 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 system, including, but not limited to, the reconstruction of
the filter system which is part of the waterworks system.
"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
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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
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.
"Underwriters" shall mean the initial purchasers of the
1987 Bonds or the manager or managers of any underwriting group
initially purchasing the 1987 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 1987
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 Bonds, Series of
1987, of the City in the principal amount of $2,650,000.
The 1987 Bonds shall be special obligations of the City,
and the principal of, premium, if any, and interest on the 1987
Bonds shall be payable solely from the Revenues and not from any
other fund or source. The 1987 Bonds constitute a lien on the
Revenues. The taxing power of the City is not pledged to the
payment of the 1987 Bonds either as to principal or interest. The
1987 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 1987 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
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interest on the 1987 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.
Section 4. Method and Place of Payment of Principal of
and Interest on the Bonds. The principal of, redemption premium,
if any, and interest (computed on the basis of a 360 -day year of
The 1987 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. The
1987 Bonds shall not have any priority with respect to the payment
of principal or interest from the Revenues or otherwise over the
1984 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 1987
Bonds, nor shall the 1984 Bonds or any other combined water and
sewage system revenue bonds of the City hereafter issued have any
priority with respect to the payment of principal, premium, if any,
or interest from the Revenues or otherwise over the 1987 Bonds.
Section 3. Description of the Bonds, Designation of
Paying Agent and Bond Registrar. The Bonds shall consist of fully
registered Bonds, without coupons, transferable to subsequent
owners only in the Bond Register maintained by the Bond Registrar
as hereinafter provided. Each Bond shall be in the denomination of
$5,000 or any integral multiple thereof not exceeding the principal
amount of Bonds becoming due on the Stated Maturity of such Bond,
as specified by the Holder of such Bond. The Bonds shall be
numbered in a manner determined by the Bond Registrar. The Bonds
shall be dated October 1, 1987, shall have the Stated Maturities,
and shall bear interest at the rates per annum, as follows:
MATURITY PRINCIPAL INTEREST
OCTOBER 1 AMOUNT RATE
1988 $ 70,000 9.50%
1989 75,000 9.00%
1990 80,000 8.50%
1991 85,000 8.50%
1992 90,000 8.00%
1993 95,000 8.00%
1994 100,000 8.00%
1995 1 05, 000 8.00%
1996 110,000 7.00%
1997 120,000 7.15%
1998 125,000 7.30%
1999 135,000 7.45%
2000 140,000 7.60%
2001 150,000 7.70%
2002 165,000 7.80%
2003 175,000 7.90%
2004 185,000 8.00%
2005 200,000 8.00%
2006 215,000 8.00%
2007 230,000 8.00%
The Bonds shall bear interest from the most recent
Interest Payment Date to which interest has been paid in full or,
if no interest has been paid, from October 1, 1987. Interest on
the Bonds at the rates aforesaid shall be payable semiannually on
April 1 and October 1 in each year, beginning April 1, 1988 (the
"Interest Payment Date"). The First National Bank and Trust
Company of Salina, Salina, Kansas, is hereby designated as the
Paying Agent and as the Bond Registrar for the Bonds.
Section 4. Method and Place of Payment of Principal of
and Interest on the Bonds. The principal of, redemption premium,
if any, and interest (computed on the basis of a 360 -day year of
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twelve 30 -day months) on the Bonds shall be payable in such coin 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 Holder 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.
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
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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. Registration, Transfer and Exchange 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 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 City 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.
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 Destroyed 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 cancell
Bonds shall be delivered to the City.
-10-
The Bond Registrar shall call Bonds for redemption and paymen
Section 10.
Redemption of Bonds Prior to Maturity. At
the option
of the City,
Bonds maturing on October 1, 1998, and
thereafter
may be called for redemption and payment prior to
Price or Prices and the Redemption Date.
maturity,
as a whole or
in part, in inverse order of Maturity on
October
October 1,
1997, or on
any Interest Payment Date thereafter, at th
September
respective
Redemption Prices
(expressed as percentages of principa
October
amount) set
out below,
plus accrued interest thereon to the
September
Redemption
Date:
101.50%
-10-
The Bond Registrar shall call Bonds for redemption and paymen
Redemption
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
Redemption
Such request shall specify the principal amount of Bonds and their
maturities to be called for redemption, the applicable Redemption
Dates
Price or Prices and the Redemption Date.
