HomeMy WebLinkAboutOrdinance 57- 800, Water system
442
R8P3afml by Ordinanca Mo. ~39' .
(1/#. ORDINANCE NO. aUo
AN O'RDINA'\CE RELATING To THE RECOtISTRUCTION,
IMPROVEMENT, BETTERMENT AND F.JCTENSION OF THE
WATER SYSTEM OF THE CITY OF BOZEMAN, ~RESCRIB~
ING RATES, CHARGES AND RENTALS FOR THE USE OF
THE FACILITIES THEREOF AND FoR CONNECTIONS
THEREWITH, CREATING SPECIAL FUNDS AND ACCOUNTS
FOR THE ADMINISTRATION OF THE MONEYS DERIVED I
THEREFROM, AUTHORIZING AND DIRECTING THE IS-
SUANCE AND SALE UF REVENUE BONDS TO ~AY THE
CuST UF SAID UNDERTAKING, AND DEFINING THE TERMS
AND MANNER OF PAYMENT OF THE BONDS AND THE SE~
CURITY T.HEREOF.
BE IT ORDAINED BY THE COMMISSION OF THE CITY OF BOZEMAN, MONTANA, AS FuLLOWS:
Section .1.. Findings. It 1s ,hereby found, determined and declared the t the
City of Bozeman has been and 1s now duly authorized by the provisions of Chapter 24,
Title 11 of the Revised Codes of Montana 1947, as amended, and by an election and other
proceedings heretofore duly taken thereunder to reconstruct, improve, better and extend
an undertaking corrprising the entire municipal water system and all parts thereof and
appurtenances thereto, including but not limi ted to the suppJ.y and dis tribu tion s ys terns,
reservoirs and dams; to prescribe and cOLlect just and equitable rates, charges and
rentals for connections therewith and for services, facilities and commodities directlY
or indirectly furnished thereby; to issue the City's revenue bonds in the aggregate
principal amount of $1,5UO,uOU to prOVide moneys to pay the .cost of said undertaking
and to pledge and appropriate to the payment of said bonds the net revenues to be de-
rived from the operetion of said system, including improvements, betterments or exten-
sions thereof hereafter constructed or acquired; that such rates, charges and renteLs I
will be sufficient d~ring the usefUl life of said improvements and the term of said
bonds to produce net revenues more than adequate to pay the principal and interest
when due on said bonds and to crea te and main tain ressonable- reserves therefor as here-
in prescribed; that the City hes hentofore approved plans and specifications prepared
by its Engineer for said undertaking, which are now on file in the office of the
Director of Public Service; and it is necessary and expedien t for tne Ci ty a t this tmle
to issue and sell satd revenue bonds ih the amount of $1,2uO,OOO, for the purpose of
paying costs heretofore ipcurred and tb be incurred in the near future by the City in
connection with seid undertaking.
Sec tion 2. Terms of Bonds. The revenue bonds initially issued hereunder
shall be designated as IlWater System Revenue Bonds, Series A," shall be in the aggregate
principal amount of $l,200,OUO, and in the denomination of $l,UUO each, shall be l,2uO
in number and numbered serially from l to L,2UO, inc.1.usive, aha.1.l bear date as of JULY
.
