HomeMy WebLinkAbout0705 Water Revenue Bonds 2011ORDINANCE NO. ! ��
AN ORDINANCE OF THE CITY OF CHUBBUCK, IDAHO, AUTHORIZING AND
PROVIDING FOR THE ISSUANCE OF WATER REVENUE BONDS, SERIES 2011,
IN THE AGGREGATE PRINCIPAL AMOUNT OF $2,000,000, FOR THE PURPOSE
OF FINANCING IMPROVEMENTS TO THE DOMESTIC WATER SYSTEM OF THE
CITY OF CHUBBUCK, BANNOCK COUNTY, IDAHO; DESCRIBING THE BONDS;
PROVIDING FOR THE COLLECTION AND DISPOSITION OF REVENUES;
PROVIDING FOR THE PAYMENT OF THE PRINCIPAL OF THE BONDS;
ESTABLISHING FUNDS AND ACCOUNTS; PROVIDING COVENANTS RELATING TO
THE BONDS; PROVIDING FOR THE SALE OF THE BONDS TO SEATTLE -
NORTHWEST SECURITIES CORPORATION; PROVIDING FOR RELATED MATTERS;
AND PROVIDING AN EFFECTIVE DATE
WHEREAS, the. City of Chubbuck, Bannock County, Idaho (the
"City"), is a municipal corporation organized and operating under
the laws of the State of Idaho; and
WHEREAS, the City operates and maintains a domestic water
system; and
WHEREAS, the City is authorized by the Constitution and laws
of Idaho to issue revenue bonds to finance all or part of the
cost of acquisition, construction, and installation of
improvements and betterments to the domestic water system of the
City; and
WHEREAS, the City Council (the "Council") of the City,
obtained a judgment in Case No. CV 10-5253 in the Sixth Judicial
District of the State of Idaho on March 7, 2011, confirming the
City's determination that the expenditure of $2,000,000 for the
purchase of water rights is an ordinary and necessary expense of
the City and the City is authorized by the Idaho Constitution to
sell its revenue bonds in the principal amount of $200,000 in
order to provide funds for such improvements to the City's
domestic water system; and
WHEREAS, Section 50-1036, Idaho Code, authorizes the sale of
water revenue bonds at private sale in such manner as the Council
may determine; and
WHEREAS, the City has received an offer from Seattle -
Northwest Securities Corporation to purchase the Bonds of the
City, and the Council has determined to accept such offer.
NOW, THEREFORE, BE IT ORDAINED BY THE MAYOR AND COUNCIL OF
THE CITY OF CHUBBUCK, IDAHO, as follows:
Section 1: DEFINITIONS
As used in this Ordinance, the following words shall have
the following meanings:
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Additional Bonds means any bonds issued pursuant to Section
18 of this Ordinance.
Bond Counsel means Poore Smith Buxton & Turcke, Chartered,
Boise, Idaho, or another attorney at law or a firm of attorneys
of nationally recognized standing in matters pertaining to the
tax-exempt status of interest on obligations issued by states and
their political subdivisions, duly admitted to the practice of
law before the highest court of any state of the United States
Bond Fund means the "City of Chubbuck Water Revenue Bond
Fund" created by Section 15 of this Ordinance.
Bond Register means the registration books on which -are
maintained the names and addresses of the owners or nominees of
the owners of the Bonds.
Bond Registrar means the bond registrar, transfer agent, and
authenticating and paying agent appointed and designated in
Section 7 of this Ordinance.
Bond Purchase Agreement means the agreement between the City
and the Underwriter for the purchase of the Bonds as provided in
Section 22 of this Bond Resolution.
Bonds means the "City of Chubbuck Water Revenue Bonds,
Series 2011," herein authorized to be issued, sold, and delivered
in the aggregate principal amount of $2,000,000.
Book -Entry -Only System means the system of recordation of
ownership of the Bonds on the books of DTC pursuant to Section 4
of this Bond Resolution.
Business Dav means any day, other than a Saturday or Sunday,
on which banks located in the State of Idaho and in the state
where the Bond Registrar's Principal Corporate Trust Office is
located, are open for the purpose of conducting commercial
banking business.
Capital Improvement Fund means the "City of Chubbuck Water
Project Capital Improvement Fund" created by Section 13 of this
Ordinance.
Cede means Cede & Co., the nominee of DTC, and any successor
nominee of DTC with respect to the Bonds pursuant to Section 4
hereof.
Certificated Bond(s) means a Bond or Bonds evidenced by a
printed certificate in the event that the Book -Entry -Only System
is discontinued.
City means the City of Chubbuck, Bannock County, Idaho.
City Clerk means the Clerk of the City, or other officer of
the City who is the custodian of the seal of the City and of the
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records of the proceedings of the City, or his/her successor in
functions, if any.
Cost of Issuance Fund means the fund created by Section 13
of this Bond Resolution for the payment of the costs of issuance
of the Bonds.
Cost of Project or any phrase of similar import, means all
or any part designated by the Council of the costs of the
Project, or interest therein, which costs, at the option of the
Council, may include all or any part of the incidental costs
pertaining to the Project, including, without limitation:
(1) Preliminary expenses advanced by the City from
funds available for the. use therefore, or advanced by the
Federal Government, or from any other source, with approval
of the Council, or any combination thereof;
(2) The costs of making surveys, audits, preliminary
plans, other plans, specifications, estimates of costs and
other preliminaries;
(3) The costs of appraising, printing, estimates,
advice, services of engineers, architects, financial
consultants, attorneys at law, clerical help, or other
agents or employees;
(4) The costs of contingencies;
(5) The costs of the issuance of the Bond;
(6) The costs of funding any short-term financing,
bond anticipation notes, and other temporary loans per-
taining to the Project and of the incidental expenses
incurred in connection with such loans;
(7) The costs of any properties, rights, easements, or
other interest in properties, or any licenses, privileges,
agreements and franchises; and
(8) All other expenses necessary or desirable and
pertaining to the Project, as estimated or otherwise
ascertained by the Council.
Council means the City Council of the City.
DTC means The Depository Trust Company, New York, New York,
and its successors and assigns
Estimated Net Revenues means, for any year, the estimated
Revenues of the System for such year less the estimated Operation
and Maintenance Expenses for such year, based upon estimates
prepared by the City Engineer or an independent engineer, or an
independent certified public accountant. In computing Estimated
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Net Revenues, Revenues of the System may be adjusted as necessary
to reflect any changed schedule of rates and charges.
Exchange Bond means any Exchange Bond as defined in
Section 8 hereof.
Interest Payment Date(s) means the payment date(s) set forth
in Section 4of this Bond Resolution.
Mayor means the Mayor of the City, or his/her successor in
functions, if any.
