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HomeMy WebLinkAboutOrdinance 82- 1115 Water system .lI. " 24.S ORDINANCE NO. 1115 AN ORDINANCE DIRECTING THE CONSTRUCTION OF IMPROVEMENTS TO THE MUNICIPAL WATER SYSTEM FOR THE CITY OF BOZEMAN, CREATING SPE- CIAL FUNDS AND ACCOUNTS FOR THE ADMINISTRATION OF THE MONEYS DERIVED THEREFROM, AUTHORIZING AND DIRECTING THE ISSUANCE OF $5,000,000 WATER SYSTEM REVENUE BONDS TO PAY THE COST OF SAID I UNDERTAKING AND DEFINING THE TERMS AND MANNER OF PAYMENT OF THE BONDS AND THE SECURITY THEREOF. BE IT ORDAINED BY THE COMMISSION OF THE CITY OF BOZEMAN, MONTANA, AS FOLLOWS: Section 1. Definitions. Section 1.01. General. The terms defined in this Section 1 shall for all purposes of this Ordinance have the meanings herein specified, unless the context clearly otherwise requires: A. "This Ordinance" means this instrument as originally adopted or as it may from time to time be amended by one or more Ordinance Amendments adopted pursuant to the applicable provisions hereof. B. All references in this instrument to designated "Sections" and other sub- divisions are to the designated Sections and other subdivisions of this instrument as originally adopted. C. The words "herein", "hereof" and "hereunder" and other words of similar import without reference to any particular Section or subdivision refer to this Ordinance as a whole and not to any particular Section or other subdivision unless the context I clearly indicates otherwise. D. The terms defined in this Section 1 shall include the plural as well as the singular. E. All accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles. F. All computations provided herein shall be made in accordance with generally accepted accounting principles. Sect ions 1. 02. Other Definitions. Accountant shall mean a Person who is a certified public accountant employed or retained by the City. Act shall mean Montana Code Annotated, Title 7, Chapter 7, Part 44 as heretofore and hereafter amended or supplemented. Additional Bonds shall mean any Bonds issued pursuant to Section 5 hereof, exclusive of Subordinate Bonds. Bonds_ shall mean all Bonds issued pursuant to this Ordinance, including the Series 1982 Bonds and any Additional Bonds, but exclusive of Subordinate Bonds. I Bond Counsel shall mean any firm of nationally recognized bond counsel experienced in matters relating to the financing of public facilities, selected by the City. Bond Account shall mean the account created in Section 4.04 of this Ordinance. Bondholder shall mean the bearer of a Bond. ORDINANCE NO. 1115 246 City shall mean the City of Bozeman, Montana, and any successor to its functions hereunder. City Request, City Order or City Consent shall mean, respectively, a written request, order or consent of the Commission, signed by the Manager or other official of the City designated pursuant to a City Resolution. I City Resol ution shall mean a resoluti on, ordi nance or other appropri ate enactment by the Commission certified by an appropriate official thereof to have been duly adopted by the Commission and to be in full force and effect on the date of such certifi cati on. Code shall mean the Internal Revenue Code of 1954, as amended. All references herein to sections of the Code are to the sections thereof as they exist on the date of adoption of this Ordinance, but include any amendments of the provisions thereof. Commission shall mean the City Commission of the City or a successor to its functions. Construction Account shall mean the account created in Section 4.02 of this Ordinance. Depreciation Account shall mean the account created in Section 4.06 of this Ordinance. Engineer shall mean an engineer or firm of engineers duly licensed in the State of Montana and experienced in the operation, design and construction of municipal I wa ter sys terns. Fiscal Year shall mean the twelve-month period commencing July 1 and ending June 30 or any other twelve month period adopted by the Commission as the fiscal year of the System. Fund or Water Fund shall mean the Water System Fund created in Section 4.01 of this Ordinance. Government Obligations shall mean direct general obligations of, or obligations the prompt payment of the principal of and the interest on which are fully and uncondi- tionally guaranteed by, the United States of America. Improvements shall mean any additions, enlargements, improvements, extensions or alterations of or to the System as it then exist (other than the Project), and shall also mean any fixtures, structures, other facilities or personal property acquired or constructed by the City for use in connection with the System. Independent when used with respect to any specified Person means such a Person who (i) is in fact independent; (ii) does not have any direct financial interest or any material indirect financial interest in the City, other than the payment to be received I under a contract for services to be performed by such Person; and (iii) is not connected with the City, the City as an official, officer, employee, promoter, underwriter, trustee, affiliate or person performing similar functions. Interest Payment Date shall mean the Stated Maturity of an installment of interest on any of the Bonds. ORDINANCE NO. 1115 247 Manager shall mean the City Manager of the City or a successor to his functions. Maturity when used with respect to any Bond shall mean the date on which the principal of such Bond becomes due and payable as therein or herein provided, whether at the Stated Maturity or by declaration of acceleration, call for redemption or otherwise. I Maximum Reserve Requirement shall mean, as of the date of calculation, an amount of money equal to the average annual Principal and Interest Requirements on Outstanding Bonds for the then remaining future Fiscal Years during the term of the Outstanding Bonds or such greater amount as may be required in connection with the issuance of a series of Additional Bonds. MBIA Insurance shall mean a policy of insurance and all amendments thereto, if any, issued by the Municipal Bond Insurance Association with respect to the Series 1982 Bonds or any series of Additional Bonds. Net Revenues shall mean the Revenues of the System remaining upon each monthly apportionment pursuant to Section 4 hereof, after crediting to the Operating Account the amount required by Section 4.03 hereof to be credited thereto. The Net Revenues for a Fiscal Year shall be the aggregate of the Net Revenues for each of the twelve months therein after appropriate adjustments and accruals, if any. Outstanding when used with reference to Bonds shall mean, as of the date of determination, all Bonds theretofore issued and delivered under this Ordinance except: I (i) Bonds theretofore cancelled by the City or delivered to the City cancelled or for cancellation; (ii) Bonds and portions of Bonds for whose payment or redemption moneys or Government Obligations (as provided in Section 8) shall have been theretofore deposited for the Holders of such Bonds; provided, however, that if such Bonds are to be redeemed, notice of such redemption shall have been duly given pursuant to this Ordinance or irrevocable instructions to call such Bonds for redemption at a stated Redemption Date shall have been given to the Paying Agent; and (iii) Bonds in exchange for or in lieu of which other Bonds shall have been issued and delivered pursuant to this Ordinance; provided, however, that in determining whether the Holders of the requisite principal amount of Outstanding Bonds have given any request, demand, authorization, direction, notice, consent or waiver hereunder, Bonds owned by the City shall be disregarded and deemed not to be Outstanding. Paying Agent shall mean any Person designated by or pursuant to this Ordinance I to receive and disburse the principal of, premium, if any, and interest on the Bonds on behalf of the City. Person shall mean any individual, corporation, partnership, jOint venture, association, joint stock company, trust, unincorporated organization or government or any agency or political subdivision thereof. ORDINANCE NO. 1115 - -- - --_._-~._- -------"- -------"---~.~ ~ ~~_._."