1, 1957, and ehall mature serially on July 1 in the yeare and amounts sa follow's, be8.r-
I
ing interest at the annual rates set forth opposite their maturity years, respectively:
Year Am oun t Interes t Ra te Year Amount In teres t fia te I
. -
1958 $15,OUO 5 ~ 1973 $35,OuO 4 3/4 %
1959 15,000 5 1974 40,000 4 3/4
1960 15,000 5 1975 40,000 4 3/4
1961 15,000 5 1976 45,000 4 1/2
1962 15,000 5 1977 45,000 4 I/.2
1963 20,000 5 1978 50,000 4 1/2
1964 20,000 5 1979 55,000 4 1/2
1965 2U,UUO 4 3/4 1980 55,000 4 1/2
443
Year Amount Interest Rate ~ Amount Tnterest.Rate
-
1966 $25,UOO 4 3/4 $ 1981 $60,0'00 4 1/2 $
1~67 25,OUO 4 3/4 1982 65,UOO 4 1/2
196/:j 25,UOO 4 3/4 1983 65,uOO 4 1/2
1969 30,UOO 4 3/4 1984 . 70,000 4 1/2
1970 30,000 4 3/4 1985 75,000 4 1/2
1971 30,000 4 3/4 1986 80,uOO 4 1/2
1972 35,uOO 4 3/4 1987 85,000 4 1/2
I All interest shall be payable semiannually on July 1 and January 1 of each year, comm-
enCing January 1, 1958. The bonds maturing in the years 1958 through '1967 shall not be
subject to redemption prior to maturity, but those maturing in the years 1968 through
1987 shall each be subject to redemption and prepayment at the option of the City, in
inverse order of their serial numbers, out of surplus net revenues of said system as
hereinafter defined, on July 1, 1967, and any interest payment date tnereafter, at par
plus interest to accrue to the date fixed for redemption thereof; provided that not
less than thirty days prior to the redemption date specified, notice of the call of
each bond to be prepaid shall be mailed by tne Director of Finance by registered mail
to the holder thereof, if known, and to Kalman & Company, Inc., Minneapolis, Minnesota,
and to the Harris Trust and Savings Bank, Chicago, Illinois, and shall also be publish~
ed in one issue of a daily newspaper at Bozeman, Montana, and in one issue of a daily
financial newspaper published in New York City, New York. The Director of Finance is
hereby authorized and directed to maintain a record of the names and addresses of the
holders of prepayable bonds of said issue, so far as such information is made avail-
able to him. The principal of and interest on said bonds shall be payable at said
I Harris Trust and Savings Bank, in Chicago, Illinois, in any coin or currency of the
United States of America wnich on the respective dates of payment is legal tender for
public and private debts. The City shall pay, as an operating cost of said system,
the reasonable and customary charges of said paying agent for the receipt and dis~
sement of such moneys. The terms of the remaining bonds authorized by the electors
shall be as prescribed by the Commission, by resolution, when and as such bonds are
issued; provided tnat not more than $lO,UUO principal amount of such bonds snall
mature in any year prior to 1987, and none of such bonds shall be prepayable prior
to July 1, 1967.
Section 3. Form of Bond. Said bonds and the interest coupons appurtenant
thereto shall be in substantially the following form:
(Form of Bond)
UNITED STATES OF AMERICA
STATE OF MONTANA
COUNTY OF GALLATIN
CITY OF BOZEMAN
WATER SYSTEM REVENUE BUND
I SERIES A
No. $l,UOO
KNOW ALL MEN BY THESE PRESENTS that the City of Bozeman, a duly organized
municipal corporation of Gallatin County, Montana, hereby promises to pay to bearer,
out of the Revenue Bond Account of its Water Fund, the sum of ONE THOUSAND DOLLARS on
the 1st day of July, 19__ or, if this bond is prepayable~ as noted below, on a date
prior thereto on which it shall have been duly called for redemption, and to pay, out
of said account, interest on said principal sum from the date hereof until said prin-
cipal sum be paid, or, if this bond is prepayeble, until it has been duly called for
redemption, at the rate of _.... percent ( $)
per annum, payable semiannually on the 1st day of July and the 1st day of January of
Ordinance No. HOO
444
each year, commencing January 1, 19S8, interest to maturi ty being represented by, and
payable in accordance with and upon presentation and surrender of the interest coupons
appurtenant hereto~ Both principal and inte~est are payable at the Harris Trust and
Sa vings Bant, in Chicago, Illinois, in any coin or currency of the United States of
America which on the respec ti ve da tea of pa ymen t is legal tender for public and private
debts.
This bond is one of an issue authorized in the total principal amount of
$l,SUO,OUO, Series A of said issue being in the aggregate principal amount of $1,2UO,exn..
The bonds of Series A are all of like date and tenor except as to serial number, I
(interest rate,) maturity and redemption privilege. Said bonds are issued pursuant
to authorization by the requisite majority of the qualified electors of said City
voting on the question at an election duly called and held, for the purpose of pro.
viding money to finance the reconstruction,~ improvement, betterment and extension of
the water system of the City and all parts thereof and appurtenances thereto, and pur-
suant to and in full conformity with the Constitution and laws of the State of Montana
and the ordinances of said City thereunto enabling, inCluding Chapter 24, Title 11 of
the Revised Codes of Montana 1947, as amended, and Ordinance No. 8uO of the City, duly
enacted on August 2, 1957.
Bonds of this issue bearing serial numbers 1 to 185, inclusive, are payable
at their respective stated maturity dates without option of prior payment, but those
bearing serial numbers 186 through 1,200, inclus i ve, are each subject to redemption
and prepa ymen t, ~t par and accrued interest, at the option of the City, ou t of surplus
net revenues of said fund, on July 1, 1967, and on any lnterest payment date there.
after. Not less than thirty days in advance of the date fixed for redemption of any
of said bonds, the City will mail notice of the call thereof to the holder, if known,
and to the bank at which principal and interest are then payable, and will cause such
notice to be. published in a Bozeman, Montana, daily newspaper and in a New York City,
New York, financial newspaper. Holders of prepayable bonds of this issue may have
their names and addresses and the serial numbers of tneir bonds recorded by the
Director of Finance of the City of Bozeman for the purpose of receiving sucn mailed
notice.