Net Revenues means Revenue of the System after the deduction
of Operation and Maintenance Expenses: -
Operation and Maintenance Expenses or any phrase of similar
import means all reasonable and necessary current expenses of the
City, paid or accrued, of operating, maintaining, and repairing
the System or of levying, collecting, and otherwise administering
the Net Revenues for the payment of the Bonds; and the term
includes (except as limited by contract or otherwise limited by
law) without limiting the generality of the foregoing:
(1) Engineering, auditing, reporting, legal, and other
overhead expenses of the various City departments directly
relating and reasonably allocable to the administration of
the System;
(2) Fidelity bonds and property and liability
insurance premiums pertaining to the System, or a reasonably
allocable share of a premium of any blanket bond or policy
pertaining thereto;
(3) Payments to pension, retirement, health, and
hospitalization funds and other insurance;
(4) Any taxes, assessments, excise taxes, or other
charges which may be lawfully imposed on the City, the
System, revenues therefrom, or any privilege in connection
with their operation;
(5) The reasonable charges of the bond registrar,
fiscal or paying agent, commercial bank, trust bank, or
other depository bank pertaining to the Bond issued by the
City or pertaining to the Project, if any;
(6) Contractual services, professional services,
salaries, other administrative expenses, and the cost of
materials, supplies, repairs, and labor, pertaining to the
issuance of the Bond and to the ordinary operation of the
System; and
(7) All other administrative, general, and commercial
expenses.
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Ordinance means this Ordinance No. adopted on
2011.
Participants mean those broker-dealers, banks, and other
financial institutions from time to time for which DTC holds
Bonds as securities depository.
Principal Corporate Trust Office means, with respect, to the
Bond 'Registrar, the office of. the Bond Registrar at Salt Lake
City, Utah; provided, however, that with respect to payments on
the Bonds and any exchange, transfer, or surrender of the Bonds,
Principal Corporate Trust Office shall mean the office of the
Bond Registrar at U.S. Bank Trust National Association, 60
Livingston Avenue, St. Paul, MN 55107 or such other or additional
offices as may be specified by the Bond Registrar
Project means the water system improvement project described
in Section 3 of this Ordinance.
Record Date means in the case of each interest payment date,
the Bond Registrar's close of business on the last business day
of the month next preceding such interest payment date.
Registered Owner means the purchaser of the Bond and any
subsequent transferee or purchaser of the Bond.
Regulations means the Treasury Regulations issued or
proposed under Section 103, Section 148, Section 149, or Section
150 of the Code (26 CFR Part 2) or other sections of the Code
relating to "arbitrage bonds" or rebate, including without
limitation Sections 1.148-0 through 1.148-11 and 1.150-1 of the
Treasury Regulations, to the extent applicable, and includes
amendments thereto or successor provisions.
Representation Letter means the representation letter from
the City to DTC, as authorized in Section 4 hereof.
Reserve Fund means the "City of Chubbuck Water Revenue Bond
Reserve Fund," created by Section 16 of this Ordinance.
Reserve Requirement means the monies to be held by the City in the Reserve Fund to
secure payment of debt service on the loan and the Bond which shall be in an amount provided
for in the Loan Agreement, which amount shall not exceed the lesser of (i) the maximum annual
principal and interest requirements on the Bond, or (ii) 125% of the average annual principal and
interest requirements on the Bond, not to exceed ten percent (10%) of the proceeds of the Bond.
Revenue Fund means the -City of Chubbuck Water Revenue Fund"
created by Section 14 of this Ordinance.
Revenue of the System means all revenues received by the
City from its System and may include, at the discretion of the
City, moneys derived from one, all, or any combination of revenue
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sources pertaining to the System, including, without limitation,
rates, charges, rents, fees, and any other income derived from
the operation or ownership of, the use of services of, or the
availability of or services pertaining to, or otherwise derived
in connection with, the System or all or any part of any property
pertaining to the System.
System, for purposes of this Ordinance, means the domestic
water system of the City, as the same -now exists, including its
assets, real and personal, tangible and intangible, and as it may
later be added to, extended, and improved, and shall include
buildings, structures, utilities, or other income producing water
facilities from the operation of or in connection with which the
revenues of the payment of the Bond to be issued hereunder will
be derived, and the lands pertaining thereto.
Treasurer means the Treasurer of the City, or his/her
successor in functions, if any.
Underwriter means Seattle -Northwest Securities Corporation
as initial purchaser of the Bonds.
Written Certificate means an instrument in writing on behalf
of the City executed by an authorized officer of the City.
Section 2: BONDS AUTHORIZED
Revenue bonds of the City, in fully registered form,
designated "City of Chubbuck Water Revenue Bonds, Series 2011,"
are herein authorized to be issued, sold, and delivered in the
aggregate principal amount of $2,000,000.
Section 3: PURPOSE OF BONDS
A. Prosect Description. The Bonds are being sold to
finance the water improvement project, which consists of the
acquisition of additional water rights, together with costs of
engineering, legal, accounting, and other necessary professional
services, costs of bond issuance, interest on borrowed funds (if
any), and related costs (the "Project").
B. Project Changes. The Council may make changes in the
Project, provided such changes are found necessary and desirable
by the Council and that such changes do not substantially affect
or alter the plans or the cost of the Project.
C. Costs. The total estimated cost of the Project is
$2,000,000, $2,000,000 of which will be paid from the issuance
and sale of the Bonds, hereinafter defined.
Section 4: DESCRIPTION OF THE BONDS
A. The Bonds. The Bonds shall be dated as of their date of
delivery, shall be substantially in the form of Exhibit "A" which
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is annexed hereto, shall be issued in accordance with the Book -
Entry -Only System described in this Section 4, shall be issued
only in fully registered form, in denominations of $5,000 each,
or integral multiples thereof within a maturity, not exceeding
the total amount of Bonds maturing in a single maturity, and
shall be numbered separately in a consecutive series, in the
manner and with any additional designation as the Bond Registrar
(hereinafter defined) deems necessary for the purposes of
identification. Interest on*the Bonds shall be calculated on the
basis bf a 360 -day year and twelve 30 -day months. The Bonds bear
interest from their date, payable commencing on
2011, and semiannually on each and
thereafter until their maturity or prior redemption, at the
following rates of interest- and shall mature on of
each year in the amounts set forth in the following schedule:
Maturity
Date
Principal
Amount Interest Rate
B. The
Book -Entry
-Only System
(1) Book -Entry Only System; Limited Obligation of City.
The Bonds shall be initially issued in the form of a separate
single fully registered Bond for each of the maturities set forth
hereinabove. Each such Bond shall be manually executed by the
Mayor and manually countersigned by the Clerk, and the corporate
seal of the City shall be impressed thereon. Each Bond shall
also be manually authenticated by the Bond Registrar. Upon
initial issuance, the ownership of each Bond shall be registered
in the registration books kept by the Bond Registrar in the name
of Cede, as nominee of DTC. Except as provided in Section 6
hereof, all of the outstanding Bonds shall be registered in the
registration books kept by the Bond Registrar in the name of
Cede, as nominee of DTC.