---"-----~------"'---'--- 248 Principal and Interest Requirements on Outstanding Bonds shall mean, for any Fiscal Year, the amount required to pay the principal and the interest becoming due on all Outstanding Bonds during such Fiscal Year, to be determined on the assumption that each Outstanding serial Bond is to be paid on its Stated Maturity and each Outstanding term Bond is to be paid on its mandatory Redemption Date. I Qualified Investments shall mean those obligations and securities set forth in Section 4.08 hereof, in which Revenues and other monies may be invested. Rates shall mean the rates, fees, charges and rentals imposed by the City for connection to and for the availability, use and benefit of the System and for the purchase of water and other commodities and services provided thereby. Redemption Date when used with respect to any Bond to be redeemed shall mean the date on which it is to be redeemed pursuant hereto. Redemption Price when used with respect to any Bond to be redeemed shall mean the price at which it is to be redeemed pursuant hereto. Reserve Account shall mean the account created in Section 4.05 hereof. Series 1982 Bonds shall mean the $5,000,000 aggregate principal amount of the City's Water System Revenue Bonds, Series 1982. Stated Maturity when used with respect to any Bond or any installment of interest thereon means the date specified in such Bond or the coupon representing such installment of interest as the fixed date on which principal of such Bond or such installment of interest is due and payable. I Supplemental Ordinance shall mean any ordinance supplemental or amendatory to this Ordinance adopted pursuant to Section 7 hereof. Subordinate Bonds shall mean bonds or obligations issued by the City pursuant to Section 5.05 hereof. Surplus Account shall mean the account created in Section 4.07 of this Indenture. Surplus Net Revenues shall mean the Net Revenues of the System remaining upon each monthly apportionment pursuant to Section 4 hereof, after crediting to the Bond Account and Reserve Account the amounts required by Sections 4.04 and 4.05 hereof to be credited thereto. System or Water System shall mean the real and personal properties owned or used by the City in connection with its acquisition, treatment and distribution of water, including without limitation all water rights, water storage facilities, water mains and distribution lines, water treatment and purification facilities, purifying equipment and facilities and all real and personal properties incidental thereto and used in connection therewith and all Improvements thereto. I Section 2. Findings and Authorization. 2.01. The System. The City, pursuant to authority conferred by laws of the State of Montana has established and presently owns and operates the System. The ORDINANCE NO. 1115 --~. ~._~ ~-~-~----~~_.~---_._~~- -- "------------- . . ~~---------~~_.~~-~-_._---~~ - - ---~ ". 24'9 City and the System have all necessary right and title to an adequate supply of water for its present and its projected requirements during the useful life of the Project. 2.02. The Project. After investigation of the facts and as authorized by the Act, thisCQmmi~sioRas determined it to be necessary and desirable and in the best I interests of the City to acquire and construct the Project. The Project will consist of a water treatment plant, two major water transmission lines, water storage facilities and incidental and related real and personal properties all as more fully described in plans and specifications therefor prepared by the Engineer for the Project. Plans and specifications for the Project has been prepared and approved. The total cost of the Project, including construction contracts, engineering, legal, consulting and adminis- tration fees and expenses, insurance premiums, reserve funds and a reasonable allowance for contingencies, is presently estimated to be $4,720,000. In addition, it is estimated that an additional $300,000 will be required to establish an initial bond reserve, $80,000 will be required to pay and retire outstanding water system revenue bonds and approximately $160,000 will be required to pay a premium for bond insurance and other costs of issuance with respect to the Series 1982 Bonds issued to finance Project costs. The City has applied to the Montana Public Service Commission for an increase in its Rates to provide sufficient Revenues to pay for the increased costs arising from the Project and Series 1982 Bonds and has obtained approval from the Public Service Commission for such increases. All acts of the Commission and the City and its officers and I employees with respect to authorizing, construction and financing the Project heretofore taken and done and not inconsistent with this Ordinance are hereby ratified and confirmed. 2.03. Authority for Bonds. The City is duly authorized by the Act to issue the Series 1982 Bonds in the aggregate principal amount of $5,000,000 for the purpose of paying costs of acquiring and constructing the Project and costs and expenses incident thereto; to prescribe and collect just and equitable Rates for connections to and use of the System and for services, facilities and commodities directly or indirectly furnished thereby; and to pledge and appropriate to the payment of the Bonds the Net Revenues to be derived from the operation of the System as set forth herein. There are no bonds outstanding which are payable from or constitute a lien against the Net Revenues of the System except $80,000 of water revenue bonds due and payable in the principal amount of $50,000 on July 1 in the years 1983 and 1984. The City shall deposit in escrow with the paying agent for the outstanding bonds an amount of cash or cash and qualified securities sufficient to pay and redeem said bonds on July 1, 1983, and shall take all required action to call for redemption and prepay said bonds I on said date. The Clerk, Director of Finance and Mayor are authorized and directed to call said outstanding Bonds for redemption and execute and enter into instruments with respect thereto. The useful life of the System, as improved by the Project, is greater than the term of the Series 1982 Bonds. ORDINANCE NO. 1115 250 Section 2.04. Issuance and Sale of Series 1982 Bonds. The Series 1982 Bonds shall be offered for sale at public, competitive sale in accordance with the provisions of the Act. Upon the sale of the Series 1982 Bonds, the City shall, pursuant to and in accordance with this Ordinance, issue the Series 1982 Bonds in the aggregate princi- pal amount of $5,000,000 for the purpose of paying costs of the Project. Costs of the Project in excess of the proceeds of the Series 1982 Bonds available therefor will be I payable from investment income and other available funds of the System. Section 3. Series 1982 Bonds. 3.01. Date, Amount, Denomination and Maturity. The Series 1982 Bonds shall be in the aggregate principal amount of $5,000,000, shall be designated Water System Revenue Bonds, Series 1982, shall be dated as of December 1, 1982, shall be 1000 in number and numbered from 1 through 1000, in the denomination of $5,000 each and shall have Stated ~1aturities of December 1 in the years and amounts as follows: Serial Serial Year Amount Number Year Amount Number 1983 $ 90,000 1993 $250,000 1984 100,000 1994 280,000 1985 115,000 1995 305,000 1986 125,000 1996 340,000 1987 140,000 1997 375,000 1988 155,000 1998 415,000 1989 170,000 1999 460,000 1990 185,000 2000 505,000 1991 205,000 2001 560,000 1992 225,000 I 3.02. Interest. The Series 1982 Bonds shall bear interest payable on each June 1 and December 1, commencing June 1, 1983 at the rate or rates per annum designated by the Original Purchaser thereof and approved by Municipal Resolution. 3.03. Redemption. Series 1982 Bonds maturing in the years 1983 through 1992 shall be payable on their respective Stated Maturities without option of prior payment, but those having Stated Maturities dates in the years 1993 through 2001 shall each be subject to redemption and prepayment at the option of the City, in inverse order of serial numbers, on December 1, 1992, and any Interest Payment Date thereafter, at the Redemption Prices (expressed as a percentage of the principal amount of each such bond to be redeemed) set forth below opposite the respective Redemption Dates of redemption plus accrued interest to the Redemption Date, as follows: Redemption Date Redemption Price December 1, 1992 through June 1, 1997 101% December 1, 1997 and thereafter 100% Not less than 30 days before the date specified for redemption of any Bond, notice of I the call thereof shall be mailed by the City Director of Finance, by registered mail, to the Holder, if known, to the Original Purchaser of the Series 1982 Bonds and to the Paying Agent therefor, and shall also be published in one issue of the official news- paper of the City and in one issue of The Bond Buyer published in New York, New York. ORDINANCE NO. 1115 251 The City Director of Finance is directed to maintain a record of the names and addresses of the Holders of the prepayable Series 1982 Bonds so far as such information is made available to him, for the purpose of mailing such notices. 3.04. Payment. The principal of and interest on the Series 1982 Bonds shall I be payable in any coin or currency of the United States of America which on the respective dates of payment is legal tender for public and private debts. The principal of and interest on the Series 1982 Bonds shall be payable at a 'Paying Agent designated by the Original Purchaser thereof and approved by City Resolution, or any successor paying agent designated in accordance with law. The City shall pay the reasonable charges and expenses of the payi ng agent. 