IT IS HEREBY CERTIFIED, RECITED, COVENANTED AND AGREED that the City has
duly authorized and will forthwith construct and complete the undertaking above men-
tioned; that it has created a special Water Fund into which the gross revenues of
said system, including all future additions thereto and replacements and improvements
thereof, Wiil be paid, and a Revenue Bond Account in said fund into which will be
paid so much of the net revenues, received from time to time in excess of normal,
reasonable and current operating expenses, ~s shall be necessary to pay all principal
and interest on the bonds of said authorized issue when due, and also to accumulate
and thereafter to maintain at all tiFes a reserve in a sum equal to the maximum I
am~unt of such principal and interest to fall due within any subseQuent fiscal yearj
the tit has es tablished reasonable ra tes and charges for all services and facili ties
afforded by said system which are estimated, on the basis of previous operating costs,
to be sufficient to produce net revenues in each fiscal year, ending June 30, in a
sum equal to at least 15U% of the principal and interest due on all bonds of said
authorized issue during such year, and the City will revise sucb Charges, subject to
regulation by the Public Service Commission of the State of Montana, whenever and as
often as necessary to maintain said ratio between net revenues and principal and in.
teres t reauiremen ts; tha t said payments to the Revenue Bond Account cons ti tute a
first and prior lien and charge on the entire net income and revenues to be derived
from the operation of said system and of all future additions thereto and betterment
thereof; that bonds may be issued and made payable from said net revenues on a
parity herewith as to in teres t, for the purpose of refunding bonds of said authorized
issue, provided that SUCh refunding bonds mature subse~uent to the last maturity date
of bonds not so refunded, but no other obligation will be incurred and made payable
from said net revenues, whether or not such obligation shall also constitute a general
obligation and indebtedness of the City, unless the lien thereof shall be expreSSlY
made subordinate to the lien of the bonds of said authorized issue on said net income
and re venue s ; that ail provisions for the security of the holders of this bond set
forth in said Ordinance No. ~UO Will be punctually and faithfUlly performed as there.
in s tipula ted; that all acts, conditions and things required by the Constitution and
laws of' the State of Montana and the ordinances of said City to be done, to exis t,
to happen and to be performed in order to make this bond a valid ~nd binding special
obligation of said City according to its terms have been done, do exist, have happen-
ed and nave been performed as so required; and that tne issuance of this bond dtd not
cause the indebtedness, whether generai or spec1al, of said City to exceed any con.
stitutional or statutory limitation of indebtedness.
IN WITNESS WHEREuF the City of Bozeman, Gallatin County, Montana, by its
Ci ty Commission, has caused this bond to be executed in ita behal.f by tne signa tures
of its Mayor and its Director of Finance, countersigned by the Clerk of the Commiss- I
ion, and sealed with its corporate seai, and tne appurtenant interest coupons to be
executed and authenticated by the facsimile signatures of said officers, and has
caused this bond to be dated as of July 1, 1957.
Ma yor
Coun ters igned:
Clerk of the Commission Director of Finance
(SEAL)
Ordinance No. 8UO
" 445
(Form of Coupon)
No. $
-
On the 1st day of July (January), 19 , the City of' Bozeman, Gallatin County,
Montana, will pay to bearer at the Harris Trustand Savings Bank, in Chicago, Illinois,
out of the specialbund and account named in the bond described belOW, the sum of'
, . DOLLARS lawf'ul money of the United States of
America 'for interest then due on its Water System Revenue Bond, dated July 1, 1957, No.
I .
(Facsimile signature) (Facsimile signature) (Facsimile signature)
Clerk of the Commission Director of Finance Ma yor
(Coupons numbered 21 and upwards shall also contain tne
phrase: "Unless ~e bond described below is called for
earlier redemption".)