Bonds shall be redeemed in inverse order of maturity in
Prices
October
1,
1997,
through
September
30,
1998
102.00%
October
1,
1998,
through
September
30,
1999
101.50%
October
1,
1999,
through
September
30,
2000
101.00%
October
1,
2000,
through
September
30,
2001
100.50%
October
1,
2001,
and thereafter
exchange as aforesaid, such Bond shall, nevertheless, become due
100.00%
-10-
The Bond Registrar shall call Bonds for redemption and paymen
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. I
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 ani
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 first class 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:
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(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;
(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 Holder 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 affec
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 OF 1987
Interest Maturity Bond
Rate Date Date CUSIP
% October 1, 1987
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 redemption
prior to maturity, the Principal Amount identified above and to pa
interest thereon at the Interest Rate specified above from the mos
-11-
recent Interest Payment Date to which interest has been paid in
full or, if no interest has been paid, from October 1, 1987, said
interest being payable semiannually on April 1 and October 1 in
each year, beginning April 1, 1988 (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 to the person in whose
name this Bond (or one or more predecessor 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 a
otherwise provided in the Ordinance. The principal of this Bond
shall be payable to the Registered Holder upon presentation and
surrender hereof at the principal office of The First National Ban.
and Trust Company of Salina, in the City of Salina, 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 an
purpose or be entitled to any security or benefit under the
Ordinance until the Certificate of Authentication hereon shall hav,
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 t
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 October 1, 1987.
ATTEST:
CITY OF SALINA, KANSAS
facsimile
Mayor
facsimile)
City Clerk
CERTIFICATE OF AUTHENTICATION
This Bond is one of the Bonds described in the within
mentioned Ordinance.
REGISTRATION DATE:
THE FIRST NATIONAL BANK AND TRUST
COMPANY OF SALINA
Bond Registrar and Paying Agent
By
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(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 of 1987," aggregating the principal amount of $2,650,000,
issued for the purpose of repairing, altering, extending,
reconstructing, enlarging and improving the combined water and
sewage system, including, but not limited to, the reconstruction of
the filter system which is part of the waterworks system, by the
authority of and in full compliance with the provisions,
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 fron
the operation of its combined water and sewage system and not from
any other fund or source as described in the Ordinance. 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 tc
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
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. 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, 1998, and thereafter, a
the option of the City, may be called for redemption and payment
prior to maturity, as a whole or in part, on October 1, 1997, or o
any Interest Payment Date thereafter, at the respective Redemption
Prices (expressed as percentages of principal amount) set out
below, 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.
-13-
IN THE EVENT any of the Bonds are called for redemption
and payment as aforesaid, written notice thereof will be given by
first class 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 PRINCIPAL of and interest (computed on the basis of
360 -day year of twelve 30 -day months) on this Bond are payable in
such coin 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.
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 tho
Registered Holder hereof or his attorney or 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 fo:
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. N<
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 tc
reimburse it or them for any tax or other governmental charge
required to be paid with respect to such transfer or exchange. Th(
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 accouni
of, the principal hereof and interest due hereon and for all other
purposes.
(FORM OF ASSIGNMENT)
BOND ASSIGNMENT
FOR VALUE RECEIVED the undersigned does (do) hereby sell,
assign and transfer to
(Name and Address)
-14-
Redemption
Redemption
Dates
Prices
October
1,
1997,
through
September
30,
1998
102.00%
October
1,
1998,
through
September
30,
1999
101.50%
October
1,
1999,
through
September
30,
2000
101.00%
October
1,
2000,
through
September
30,
2001
100.50%
October
1,
2001,
and thereafter
100.00%
IN THE EVENT any of the Bonds are called for redemption
and payment as aforesaid, written notice thereof will be given by
first class 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 PRINCIPAL of and interest (computed on the basis of
360 -day year of twelve 30 -day months) on this Bond are payable in
such coin 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.
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 tho
Registered Holder hereof or his attorney or 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 fo:
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. N<
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 tc
reimburse it or them for any tax or other governmental charge
required to be paid with respect to such transfer or exchange. Th(
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 accouni
of, the principal hereof and interest due hereon and for all other
purposes.
(FORM OF ASSIGNMENT)
BOND ASSIGNMENT
FOR VALUE RECEIVED the undersigned does (do) hereby sell,
assign and transfer to
(Name and Address)
-14-
(Social Security or Taxpayer Identifying No.)
the bond to which this assignment is affixed in the outstanding
principal amount of $ , standing in the name of the
undersigned on the books of The First National Bank and Trust
Company of Salina, Salina, Kansas. The undersigned does (do) hereb
revocably constitute and appoint attorney t
transfer the said bond, on the books of said The First National
Bank and Trust Company of Salina, with full power of substitution
in the premises.
Dated
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
-15-
1
n
the issuance of this
Bond was registered
Bond has been filed in my office and that this
in my office according to law on
19
WITNESS my hand and official seal.