3.05. Form. The Series 1982 Bonds and the interest coupons appurtenant thereto shall be in substantially the following form: UNITED STATES OF AMERICA STATE OF MONTANA COUNTY OF GALLATIN CITY OF BOZEMAN WATER SYSTEM REVENUE BOND, SERIES 1982 No. $5,000 KNOW ALL MEN BY THESE PRESENTS that the City of Bozeman (the City), a duly organized municipal corporation of Gallatin County, Montana, for value received promises I to pay to bearer, solely from the Bond Account of its Water System Fund, the sum of FIVE THOUSAND DOLLARS on the 1st day of December, 19_ ' or, if this Bond is prepayable as stated below, on a date prior thereto on which it shall have been duly called for redemp- tion, and to pay interest on said principal sum from said account from the date hereof until the principal sum is paid or, if this Bond is prepayable, until it has been duly called for redemption, at the rate of percent ( %) per annum, payable semiannually on June 1 and December 1 in each year, commencing June 1, 1983, interest to maturity being represented by and payable in accordance with and upon presentation and surrender of the interest coupons appurtenant hereto. Both principal and interest are payable at , in , , or a duly appointed successor paying agent, in any coin or currency of the United States of America which on the respective dates of payment is legal tender for public and private debts. This Bond is one of an issue in the principal amount of $5,000,000 (the Series 1982 Bonds), all of like date and tenor except as to serial number, interest rate, maturity date and redemption privilege, issued for the purpose of providing money to I finance the construction of improvements (the Project) to the City's municipal water system (the Water System) and to refund outstanding water system revenue bonds pursuant to and in full conformity with the Constitution and laws of the State of Montana and the resolutions of said City thereunto enabling, including Title 7, Chapter 7, Part 44, Montana Code Annotated, and Ordinance No. of the City, duly enacted on , (the Authorizing Ordinance). ORDINANCE NO. 1115 ~_.~-~~ 25'2 The Series 1982 Bonds maturing in the years 1983 through 1992 are payable on their respective Stated Maturities without option of prior payment, but those having Stated Maturities in the years 1993 through 2001 are each subject to redemption and prepayment at the option of the City, in inverse order of serial numbers, on December 1, 1992, and any Interest Payment Date thereafter, at the Redemption Prices (expressed as I a percentage of the principal amount of each such bond to be redeemed) set forth below opposite the respective Redemption Dates plus accrued interest to the Redemption Dates as follows: Redemption Date Redemption Price December 1, 1992 through June 1, 1997 101% December 1, 1997 and thereafter 100% Not less than 30 days before the date specified for redemption of any Bond, notice of the call thereof shall be mailed by the City Director of Finance, by registered mail, to the Holder, if known, to the Original Purchaser of the Series 1982 Bonds and to the Paying Agent therefor, and shall also be published in one issue of the official newspaper of the City and in one issue of The Bond Buyer published in New York, New York. The City Director of Finance is directed to maintain a record of the names and addresses of the Holders of the prepayable Series 1982 Bonds so far as such information is made available to him, for the purpose of mailing such notices. IT IS CERTIFIED, RECITED, COVENANTED AND AGREED that the City has duly authorized and will forthwith construct and complete the construction of the Project, has fixed I and established and will collect reasonable rates and charges for the services and facili- ties afforded by the System, in accordance with and subject to the regulations of the Montana Public Service Commission, and has created a special Water System Fund into which the gross revenues of the Water System, including all additions thereto and replacements and improvements thereof, will be paid, and a separate and special Bond Account in that fund, into which will be paid each month, from and as a first and prior lien on the Net Revenues of the Water System an amount which is equal to not less than the sum of one- sixth of the interest due within the next six months and one-twelfth of the principal due within the next twelve months with respect to all outstanding Bonds payable from that account, and into which shall be paid additional Net Revenues sufficient to accumu- late and maintain a reserve therein equal to the average annual amount of principal and interest to fall due within any subsequent fiscal year on all such Bonds; that the BondlAtcount will be used only to pay the principal of and interest on Bonds issued pursuant to the authority herein recited; that the rates and charges for the Water System will from time to time be made and kept sufficient to provide gross income and revenues adequate to pay promptly the reasonable and current expenses of operating and maintaining I the Water System and to produce in each fiscal year Net Revenues in excess of such current expenses equal to 125% of the maximum amount of principal and interest payable from the Revenue Bond account in any subsequent fiscal year; that additional Bonds and refunding ORDINANCE NO. 1115 25:3 Bonds may be issued and made payable from the Revenue Bond Account on a parity with the Series 1982 Bonds upon certain conditions set forth in the Authorizing Ordinance but no obligation will be otherwise incurred and made payable from the Net Revenues of the Water System, whether or not such obligation shall also constitute a general obligation and I indebtedness of the City, unless the lien thereof shall be expressly made subordinate to the lien of the Series 1982 Bonds and parity Bonds on such Net Revenues; that all provisions for the security of the holder of this Bond set forth in the Authorizing Ordinance will be punctually and faithfully performed as therein stipulated; that all acts, conditions and things required by the Constitution and laws of the State of Montana and the ordinances and resolutions of the City to be done, to exist, to happen and to be performed in order to make this Bond a valid and binding special obligation of the City according to its terms have been done, do exist, have happened and have been performed as so required; and that this Bond and the interest hereon are payable solely from the Net Revenues of the Water System pledged and appropriated to the Revenue Bond Account and do not constitute a debt of the City within the meaning of any constitutional or statutory limitation or provision and the issuance of this Bond does not cause either the general or the special indebtedness of the City to exceed any constitutional or statutory limitation. (To be inserted if appropriate) I (The payment of the principal and interest on the Series 1982 Bonds, as due in accordance with their respective terms, without regard to any acceleration thereof, is guaranteed by the Municipal Bonds Insurance Associations pursuant to and in accordance with the terms and provisions of a policy of insurance - Policy No. , a copy of which is on file with the paying Agent.) IN WITNESS WHEREOF, the City of Bozeman, Gallatin County, Montana, by its City Commission, has caused this Bond and the certificate on the reverse side hereof and the coupons appurtenant hereto to be executed in its behalf by the signatures of the Mayor, Clerk of Commission and Director of Finance, and its cprporate seal to be affixed hereto, all of such signatures being authentic facsimiles authorized by the officers to be printed hereon, except for the manual signature of one officer on the face of this Bond, and has caused thi s Bond to be dated as of Oeqamb~r' 1 ~~ '1982. Mayor Countersigned: I Director of Finance Attest: Clerk of Commission (SEAL) ORDINANCE NO. 1115 254 (Form of Coupon) No. $ On the 1st day of June (December), 19_, unless the Bond described below is subject to and has been called for earlier redemption, the City of Bozeman, Gallatin County, Montana, will pay to bearer , I in , , from the Bond Account in its Water System Fund, the amount shown hereon in lawful money of the United States of America for interest then due on its Water System Rev~nue Bond, Series 1982, dated Oac; 1, 1982, No. . (Facsimile signature) (Facsimile signature) (Facsimile signature) Director of Finance Clerk of Commission Mayor (Form of certificate to be printed on the reverse side of each Bond, following a