With respect to Bonds registered in the registration books
kept by the Bond Registrar in the name of Cede, as nominee of
DTC, the City and the Bond Registrar shall have no responsibility
or obligation to any Participant or to any person on behalf of
which a Participant holds an interest in the Bonds with respect
to (i) the accuracy of the records of DTC, Cede or any
Participant with respect to any ownership interest in the Bonds,
(ii) the delivery to any Participant or any other person, other
than a Registered Owner, as shown in the registration books kept
by the Bond Registrar, of any notice with respect to the Bonds,
including any notice of redemption, or (iii) the payment to any
Participant or any other person, other than a Registered Owner,
as shown in the registration books kept by the Bond Registrar, of
any amount with respect to principal of or interest on the Bonds.
The City and the Bond Registrar may treat and consider the
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person in whose name each Bond is registered in the registration
books kept by the Bond Registrar as the holder and absolute owner
of such Bond for the purpose of payment of principal and interest
with respect to such Bond, and for all other purposes whatsoever.
The Bond Registrar shall pay all principal of and interest on
the Bonds only to or upon the order of the respective Registered
Owners, as shown in the registration books kept by the Bond
Registrar, or their respective attorneys duly authorized in
writing, as provided in Section 7 hereof, and all such payments
shall be valid and effective to fully satisfy and discharge the
City's obligations with respect to payment of principal of and
interest on the Bonds to the extent of' the sum or sums so paid.
No person other than a Registered Owner, as shown in the
registration books kept by the Bond Registrar, -shall-receive a -
Bond certificate evidencing the obligation of the City .to make
payments of principal and interest pursuant to this Bond
Resolution. Upon delivery by DTC to the City of written notice
to the effect that DTC has determined to substitute a new nominee
in place of Cede, and subject to the provisions herein with
respect to Record Dates, the word "Cede" in this Bond Resolution
shall refer to such new nominee of DTC; and upon receipt of such
a notice the City shall promptly deliver a copy of the same to
the Bond Registrar.
(2) Representation Letter. The Representation Letter
in substantially the form annexed hereto as Exhibit "B" and by
reference incorporated herein, is hereby authorized for use in
connection with the Bonds. The Representation Letter shall not
in any way limit the provisions of Paragraph A of this Section 4
or in any other way impose upon the City any obligation
whatsoever with respect to persons having interests in the Bonds
other than the Registered Owners, as shown on the registration
books kept by the Bond Registrar. In the written acceptance of
each Bond Registrar referred to in Section 7 hereof, such Bond
Registrar shall agree to take all action necessary for all
representations of the City in the Representation Letter with
respect to the Bond Registrar to at all times be complied with.
(3) Transfers Outside Book -Entry -Only System. In the
event that (a) the City determines that DTC is incapable of
discharging or is unwilling to discharge its responsibilities
described herein and in the Representation Letter, (b) DTC
determines to discontinue providing its service as securities
depository with respect to the Bonds at any time as provided in
the Representation Letter, or (c) the City determines that it is
in the best interests of the beneficial owners of the Bonds that
they be able to obtain Certificated Bonds in certificated form,
and an alternative book -entry system is not available or is not
selected as provided in the succeeding sentence, the City shall
notify DTC and direct DTC to notify the Participants of the
availability through DTC of Bond certificates, and the Bonds
shall no longer be restricted to being registered in the
registration books kept by the Bond Registrar in the name of
Cede, as nominee of DTC. At that time, the City may determine
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that the Bonds shall be registered in the name of and deposited
with such other depository operating a universal book -entry
system, as may be acceptable to the City, or such depository's
agent or designee, and if the City does not select such alternate
universal book -entry system, then the Bonds shall no longer be
restricted to being registered in the registration books kept by
the Bond Registrar in the name of Cede, as nominee of DTC, but
may be registered in whatever name or names Registered Owners
'transferring or exchanging Bonds shall designate, in accordance
with the provisions of Section 8 hereof.
(4) Payments to Cede. Notwithstanding any other
provision of this Bond Resolution to the contrary, so long as any
'Bond or is registered in the name of Cede, as nominee of DTC, all
payments with respect to principal of and interest on such Bond
and all notices with respect to such Bond shall be made and
given, respectively, in the manner provided in the Representation
Letter.
Section 5: PAYMENT OF THE BONDS
Both the principal of and interest on the Bonds shall be
payable in lawful money of the United States of America to the
registered owners thereof whose names and addresses shall appear
on the registration records of the City (the "Bond Register"),
maintained by the Bond Registrar.
Principal of each Bond shall be paid to the registered owner
thereof, upon presentation and surrender of such Bond by the
registered owner at the principal corporate trust office of the
Bond Registrar, on or after the date of maturity or prior
redemption.
Payment of each installment of interest shall be made to the
registered owner whose name appears on the Bond Register on the
Record Date next preceding the interest payment date, and shall
bepaid by check or draft of the Bond Registrar mailed to such
registered owner on the due date at the address appearing on the
Bond Register, or at such other address as may be furnished in
writing by such registered owner to the Bond Registrar.
Section 6: EXECUTION OF CERTIFICATED BONDS
In the event that the Book -Entry -Only System is discontinued
with respect to the Bonds, the City shall cause Certificated
Bonds to be prepared, executed, authenticated, and delivered.
The Certificated Bonds shall be numbered separately in the manner
and with such additional designation as the Bond Registrar shall
deem necessary for purposes of identification.
Certificated Bonds shall be executed on behalf of the City
by the Mayor and countersigned by the Clerk (the signatures of
said Mayor and Clerk being either manual or by facsimile) and the
Corporate seal of the City shall be impressed thereon or the
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facsimile of the corporate seal of the City shall be printed
thereon. The said officials and each of them are hereby
authorized and instructed to execute the Certificated Bonds
accordingly, and the use of such facsimile signatures of said
Mayor and Clerk and such facsimile of the seal of the City on the
Certificated Bonds are hereby authorized, approved, and adopted
as the authorized and authentic execution, countersigning, and
sealing of the Certificated Bonds by said officials. The
Certificated Bonds shall then be delivered to the Bond Registrar
for manual authentication. Only such of the Certificated Bonds
shall bear thereon a certificate of authentication, manually
executed by the Bond Registrar, shall be valid or obligatory for
any purpose or entitled to the benefits of this Bond Resolution,
and such certificate of the Bond Registrar shall be conclusive
evidence that the Certificated Bonds so authenticated have been
duly authenticated and delivered under, and are entitled to the
benefits of, this Bond Resolution and that the Registered Owner
thereof is entitled to the benefits of this Bond Resolution. The
certificate of authentication of the Bond Registrar on any
Certificated Bond shall be deemed to have been executed by it if
(a) such Certificated Bond is signed by an authorized officer of
the Bond Registrar, but it shall not be necessary that the same
officer sign the certificate of authentication on all of the
Certificated Bonds issued hereunder or that all of the
Certificated Bonds hereunder be authenticated by the same Bond
Registrar, and (b) the date of registration and authentication of
the Certificated Bond is inserted in the place provided therefor
on the certificate of authentication.