[FACSIMILE SEAL]
State Treasurer's Registration
Number:
JOAN FINNEY
Treasurer of the State
of Kansas
By
Assistant State Treasurer
Section 12. Uncertificated Bonds. There will be no
uncertificated bonds.
Section 13. Disposition of 1987 Bond Proceeds. All
accrued interest and premium, if any, received from the sale of the
1987 Bonds shall be credited to and deposited in the 1987 Principal
and Interest Account hereinafter created by Section 15 of this
Ordinance.
The remainder of the proceeds received from the sale of
the 1987 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 1987" (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.
-16-
Upon completion of the Project as hereinbefore provided,
any surplus remaining in the Construction Fund shall be deposited
in the 1987 Principal and Interest Account created by Section 15 of
this Ordinance.
Section 14. Water and Sewage Fund. The City covenants
and agrees that so long as any of the 1987 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 mingled with
the other funds of the City and shall be administered and used
solely as hereinafter in this Ordinance provided.
-16-
Section 15. Ratification and Creation of Funds and
Accounts. The establishment by the 1961 Ordinance of the City of
the two accounts known 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 are, 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 are hereby created and established in
the treasury of the City the following two separate accounts
(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").
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 and this Ordinance so long
as any of the 1977 Bonds, 1984 Bonds or 1987 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 by the City as
hereinafter provided in this Ordinance so long as any 1987 Bonds
remain Outstanding.
Section 16. Application of Moneys in Funds and Accounts.
Moneys paid and deposited in the "Water and Sewage Fund" heretofore
-17-
established by the City and hereinbefore referred to shall be
administered and disposed of by the City so long as any of the 1987
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, 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
Combined 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.
(i) Beginning on the first day of each month from
and after the delivery of the 1987 Bonds, and continuing
on the first day of each month thereafter to and
including March 1, 1988, an equal pro rata portion of
the amount of interest that will become due on the Bonds
on April 1, 1988 and beginning on April 1, 1988, 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 1987 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 1987 Bonds, and continuing
on the first day of each month thereafter to and
including September 1, 1988, an equal pro rata portion
of the principal amount of the 1987 Bonds that will
become due on October 1, 1988; and beginning on October
1, 1988, 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 1987 Bonds that will
become due on the next succeeding Stated Maturity; and
(iii) On the first day of each month preceding a
month 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.
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(d) After making all
required to be made by the City
payments and credits at the time
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 any amounts at the time
required to be paid or credited to
said Account under the provisions
of the 1984 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 1987 Principal and
Interest Account, to the extent
necessary to meet at the Stated
Maturity thereof the interest on
and principal of the 1987 Bonds,
the following amounts:
(i) Beginning on the first day of each month from
and after the delivery of the 1987 Bonds, and continuing
on the first day of each month thereafter to and
including March 1, 1988, an equal pro rata portion of
the amount of interest that will become due on the Bonds
on April 1, 1988 and beginning on April 1, 1988, 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 1987 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 1987 Bonds, and continuing
on the first day of each month thereafter to and
including September 1, 1988, an equal pro rata portion
of the principal amount of the 1987 Bonds that will
become due on October 1, 1988; and beginning on October
1, 1988, 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 1987 Bonds that will
become due on the next succeeding Stated Maturity; and
(iii) On the first day of each month preceding a
month 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.
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All amounts paid and credited to the 1987 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 1987
Bonds as and when the same become due and the fees of the Paying
Agent and Bond Registrar for acting hereunder.
(e) Prior to or concurrently with the issuance and
delivery of the 1987 Bonds, there shall be paid and credited to the
1987 Reserve Account, from available cash funds and investments
which the City has on hand, the sum of $265,000 (the "Reserve
Requirement").
All amounts paid or credited to the 1987 Reserve Account
shall be used and expended solely to prevent any default in the
payment of interest on or principal of the Outstanding 1987 Bonds
of the City if the moneys in the 1987 Principal and Interest
Account hereinbefore created are insufficient to pay the interest
on or principal of the 1987 Bonds as they become due. No part of
said 1987 Reserve Account shall ever be expended or used by the
City to call any 1987 Bonds for payment prior to their ultimate
maturity unless all of the Outstanding 1987 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 1987 Reserve Account
aggregates the Reserve Requirement, no further payments into the
1987 Reserve Account shall be required, but if the City shall ever
be compelled to use and expend any part of the 1987 Reserve Account
for the purpose of paying the interest on or principal of 1987
Bonds of the City and such expenditure shall reduce the amount of
the 1987 Reserve Account 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 any amounts at the time required to be paid or
credited to said Account under the provisions of the 1984
Ordinance, and, at the same time such payments or credits are made
and on a parity therewith, the City shall pay or credit from the
Water and Sewage Fund to the 1987 Reserve Account all available
funds until the Reserve Account aggregates the Reserve Requirement.