full copy of the legal opinion on the issue) We certify that the above is a full, true and correct copy of the legal opinion rendered by Bond Counsel, on the issue of Bonds of the City of Bozeman, Gallatin County, Montana, which includes the within Bond, dated as of the date of delivery of and payment for the Bonds. (Facsimile signature) (Facsimile signature) (Facsimile signature) Director of Finance Clerk of Commission Mayor 3.06. Preparation and Delivery. The Series 1982 Bonds shall be prepared under the direction of the Director of Finance, and shall be executed on behalf of the City by the signature of the Mayor, countersigned by the Director of Finance, and attested by the Clerk of Commission; provided, that the signature of two of such officers may be a I printed facsimile thereof. The interest coupons appurtenant to the Series 1982 Bonds shall be executed and authenticated by the printed facsimile signatures of such officers, and on the reverse side of each Bond shall be printed a copy of the legal opinion to be rendered by Bond Counsel, authenticated by the certificate and facsimile si~natures of such officers. The Series 1982 Bonds shall be sealed with the corporate seal of the City, which may be printed thereon. After registering the Series 1982 Bonds in the manner specified in Section 7-7-4257, Montana Code Annotated, the Director of Finance shall cause them to be delivered to the Original Purchaser thereof, upon payment of the purchase price as specified in the contract of sale, and the Original Purchaser shall not be obligated to see to the application of the purchase price. Section 4. Water System Fund. 4.01. Bond Proceeds and Revenues Pledged and Appropriated. The Water System Fund is hereby created and shall be maintained as a separate and special bookkeeping account on the official books of the City until all Bonds issued hereunder and interest and redemption premiums due thereon have been fully paid, or the City's obligations with reference to such Bonds has been discharged as provided in this Ordinance. All I proceeds of Bonds issued hereunder and all other funds from the system hereafter received or appropriated for purposes of the System are appropriated to this fund. All Revenues derived from the System are hereby irrevocably pledged and appropriated and shall be credited to the Fund as received. All Revenues of the System on hand in the City's existing water system fund as of December 1, 1982, exclusive of Revenues appropriated ORDINANCE NO. 1115 25'5 and pledged to the payment and defeasance of the City's outstanding water revenue bonds, shall be pledged, appropriated and credited to the Fund. The Fund shall be subdivided into separate accounts as designated and described in Sections 4.02 and 4.06, to segre- gate income and expenses received, paid and accrued for the respective purposes described I in those sections. The Revenues received in this Fund shall be apportioned monthly, commencing December 1, 1982. 4.02. Construction Account. The Construction Account shall be used only to pay as incurred and allowed costs which under generally accepted accounting principles are capital costs of the Project, and of such future Improvements as may be authorized in accordance with law, including but not limited to payments due for work and materials performed and delivered under construction contracts, architectural, engineering, inspection, supervision, fiscal and legal expenses, the cost of lands and easements, interest accruing on Bonds issued hereunder during the period of construction of the Project and the Improvements financed thereby and for six months thereafter, if and to the extent that the Bond Account is not sufficient for payment of such interest, reimbursement of any advances made from other City funds, and all other expenses incurred in connection with the construction and financing of the Project or any such Improvement. To the Construction Account shall be credited as received all proceeds of Bonds issued hereunder (except proceeds of Additional Bonds appropriated to refund Outstanding Bonds or appropriated to another account in the Fund), amounts appropriated by the City for the Project, and I all income received from the investment of the Construction Account. , 4.03. Operating Account. On each monthly apportionment there shall first be set aside and credited to the Operating Account, as a first charge on the Revenues, such amount as may be required over and above the balance then held in the account to pay the reasonable and necessary operating expenses of the System which are then due and payable, or are to be paid prior to the next monthly apportionment. The term "operating expenses" shall mean the current expenses, paid or accrued, of operation, maintenance and current repair of the System, as calculated in accordance with generally accepted accounting principles, and shall include, without limitation, administrative expenses of the City relating solely to the System, premiums for insurance on the properties thereof, labor and the cost of materials and supplies used for current operation and for maintenance, and charges for the accumulation of appropriate reserves for current expenses which are not recurrent monthly but may reasonably be expected to be incurred. Such expenses shall not include any allowance for depreciation or renewals or replacements of capital assets of the System or interest expense and shall not include any portion of the salaries or wages paid to any officer or employee of the City, except such portion as shall represent I reasonable compensation for the performance of duties necessary to the operation of the Sys tem. There shall also be credited to this account forthwith upon the delivery of the Series 1982 Bonds and from available funds other than the proceeds therefrom a sum equal to the estimated average monthly operating expenses of the System to establish an Operating ORDINANCE NO~~1115 25$ Reserve, which sum shall be maintained by additional transfers upon each monthly apportionment whenever necessary, or may be augmented by transfers of additional amounts from the Surplus Account described below if determined by the City Commission to be necessary to meet contingencies arising in the operation and maintenance of the System. Monies in the Operating Account shall be used solely for the payment of I current operating expenses of the System, as herein defined. 4.04. Bond Account. Upon each monthly apportionment there shall be set aside and credited to the Revenue Bond Account out of the Net Revenues an amount equal to not less than the sum of one-sixth of the interest due within the next six months plus one-twelfth of the principal to become due within the next twelve months with respect to all Outstanding Bonds. Monies from time to time held in the Bond Account shall be disbursed only to meet payments of principal and interest on Bonds as such payments become due; provided, that on any date when all Outstanding Bonds are due or prepayable by their terms, if the amount then on hand in the Bond Account is suffi- cient with other monies available for the purpose to pay all such Bonds and the interest accrued thereon in full, it may be used for that purpose. If any payment of principal or interest becomes due when monies in the Bond Account are temporarily insufficient therefor, such payment shall be advanced out of any Net Revenues theretofore segregated and then on hand in the Depreciation Account or the Surplus Account or the Reserve Account in said order. 4.05. Reserve Account. Forthwith upon receipt and from the proceeds of the I Series 1982 Bonds the City shall credit to the Reserve Account the sum of $200,000. Thereafter, upon each monthly apportionment, from the Net Revenues remaining after the credit therefrom to the Bond Account, the City shall credit the Revenue Account an amount equal to one-thirty~ixth of the difference between the Maximum Reserve Require- ment and $300,000 until the balance in the Reserve Account shall equal the Maximum Reserve Requirement. Thereafter the City shall maintain the same by crediting on each monthly apportionment to the Reserve Account from the Net Revenues remaining after the credit to the Bond Account. Amounts on hand in the Reserve Account shall be transferred by the City to the Bond Account if on any Interest Payment Date the amount then on hand in the Bond Account, after transfers from the Depreciation Account and Surplus Account, is not sufficient to pay the principal and interest then due, whether at maturity or upon redemption or by acceleration. If not used for that purpose, the City shall hold the Reserve Account in trust to be applied toward payment of the final payment or toward redemption or defeasance of Outstanding Bonds when Bonds are by their terms redeemable or defeasable and all of the Outstanding Bonds are to be redeemed or defeased and paid in full. I 4.06. Depreciation Account. There shall next be credited, upon each monthly apportionment, to the Depreciation Account such portion of the Surplus Net Revenues as the Commission shall determine for depreciation of the System and for replacement or renewal of worn out, obsolete or damaged properties and equipment thereof. Monies in ORDINANCE NO. 1115 257 this account shall be used only for the purposes above stated, or if so directed by the Commission, to redeem Bonds whi"ch are prepayable according to their terms, to pay principal or interest when due thereon as required in Section 4.04 hereof, or to pay the cost of improvements to the System; provided, that in the event of financing the I construction and installation of additional improvements or additions to the Water System other than from proceeds of Bonds payable from the Bonds Account, Surplus Net Revenues from time to time received may be segregated and paid into one or more separate and additional accounts prior to the payment required to be made into the Depreciation Account. 