The Mayor and Clerk are authorized to execute, countersign,
and seal from time to time, in the manner described above,
Certificated Bonds (the "Exchange Bonds") to be issued and
delivered for the purpose of effecting transfers and exchanges of
Bonds pursuant to Section 8 hereof. At the time of the
execution, countersigning, and sealing of the Exchange Bonds by
the City, the payee, maturity, or due date, as applicable, and
interest rate, if applicable, shall be in blank. All Exchange
Bonds shall be in the denomination of $5,000 or integral
multiples thereof. Upon any transfer or exchange of Bonds
pursuant to Section 8 hereof, the Bond Registrar shall cause to
be inserted in appropriate Exchange Bonds the appropriate payee,
maturity, or due date, as applicable, and interest rate. The
Bond Registrar is hereby authorized and directed to hold the
Exchange Bonds, and to complete, authenticate, and deliver the
Exchange Bonds, for the purpose of effecting transfers and
exchanges of Certificated Bonds; provided that any Exchange Bonds
authenticated and delivered by the Bond Registrar shall bear the
same series, maturity, or due date, as applicable, and interest
rate as Bonds delivered to the Bond Registrar for exchange or
transfer, and shall bear the name of such payee as the Registered
Owner requesting an exchange or transfer shall designate; and
provided further that upon the delivery of any Exchange Bonds by
the Bond Registrar a like principal amount, if applicable, of
Certificated Bonds submitted for transfer or exchange, and of
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like series and having like maturities and interest rates, if
applicable, shall be canceled. The execution, countersigning,
and sealing by the City and delivery to the Bond Registrar of any
Exchange Bond shall constitute full and due authorization of such
Certificated Bond containing such payee, maturity, or due date,
as applicable, and interest rate, if applicable, as the Bond
Registrar shall cause to be inserted, and the Bond Registrar
shall thereby be authorized to authenticate and deliver such
Exchang.e Bond in accordance with the provisions hereof.
In case any officer whose signature or a facsimile of whose
signature shall appear on any Bond (including any Exchange Bond)
shall cease to be such officer before the issuance or deliver of
such Bond, such signature or such facsimile shall nevertheless- be
valid and sufficient. for all purposes, the same as if such
officer had remained in office until such issuance of delivery,
respectively.
Section 7: BOND REGISTRAR
U.S. Bank National Association is hereby appointed the Bond
Registrar for the Bonds. The City may remove any Bond Registrar,
and any successor thereto, and appoint a successor or successors
thereto. Each Bond Registrar shall signify its acceptance of the
duties and obligations imposed upon it by the Bond Resolution by
executing and delivering to the City a written acceptance
thereof. The principal of and interest on the Bonds shall be
payable in any coin or currency of the United States of America
which, at the respective dates of payment thereof, is legal
tender for the payment of public and private debts. Principal of
the Bonds shall be payable when due to the Registered Owner of
each Bond at the principal corporate trust office of the Bond
Registrar. Payment of interest on each Bond shall be made to the
person who, as of the Record Date, is the Registered Owner of the
Bond and shall be made by check or draft mailed to the Registered
Owner, at the address of such Registered Owner as it appears on
the registration books of the City kept by the. Bond Registrar, or
at such other address as is furnished to the Bond Registrar in
writing by such Registered Owner on or prior to the Record Date.
Section 8: TRANSFER AND EXCHANGE OF BONDS
A. Transfer of Bonds.
(1) Any Bond may, in accordance with its terms, be
transferred, upon the registration books kept by the Bond
Registrar pursuant to Paragraph C of this Section 8, by the
Registered Owner, in person or by his duly authorized attorney,
upon surrender of such Bond for cancellation, accompanied by
delivery of a written instrument of transfer in a form approved
by the Bond Registrar, duly executed. No transfer shall be
effective until entered on the registration books kept by the
Bond Registrar. The City and the Bond Registrar may treat and
consider the Registered Owner as the absolute owner thereof for
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the purpose of receiving payment of, or on account of, the
principal, if any, or redemption price thereof and interest due
thereon and for all other purposes whatsoever.
(2) Whenever any Bond or Bonds shall be surrendered
for transfer, the Bond Registrar shall authenticate and deliver a
new fully registered Bond or Bonds (which may be an Exchange Bond
or Bonds pursuant to Paragraph B of this Section 8) of the same
series, designation, maturity, or due date, as applicable, and
interest rate and of authorized denominations duly executed by
the City, for a like aggregate principal amount or interest
amount, as applicable. The Bond Registrar shall require the
payment by the Registered Owner requesting such transfer of any
tax or -othergovernmental charge required to be paid with respect
to such transfer. With respect to each Bond, no such transfer
shall be required to be made after the Record Date with respect
to any interest payment date to and including such interest
payment date. If Exchange Bonds are prepared in connection with
transfers outside the book-entry registration system as provided
in Section 4, the foregoing provisions of this Section 8 shall
apply to such transfers or exchanges.
B. Exchange of Bonds. Bonds may be exchanged at the
principal corporate trust office of the Bond Registrar for a like
aggregate principal amount of fully registered Bonds (which may
be an Exchange Bond or Bonds) of the same series, designation,
maturity, or due date, as applicable, and interest rate of other
authorized denominations or amounts, as applicable. The Bond
Registrar shall require the payment by the Registered Owner
requesting such exchange of any tax or other governmental charge
required to be paid with respect to such exchange. With respect
to each Bond, no such exchange shall be required to be made after
the Record Date with respect to any interest payment date to and
including such interest payment date.
C. Bond Registration Books. This Bond Resolution shall
constitute a system of registration within the meaning and for
all purposes of the Registered Public Obligations Act of Idaho,
Chapter 9 of Title 57, Idaho Code. The Bond Registrar shall keep
or cause to be kept, at its principal corporate trust office,
sufficient books for the registration and transfer of the Bonds,
which shall at all times be open to inspection by the City; and,
upon presentation for such purpose, the Bond Registrar shall,
under such reasonable regulations as it may prescribe, register
or transfer or cause to be registered or transferred, on said
books, Bonds as herein provided.
D. List of Registered Owners. The Bond Registrar shall
maintain a list of the names and addresses of the Registered
Owners of all Bonds and upon any transfer shall add the name and
address of the new Registered Owners and eliminate the name and
address of the transferor Registered Owner.
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E. Duties of Bond Registrar. If requested by the Bond
Registrar, the Mayor and Clerk are authorized to execute the Bond
Registrar's standard form of agreement between the City and the
Bond Registrar with respect to the compensation, obligations, and
duties of the Bond Registrar hereunder which may include the
following:
(1) to act as bond registrar, authenticating agent,
paying agent, and -transfer agent as provided herein;
(2) to maintain a list of Registered Owners as set
forth herein and to furnish such list to the City upon request,
but otherwise to keep such list confidential;
(3) to give. notice of redemption of Bonds as provided
herein;
(4) to cancel and/or destroy Bonds which have been
paid at maturity or upon earlier redemption or submitted for
exchange or transfer;
(5) to furnish the City at least annually a
certificate with respect to Bonds canceled and/or destroyed;
(6) to furnish the City at least annually an audit
confirmation of Bonds paid, Bonds outstanding and payments made
with respect to interest on the Bonds; and
(7) to comply with all applicable provisions of the
Representation Letter, as called for in Section 4(B) hereof.