Section h. Execution and Delivery of Bonds. The bonds of said Series A shall
be forthwith prepared for execution tmder the direction of the Director of Finance and
the bond purchaser, and when so prepared shall be executed on behalf of the City by the
signatures of the Mayor and Director of Finance and countersigned by the Clerk of the
Commission, and the interest coupons appurtenant to each of said bonds shall be execuood
and authenticated by the engraved, printed or lithographed facsimile signatures of said
officers; and after being registered by the Director of Finance in the manner specified
in Section 11-2318 Revised Codes of Montana 19lt7, said Director of Finance shall cause
said bonds to be delivered to Ha.lsey,. stuart & Company, Inc., an d associates, of Chic ago,
Illinois, as purchaser thereof, upon payment of the purchase price as specified in the
contract of sale heretofore made and executed, pursuant to the bid of said purchaser and
I the published notice of sale of said bonds, which contract is hereby approved, ratified
and confirmed, and said purchaser shall not be obligated to see to the application of
the purchase price. The remaining bonds authorized by the electors shall be similarly
sold and delivered, in one or more series as determined by the Commission by resolution.
Section 5. Water System Improvement Fund. The pl~chase price of all of the
bo~ds herein authorized, except accrued interest and prem! un, s hall be credited and paid
into a separate and special fund which is hereby created and shall be maintained upon
the books of the City, designated as the "Water System Improvement Fund", and shall be
deposited and secured as provided in Section 9 hereof. From s aid account there shall be
paid as incurred all such items as constitute, in ae cordance with sound a ccounting prac-
tice, proper costs of the reconstruction, improvement, betterment and extension of said
system as provided in, the plans and specifications therefor which have heretofore been
approved; inclUding, but without li~itation, all engineering, inspection, fiscal and
legal expenses, the costs of lands and easements, the reimbursement of any advances here-
tofore made by the City, and all other expenses in connection with the financing and con-
I struction of said undertaking. The moneys in said fund shall be used only for the pur-
poses aboye set forth, provided that if any moneys shall remain after the completion of
the undertaking described in Section 1 hereof and after payment of all costs thereof,
such remaining moneys shall be transferred to the Water Fund referred to below.
Section 6. Order of Payment. Each and all of the bonds of said authorized
issue shall be equally and ratably secured by and payable out of the net revenues of,'said
water system, without preference or priority of anyone bond over any other; provided,
Ordinance No. 800
44fi
that if at any time the net revenues on hand in the Water Fund, as defined in Section
8 hereof, are insufficient to pay principal and interest then due on all bonds of said
authorized issue, said moneys then on hand shall be first used to pay the interest
accrued on all such bonds, and the balance shall be applied toward payment of matured
principal of said bonds in order of their maturities, the earliest maturing bonds f'.1rst,
and pro rata toward the payment of all bonds having the same maturity date. I
Section 7. Refunding Revenue Bonds. The city hereby reserves the right and
privilege of refunding any matured bonds of said authorized issue in the event that
moneys on hand and available at maturity within the limitation prescribed in Section 6
hereof should be insufficient for the payment thereof, and the right and privilege of
refunding any outstanding bonds of said issue prior to the maturity thereof as and
when 'the same become redeemable according to their terms or by the consent of the
hol ders thereof or, if not prepayable, then upon the deposit with a duly qualified de-
positary bank as escrow agent of a sufficient amount of cash or general obligations of
the United states to pay the principal amount of the outstanding bonds to be refunded,
plus interest to the earliest date upon which they may be called for redemption; and
for such purposes the City reserves the privilege of issuing and selling refunding re-
venue bonds payable from said net revenues on a parity as to interest with all then
outstanding bonds of said issue, but the maturity of each such refunding revenue bond
shall be subseql~nt to the last maturity of the then outstanding revenue bonds of this
issue which are not so refunded, and no bondholder shall be required to accept a re-
funding revenue bond in exchange for any bond owned by him. I
Section 8. Water Fund. So long as any of the prinCipal of or interest on
any of the bonds of the issue herein authorized or bonds issued to refund the same
shall be outstanding and unpaid, or until there shall have been set apart in the Re-
venue Bond Account herein established a Slm sufficient to pay when due, or to redeem
prior to maturity, the entire principal of such bonds remainlng unpaid, together with
interest accrued and to accrue thereon to maturity or to the earliest date upon which
they may be redeemed according to their terms, the City irrevocably covenants with the
holders of each and all of said bonds that all of the gross revenues derived from the
operation of said system will be accounted for, applied and disposed of in the manner
provided in this Section, and will be deposited and secured as provided in Section 9
hereof. The g rOBS revenues are herein defined to include all income and receipts de-
rived from rates, charges and rentals imposed for connections with and for the use of
the water system, including all a dditions thereto and betterments and replacements rrNI
or hereafter constructed or acquired, or for the benefits provided by the facilities
of said system, and all proceeds of sales of property acquired in connection with the I
system, and all penalties and interest on said rates, charges and rentals (excepting
customers' deposits). said gross revenues shall be paid daily, as received by the
City, into the municipal Water Fund, which fund shall a t all times be segregated and
maintained as a separate and special fund on the books of the city. Said fund shall
be subdivided into the separate accounts described below, and the gross revenues re-
ceived in said fund in each calendar month shall be apportioned to said respective
Ordinance No. 800
4,47
'?