4.07. Surplus Account. Any amount of the Surplus Net Revenues from time to time remaining after the above required applications thereof shall be credited to the Surplus Account, and the monies from time to time in that account, when not required to restore a current deficiency in the Bond Account as provided in Section 4.04 hereof, may be used for any of the following purposes and otherwise: (a) To redeem and prepay Bonds payable from the Net Revenues when and as such Bonds become prepayable according to their terms; or (b) To purchase Bonds on ~he open market, whether or not the Bonds may then be prepayable according to their terms; or (c) To be held as a reserve for redemption and prepayment of Bonds payable from the Net Revenues which are not then but will later be prepayable according to thei~ I terms; or (d) To pay for repairs of or for the construction and installation of Improve- ments to the System; or (e) To restore the Operating Reserve or increase the same when determined to be necessary by the Commission. No monies shall at any time be transferred from the Surplus Account or any other account of the Fund to any other fund of the City, nor shall such moneys at any time be loaned to other municipal funds or invested in warrants, special improvement bonds or other obligations payable from other funds, except as provided in Section 4.08 hereof. 4.08. ~osit and Investment of Funds. The Director of Finance shall cause all monies pertaining to the Fund to be deposited as received with one or more depository banks duly qualified in accordance with the provisions of Section 7-7-201, Montana Code Annotated, in a deposit account or accounts. The balance in such accounts, except such portion thereof as shall be guaranteed by federal deposit insurance, shall at all times be secured to its full amount by bonds or securities of the types set forth in said Section 7-7-201. Any of such monies not necessary for immediate use may be deposited I with such depOSitory banks in savings or time deposits. No monies shall at any time be withdrawn from such deposit accounts except for the purposes of the Fund as defined and authorized in this Ordinance; except that monies from time to time on hand in the Fund may at any time, in the discretion of the Commission, be invested in Government Obligations, bank repurchase agreements with respect to such obligations or certificates of deposits of national banks having a combined capital and surplus of at least $1,000,000 maturing and bearing interest at the times and in the amounts estimated to be required to provide ORDINANCE NO. 1115 ~--------- --~-------'-"---~---------------- 2"5-8 . cash when needed for the purposes of the respective accounts; provided, that the Reserve Account, the Depreciation Account and the Surplus Account may be invested in Government Obligations maturing not later than five years from the date of the investment. Income received from the deposit or investment of monies in said accounts shall be credited to the account from whose monies the deposit was made or the invest- I ment was purchased, and handled and accounted for in the same manner as other monies in that account. Section 5. Priorities and Additional Bonds. 5.01. Priority of Bond Payments. Each and all of the Bonds shall be equally and ratably secured by and payable out of the Net Revenues without preference or priority of anyone Bond over any other by reason of serial number or otherwise; provided, that if at any time the Net Revenues on hand in the Fund are insufficient to pay principal and interest then due on all such Bonds, any and all monies then on hand shall be first used to pay the interest accrued on all Outstanding Bonds, and the balance shall be applied toward payment of the maturing principal of such Bonds to be paid first, and pro rata in payment of Bonds maturing on the same date. 5.02. Additional Refunding Bonds. The City reserves the right and privilege of refunding any or all of the Bonds herein authorized and referred to, but only SUbject to the following terms and conditions: (a) Any matured Bonds may be refunded if monies- available for the payment thereof at maturity, within the limitation prescribed in Section 4.01 hereof, should I at any time be i nsuffi ci ent to make such payment in full. (b) Any Bonds may be refunded prior to maturity, as and when they become prepayable according to their terms. (c) Provision may be made for the payment and refunding of any unmatured Bonds by the deposit with a duly qual ified depository bank, as escrow agent, of cash sufficient, or of securities of the kinds authorized by law, the agreed payments of interest and principal with respect to which are sufficient, to pay the principal amount of such Bonds with interest to maturity or to any prior date or dates on which they have been duly called for redemption, and any premium required for such redemption. (d) Any refunding Bonds issued for the above purposes may be made payable from the Net Revenues on a pa~ity with all then Outstanding Bonds, provided that (1) the maturity of each refunding Bond shall be subsequent to the last maturity of any then Outstanding Bonds which are not refunded or to be refunded out of monies on deposit with such escrow agent, and (2) no Bondholder shall be required to accept a refunding Bond in exchange for any Bond owned by him. I 5.03. Additional Bonds. The City reserves the right to issue Additional Bonds for the purpose of financing costs of Improvements (including the Project), including reserve requirements and financing costs with respect thereto, payable from the Bond Account of the Fund, on a parity as to both principal and interest with the Series 1982 Bonds and other Additional Bonds, if ORDINANCE NO. 1115 ;. (1) the Net Revenues for the last complete Fiscal Year preceding the issuance of such additional Bonds have equaled at least 125% of the maximum Principal and Interest Requirements on Outstanding Bonds and the Additional Bonds; in any subsequent Fiscal Year during the term of the Outstanding Bonds; (2) the balance in the Reserve Account I is increased to the Maximum Reserve Requirement with respect to the Outstanding Bonds and Additional Bonds from the proceeds of the Additional Bonds or from Net Revenues within 36 months from the issuance of the Additional bonds; and (3) an opinion of Bond Counsel is obtained to the effect that the issuance of the Additional Bonds will not cause interest on the Outstanding Bonds to become subject to federal income taxation. For the purpose of the foregoing computation, the Net Revenues for the Fiscal Year pre- ceding the issuance of additional bonds shall be those shown by the financial reports caused to be prepared by the City pursuant to Section 6.06 hereof, except that if the Rates for services provided by the System have been changed since the beginning of such pre- ceding Fiscal Year, then the Rates in effect at the time of issuance of the Additional Bonds or finally authorized to go into effect within 60 days thereof shall be applied to the quantities of service actually rendered and made available during such preceding Fiscal Year to ascertain the Revenues, from which there shall be deducted to determine the Net Revenues, the actual operating costs plus any additional annual operating costs of which an Independent Engineer estimates will be incurred because of the Improvements of the System to be constructed from the proceeds of the Additional Bonds proposed to be I issued. In no event shall any Additional Bonds be issued Bond Account if the City is then in default in any payment of principal or interest on any Outstanding Bonds or if there then exists any deficiency in the balances required by this Ordinance to be main- tained in any of the accounts of the Fund which will not be corrected upon the issuance of the Additional Bonds. 