Section 9: REDEMPTION PRIOR TO MATURITY
A. Optional Redemption. The Bonds maturing on or before
shall not be subject to call or redemption prior to
their stated dates of maturity. On any date on or after
the Bonds maturing on or after ,
shall be subject to redemption, at the option of the City, in
whole or in part (and by lot selected by the Bond Registrar if
less than the entire maturity is being redeemed), upon notice as
hereinafter provided, at the redemption price of 100% of the
principal amount of the Bonds to be redeemed, plus accrued
interest to the date of redemption.
B. Notice of Redemption. Notice of redemption of any
Bonds prior to their stated maturity shall be given by mailing of
notice by the Bond Registrar to the registered owner of any Bond
being called for redemption not less than thirty nor more than
sixty days prior to the redemption date by first class mail,
postage prepaid, at the address appearing on the Bond Register,
or at such other address as may be furnished in writing by such
registered owner to the Bond Registrar. The foregoing
requirements shall be deemed to be complied with when notice is
mailed as provided herein, regardless of whether or not it is
Page 13
actually received by the owner of such Bond. Notice shall also
be given by one (1) publication not less than thirty (30) days
prior to said redemption date, in a newspaper of general
circulation in the City, and by mailing of a copy of the notice
to The Bond Buyer, a publication printed in New York City. The
notice shall specify the Bonds to be redeemed, the date and place
of redemption, and shall provide that the Bonds so called for
redemption shall cease to accrue interest on the specified
redemption date, provided funds for such redemption are on
deposit atthe place of payment at such time, and shall not be
deemed.to be outstanding as of such redemption date.
C. Other Redemption Provisions. Portions of any Bond of a
denomination of more than $5,000 may be redeemed. The portion of
any Bond of a denomination of more than $5,000 to be. redeemed
shall be in the principal amount of $5,000 or any integral
multiple of $5,000, and in selecting portions of such Bonds for
redemption, the Bond Registrar will treat each such Bond as
representing that number of Bonds of $5,000 denomination which is
obtained by dividing the principal amount of such bond by $5,000.
Section 10: DEFEASANCE OF THE BONDS
In the event that money and/or government obligations,
maturing or having guaranteed redemption prices at the option of
the owner at such time or times and bearing interest to be earned
thereon in such amounts as are sufficient (together with any
resulting cash balances) to redeem and retire part or all of the
Bonds in accordance with its terms, are hereafter irrevocably set
aside in a special Fund and pledged to effect such redemption and
retirement, then no further payments need be made into the Bond
Fund for the payment of the principal of and interest on the
Bonds so provided for, and the Bonds and interest accrued thereon
shall then cease to be entitled to any lien, benefit, or security
of this Bond Resolution, except the right to receive the funds so
set aside and pledged, and the Bonds and interest accrued thereon
shall no longer be deemed to be outstanding hereunder.
Section 11: CHARGES
The City has established, may from time to time revise, and
shall maintain and collect water rates and charges for furnishing
the services of the System to its customers, which rates and
charges are, and shall continue to be, uniform as to all persons
or properties which are of the same class, which rates and
charges shall be collected from the users thereof.
Section 12: PLEDGE OF REVENUES
The Net Revenues of the System are hereby pledged for the
payment of the Bond and shall be used and applied in the order of
priority provided in Section 14 of this Ordinance.
Page 14
The City shall establish, revise, maintain, and collect
charges sufficient, with other revenues received, after taking
into consideration anticipated delinquencies, to provide Net
Revenues equal to not less than 1.10 times the average annual
debt service on the Bond and any Additional Bonds issued in
accordance with Section 18 of this Ordinance.
Section 13: FUNDS
A. Establishment of Funds. The following funds on the
accounting records of the City are hereby created in this Section
with respect to the Bonds:
(1) Capital Improvement Fund, to be held by the
City.
(2) Cost of Issuance Fund, to be held by the City.
B. Delivery of Bonds• Application of Proceeds. The
Treasurer of the City is hereby instructed to make delivery of
the Bonds to the Underwriter and to receive payment therefor in
accordance with the terms of the Bond Purchase Agreement and to
deposit the proceeds of sale (after deduction of underwriter's
discount) as follows:
(1) A portion of the proceeds of sale of the Bonds
shall be deposited in the Cost of Issuance Fund to be used
as described in Section 13(D).
(2) A portion of the proceeds of sale of the Bonds
shall be deposited into the Capital Improvement Fund to be
used as described in Section 13(C).
(3) The remaining portion of the proceeds of the sale
of the Bonds shall be deposited into the Debt Service
Reserve Fund to be used as described in Section 16.
C. Capital Improvement Fund. There has is hereby been
created in the office of the Treasurer of the City a fund
separate and distinct from all other funds of the City, known as
the "City of Chubbuck Capital Improvement Fund" (the "Capital
Improvement Fund"), into which shall be deposited the proceeds of
the sale of the Bonds, except accrued interest, if any, which
shall be deposited into the Bond Fund, and except for amounts
deposited into the Cost of Issuance Fund pursuant to Section
13(D) below, and except for amounts deposited into the Debt
Service Reserve Fund pursuant to Section 14. The proceeds of the
Bonds shall be used to pay for the costs of the capital
improvements heretofore authorized. Monies in the Capital
Improvement Fund may be invested in lawful investments until
needed for purposes for which the Bonds are issued. Any
investment earnings shall accrue to and be used solely for the
purposes of the Capital Improvement Fund. In the event there are
funds remaining in said Capital Improvement Fund after all
Page 15
expenditures for improvements as set forth hereinabove, any
surplus funds shall be deposited into the Bond Fund and used for
the payment of principal of and interest on the outstanding Bonds
as the same shall accrue.
D. Cost of Issuance Fund. There is hereby established in
the office of the Treasurer of the City a separate fund
designated as the "Cost of Issuance Fund." At the time of the
delivery 'of the Bonds the City shall deposit into the Cost of
Issuance Fund such amount as shall be required to pay the
reasonable and necessary costs of issuance of the Bonds. Moneys
in the Cost of Issuance Fund shall be used for the payment of
costs of issuance of the Bonds. Any moneys remaining in the Cost
of Issuance Fund on the date of the full and final payment of all
costs of issuance of the Bands shall be transferred into the.Bond
Fund.
Section 14: THE REVENUE FUND
There has heretofore been created a special fund, designated
the "City of Chubbuck Water Revenue Fund" (the "Revenue Fund"),
which shall be maintained by the Treasurer and into which the
Revenue of the System shall be deposited immediately upon its
receipt.
A. Use of Revenues. The Revenue of the System shall be
used for the payment of the following obligations in the
following order of priority:
(1) First Charge and Lien: The costs of Operation and
Maintenance Expenses.