accounts not later than the 15th day of the following month and thereafter accolmted
for therein and expended therefrom as follows:
8.01 Operating Account. There shall first be set aside and credited to
the Operating Account each month, as a first charge on said gross revenues, s uc h a-
I mormt as may be required, with the balance then held in said account, to pay the rea-
sonable and necessary operating expenses of the system which are then due and payable
or are to be paid within a period of one month, and mO'leys 1n said account shall be
used solely for the payment of current operating expenses of the wa ter system as here-
in defined. The term "operating expenses" shall mean the expenses of operation, mam-
tenance and current repair of said system and its facilities, as calculated in accord-
ance with sound accounting practice, and'shall include, without limitation, adminis-
grative expenses of the City relating solely to the water system, premilws for insur-
ance on the properties thereof, labor and the cost of materials and supplies used fer
current operation and for maintenance, and charges for the accumulation of appropriate
reserves for current expenses which are not recurrent monthly but may reas~nable be
expected to be incurred, in accordance with sound accounting practice. Such expenses
shall not include any allowance for depreciation or renewals or replacements of capibU
assets of the water system, and shall not include any portion of the salary or com-
pensation of city officers or employees except to the extent that such officers' and
employees' working time is actually devoted to the operation and maintenance of the
I water system. There is also created in said accormt an Operating Reserve in the am-
ount of $10,000, which sum is hereby found and determined to be available from net
revenues hentofore received and is hereby appropriated for said purpose, and said re-
serve shall be mai~tained in said amount or in such increased amount as shall be de-
termined by the City Commission in its reasonable discretion to be adequate to meet
contingencies arising in the operation and maintenance of the system; but no moneys
shall be transferred to said Operating Reserve after the effective date of this ord-
inance unless all current payments into the Revenue Bond Account have been duly made
as required below.
8.02 Revenue Bond Account. The net revenues of the water system are here-
by defined to include the entire amormt of the gross revenues remaining upon each of
said monthly apportionments, after creditine to the Operating Accolmt the amount re-
quired in part 8.01, exclusive of any sum required to maintain the Operating Reserve.
Upon each of said monthly apportionments commencing on September 15, 1957 , all net re-
venues on hand shall be credi ted to the Revenue Bond AccOlmt lmtil there shall have
been accumulated in said accolmt a reserve, which shall thereafter be maintained by
I the transfer of additional net revenues whenever necessary, in an amount at all tlmes
at least equal to the maximum amount of principal and interest to fall due on the
bonds herein authorized within any slIDsequent fiscal year. After said reserve has
been accumulated there shall continue to be credited to the Revenue Bond Account out
of the net revenues upon each of said monthly apportionments, the sum of $9,000 if a-
vailable, plus such SlW as may be necessary to complete such ~9,OOO payment for any
prior month in the current or any prior fiscal year, and such additional sum as maybe
Ordinance No. 800
448
necessary to maintain said reserve. At the close of each fiscal year, on .June 30,
if the reserve herein agreed is then on hand in the Revenue Bond Accolmt, together
with sl~ficient additional moneys to pay all principal and interest due on said
bonds on and prior to the first day of January next following, any excess over said
amount shall be first used, if necessary, to complete the payments theretofore due I
to the Replacement and Depreciation Acconnt described below, Rnd any remaining moneys
may be transferred to the Surplus Acconnt described below. Moneys at any time held
in the Revenue Bond Account, other than those so permitted to be transferred to the
Surplus Account, shall be used only to pay principal and interest when due on the
bonds herein authorized, except that on any date when all outstanding bonds of the
authorized issue are redeemable by their terms, if the amount then on hand in the Re-
venue Bond Accolmt, including said reserve, equals the total principal, plus interest
then due thereon, the entire amount on hand may be used to 'retire and prepay said
bonds. If any payment of principal or interest become due when moneys in the Revenue
Bond Accolmt are temporarily insui'ficient therefore, said payment shall be advanced
out of any surplus net revenues theretofore segregated and then on hand in the Oper-
ating Reserve or the Replacement and Depreciation Account or the Surplus Account.
