Loading...
HomeMy WebLinkAboutOrdinance 69- 887, Sewer improvement bonds. 158 ORDINANCE NO. 887 AN ORDINANCE DIRECTING THE UNDERTAKING OF AN IMPROVEMENT OF THE SEWERAGE SYSTEM OF THE CITY OF BOZEMAN, CREATING SPECIAL FUNDS AND ACCOUNTS FOR THE ADMINISTRATION OF MONEYS DERIVED FROM THE OPERATION OF SAID SYSTEM, AUTH- ORIZING AND DIRECTING THE ISSUANCE OF REVENUE BONDS TO PAY THE COST OF SAID 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: I Section 1. Findings. It is hereby found, determined and declared that the City of Bozeman has been and is now duly authorized by the provisions of Title 11, Chapter 24, Revised Codes of Montana 1947, as amendeq and by an election held September 10, 1968, at which such authorization was approved by a vote of 1,008 ballots cast in favor thereof and 434 against the same, and by other proceedings heretofore duly taken thereunder, to finance the reconstruction, improvement, betterment and extension of its sewerage system; to prescribe and collect just and equitable rates, charges and rentals for connections with the system and for services, facilities and commodities directly or indirectly furnished thereby; to issue the City's revenue bonds in the aggregate princi- pal amount of $1,400,000 to pay the cost of such undertaking, and to pledge and appropriate to the payment of the bonds the net revenues to be derived from the operation of the sewerage system, including improvements, betterments or extensions thereof hereafter constructed or acquired; that such rates, charges and rentals will be sufficient during the useful live ~f said improvement and the term of the bonds herein authorized to produce net revenues more than adequate_to pay the princi- pal and interest due on such bonds and to create and maintain reasonable reserves therefor as pre- scribed; that there are no obligations of the City presently outstanding having a lien on such net revenues of said system; that the City has approved plans and specifications prepared by its engineer for said undertaking, which are now on file in the office of the Clerk; and that it is necessary and expedient at this time to issue and sell revenue bonds pursuant to such authorization in the amount of $1,400,000, for the purpose of paying costs of construction of the undertaking necessarily in- curred and to be incurred by the City. Section 2. Terms of Bonds. For the purpose and pursuant to the authority described above, the I City shall forthwith issue its negotiable coupon bonds to be designated as Sewerage System Revenue Bonds, in the aggregate prinicipal amount of $l,400,OOO. The bonds shall be dated as of July 1, 1969, and shall be 280 in number and numbered from 1 through 280, each in the denomination of $5,000. The bonds shall mature in order of serial numbers on July 1 in the years and amounts set forth below, and bonds maturing in such years and amounts shall bear interest from date of issue until paid or duly called for redemption at the annual rate set forth opposite such maturity years and amounts, respectively: Year Amount Rate Year Amoun t Rate 1970 1971 1972 1973 1974 1975 $35,000 40,000 50,000 50,000 50,000 50,000 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 1976 1977 1978 1979 1980 $50,000 50,000 50,000 75,000 900,000 6.00% 6.00% 6.00% 6.00% 6.00% Interest on the bonds shall be payable on January 1, 1970, and semiannually thereafter on each July 1 and January 1. Bonds maturing in the years 1970 through 1976 shall be payable on their respective stated maturity dates without option of prior payment, but those having stated maturity dates in the years 1977 through 1980 shall each be subject to redemption andprepayment at the option of the City on July 1, 1976, and any interest payment date thereafter in inverse order of their serial numbers at par and accrued interest plus a premium of 2% of par value if so redeemed before January 1, 1979, or a premium of 1% of par value if so redeemed on January 1 or July 1, 1979, or a premium of 1/2 of 1% of par value if redeemed on January l, 1980, provided that no less than thirty days before the I date specified for redemption of any bond, notice of the call thereof shall be mailed by the Director of Finance, by registered mail, to the holder, if known, and to the initial purchaser of the bonds, and to Dain, Kalman & Quail, Inc., Minneapolis, Minnesota, and to the bank at which principal and in- terest are payable, and shall also be published in one issue of a newspaper at Bozeman, Montana, and in one issue of a daily financial newspaper published in New York City. The Director of Finance is directed to maintain a record of the names and addresses of the holders of prepayable bonds of the issue, so far as such information is made available to him, for the purpose of mailing such notices. The principal of and interest on the bonds shall be payable at Harris trust & Savings Bank, in Chicago, Ordinance No. 887 I I I Illinois, or, at the option of the holder, at the First National Bank of Minneapolis, in Minneapolis, Minnesota, 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 City shall pay, as an operating cost of said system, the reasonable and customary charges of the paying agents for the receipt and disburse- ment of such moneys. Section 3. Form of Bonds. The bonds herein authorized and the interest