(2) Second Charge and Lien: Payment of the Bond and
any Additional Bonds, by payment into the Bond Fund, as
provided in Section 15 of this Ordinance.
. (3) Third Charge and Lien: To maintain the Reserve
Fund as provided by Section 16 of this Ordinance; and
(4) To administer surplus funds.
B. Interest Earnings. Interest earnings on deposits in
the Revenue Fund shall remain in and be used for the purposes of
the Revenue Fund.
C. Surplus Funds. Funds remaining in the Revenue Fund
after having been applied to designated funds for the purposes
provided in this section shall constitute surplus funds and may
be used for the purposes set forth in Section 17 of this
Ordinance.
Section 15: THE BOND FUND
Page 16
There is hereby created a special fund, designated the "City
of Chubbuck Water Revenue Bond Fund" (the "Bond Fund"). There
shall be deposited, from Net Revenues of the System the following
amounts:
A. Such amounts, in approximately equal monthly
installments from the Revenue Fund, as will cause to be
accumulated, not less than ten (10) days prior to each semiannual
payment date, the amount sufficient, to make each semiannual
payment ori the Bond as the same becomes due. The moneys herein
allocated shall be used solely.to pay currently maturing payments
on the Bond.
B. If the City for any reason shall fail- to accumulate
within the Bond Fund sufficient moneys to make the required
semiannual payment on the Bond as the same becomes due, then an
amount equal to the deficiency shall be deposited into the Bond
Fund, not less than ten (10) days prior to such payment date,
from the Reserve Fund, described hereinafter.
Section 16: DEBT SERVICE RESERVE FUND
A.. Deposits. There is hereby created a special fund known
as the "City of Chubbuck Water Revenue Bond Reserve Fund" (the
"Reserve Fund"), which shall be maintained by the Treasurer so
long as the Bond remains outstanding, into which shall be deposited, from funds
of the City, the amount of the Reserve Requirement, which amount shall be maintained as a debt
service reserve fund for the Bond until the Bond has been paid in full.
B. Deficiencies or Withdrawals. Whenever any moneys are
withdrawn from the Reserve Fund to make required payments on the
Bond, or if a deficiency exists therein, the amount so withdrawn
or the .amount of such deficiency shall be restored by monthly
deposits from Net Revenues until there has been restored therein
the gross amount provided heretofore in subdivision A of this
Section.
C. Refunding. In the event refunding bonds are ever
issued, the amount set aside into the Reserve Fund to secure the
payment of the Bond may be used to retire bonds or may be held in
the Reserve Fund to secure payment of the refunding bonds issued,
to refund the outstanding refunding bonds, or may be held in the
Reserve Fund to secure the payment of any other issue or series
of bonds payable out of the Bond Fund and issued on a parity with
the Bond.
D. Investments. All moneys in the Reserve Fund may be
kept in cash or deposited in institutions permitted by law in an
amount in each institution not greater than the amount insured by
any department or agency of the United States Government, or may
be invested and reinvested in any legal investment permitted for
City moneys maturing not later than the last maturity date of any
outstanding bonds. Interest earned on any such investment shall
be deposited, directly as earned, into the Bond Fund.
Page 17
Section 17: SURPLUS FUNDS
Funds remaining in the Reserve Fund after having been
applied to or designated funds for the purposes provided in
Section 14 of this Ordinance shall constitute surplus funds and
may be used for any of the following purposes:
A. To pay the costs of unusual or extraordinary
maintenance of or repair to the System;
B. To pay the principal of and interest on any subordinate
lien obligations which may have been issued to provide water
facilities in or for the City;
C. To improve, extend, enlarge, or replace any water
facilities;
D. To acquire or construct additional water facilities in
or for the City;
E. To call or redeem prior to their fixed dates of
maturity any Bond, parity bonds, or subordinate lien obligations
issued to provide water facilities for the City; and
F. For any other lawful purpose.
Section 18: ADDITIONAL BONDS OR OTHER OBLIGATIONS
A. Limitation Upon Issuance of Parity Obligations.
Nothing contained in this Ordinance shall be construed in such a
manner as to prevent the issuance by the City of Additional Bonds
or other additional obligations payable from the Net Revenues on
a parity with, but neither prior nor superior to, the lien of the
Bond herein authorized; provided, however, that before any such
Additional Bonds or other additional parity obligations are
authorized or actually issued:
(1) The City is not, and has not been, in default as
to any payments required by this Ordinance for a period of
not less than twelve (12) months immediately preceding the
issuance of such Additional Bonds, and there is no
deficiency in the Bond Fund or Reserve Fund.
(2) The principal of and interest on the Additional
Bonds shall be payable from the Bond Fund and further
secured by the Reserve Fund, the Reserve Requirement for
which shall be increased in proportion to the principal
amount of the Additional Bonds being issued.
(3) Prior to the delivery of any Additional Bonds, the
City shall have on file at the office of the City Clerk a
certificate of a licensed professional engineer, who may be
the City engineer, or a certificate of an independent
certified public accountant, dated prior to the
Page 18
authorization of such Additional Bonds, showing that the
Estimated Net Revenues, determined and adjusted as hereafter
provided, for each fiscal year after the issuance of such
Additional Bonds, will equal at least 1.10 times the amount
required for the average annual debt service payment on the
Bond and any Additional Bonds then outstanding, plus the
Additional Bonds proposed to be issued.
(4) In determining Estimated .Net Revenues, the Net
Revenues for the past twelve (12) consecutive months.
.immediately preceding the year of the proposed Additional
Bonds shall be adjusted by such engineer or accountant to
take into consideration changes in Net Revenues estimated to
occur under one or more of the following conditions for each
year after delivery. of the Additional Bonds for so long as
the Bond and any Additional Bonds, including the Additional
Bonds to be issued, shall be outstanding:
a. any increase or decrease in Net Revenues which
would result if any change in rates or charges
adopted prior to the date of such certificate and
subsequent to the beginning of such twelve (12)
month period had been in force during the full
twelve (12) month period;
b. any increase or decrease in Net Revenues estimated
by such engineer or accountant to result from any
additions, betterments, and improvements to and
extension of any facilities 'of the System which
(i) become fully operational during such twelve
(12) month period, (ii) were under construction at
the time of such certificate, or (iii) will be
constructed from the proceeds of the Additional
Bonds to be issued; and/or
C. the additional Net Revenue which would have been
received if any customers added to the System
prior to the date of such certificate and
subsequent to the beginning of such twelve (12)
month period were customers for the entire period.
(5) The foregoing limitations, or any of them, may be
waived or modified by the written consent of the Registered
Owner of the Bond.
B. Subordinate Lien Bonds. No provision of this Ordinance
shall be deemed to limit or restrict the power of the City to
issue bonds, notes or warrants, or to make pledges of the
revenues which shall be subordinate as to the lien of the Bond
and which shall provide for compliance with the current
provisions hereof prior to the application of any funds to said
subordinate purpose, provided that any consent required by the
Loan and Grant Approval Conditions and Loan Resolution referred
to in Section 3 of this Ordinance shall have been obtained.