8.03 Replacement and Depreciation Account. There shall next be set aside
and credited upon each such apportionment to the Replacement and Depreciation Account
such portion of the net revenues of the system in excess of the Cl~rent requirements
of the Revenue Bond Account (which portion of the net revenues is herein referred to I
as ttsurplus net revenuestt), as the City Commission shall determine to be required fir
the accumulation of a reasonable allowance for depreciation of said system and for
replacement or renewal of worn out or obsolete properties comprised therein; provided
that the portion of the surplus net revenues so credited shall be sufficient to pro-
duce in each fiscal year a sum equal to rot less than 5% of the gross revenues received
during such fiscal year. Moneys in said account shall be used only for the purposes
above stated or to pay principal or interest when due as required in part 8.02 hereof,
or, if so directed by the Commission, to redeem and prepay or to purchase bonds of srod
authorized issue in the manner and subject to the conditions provided in part 8.04 (a)
and (b) hereof, or to pay the cost of improvements described in part 8.oL~ ( d) hereof;
provided that in theevent that the City shall hereafter issue bonds over and above the
amount authorized herein, for the purpose of financing the construction and installa.
,
tion of improvements of the type described in part 8.04 ( d) , surplus net revenues from
time to time received may be segregated and paid into one or more separate and addit-
ional accounts for the payment of such bonds and interest thereon, in advance of pay-
ments required to be made into the Replacement and Depreciation Account. I
8.04 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
Surpl us Account, and the moneys from time to time in said acc'ount, when not required
to restore a current deficiency in the Revenue Bond Account as provided in part 8.02
hereof, may be used for any of the following purposes and not otherwise:
Ordinance No. 800
44!}
(a) To redeem and prepay bonds payaole from the revenues of the water
system when and as such bonds become prepayable according to their terms; or
(b) To purchase on the open market bonds payable from the revenue of
the water system, at a price to yield the City a net return, based on the
I dollar amount of interest payable to the maturity of each bond so purchased
or to the earliest date upon which such bond is prepayable according to its
terms, which bonds shall be cancelled forthwith upon being so purchased; 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 prepay-
able according to their terms; or
( d) To pay for repairs of public water mains or for connection the~f
to the curb lines of private property abutting thereon, or for water meters
or for the construction and installation of such mains which are not, or the
portion of the cost thereof which is not, legally assessable against such
property, or for improvements or additions to the water supply and treabnent
and storage facilities; or
(e) To restore the Operating Reserve or increase the same when deter-
mined to be necessary by the City Commission.
(f) No moneys shall at any time be transferred from the Surplus Acc-
ount or any other account of the Water Fund to any other fund of the City,
I nor shall such moneys at any time be loaned to other municipal funds or in-
vested in warrants, special improvement bonds or other obligations payable
from such other funds.
: Section 9. . Deposit and Investment of Funds. The Director of Finance shall
cause all moneys pertaining to the Water Fund and the Water System Im~rovement Fund
to be deposited as received with one or more depository banks duly quaiified in acc-
ordance with the provisions of Section 16-2618 of the Revised Codes of Montana 1947,
in a deposit account or accounts which shall be maintained separate and apart from
all other bank accounts of the City of Bozeman, so long as any of the bonds issued
hereunder and the interest thereon shall remain unpaid; and the balance in such acc-
01IDts, except such portion thereofoo shall be guaranteed by federal deposit insurance,
shall at all times be seclwed to its full amount by bonds or securities of the types
set forth in said Section 16-2618. No moneys shall at any time be withdrawn from
said deposit account or accolmts except for the purposes of the Water Fund and Water
System Improvement Fund as defined and authorized in this ordinance; except that
moneys from time to time on hand in said Improvement Fund or in the reserve in the Re-
I venue Bond Account or in the Replacement and Depreciation Account of the Water Fund
may at any time, in the discretion of the City Commission, be invested in securities
which are general obligations of the United States of America, maturing not more than
one year from the date of such investment; and provided further that moneys pertainmg
to the Surplus Account of the We ter Flmd may, in the discretion of the Commission, be
invested in securities which are general obligations of the United States of America
or in general obligation bonds of the City of Bozeman, maturing not more than five
Ordinance No. 800
450
years from the date of such investment. The income received from any such invest-
ments shall be credited to the fund and account from whose moneys the investment
was purchased, and handled and accounted for in the same manner as other moneys in
the t flmd or account.
Section 10. Additional Covenants. The City of Bozeman further covenants I
and agrees with the purchaser and holders from time to time of all bonds of said au-
thorized issue and bonds issued to ref\md the same:
10.01 That it will maintain and hold said system free from all liens
thereon or on the income therefrom other than the liens herein granted or provided
for.