coupons appurtenant thereto shall be in substantially the following form: UNITED STATES OF AMERICAN STATE OF MONTANA COUNTY OF GALLATIN CITY OF BOZEMAN SEWERAGE SYSTEM REVENUE BONDS No . $ 5 , 000 KNOW ALL MEN BY THESE PRESENTS THAT THE CITY OF BOZEMAN, a duly organized municipal corporation of Gallatin County, Montana, for value received promises to pay to bearer, solely out of the Revenue Bond Account of its Sewerage System Fund, the sum of Five Thousand Dollars on the 1st day of July. 19 ,or if this bond is prepayable as stated below, on a date prior thereto on which it shall have been duly called for redemption, and to pay interest thereon out of that 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 basic rate of per cent ( %) per annum, payable semiannually on the 1st day of January and the 1st day of July of each year, interest to maturity being represented by and payable in accordance with and upon presentation and surrender of the interest coupons appurt- enant hereto. Both principal and interest are payable at the Harris Trust and Savings Bank, in Chicago, Illinois, or, at the option of the holder, at the First National Bank of Minneapolis, in Minneapolis, Minnesota, in any coin or currency of the United States of America which on the respect- ive dates of payment is legal tender for public and private debts. This bond is one of an issue in the total principal amount of $1,400,000 all of like date and tenor except as to serial number, interest rate, maturity date and redemption privilege, issued pursuant to authorization by the requisite majority of the qualified electors of the City at a special election duly called and held, for the purpose of providing money to finance the improvement of its municipal sewerage system, and pursuant 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 11-24. revised Codes of Montana 1947, as amended, and Ordinance No. 887 of the Cit~ Duly enacted on October 1, 1969. Bonds of this issue maturing in the years 1970 through 1976, inclusive, are payable at their respective stated maturity dates without option of prior payment, but bonds having stated maturity dates in the years 1977 through 1980, inclusive, are each subject to redemption and prepayment at the option of the City and in inverse order of their serial numbers, on July 1, 1976, and any interest payment date thereafter at par and accrued interest plus a premium of 2% of par value if so redeemed before January 1, 1979, or a premium of 1% of par value if so redeemed on January 1 or July 1, 1979, or a premium of 1/2 of 1% of par value if redeemed on January l, 1980. Not less than thirty days in advance of the date fixed for prepayment and redemption of any bond, the City will mail notice of the call thereofm 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 newspaper and in a New York City daily financial newspaper. Holders of prepayable bonds if this issue may register their names, addresses and the serial numbers of their bonds with the Director of Finance for the purpose of receiving such 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 mentioned, has fixed and established and will collect reasonable rates and charges for the services and facilities afforded by the muni- cipal sewerage system, and has created a special Sewerage System Fund into which the gross revenues of the system, including all additions thereto and replacements and improvements thereof, will be paid, and a separate and special Revenue Bond Account in that fund, into which account there shall be credited each month, out of the ne~ revenues of the system then on hand, an amount equal to at least one-twelfth of the amount of principal and interest payable therefrom in the next succeeding twelve months, and into which account there shall also be credited monthly out of the remaining net revenues, such additional amounts as may be necessary to accumulate therein by June 30, 1972, a reserve, which reserve shall thereafter be maintained by the transfer of additional net revenues ORDINANCE NO. 887 159 160 whenever necessary, in a sum equal to the maximum amount of prinicipal and interest to fall due within any subsequent calendar year other~ the year 1980 on all such bonds; that the Revenue Bond Account will be used only to pay the principal of an interest on bonds issued pursuant to the authority here- in recited, as such principal and interest respectively become due; that such rates and charges will from time to time be made and kept sufficient to provide gross income and revenues adequate for prompt payment of the reasonable and current expenses of operation and maintenance of the sewerage system and to produce in each fiscal year commencing after June 30, 1970, net revenues, in excess of such current expenses, equal to 130% of the maximum amount of principal and interest payable from the Revenue Bond Account in any subsequent calendar year other than the year 1980; that the payments re- quired to be made to the Revenue Bond Account constitute a first and prior lien and charge on the entire net income and revenues to be derived from the operation of such system and of all future addi- tions thereto and betterments thereof; that except as expressly authorized in Ordinance No. 887, no other obligation will be incurred and made payable from the net revenues of the