5.04. Subordinate Bonds. Nothing in this Ordinance shall preclude the City from issuing bonds or obligations which are expressly made a charge on only the Surplus Net Revenues subordinate to the pledge of Net Revenues to the Bond Account. Section 6. Covenants. 6.01- General. The City covenants and agrees with the Holders from time to time of all Bonds that the recitals contained in Section 1 hereof are correct; and that until all Bonds are fully discharged as provided in this Ordinance. it will continue to hold, maintain and operate the System as a pUblic utility and convenience, free from all liens thereof or on the Revenues other than the liens herein granted or provided for, and will maintain, expend and account for the Fund and the several accounts therein as provided in Section 4 hereof, and will not incur a further lien or charge on the I Revenues of the System except upon the conditions and in the manner prescribed in Section 5 hereof, and will perform and cause all other officers and employees of the City to per- form and enforce each and all of the additional covenants and agreements set forth in this Section 6; and that it will complete the construction, furnishing and equipping of the Project and all other Improvements as expeditiously as practical. ORDINANCE NO. 1115 - . -- - ~--- ~--~-~ -~~-~~ 260 . 6.02. Competing Service. The City will not establish or authorize the establishment of any other system for the public supply of service or services in competition with any or all of the services suppl ied by the System. 6.03. Property Insurance. The City will cause all buildings, properties, fixtures and equipment constituting a part of th.e System to be kept insured with a I reputable insurance carrier or carriers, qualified under the laws of Montana, in such amounts as are ordinarily carried, and against loss or damage by fire, explosion, and such other hazards and risks as are ordinarily insured against, by public utilities owning and operating properties of a similar character and size, provided, that if at any time the City is unable to obtain insurance, it will obtain insurance in such amounts and against risks as are reasonable obtainable. The proceeds of all such insurance are duly appropriated to the Construction Account and shall be available and used for the repair, replacement and reconstruction of damaged or destroyed pro- perty, and until paid out in making good such loss or damage, are pledged as security for the Outstanding Bonds. All insurance proceeds received in excess of the amount required for restoration of the loss or damage compensated thereby shall be and become part of the Revenues appropriated to the Fund. If for any reason insurance proceeds are insufficient for the repair, replacement and reconstruction of the insured proper- ty, the City shall supply the deficiency from revenues on hand in the Depreciation Account and Surplus Account. 6.04. Li abil i ty Insurance and Surety Bonds. The City will carry insurance I against liability of the City and its employees for damage to persons and property resulting from the operation of the System in such amounts as the City determines from time to time to be necessary or advisable by reason of the character and extent of such operation. It will also cause all persons handling money and other assets of the Fund to be adequately bonded for the faithful performance of their duties and to account for and pay over such money to the City. All amounts received under such insurance and bonds shall be appl i ed to the payment of the loss or damage covered thereby. The premiums for all insurance and bonds required by this section and Section 6.03 hereof constitute part of the operating expenses of the System, but no insurance 1 iabil ities of the City in excess of amounts received under such insurance and bonds shall constitute a lien or charge on revenues or any other assets herein or otherwise pledged to the Fund. 6.05. Disposition of Property. The City will not mortgage, lease, sellar otherwise dispose of any real or personal properties of the System, unless: (a) Prior to or simultaneous with such mortgage, lease, sale or other disposition, all of the Bonds issued hereunder and then outstanding shall be I discharged as provided in Section 7 hereof; or (b) (i) The properties to be mortgaged, leased, sold or otherwise disposed of are unserviceable, inadequate, obsolete or no longer required for use in connection with the System; ORDINANCE NO. 1115 ~-------"""----~"'''''-''''- ~.. --... .. 261 (i i) the mortgage, lease, sale or other disposition will not prevent the City from complying with the provisions of this resolution; and (iii) all proceeds of the mortgage, lease, sale or other disposition of such properties are deposited into the Fund. 6.06. Books and Records. The City will cause proper and adequate books of I record and account to be kept showing complete and correct entries of all receipts, disbursements and other transactions relating to the System, the monthly gross revenues derived from its operation, and the segregation and application of the gross revenues in accordance with this Ordinance, in such reasonable detail as may be determined by the City in accordance with generally accepted accounting practices and principles. It will cause such books to be maintained on the basis of the same Fiscal Year as that utilized by the City. The City shall have prepared and supplied to the Original Purchasers and Paying Agents, within 120 days of the close of each Fiscal Year, an audit report prepared by an Independent Accountant in accordance with applicable generally accepted accounting principles with respect to the financial statements and records of the System which report shall, in addition to other information deemed appropriate by the Independent Accountant, contain the following information: (a) A statement in detail of the income and expenditures of the System for the Fiscal Year, identifying capital expenditures and separating them from operating expenditures; I (b) A balance sheet as of the end of the Fiscal Year; (c) The number of premises connected to the System at the end of the Fiscal Year; (d) The amount on hand in each account of the Fund at the end of the Fiscal Year; ( e) A list of the insurance policies and fidelity bonds in force at the end of the Fiscal Year, setting out as to each the amount thereof, the risks covered thereby, the name of the insurer or surety and the expiration date of the policy or bond; and ( f) A determination that the report shows full compl iance by the City with the provisions of this Ordinancedurin~ the Fiscal Year covered thereby; including proper segregation of the capital expenditures from operating expenses, maintenance of the required balance in the Bond Account, and receipt of Net Revenue during each fiscal year at least equal to 125% of the Maximum Principal and Interest Requirements in or, if the report should reveal that the Revenues and Net Revenue have been insufficient for compliance with this Ordinance, or that the methods used in accounting for such Revenues or Net Revenues were contrary to any provision of this Ordinance, the report shall I include a full explanation thereof, together with recommendations for such changes in Rates accounting practices or in the operation of the System as may be required. 6.07. Cost of Insurance and Accounting. The insurance and fidelity bond premiums and the cost of the bookkeeping and audits herein provided for and of the billings and collection of the Rates, shall be payable from the Operating Account. ORDINANCE NO. 1115 -~- .. ~ 262 6.08. Handlins of Funds. The employees of the City, under the direction and control of the Manager, shall keep books of account, issue statements and collect bills for the Rates and for other money currently receivable on account of the System and shall, to the extent required by Section 6.10 hereof, provide for the discontinuance of service in case of nonpayment for services or noncompliance with regulations. All I money collected with respect to the System shall be deposited daily with the Director of Finance. The Director of Finance shall be bonded at all times with a surety company authorized to do business in Montana, in the amount of at least $5,000, to assure the faithful carrying out of such duties. Any failure on the part of the Director of Finance to comply and to enforce compliance on the part of all officers and employees concerned with the provisions of this Ordinance shall constitute malfeasance for which the Director of Finance and the surety on his bond shall be personally liable. 