10.02 That it will continue to operate said system as a public utility
and convenience of the City and will not establish or authorize any other system
for supplying service in competition therewith.
10.03 That it will at all times keep said system and the various parts
thereof insured by reputable carriers, in amounts and against all risks for which
like private utility properties in Montana are customarily insured by prudent own-
ers thereof, and will at all times keep persons handling funds of said system ade-
quately bonded for the faithful performance of their duties and to account for and
pay over such moneys to the City, and in the event of loss or default covered by
any such insurance or bond, will use and apply the proceeds thereof to restore the
loss or damage or to pay and redeem bonds issued hereunder. I
10.0!t That no portion of the gross or net revenues at any time derived
from said water system will ever be loaned, invested, used or applied in any man-
ner or for any purpose other than as specifically prescribed and permitted in this
ordinance.
10.05 That it will at all times keep proper and adequate books of acc-
ount showing all receipts and disbursements of moneys derived from the operation of
said system and the bonds issued hereunder, in accordance with the laws of the Sta~
of Montana and the regulations of the Public Service Commission adopted pursuant
thereto, which books shall show the segregation and application of the revenues of
said system, in accordance with the provisions of this ordinance, and s aid books
shall be open to inspection and copying during all reasonable business ho~s by the
holder of $5,000 or more principal amount of the bonds issued hereunder or his agent
or attorneys.
10.06 That it will cause said books to be audited annually by certified
public accountants mutually agreeable to the City and to s aid Kalman & Company, Inc. ,
which audit shall be completed and available for bondholders' examination not later I
than two monthB followin~ the close of each fiscal year, ending June 30, and will on
request, without cost, furnish a copy of the report of each such a udi t to any holder
of $5,000 or more principal amount of bonds issued hereunder. The City will also
cause to be prepared and forwarded to said Kalman & Company, Inc., whose present add-
ress is McKnight Building, Minneapolis 1, Minnesota, not later than the 15th day of
each month a report showing the cash receipts of and expenditures from each of the
Ordinance No. 800
451
several accounts of the Water Fund during the preceding month, and the cash balance on
hand in and the amount of outstanding and unpaid warrants on each of said accounts as
of the last day of such preceding month.
10.07 That the holders of 20~ or more in aggregate principal amount of the
I bonds of the authorized issue and of any bonds issued torefund the same which are at
any time outstanding may, either at law or in equity, by suit, action, mandamus, or
other proceedings, protect and enforce the rights of all owners of such bonds, and en-
force and compel the performance of all covenants and duties of the City and its off-
icials as herein specified, including the fixing and maintaining of sufficient rates,
charges and rentals for the services afforded by the system, the collection and proper
segregation of the re~Tenues, and the proper application thereof.
10.08 That the insurance and fidelity bond premiums and the cost of the
bookkeeping and audits herein provided for and of the billing and collection of the
water rates, charges and rentals shalloo payable from said Operating Account.
10.09 That except as herein expressly authorized, no obligation will be i.n-
curred by the City and made payable from revenues of said system, whether or not such
obligation shall also constitute a general obligation and indebtedness of the City,
unless the lien thereof shall be expressly made s ubordina te to t he lien of the bonds
of said authorized issue on the net income and revenues of said system.
10.10 That the schedules of rates, charges and rentals presently establish-
I ed, as set forth in Section 12 hereof, are calculated, on the basis of the recent h~
tory of water usage and operating costs of the system, to be sufficient to produce
net revenues in each fiscal year in an amount at least equal to 150% of the principal
and interest to become due on the bonds herein authorized; the establishment of such
ratio having been deemed necessary in order to sell said bonds upon terms advantage-
ous to the City, and the maturity schedules set forth in Section 2 hereof having been
devised so as to permit said ratio to be maintained. The excess of the net revenues
over the annual principal and interest and reserve requirements or the bonds may, in
accordance with Section 8 hereof, be used for replacements, renewals and capital im-
provements of utility properties, and for the payment of said bonds in advance of
their maturities. Said bonds may be prepaid according to the ir terms on a nd after
July 1, 1967, and in the estimation of the Commission any excess prior to said date of
net revenues over principal and interest payments actually due and the reserve reqired
to be maintained will be needed to payor to provide reserves for payment of replace-
ment, renewal and improvement costs, in order to provide adequate service for the pre-
sent population and the in,creases thereof reasonably to be expected; and after said
I date any excess not required for such purposes in the judgment of the Commission may
be used to prepay bonds and thereby toreduoe the interest cost thereon to the City and
to the persons served by the water system. Accordingly it is further covenanted and
agreed that said schedules of rates, charges and rentals shall be revised, subject to
the supervision of the Public Service Commission of the State of Montana, whenever a~d
PS often as may be necessitated by any rise in the costs or current operation and main-
Ordinance No. 800
452
tenance of the utility, so that the net revenues derived therefrom in each fiscal
year will be not less than 15010 of the sum of the principal and interest to become
due within such year on all bonds herein authorized; and if at the close of any fis-
cal year, on June 30, the net revenues of such year have not equalled 15010 of such
sum, the City will forthwith prepare a schedule of increased rates, cha rges and ren t- I
als, sufficient to produce net revenues in said amoant, and submit the same to the
Public Service Corrnnission with an adequate rate study and supporting data, so that
such schedule may be placed in effect at the earliest possible date.