municipal sewerage 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 subordinate to the lien of the bonds of this issue on such net revenues; that all provisions for the security of the holder of this bond set forth in Ordinance No. 887 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 of the City of Bozeman 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 the issuance of this bond does not cause the indebtedness, whether general or special, of the City to exceed any constitutionaly or statutory limitation of indebtedness. IN WITNESS WHEREOF the City of Bozeman, Gallatin County, Montana, by its City Commission, has caused this bond to be executed in its behalf by the signature of the Mayor and the printed facsimile signature of the Director of Finance, countersigned by the printed facsimile signature of the Clerk of the Commission, and sealed with the corporate seal of the City, has caused the appurtenant interest coupons and the certificate appearing on the reverse side hereof to be executed and authenticated by the facsimile signatures of said officers, and has caused this bond to be dated as of July 1, 1969. Countersigned: Clerk of the Commission (Facsimile Seal) Signed by: R. Harry Morrow Mayor (Facsimile signature) (Form of Coupon) No. $ On the first day of January (July), 19 will pay to bearer at the Harris Trust option of the holder at Account in its Sewerage System Fund, the States of America for interest then due 1969, No. (Facsimile signature) Clerk of the Commission , the City and Savings , in amount on its of Bozeman, Gallatin County, Montana, Bank, in Chicago, Illinois, or, at the , , out of the Revenue Bond shown hereon in lawful money of the United Sewerage System Revenue Bond, dated July 1, (Facsimile signature) Director of Finance (Facsimile signature) Mayor Section 4. Execution of Bonds. The bonds shall be forthwith prepared for execution under the direction of the Clerk and the bond purchaser, and when so prepared shall be executed on behalf of the City by the printed facsimiles of the signatures of the Mayor and City Treasurer and countersigned by the manual signature of the Clerk, and the interest coupons appurtenant thereto shall be executed and authenticated by the printed, engraved or lighographed facsimile signatures of such officers. A facsimile of the official seal of the City shall also be printed on each bond. On the reverse side of each bond will be printed a copy of the approving opinion to be rendered by bond counsel, certified by the facsimile signatures of said officers. The printed bonds shall be delivered to the Director of Finance, and after registering the bonds in the manner specified in Section 11-2318, Revised Codes of Montana, 1947, the Director of Finance shall cause them to be delivered to the purchasers thereof, upon payment of the purchase price as specified in the contract of sale heretofore made and executed, which contract is hereby approved, ratified and confirmed, and the purchasers shall not be obligated to see to the application of the purchase price. Section 5. Sewerage System Improvement Fund. The premium, if any, and accrued interest from date of issue to date of delivery of the bonds herein authorized shall be credited to the Revenue Bond Account of the Sewerage System Fund hereinafter created. The par value of the bonds herein authorized ORDINANCE NO. 887 I I I I I I 161 shall be credited and paid into a special fund which is hereby created and shall be maintained by the Clerk and Director of Finances upon the books of the City, separate from all of its other funds, designated as the Sewerage System Improvement Fund, and shall be deposited and secured as provided in Section 9 hereof. From this fund there shall be paid as incurred all such items as constitute, in accordance with sound accounting practices, proper costs of the undertaking described in Section 1, as provided in the plans and specifications therefor; including, but without limitation, all engineer- ing, inspection, fiscal and legal expenses, the cost of lands and easements, the reimbursement of any advances heretofore made by the City, and all other expenses heretofore incurred and to be incurred in connection with the financing and construction of such undertaking. All other moneys granted to or appropriated by the City for the undertaking shall likewise be credited to this fund. The moneys in the fund shall be used only for the purposes above set forth, except that if any moneys shall remain after the completion of the undertaking and after payment of all costs thereof, such remaining moneys shall be transferred to the Sewerage System Fund referred to below. Section 6. Priority of Bond Payments; issuance of Additional Authorized Bonds. Each and all of the bonds herein authorized shall be equally and ratably secured by and payable out of the net revenues of the municipal sewerage system 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 Sewerage System Fund as defined in Section 8 hereof are insufficient to pay principal and interest to become due in the following month on all such bonds, any and all moneys then on hand shall be first used to pay the interest accrued and to accrue on all outstanding bonds to their next succeeding interest payment dates, respectively, and the balance shall be applied toward payment