6.09. Rules and Regulations. The rules and regulations for operation of the System and the use of water service from the System shall be as provided in the existing City Resolutions, and any City Resolutions subsequently adopted amendatory thereof or supplemental thereto, all, however, consistent with the terms and provisions of this Ordinance and prudent practices and procedures for the operation of a pUblic water utility of the size and character of the System. 6.10. Bill ing. The charges for water services will be billed at least monthly, and if the bill is not paid within 90 days of the date of billing, or if the customer fails to comply with all rules and regulations established for the System within 90 I days after notice of violation thereof (which notice shall be given promptly upon discovery of any such violation), the service to the premises involved shall be dis- continued and shall not be resumed until payment of all past-due bills for water service and compliance with all such rules and regulations. The City shall take appropriate legal action to collect the unpaid charges, including, to the extent now or hereafter authorized by law, making the charge a lien against the real property served by the water connection for which the charge remains unpaid and causing charges with respect to such properties to be collected in the same manner as taxes levied against property within the City. 6.11. Rate Covenant. While any Bonds payable from the Revenue Bond Account are outstanding and unpaid, the Rates for all services and facilities furnished and made available by the System to the City and its inhabitants, and to all customers within or without the boundaries of the City, shall be reasonable and just, taking into consideration the cost and value of the System and the cost of maintaining and operating them, and the amounts necessary for the payment of all Bonds and the accruing interest I thereon, and the proper and necessary allowances for the depreciation of the Water System, and no free service shall be provided to any person or corporation. It is covenanted and agreed that the rates, charges and rentals to be charged to all recipients of water services shall be maintained and shall be revised, subject to any required ORDINANCE NO. 1115 ~ 263 approval and regulation by the Public Service Commission of the State of Montana, when- ever and as often as may be necessary, according to schedules such that the Revenues therefrom will be at least sufficient to pay the current operating expenses, to maintain the operating reserve established, and to produce Net Revenues during each fiscal year I commencing with the fiscal year ending June 30, 1983, not less than 125% of the sum of the maximum Principal and Interest Requirements on Outstanding Bonds during any subsequent Fiscal Year. If at the close of any Fiscal Year the Net Revenues have been less than required hereby, the City will forthwith prepare a schedule of altered Rates which are just and equitable and sufficient to produce Net Revenues in such amount, and will do all things necessary to the end that such schedule will be placed in operation at the earliest possible date. The establishment of a ratio of Net Revenues at least equal to 125% of the sum of the maximum Principal and Interest Requirements on Outstanding Bonds has been deemed necessary in order to sell the Bonds upon terms most advantageous to the City. The excess of the Net Revenues may be used as authorized in Section 4 of this Ordinance. The Bonds may be prepaid according to their terms on and after December 1, 1992, and in the estima- tion of the Commission any excess, prior to that date, of Net Revenues will be needed to payor to provide reserves for payment of replacements, renewals and improvement costs, in order to provide adequate service for the present population and the increase thereof I reasonably to be expected; and after that date, any excess not required for such purposes in the judgment of the Commission may be used to prepay Bonds and thereby reduce the interest cost thereon to the City and to the persons served by the System. 6.12. Independent Engineer. If the Commission shall default in its obligations hereunder or if Additional Bonds for Improvements are to be issued, the Commission will retain an Independent Engineer to advise it. In the event the City defaults in the payment of principal or interest on any Bonds or fails for two consecutive years to meet the requirements of Section 6.11, the Independent Enqineer shall prepare a report based upon a survey of the System and the operation and maintenance thereof. Such report shall, in addition to such other information and recommendations as the Independent Engineer may determine to include or the Commission may request, include the Independent Engineer's comments regarding the manner in which the Commission has carried out the requirements of this Ordinance, and regarding any change or improvement which should in his opinion be made in the operation of the System. Copies of such reports shall be made available upon request to Bondholders. 6.13. Remedies. The Holders of not less than 25% in principal amount of the I Outstanding Bonds issued and secured under the provisions of this Ordinance shall have the right, either at law or in equity, by suit, action or other proceedings, to protect and enforce the rights of all Holders of such Bonds and to compel the performance of any and all of the covenants required herein to be performed by the City, and its officers and employees, including but not limited to the fixing and maintaining of Rates and the collection and proper segregation of Revenues and the application and use thereof. The ORDINANCE NO. 1115 2,64 , Holders of a majority in principal amount of such Outstanding Bonds shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Bondholders or the exercise of any power conferred on them, and the right to waive a default in the performance of any such covenant, and its consequences, except a default in the payment of the principal of or interest on any Bond when due. I However, nothing herein shall impair the absolute and unconditional right of the Holder of each such Bond to receive payment of the principal of and interest on such Bond as such principal and interest respectively become due, and to institute suit for any such payment. Any court having jurisdiction of the action may appoint a receiver to adminis- ter the System on behalf of the City with power to charge and collect Rates sufficient to provide for the payment of any Bonds or other obligations outstanding against the System, and to apply the Revenues in conformity with this Ordinance and the laws of the State of Montana. Section 6.14. MBlA Insurance. The City will keep, perform and observe each of its obligations under and with respect to the MBIA Insurance. Section 7. Amendments. 7.01. Amendments Without Bondhol der Consent. The City reserves the right to amend this Ordinance from time to time and at any time. for the purpose of curing any ambiguity or of curing, correcting or supplementing any defective provision contained herein, or of making such provisions with regard to matters or questions arising here- under as the Commission may deem necessary or desirable and not inconsistent with this I Ordinance, and which shall not adversely affect the interest of the Holders of Bonds issued hereunder, or for the purpose of adding to the covenants and agreements herein contained, or to the Revenues herein pledged, other covenants and agreements thereafter to be observed and additional Revenues thereafter appropriated to the Fund, for the purpose of surrendering any right or power herein reserved to or conferred upon the City or for the purpose of authorizing the issuance of Additional Bonds in the manner and subject to the terms and conditions prescribed in Section 5 hereof. Any such amendment may be adopted by Supplemental Ordinance, without the consent of the holders of any of the Bonds issued hereunder. 