Page 19
C. Refunding. The restrictions with respect to the
issuance of parity obligations shall not apply if such additional
parity bonds proposed to be issued are for the sole purpose of
refunding outstanding water revenue bonds.
Section 19: INVESTMENTS
Surplus funds in any'of the funds or accounts set forth in
this Ordinance may be invested in securities 'as permitted by
law.
Section 20: GENERAL COVENANTS
For the protection and security of the Bond, it is
covenanted and agreed to and with the Registered Owner of the
Bond from time to time, that the City will perform the following
covenants:
A. Operate System. It will operate the System in an
efficient and economical manner and prescribe, revise, and
collect such charges in connection therewith so that the
services, facilities, and properties of the System may be
furnished at the lowest possible cost consistent with sound
economy and prudent management.
B. Good Repair. It will operate, maintain, preserve, and
keep the System and every part hereof in good repair, working
order, and condition.
C. Corporate Status. It will maintain its status as a
municipal corporation of the State of Idaho and will take no
steps to disincorporate or otherwise change its corporate status.
D. Preserve Security. It will preserve and protect the
security of the Bond and the rights of the Registered Owner
thereof.
E. Collect Revenues. It will collect and hold in trust
the revenues and other funds pledged to the payment of the Bond
and apply such revenue or other funds only as provided in this
Ordinance.
F. Service Bond. It will pay and cause to be paid
punctually the principal of the Bond and the interest thereon on
the date or dates and at the place or places and in the manner
mentioned in the Bond, and in accordance with this Ordinance.
G. Pay Claims. It will pay and discharge any and all
lawful claims for labor, materials, and supplies which, if
unpaid, might by law become a lien or charge upon the Revenue of
the System, or any part of said Revenue of the System, or any
funds in the hands of the Treasurer, prior or superior to the
lien of the Bond or which might impair the security of the Bond,
Page 20
to the end that the priority and security of the Bond shall be
fully preserved and protected.
H. Encumbrances. It will not mortgage or otherwise
encumber, sell, lease, or dispose of the System or any part
thereof, nor enter into any lease or agreement which would impair
or impede the. operation of the System or any part thereof
necessary to secure adequate revenues for the payment of the
principal of and interest on the Bond, nor which would otherwise
impair or impede the rights of the Registered Owner of the Bond
with respect to such revenues of the operation of the System
without- provisions for the retirement of the Bond then
outstanding from the proceeds thereof.
I. Insurance. It will procure and keep in force insurance
upon all buildings and structures of the System and the machinery
and equipment therein, which are usually insured by entities
operating like property, in good and responsible insurance
companies. The amount of the insurance shall be such as may be
required to adequately protect it and the Registered Owner of the
Bond from loss due to any casualty, and in the event of any such
loss, the proceeds shall be used to repair or restore the System
or for the payment of the Bond issued under this Ordinance.
J. Fidelity Bonds. It will procure suitable fidelity
bonds covering all of its officers and other employees charged
with the operation of the System and the collection and disburse-
ment of revenues therefrom.
K. Engineers. It will employ consulting engineers of
acknowledged reputation, skill, and experience in the improvement
and operation of the System for any unusual or extraordinary
items of maintenance, repair, or betterments as shall be required
from time to time, all reports, estimates, and recommendations of
such consulting engineers to be filed with the Clerk and
furnished to the Registered Owner of the Bond issued hereunder,
upon request.
M. Accounts. It will keep proper and separate accounts
and records in which complete and separate entries shall be made
of all transactions relating to the System, and it will furnish
complete operating and income statements upon request.
N. Delinquencies. It will not furnish water service to
any customer whatsoever free of charge, and it shall not later
than sixty (60) days after an account becomes delinquent, take
such legal action as may be reasonable to enforce collection of
any collectible delinquent account.
Page 21
Section 21: SPECIAL COVENANTS
The City further covenants and agrees:
A. In accordance with Section 149(a) of the Internal
Revenue Code of 1986, as amended (the "Code"), the Bond, and any
serial bonds to which it may be converted, shall be issued and
remain in fully registered form in order that interest thereon,
if any, be excluded from gross income of the -owner or owners for
federal income tax purposes. The City covenants and agrees that
it will take no action to permit the Bond, or any serial bonds to
which.it may be converted, to be issued in or converted to bearer
or coupon form.
B. The Bond is hereby designated as a "qualified tax-
exempt obligation" within the meaning and for the purposes of
Section 265(b)(3) of the Code, and the City does not reasonably
anticipate that it will designate more than $10,000,000,
including the Bond, as qualified tax-exempt obligations during
the calendar year in which the Bond is issued.
C. None of the proceeds of the Bond will be used, directly
or indirectly, (i) to make or finance loans to persons or (ii) in
any trade or business carried on by any person (other than as a
member of the general public). For purposes of the preceding
sentence, the term "person" does not include a government unit
other than the United States or any agency or instrumentality
thereof, and the term "trade or business" means any activity
carried on by a person other than a natural person. The City
further covenants and agrees to take no action which would cause
the Bond to be a "private activity bond," nor will it omit to
take any action necessary to prevent the Bond from becoming a
"private activity bond," within the meaning of Section 141 of the
Code.
D. The City has general taxing powers. The Bond is not a
"private activity bond" within the meaning of Section 141 of the
Code. 95% or more of the net proceeds of the Bond is to be used
for the local governmental activities of the City. The City has
no subordinate entities. The City has not issued, and does not
reasonably anticipate that it will issue, tax-exempt obligations
in the calendar year in which the Bond is issued in a face amount
which exceeds $5,000,000. Accordingly, under Section
148(f)(4)(D) of the Code, the City is not required to pay rebates
to the United States under Section 148(f) of the Code.
E. The Mayor, Clerk, and Treasurer, and other appropriate
officials of the City, or any one or more of such officials, as
may be appropriate, are each hereby authorized and directed to
execute, on behalf of the City, such certificate or certificates
as shall be necessary to establish that the Bond is not an
"arbitrage bond" within the meaning of Section 148 of the Code
and the Treasury Regulations promulgated thereunder, and to
establish that interest on the Bond, if any, is not and will not
Page 22
become includable in the gross income of the owner(s) of the Bond
under the Code and applicable regulations. The City covenants
and agrees that no use will be made of the proceeds of the Bond,
or any funds of the City which may, pursuant to Section 148 of
the Code and applicable regulations, be deemed to be proceeds of
the Bond, which would cause the Bond to be an "arbitrage bond"
within the meaning of Section 148 of the Code. The City further
covenants to comply throughout the term of the Bond with the
requirements of Section 148 of the Code and the regulations
promulgated thereunder in order to prevent the Bond from becoming
an "arbitrage bond."
F. The City will comply with the information reporting
requirements of Section.149(e) of the'Code.