of the maturing principal of such bonds in order of their maturities, the earliest maturing bonds to be paid first, and pro rata in payment of bonds maturing on the same date. Section 7. Refunding Revenue Bonds. The City reserves the right and privilege of refunding any matured bonds for the payment of which revenues are not available within the limitations prescribed in Section 6, by the issuance and sale of refunding revenue bonds, which may be made payable from net revenues on a parity as to interest with all bonds herein authorized and then outstanding, provided, of each such refunding revenue bond is subsequent to the last maturity that the maturity/of the then outstanding bonds herein authorized which are not so refunded. No holder of any bond herein authorized shall be required to accept a refunding revenue bond in exchange therefor. Section 8. Sewerage System Fund. 8.0l Revenue Appropriated. The City irrevocably covenants with the holders of each and all of the bonds herein authorized that until the bonds are fully paid and discharged as provided in Section 11, all of the gross revenues derived from the operation of its sewerage 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. Such gross revenues are hereby defined to include all income and re- ceipts derived from rates, charges and rentals imposed for the availability of and connections with and for the use of such system, including all additions thereto and betterments and replacements there- of originally or subsequently constructed or acquired, or for the benefits provided by the facilities of the system, or from sales of property acquired in connection therewith, and all penalties and interest on such rates, charges and rentals, but shall not include any special assessments levied for the construction of sewer mains or other improvements. All gross revenues shall be paid daily, as received by the City, into the municipal Sewerage System Fund, which fund shall at all times be segregated and maintained by the Director of Finance on the books of the City as a separate and spec- ial fund. This fund shall be subdivided into the separate accounts described below, and the gross revenues received in the fund shall be apportioned once in each calendar month, which apportionment is hereinafter referred to as the "periodic apportionment". The gross revenues received in the fund shall be credited to the respective accounts and accounted for therein and expended therefrom as follows: 8.02 operating Account. On each periodic apportionment there shall first be set aside and credited to the Operating Account, as a first charge on the gross 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 periodic apportionment. The term "operating Expenses" shall mean the current expenses, paid or accrued, of operation, maintenance and current repair of the sewerage system and its facilities, as calculated in accordance with sound accounting practice, and shall include, without limitation, administrative expenses of the City relating solely to the sewerage 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 in accordance with sound accounting ORDINANCE NO. 887 162 practices. Such expenses shall not include any allowance for depreciation or renewals or replace- ments of capital assets of the system 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 reasonable compensa- tion for the performance of duties necessary to the operation of the sewerage system. There shall also be credited to this account all additional sums collected since the last periodic apportionment, until there has been accumulated therein an Operating Reserve in the amount of $5,000, which sum shall be maintained by additional transfers upon each periodic 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. Moneys in the Operating Account shall be used solely for the payment of current operating expenses of the sewerage system as herein defined. 8.03 Revenue Bond Account. The net revenues of the municipal sewerage system, as referred to in this ordinance, are hereby defined to include the entire amount of such gross revenues remaining upon each such periodic apportionment, after crediting to the Operating Account the amount required in part 8.02, hereof, including sums required to create and maintain the Operating Reserve at the minimum amount therein stated. Upon each periodic 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 one-twelfth of the total sum of the principal and interest to become due within the then next succeeding twelve months on all bonds of the issue herein authorized and on all bonds refunding the same. Immediately upon delivery of the bonds herein authorized there shall be credited to the Revenue Bond Account as and for a part of the reserve balance which is hereby required to be accumulated therein the sum of $20,000 from amounts on hand in funds of the City and available for this purpose. Upon each periodic apport- ionment thereafter there shall also be credited to the Revenue Bond Account such additional sum as may be necessary in the judgement of the Council to establish in that account by June 30, 1972, a reserve, which shall thereafter be maintained by the transfer of additional net revenues whenever necessary, in an amount at all times equal at least to the maximum amount of principal and interest