At no time shall the balance of monies on hand in the
1987 Bond Reserve Account exceed the sum of $265,000.
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 and other
combined water and sewage system revenue bonds of the City
hereafter issued and standing on a parity with the 1987 Bonds, the
lavailable moneys in the Water and Sewage Fund shall be divided
among such bond reserve accounts in proportion to the respective
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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 and any other
combined water and sewage system revenue bonds of the City
hereafter issued and standing on a parity with the 1987 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 1987 Bonds, there shall be paid and credited to the
1987 Reserve Account, from available cash funds and investments
which the City has on hand, the sum of $265,000 (the "Reserve
Requirement").
All amounts paid or credited to the 1987 Reserve Account
shall be used and expended solely to prevent any default in the
payment of interest on or principal of the Outstanding 1987 Bonds
of the City if the moneys in the 1987 Principal and Interest
Account hereinbefore created are insufficient to pay the interest
on or principal of the 1987 Bonds as they become due. No part of
said 1987 Reserve Account shall ever be expended or used by the
City to call any 1987 Bonds for payment prior to their ultimate
maturity unless all of the Outstanding 1987 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 1987 Reserve Account
aggregates the Reserve Requirement, no further payments into the
1987 Reserve Account shall be required, but if the City shall ever
be compelled to use and expend any part of the 1987 Reserve Account
for the purpose of paying the interest on or principal of 1987
Bonds of the City and such expenditure shall reduce the amount of
the 1987 Reserve Account 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 any amounts at the time required to be paid or
credited to said Account under the provisions of the 1984
Ordinance, and, at the same time such payments or credits are made
and on a parity therewith, the City shall pay or credit from the
Water and Sewage Fund to the 1987 Reserve Account all available
funds until the Reserve Account aggregates the Reserve Requirement.
At no time shall the balance of monies on hand in the
1987 Bond Reserve Account exceed the sum of $265,000.
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 and other
combined water and sewage system revenue bonds of the City
hereafter issued and standing on a parity with the 1987 Bonds, the
lavailable moneys in the Water and Sewage Fund shall be divided
among such bond reserve accounts in proportion to the respective
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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 Account established by the 1961 Ordinance
of the City shall be maintained and administered by the City so
long as any of the City's 1987 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 no 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 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
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1
1
1
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 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 22(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 22(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. 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 subject to redemption, or, at
the option of the City, for 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.
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
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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 1987 Principal and
Interest Account and in the 1987 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 1987 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 in any fund or account under any of the provisions of
this Ordinance, obligations of the United States Government 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 1987 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 Emergency and Replacement Account during such
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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) Engineering Report. At least once in every two
years the City will employ a Consulting Engineer and will cause
such Consulting Engineer or 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.
(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 cost out of the revenues of the City's Water and Sewage
Utility.
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(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 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's Water and Sewage
Utility rates which will adequately provide for such requirements.
(h) Right to Inspect. The Holder of any of the Bonds of
the City herein authorized shall 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, said 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
than 1.25 times the maximum Aggregate Debt Service for any
succeeding fiscal year (excluding the year of final maturity of any
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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.
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
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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 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 1987 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 1987 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
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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.
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 1987 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
activity bonds and current refunding of outstanding obligations)
during the calendar year 1987 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 1987 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 1987 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
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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
ten percent (10%) of the Bonds at the time Outstanding shall have
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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 permitting (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 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
ten percent (10%) of the Bonds at the time Outstanding shall have
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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.
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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 1987 Bonds or
any maturity thereof 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 with respect to such bonds. Series 1987 Bonds shall be
deemed 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 redemption date of such 1987 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 1987 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 1987 Bonds shall be redeemed prior to the maturity thereof,
the City shall have elected to redeem such 1987 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 1987 Bonds, shall be and are hereby
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assigned, transferred and set over to such Paying Agent or Kansas
bank in trust for the respective Holders of the 1987 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
September 3, 1987, 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 "D", 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. Amendment to Ordinance No. 84-9025.
Ordinance No. 84-9025, adopted and approved by the governing body
on May 23, 1984, is hereby amended to correct certain errors and
omissions in said Ordinance by adding the following definitions to
Section 1 of Ordinance No. 84-9025:
"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.
"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.
"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.
Section 29. 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 30. 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 2/- day of September, 1987.
ATTEST: Mayor
City Clerk
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