7.02. Amendments With Bondholder Consent. With the consent of Holders of Bonds issued hereunder as provided in Section 7.03 hereof, the City may from time to time and a;t any time amend this Ordinance by adding any provisions hereto or changing in any manner or eliminating any of the provisions hereof, or of any Supplemental Ordinance, except that no amendment shall be adopted at any time without the consent of the Hol ders of all Bonds issued hereunder which are then Outstanding, if it would extend the maturi- ties of any such Bonds, would reduce the rate or extend the time of payment of interest I thereon, would reduce the amount or extend the time of payment of the principal or redemp- tion premium thereof, would give to any Bond or Bonds any privileges over any other Bond or Bonds, would reduce the sources of Revenues appropriated to the Fund, would authorize the creation of a pledge of said Revenues prior to or on a parity with the Bonds (except as is authorized by Section 5 hereof), or would reduce the percentage in principal amount of such Bonds required to authorize or consent to any such amendment. ORDINANCE NO. 1115 'to 265 7.03. Notice and Consent. Any amendment adopted pursuant to Section 7.02 hereof shall be made by Ordinance, notice of which shall be published in a financial newspaper of national circulation published in New York, New York, and shall become effective only upon the filing of written consents with the Clerk, signed by the Holders I of not less than two-thirds in principal amount of the Bonds issued hereunder which are then Outstanding or, in the case of an amendment not affecting all outstanding Bonds, by the Holders of not less than two-thirds in principal amount of the Bonds adversely affected by such amendment. Any written consent to an amendment may be embodied in and evidenced by one or any number of concurrent written instruments of substantially similar tenor signed by Bondholders in person or by agent duly appointed in writing, and shall become effective when delivered to the Clerk. Any consent by the holder of the same Bond with respect to any amendment adopted by the City to such consent, provided that any Bondholder may revoke his consent with reference to any Bond by written notice received by the Clerk before the amendment has become effective. In the event that unrevoked consents of the Holders of the required amount of Bonds have not been received by the Clerk within one year after the publication of any amendment, the amendment and all consents theretofore received shall be of no further force and effect. 7.04. Proof. Proof of the execution of any consent, or of a writing apPointing any agent to execute the same, or of the ownership by any person of Bonds, shall be sufficient for any purpose of this Ordinance and shall be conclusive in favor of the I City if made in the manner provided in this Section 7.04. The fact and date of the execution by any person of any such consent or appointment may be proved by the affidavit of a witness of such execution or by the certificate of any notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the person signing it acknowledged to him the execution thereof. The amount of Bonds held by any person by or for whom a consent is given, and the distinguishing numbers of such Bonds, and the date of his holding the same, may be provided by a certificate executed by any trust company, bank or other depository, wherever situated, if such certificate is deemed satisfactory by the Clerk, showing that at the date therein mentioned such person had on deposit with such depository, or exhibited to it, the Bonds therein described; or such facts may be proved by the certificate or affidavit of the person executing such consent, if such certificate or affidavit is deemed satisfactory by the Clerk. The City may conclusively assume that such ownership continues until written notice to the contrary is received by the Clerk. The fact and date of execution of any such consent and the amount and distinguishing numbers of Bonds held by the person executing the same may also be proved in any other manner which the City Council may deem sufficient; but I the Council may nevertheless, in its discretion, require further proof in cases where it deems further proof desirable. Section 8. Defeasance. 8.01. Genera 1 . When the liability of the City on any Bond issued under and secured by this Ordinance and all coupons appurtenant thereto has been discharged as provided in this section, all pledges, covenants and other rights granted by this resolu- tion to the holder of such Bond shall cease. ORDINANCE NO. 1115 ~--- -- ....-.~._._. 2'66 8.02. Payment. The City may discharge its liability with reference to any Bonds and coupons which are due on any date by depositing with the paying agent or agents for such Bonds on or before that date a sum sufficient for the payment thereof in full; or if any Bond or coupon shall not be paid when due, the City may nevertheless discharge its liability with reference thereto by depositing with the paying agent or I agents a sum sufficient for the payment thereof in full with interest accrued to the date of such deposit. 8.03. Prepayable Bonds. The City may also discharge its liability with reference to any prepayable Bonds which are called for redemption on any date in accordance with their terms, by depositing with the paying agent or agents on or before that date an amount equal to the principal, interest and redemption premium, if any, which are then due thereon, provided, that notice of such redemption has been duly given. 8.04. Escrow. The City may also at any time discharge its liability in its entirety with reference to any Bond or Bonds, subject to the provisions of law now or hereafter authorizing and regulating such action, by calling all prepayable Bonds of such issue for redemption on the next date when they may be prepaid in accordance with their terms, by giving the notice required for such redemption, and by depositing irrevocably in escrow, with a bank qualified by law as an escrow agent for this purpose, cash or Government Obligations which are authorized by law to be so deposited, bearing interest payable at such times and at such rates and maturing on such dates as shall I be required to provide funds sufficient to pay all principal , interest and redemption premiums to become due on all Bonds of the issue on or before said redemption date. Section 9. Arbitrage and Certifications of Proceedinqs. 9.01. Arbitrage Certificate. The Mayor, Clerk of Commission and Director of Finance, being the officers of the City charged with the responsibility for issuing the Bonds pursuant to this resolution, are authorized and directed to execute and deliver to the purchaser a certification in order to satisfy the provisions of Sections 1.103-13, 1.103-14 and 1.103-15 of the Treasury Regul ations. Such certification shall state that on the basis of the facts, estimates and circumstances in existence on the date of issue and delivery of the Bonds as therein set forth, it is not expected that the proceeds of the Bonds will be used in such a manner that would cause the Bonds to be arbitrage bonds, and the certification shall further state that to the best of the knowledge and belief of the certifying officers there are no other facts, estimates or circumstances that would materially change such expectation. The City further covenants and agrees to take all action necessary to assure that the Bonds shall not be deemed to be "arbitrage bonds" under Section 103(c) of the Internal Revenue Code of 1954, as amended. I 9.02. Transcript. The officers of the City and of Gallatin County are hereby authorized and directed to prepare and furnish to the purchasers of the Bonds and to the attorneys approving the legality of the issuance thereof, certified copies of all proceedings and records of the City relating to the Bonds and to the organization ORDINANCE NO. 1115 -~--_._------ ';' 267 and financial condition and affairs of the City, and such affidavits and other information as may be required to show the facts relating to the legality and marketability of the Bonds as the same appear from the books and records under their custody and control or as otherwise known to them; and all such certified copies, certificates, and affidavits, I including any heretofore furnished, shall constitute representations of the City as to the truth of the facts purported to be shown thereby. Section 10. Repeals and Effective P?te. 10. OJ. Repeal. All provisions of other ordinances, resolutions and other actions and proceedings of the City and the Commission which are in any way inconsistent with the terms and provisions of this resolution are repealed, amended and rescinded to the full extent necessary to give full force and effect to the provisions of this resolution. 10.02. Effective Date. This Ordinance shall be in full force and effect 30 days from and after its final passage and approval. Passed by the Commission and approved by the Mayor of the City of Bozeman, Montana, this 22nd day of November, 1982. I ALFRED M. STIFF, Mayor Attest: Clerk of the Commission State of Montana ) County of Gallatin) City of Bozeman ) I, Robin L. Sullivan, Clerk of the City Commission of the City of Bozeman, Montana, do hereby certify that the foregoing Ordinance 1115 was published by title and number in the Bozeman Daily Chronicle, a newspaper of general circulation printed and published in said City of Bozeman, in the issue dated the 28th day of November 1982. IN WITNESS WHEREOF, I hereunto set my hand and affix the corporate seal of my office this 28th day of November 1982. Clerk of the City Commission I ORDINANCE NO. 1115