to fall due on all such bonds within any subsequent calender year other than the year 1980; ~ least one-third of the amount required by this provision to be accumulated as a reserve (the differnce between the maximum reserve balance herein required and the $20,000 initially credited for that pur- pose) shall be credited to the Revenue Bond Account in each of the fiscal years 1970, 1971 and 1972. Moneys from time to time held in the Revenue Bond Account shall be disbursed only to meet payments of principal and interest on such bonds as such payments become due, and the reserve therein shall be used only to pay maturing principal and interest when other moneys within the account are in- sufficient therefor; provided, that if in any periodic apportionment there is apportioned to such reserve an amount in excess of the amount required to be apportioned, that excess may be credited against the amount required in a subsequent apportionment or may be transferred by resolution of the Commission to any other account in the Sewerage System Fund, and if the maximum amount of principal and interest to fall due on all outstanding bonds within any subsequent calendar year is less than the amount accumulated and on hand in such reserve, such excess may likewise be transferred by re- solution of the Commission to any other account in the Sewerage System Fund; provided further, that on any date when all outstanding bonds are due or prepayab1e by their terms, if the amount then on hand in the Revenue Bond Account, including the reserve, is sufficient 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 moneys in the Revenue Bond Account are temporarily insufficient therefor, m. such payment shall be advanced out of any net revenues there~ore segregated and then on hand in the Replacement and Depreciation Account or the Surplus Account. 8.04 Replacement and Depreciation Account. There shall next be set aside and credited, upon each periodic apportionment, to the Replacement and Depreciation Account such portion of the net re- venues of the system, in excess of the current requirements of the Revenue Bond Account (which portion of the net revenues is referred to herein as "surplus net revenues"), as the Commission shall deter- mine to be required for the accumulation of a reasonable allowance for depreciation of the system and for replacement or renewal of worn out or obsolete properties comprised therein. Meneys in this account shall be used only for the purposes above slated or, if so directed by the Commission, to re- deem revenue bonds which are prepayable according to their terms, or to pay principal or interest then due thereon as required in Section 8.03 hereof; provided, that in the event that the City shall hereafter issue bonds over and above the amount heretofore authorized, for the prupose of financing the construction and installation of additional improvements or additions to the sewerage system, sur- ORDINANCE NO. 887 I I I I I I 163 plus net revenues from time to time received may be segregated and paid into one or more separate and additional accounts for the payment of such bonds and interest thereon, in advance of payments required to be made into the Replacement and Depreciation Account. 8.05 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 moneys from time to time in that account, when not required to restore a current deficiency in the Revenue Bond Account as provided in Section 8.03 hereof, may be used for any of the following purposes and not otherwise. (a) To redeem and prepay bonds payable from the net revenues when and as such and as such bonds become prepayable according to thetr terms; or (b) To purchase such bonds on the open market (whether or not such bonds or other such bonds may then be prepayable according to their terms), which bonds shall be can- celed forthwith upon being so purchase~ 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 their terms; or (d) To pay for repairs of or for the construction and installation of improve- ments or additions to the sewerage system; or (e) To restore the Operating Reserve or increase the same when determined to be necessary by the City Commission. No moneys shall at any time be transferred from the Surplus Account or any other account of the Sewer- age System 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 9. Section 9. Deposit and Investment of Funds. The Director of Finances shall cause all moneys pertaining to the Sewerage System Fund and the Sewerage System Improvement Fund to be deposited as received with one or more depository banks duly qualified in accordance with the provisions of Section 16-2618 of the Revised Codes of MOntana 1947, as amended, in a deposit account or accounts which shall be maintained separate and apart from all other bank accounts of the City, so long as any of the bonds issued hereunder and the interest thereon shall remain unpaid; and the balance in such accounts ex- cept 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 Section 16-2618. No moneys shall at any time be withdrawn from such deposit accounts except for the purposes of the Sewer- age System Fund and the Sewerage System Improvement Fund as defined and authorized in this ordinance, except that moneys from time to time on hand in either of these funds, in excess of amounts required