Section 11. Regulations for Water Service. The employees of the City's
Water Department shall, Imder the direction and control of the City Manager, issue
the statements and collect the bills for the rates, charges and rentals for water
service and for other moneys currently receivable on account of said system. All
moneys so collected shall be deposited with the Director of Finance daily, and re-
ceipt taken therefore, and shall b e a ccountedfor by said Director of Finance. The
rules and regulations for operation of the Water Department and the use of water
service from said system shall be as provided in the existing ordinances of the City
and ordinance subsequently adopted amendatory thereof or supplemental thereto; pro-
vided that all bills for water service shall become due and payable on the first day
of each month, and if any bill is not paid on or before the 30th day of the month
when due, or upon faillU'e of any customer to comply with said rules and regulations
within ten days after notice of violation thereof, the water service to the premises I
involved shall be discontinued and shall not be resumed until payment of all past
due bills for water service and compliance with all such rules and regul~jtions. The
City Manager shall be bonded for the prompt and full performance of all duties im-
pos.ed upon him and officers and employees of the City under his supervision, wi th re-
ference to the collection of bills and the enforcement of compliance with regulations
of the water system, and faillU'e on the part of any such officer or employee to per-
form such duties shall cons ti tute malfeasance for which he shall be personally liable.
See tion 12. Water Rates and Charges. Until otherwise prescribed by ordin-
ance, the rates, charges and rentals for the services and facilities provided by the
water system shall be t"lose filed by the City wi th the Public Service Commission of
the State of Montana pursuant to said Gommission's Order No. 26h7, Docket No. 4493,
dated April 1, 1957. Water meters shall be installed and maintained in all public
buildings owned by the City of Bozeman and all other public corporations and polit-
ical subdivisions, and the water service to each such public building shall be billed
to the public corporation concerned at the same rates as those applicable to private
patrons of the water system. The Ci ty of Bozeman shall also pay the sum of $1.00 per I
month in respect of each water hydrant now or hereafter maintained by it, such sum
being found and determined to represent the reasonable cost and value of water ser-
vice to be flU'nlshed and made available to the City for purposes of sa.ni tat ion and
maintenance of streets, parks and public places and for fire protection. All amounts
to become due in respect of service furnished and available to the City shall be in-
Ordinance No. 800
453
cluded in the annua.lbudget and shall be paid as the service accrues out of the City's
general funds. Amounts so received from the City and from all other public corporatimm
shall be handled and accounted for in the same manner as other revenues of said water
system.
I Section 13. Repeals. All provisions of ordinances, resolutions and other a-
ctions and proceedings of the City and of the City Commission which are in any way in-
consistent with the terms and provisions of this ordlnance are hereby repealed, amended
and rescinded to the full extent necessary to give full force and effect to the provis-
ions of this ordinance.
Section 14. Effective Date. This ordinance shall be in full force and eff-
ect thirty days from and after its final passage according to law.
Passed by the City Commission and approved by the Mayor of the City of
Bo zeman, Montana, this 2nd day of August, 1957.
,l.pproved: ~( p~,
~. -~ Mayor '-
Attest:
. :' ~ ;::: v.... &r .... .....-.......
~ Clerk of the Commission
State of Montana )
) S8
I County of Gallatin )
I, L. G. Shadoan. Clerk of the Commission of the City of Bozeman. do hereby certify that the
foregoing Ordinance No. 600 was published by title and. number in the Bozeman Daily Chronicle. a
newsppper of general circulation printed and published in said city in the issue of August 8th,
1967, and that due proof of such publication is on file in my office.
IN WITNESS WHE:REOF I hereunto set my hand and affix the corporate seal of my office this
9th day of August, 1967.
~~
c: r of e Conunission
I
Ordinance No. 800