G. None of the proceeds of the Bond will be used to
reimburse the City for capital expenditures made prior to the
date of delivery of the Bond unless the City, not later than 60
days after the payment of such expenditure, shall have adopted an
official intent resolution as provided by Section 1.150-2 of the
Treasury Regulations.
H. Continuing Disclosure. The City will comply with the
requirements of Rule 15c2 -12(a)(5) of the U.S. Securities and
Exchange Commission with respect to the continuing disclosure of
certain material events with respect to the Bonds, as more fully
set forth in the Information Reporting Agreement which is annexed
hereto as Exhibit "C". The Corporate Trust Department of U.S.
Bank National Association is hereby designated as agent of the
City for purposes of Rule 15c2 -12(a)(5).
Section 22: SALE OF BONDS
The Bonds are hereby sold to the Underwriter upon the
terms and conditions set forth in the Bond Purchase Agreement
which is annexed hereto as Exhibit "D."
The final Official Statement of the City for the sale of the
Bonds, in substantially the form presented at this meeting, with
such changes, omissions, insertions, and revisions as the Mayor
shall approve, is hereby authorized, and the Mayor shall sign
such final Official Statement and deliver such final Official
Statement to the Underwriter for distribution to prospective
purchasers of the Bonds and other interested persons, which
signature shall evidence such approval. The use of the
Preliminary Official Statement by the Underwriters, and the
actions of the City, including the certification by the Mayor as
to the "deemed finality" of the Preliminary Official Statement
pursuant to SEC Rule 15c2-12 in connection with the offering of
the Bonds, are hereby acknowledged, approved, and ratified.
The Mayor and the Clerk of the City are, and each of them
is, hereby authorized to do or perform all such acts as may be
Page 23
necessary or advisable to comply with the Bond Purchase Agreement
and to carry the same into effect.
Section 23: AMENDMENTS
A. The City from time to time and at any time may adopt an
ordinance or ordinances supplemental hereto, which ordinance or
ordinances thereafter shall become a part of.this Ordinance, for
any one or more of all of the following purposes:
(1) To add to the covenants and agreements of the City
in this Ordinance, other covenants and agreements thereafter
to be observed, which shall not adversely affect the
interest of the Registered Owner of.-. the Bond, or- to
surrender any right or power herein reserved.
(2) To make such provisions for the purpose of curing
any ambiguities or of curing, correcting, or supplementing
any defective provisions contained in this Ordinance, or any
ordinance authorizing future bonds in regard to matters or
questions arising under such ordinances as the Council may
deem necessary or desirable and not inconsistent with such
ordinances and which shall not adversely affect, in any
material respect, the interest of the Registered Owner of
the Bond.
Any such supplemental ordinance may be adopted without
the consent of the Registered Owner of the Bond at any time
outstanding, notwithstanding any of the provisions of
subsection B of this Section.
B. With the consent of the Registered Owner of not less
than 75% in aggregate principal amount of the Bond at the time
outstanding, the Council may adopt an ordinance or ordinances
supplemental hereto for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions of
this Ordinance or of any supplemental ordinance; provided,
however, that no such supplemental ordinance shall:
(1) Extend the fixed maturities of the Bond, or reduce
the rate of interest thereon, or extend the time of payments
of interest from their due date, or reduce the amount of the
principal thereof, or reduce any premium payable on the
redemption thereof, if applicable, without the consent of
the Registered Owner of the Bond so affected; or
(2) Reduce the aforesaid percentage of the Registered
Owner required to approve any such supplemental ordinance.
It shall not be necessary for the consent of the Registered
Owner under this subsection B to approve the particular form of
any proposed supplemental ordinance, but it shall be sufficient
if such consent shall approve the substance thereof.
Page 24
C. Upon the adoption of any supplemental ordinance
pursuant to the provisions of this Section, this Ordinance shall
be deemed to be modified and amended in accordance therewith, and
the respective rights, duties, and obligations of the City under
this Ordinance and the Registered Owner of the Bond outstanding
hereunder shall thereafter be determined, exercised, and enforced
thereunder, subject in all respects to such modification and
amendments, and all terms and conditions of any such supplemental
ordinance shall be deemed to be part of the terms and conditions
of this Ordinance for any and all purposes.
D. ' Any Bond executed and delivered after the execution of
any supplemental ordinance adopted pursuant to the provisions of
this Section may have a notation as to any matter provided for in
such supplemental ordinance, and if such supplemental ordinance
shall so provide, new bonds so modified as to conform, in the
opinion of the Council, to any modification of this Ordinance
contained in any such supplemental ordinance, may be prepared and
delivered without cost to the Registered Owner of the Bond then
outstanding, upon surrender for cancellation of the Bond.
Section 24: VALIDITY OF ISSUANCE
The Bonds are issued pursuant to the Idaho Revenue Bond Act,
being Idaho Code Sections 50-1027 through 50-1042. This recital
is conclusive evidence of the validity of the Bonds and the
regularity of its issuance.
Section 25: REGISTERED OWNER'S REMEDIES —RECEIVER
By action or suit in equity, the Registered Owner or subse-
quent owners of the Bond may, in the event of a material
violation of any of the foregoing covenants, cause the
appointment of a receiver, which receiver may enter and take
possession of the System and any Net Revenues for the payment of
the Bond, prescribe fees to be derived from the System, and
collect, receive, and apply all Net Revenues of other moneys
pledged for the payment of the Bond in the same manner as the
City might do in accordance with the obligations of the City.
Section 26: ORDINANCE A CONTRACT
The provisions of this Ordinance shall constitute a contract
between the City and the Registered Owner so long as the Bond
hereby authorized remains unpaid.
Section 27: SEVERABILITY
If any one or more of the covenants or agreements provided
in this Ordinance to be performed on the part of the City shall
be declared by any court of competent jurisdiction to be contrary
to law, then such covenant or covenants, agreement or agreements,
shall be null and void and shall be deemed separable from the
remaining covenants and agreements in this Ordinance and shall in
Page 25
no way affect the validity of the other provisions of this
Ordinance or of the Bond.
Section 28: REPEALER
All prior ordinances or parts thereof, to the extent
inconsistent herewith, are hereby repealed and shall, to the
extent of such inconsistency, have no further force or effect.
Section 29: AUTHORIZATION
The Mayor, City Clerk, and City Treasurer, or any one of
such officers, as may be appropriate to the circumstances, are
hereby authorized to execute; on .behalf of -the City, all such
additional documents as may be necessary to effect the sale and
delivery of the Bond.
Section 30: PUBLICATION AND EFFECTIVE DATE
This Ordinance, or a summary thereof in compliance with
Section 50-901A, Idaho Code, substantially in the form annexed
hereto as Exhibit "E," shall be published once in the official
newspaper of the City, and shall take effect immediately upon its
passage and approval.
DATED this � day of , 2011.
CITY OF CHUBBUCK
Bannock County, Idaho
B�--L==
Y
f4ld4a
Mayor 64
ATTEST:
PA Uo
City Clerk-)
( S E A L )
Page 26