to be paid from such fund, may in the discretion of the City Commission, be invested in securities which are general obligations of the United States of ~erica, maturing not later than the date on which it is anticipated such moneys will be needed in such fund. The income received from any such investments 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 that fund or account. Section 10. Additional Covenants. The City of Bozeman further covenants and agrees with the purchaser or holders from time to time of all of the bonds herein authorized and referred to until the bonds are fully paid and discharged as provided in Section 11: 10.01 That it will maintain and holdthe municipal sewerage 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 that 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 the system and the various parts thereof insured by reputable carriers, in amounts and against all risks for which like properties are customarily insured by prudent owners thereof, and will at all times keep persons handling funds of the system adequately 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 damage covered by any such insurance or bond, will use and apply the pro- ceeds thereof to restore the loss or damage or to pay and redeem bonds payable from the Revenue Bond account. 10.04 That no portion of the gross or net revenues at any time derived from the sewerage system will ever be loaned, invested, used or applied in any manner or for any purpose other than as speci- fically prescribed and permitted in this ordinance. 10.05 That it will at all times keep proper and adequate books of account showing all receipts and disbursements of moneys derived from the operation of the system and the bonds issued hereunder, in accordance with the laws of the State of Montana, which books shall show the segregation and application of the revenues of the system in accordance with the provisions of this ordinance, and ORDINANCE NO. 887 164 such books shall be open to inspection and copying during all reasonable business hours by the holder of bonds issued hereunder or his agent or attorneys. 10.06 That it will cause such books to be maintained on the basis of a fiscal year commencing July 1 and ending June 30 and to be audited annually on or before August 15 following the close of each fiscal year, by certified public accountants. mutually agreeable to the City and to Dain, Kal- man & Quail, Inc., of Minneapolis, Minnesota, and will on request, without cost, furnish a copy of the report of any such audit to any holder of bonds issued hereunder. The report of audit, in addi- tion to whatever matters may be though proper by the certified public accountant shall include the following: (a) A statement in detail of the income and expenditures of the sewerage system for the fiscal year, separating and identifying capital expenditures from operating expenditures. (b) A balance sheet as of the end of the fiscal year. (c) A determination that the audit shows full compliance by the City with the provisions of this ordinance during the year covered thereby, including proper segre- gation of capital expenditures from operating expenses, maintenance of the required balance in the Revenue Bond Account, and receipt of net revenues (for each fiscal year commencing after June 30, 1970) at least equal to 130% of the maximum amount of principal and interest payable in any subsequent calendar year other than the year 1980 from the Revenue Bond Account; or, if the audit should reveal that the revenues have been insufficient for compliance with this ordinance, or that the methods used in accounting for such revenues were contrary to any provision of this ordinance, the report of audit shall include a full explanation thereof, together with the account- ant's recommendation for such change in rates or accounting practices or in the op- eration of the system as may be required. (d) 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 bonds. (e) The number of premises connected to the sewerage system at the end of the year. The City will also cause to be prepared and forwarded to Dain, Kalman & Quail, Inc., not later than the 15th day of each month a report showing the cash receipts of and expenditures from each of the several accounts of the Sewerage System Fund during the preceeding month, and the cash balance on hand in and the amount of unpaid warrants outstanding against each of such 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 bonds which are at any time outstanding and payable from the Revenue Bond Account ma% 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 enforce and compel the performance of all covenants and duties of the City and its officials 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 revenues, 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 sewerage rates, charges and rentals shall be payable from the Operating Account. 10.09 That except as herein expressly authorized, no obligation will be incurred by the City and made payable from revenues of the municipal sewerage system whether or not such obligation shall also constitute a general obligation and indebtedness of the City, unless the lien therof shall be expressly made subordinate to the lien of the bonds herein authorized. 10.10 That while the bonds herein authorized or any bonds refunding them are outstanding and unpaid, the rates for all services furnished and made available by the sewerage system to the City and to 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 it, and the amounts necessary for the payment of all bonds and the accruing interest thereon, and the proper and necessary allowances for the depreciation of the system, and no free service shall be provided to any person or corporation. The rates and charges to be initially charged against all recipients of sewer service, as described in Section 12 hereof, are calculated, on the basis of anticipated usage, to be sufficient to produce in each fiscal year commencing after June 30. 1970 net revenues available for the Revenue Bond Account in an amount at least equal to 130% of the maximum amount of principal and interest to become due in any subsequent calendar year on the bonds herein authorized, the establishment of such ratio having been deemed necessary in order to ORDINANCE NO. 887 I I I I I I sell the bonds upon the terms most advantageous to the City. The excess of the net revenues over the annual principal and interest and reserve requirements of the bonds may, in accordance with Section 8 hereof, be used for replacements, renewals and capital improvements of utility property, and for the payment of the bonds in advance of their maturities. The bonds may be prepaid according to their terms on and after July 1, 1976, and in the estimation of the Commission any excess, prior to that date, of net revenues over principal and interest payments actually due and the reserve re- quired to be maintained therefor, will be needed to payor to provide reserves for payment of replace- ments, renewal and improvement costs, in order to provide adequate service for the present population and the increase thereof 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 to reduce the interest cost thereon to the City and to the persons served by the sewerage system. Accordingly, it is covenanted and agreed that such rates, charges and rentals shall be maintained, and shall be re- vised whenever and as often as may be necessary, according to schedules such that the gross revenues will be at least sufficient to pay the current expenses of operation and maintenance as herein defined and to maintain the operating reserve herein established and to produce net revenues fulfilling each of the following conditions: 10.lOl That the net revenues received during any fiscal year starting after June 30, 1970, shall be not less than 130% of the maximum amount of principal and interest payable from the Revenue Bond Account during any subsequent calendar year other than the year 1980. 10.102 That if at the close of each fiscal year the net revenues actually received during such year have been less than required in part 10.101 hereof, the City will forthwith prepare and place in operation a schedule of altered rates, charges and rentals which are just and equitable and suffi- cient to produce net revenues in such amount. 10.103 That the minimum net revenues required for compliance with part 10.101 hereof, based on the initial principal and interest requirements of the bonds herein authorized, and subject to re- demption in the event some of the bonds are redeemed in accordance with their terms, shall be as fol- lows: Fiscal Year Ending June 30 1971 1972 1973 1974 1975 1976 1977 1978 Net Revenues Required $175,550 175,550 l75,550 175,550 175,550 175,550 175,550 175,550 10.11 That the Director of Finance shall be charged with the responsibility for the proper billings, collection and application of all charges due for service rendered and made available by the system, and for the discontinuance of service in case of nonpayment of charges or noncompliance with regulations; and 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, and with the City's other regulations respecting the sewerage system, shall constitute malfeasance for which the Director of Finance and the surety on his bond shall be liable. In the event of default on the part of the City in the payment of principal of or interest on any bond promptly as each falls due, or in the keeping of any covenants herein contained, and if such default shall continue for a period of sixty days the Commission will appoint a special superintendent for the system, with the power and responsibility to operate the system for the City of Bozeman, and to re- commend to the Commission such revisions of the rates and charges and operating policies as may be necessary to comply with this ordinance, and to assure that the net revenues will be sufficient to pay all bond principal and interest, and he shall in all things so operate the system as to fully comply with all the requirements and provisions of this ordinance. The right of the holders of the bonds to require employment of such a superintendent shall not be exclusive, and in the event of defaultas herein outlined, such holder or holders shall have the right to proceed at law or in equity to require the performance of the covenants herein contained, in any form of action which shall to them seem appropriate. 10.12 That employees collecting bills or handling other funds of the sewerage system shall de- posit such funds in the bank daily, except that funds in an amount less than $500 may beheld in the City Safe until $500 is accumulated, at which time the entire balance shall be deposited, and dup1i- Ordinance No. 887 165 166 cate deposit receipts shall be filed with the Director of Finance and the Clerk of the Commission. 10.13 That the rules and regulations for operation of the Sewer Department and the use of Sewer service from the system shall be as provided in the existing ordinances of the City, and any ordi- provided, nances subsequently adopted amendatory thereof or supplemental thereto;/that all bills for sewer service shall be made a part of the statements, if any, for water service to the same premises, and no payment of water or sewerage charges so billed shall be accepted without payment of both of said items. 10.14 That the charges will be billed at least once in each calendar month, and if the bill is not paid within 45 days after the due date, or if the customer fails to comply with all rules and regulations established for the sewerage system within 60 days after notice of violation thereof (which notice shall be given promptly upon discovery of any such violation), the water service to the premises involved shall be discontinued and shall not be resumed until payment of all past-due bills for sewer service and compliance with all such rules and regulations. Section ll. Defeasance. When all of the bonds herein authorized and all coupons appertaining thereto have been paid and discharged as provided in this section, all pledges, covenants and other rights granted by this ordinance shall cease. ll.Ol The City may pay and discharge all bonds and coupons due on any date by depositing with the paying agent or any successor paying agent onor before that date a sum sufficient for the payment thereof in full; and if any bond or coupon should not be paid when due, the same may nevertheless be paid and discharged by depositing with the paying agent, or any successor paying agent, a sum suffi- cient for the payment thereof in full with interest accrued from the due date to the date of such deposit. 11.02 The City may pay and discharge all prepayable bonds called for redemption on any date or any successor paying agent when they are prepayable according to their terms, by depositing with the paying agent/on or before that date a sum sufficient for the payment thereof in full, provided that notice of the redemption thereof has been duly given as provided in Section 2. 11.03 The City may pay and discharge at any time all of the bonds herein authorized by irrevocably depositing in escrow with the paying agent or any successor paying agent a sum of cash and securities in such aggregate face amount, bearing interest at such rates and maturing or callable at the option of the holder on such dates as shall be required to provide funds sufficient to pay all principal and interest due on such bonds to their stated maturity dates or to an earlier date upon which they are prepayable according to their terms, provided, that notice of the redemption of the prepayable bonds has been duly given as required by Section 2. The securities to be so deposited shall be limited to general obligations of the United States, securities whose principal and interest payments are guaranteed by the United States, and securities issued by the following United States government agencies: Banks for cooperatives, Federal Home Loan Banks, Federal Intermediate Credit Banks, Federal Land Banks, and the Federal National Mortgage Association. 11.04 Any moneys or securities which at any time shall be deposited by or on behalf of the City with the paying agent or any successor paying agent for the purpose of paying and discharging any bonds or coupons shall be held by such paying agent in trust for the respective holders of such bonds or coupons arid are he'reby irrevocably appropriated to such payment and discharge. Section l2. Rates and Charges; Until modified in accordance with law the rates, charges and rentals to be imposed and collected for sewer service rendered and made available by the system, and for connections thereto from and after September l, 1969, shall be those prescribed by Ordinance No. 884, adopted July 23, 1969. Section 13. Repeals. Allprovisions of ordinances, resolutions and other actions and proceedings of the City and of the City Commission which are in any way inconsistent with the terms and provisions of this ordinance are hereby repealed, amended and rescinded to the full extent necessary to give full force and effect to the provisions of this ordinance. Section 14. Effective Date. This ordinance shall be in full force and effect from and after its final passage and approval according to law. Passed by the City Commission and approved by the Mayor of the City of Bozeman, Montana, this 1st day of October, 1969. Approved: Mayor ATTEST: / Clerk of th ORDINANCE NO. 887 I I I .~- t~ 167 I State of Montana ) County of Gallatin City of Bozeman ) I, Erna V. Harding, Clerk of the Commission of the City of Bozeman, do hereby certify that the foregoing Ordinance No. 887 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 of the 7th day of October, 1969, and due proof of such publication is on file in my office. IN WITNESS WHEREOF I hereunto set my hand and affix the corporate seal of my office this 21st day of November, 1969. I I ORDINANCE NO. 887