80-07 Water Bond
ORDINANCE NO. 80-7
AN ORDINANCE PROVIDING FOR THE ISSUANCE AND SALE OF A SODAVILLE, OREGON GENERAL OBLIGATION WATER BOND IN THE PRINCIPAL SUM OF $104,000.00 TO FARMERS HOME ADMINISTRATION FOR THE PURPOSE OF PROVIDING A PORTION OF THE COSTS OF ACQUISITION AND CONSTRUCTION OF A WATER SYSTEM WITHIN THE BOUNDARIES OF THE CITY OF SODAVILLE, OREGON: PROVIDING FOR THE FORM AND TERMS OF SAID BOND, AUTHORIZING THE PAYMENT OF SAME, AND DECLARING AN EMERGENCY.
WHEREAS, the City Council of the City of Sodaville, Oregon, has been duly authorized by a majority vote at a special election held September 18, 1979, to issue Water Bonds in an amount not to exceed the sum of $129,000.00, in excess of any existing bond issue, for the construction of a municipal water system within and without the City of Sodaville, Oregon hereinafter called "Facility", and,
WHEREAS, said bond authorization was duly published, advertising the sale of said bonds and there were no bids received for the purchase of said bonds at the time designated for the receipt of such bids; and concurrently therewith and subsequent thereto the City has commenced negotiates with the Farmers Home Administration of the United States Department of Agriculture, hereinafter called "Government", for financial assistance to construct said Facility, and,
WHEREAS, said Farmers Home Administration has indicated a desire to consider said financial assistance and as a result, it is necessary to cause the execution and delivery of installment bonds or other evidence of indebtedness to secure any loan or loans made, or insured, by the Government and to comply with any requirements, terms, and conditions prescribed by the Government or by Government regulations and to execute contracts or enter into agreements and to take any and all other action as may be necessary, incidental or appropriate to finance, construct, complete, equip, or extend the facility for and on behalf of the City, now therefore,
THE CITY OF SODAVILLE, OREGON, ORDAINS AS FOLLOWS:
Section 1. (Determination of Council).
It is necessary to defray a portion of the costs of constructing and equipping the Facility by obtaining a loan made by the Government in accordance with the applicable provisions of the Rural Development Act of 1972, it being determined by the Government that the City is unable to obtain sufficient credit elsewhere to finance the Facility taking into consideration prevailing private and cooperative rates and terms concurrently available.
Section 2. (Terms of Loan).
That the City borrow $104,000.00 and issue as evident thereof a General Obligation Water Bond for the full principal amount of the loan. The bond shall be dated with the date of delivery thereof, and shall be in the principal installment as follows:
PROPOSED ISSUE AND DELIVERY DATE
July 15, 1980
PRINCIPAL AMOUNT
$104,000.00
The bond hereby authorized shall be in substantially the following form:
UNITED STATES OF AMERICA
STATE OF OREGON
COUNTY OF LINN
CITY OF SODAVILLE, OREGON
GENERAL OBLIGATION INSTALLMENT WATER BOND NO. 1
KNOW ALL MEN BY THESE PRESENTS: The City of Sodaville, Linn County, Oregon hereinafter called the "Borrower", hereby acknowledges itself indebted and for value received, promises to pay to the order of the United States of America, acting through the Farmers Home Administration, United States Department of Agriculture, hereinafter called the "Government", the principal sum of $104,000, plus interest on the unpaid principal balance at the rate of 5% per annum. The said principal and interest shall be payable in the following installments on or before the following dates:
Interest only on the 15th day of July, 1981 and the 15th day of July, 1982, and the sum of $6,166.00 annually thereafter on the 15th day of July until the principal and interest are fully paid, except that the final installment of the entire indebtedness evidenced hereby, if not sooner paid, shall be due and payable forty (40) years from the date of this bond. In lieu of coupons evidencing semi-annual interest, unpaid accrued interest shall be paid on the 15th day of January of each year and the amount of interest so paid shall be deducted from the next succeeding installment of $6,166.00 due the next succeeding 15th day of July.
All or part of the outstanding bond installments may be paid in inverse order on any interest payment date without premiums.
This bond shall be registered as to principal and interest in the name of the United States of America in an appropriate book in the Office of the Recorder of the borrowers, each registration to be noted on the back hereof by said Recorder and no transfer hereof shall be valid unless made on said book and similarly noted on the back hereof.
Both the principal and interest shall be paid to the United States of America as such registered holder at the Office of the Farmers Home Administration serving Linn County, Oregon.
Default hereunder shall constitute default under any other instrument evidencing a debt of Borrower owing to or insured by the Government or securing or otherwise relating to such a debt, and default under any other such instrument shall constitute default hereunder upon default and Government in its Option may declare all or any part of said indebtedness immediately due and payable.
This bond is given as evidence of a loan to Borrower made by the Government pursuant to the Rural Development Act of 1972, as amended, and shall be subject to the present regulations of the Farmers Home Administration and to its future regulations not inconsistent with the express provisions hereof.
This bond is authorized and issued by virtue of the majority vote of the legal voters of the City of Sodaville, Oregon, voting at a special election called and held on the 18th day of September, 1979, and by virtue of Ordinance No. 46 of the City of Sodaville, Oregon, duly passed by the City Council and approved by the mayor of said City on December 8, 1979, and pursuant to the Constitutuion [sic] and Laws of the State of Oregon, and Charter of the City of Sodaville, Oregon, and law amendatory thereof and supplemental thereto.
This bond with interest thereon, is a general obligation of the City of Sodaville, Oregon, and in addition is payable as to principal and interest from the unobligated net revenues of the water facilities of said City. For the punctual payment of the principal of this bond with interest thereon as aforesaid, the full faith and credit of the City of Sodaville, Oregon, are hereby irrevocably pledged.
This bond is exchangeable at the sole expense of the Borrower at any time, upon ninety (90) days written notice, at the request of the registered owner hereof, and upon surrender of this bond to Borrower at the Office of the Recorder of the Borrower for negotiable coupon bonds payable to bearer registered as to principal only of the denomination of $1,000.00 each, in the aggregate principal amount equal to the unpaid principal amount of the bond, and bearing interest on the unpaid principal balances at the rate of 5% per annum.
It is hereby certified, recited, and declared that all acts, conditions and things required to exist, happen, and be performed precedent to and in the issuance of this bond have existed, have happened, and have been performed in due time, form and manner as required by law, that the amount of this bond, together with all obligations of the Borrower does not exceed any limits prescribed by the Constitution and Statutes of the State of Oregon and the Charter and Ordinances of the City of Sodaville, Oregon.
IN WITNESS WHEREOF, the City of Sodaville, Oregon, has caused this bond to be signed by the Mayor of said City and its corporate seal to be affixed hereto and attested by the recorder of said city, all on the __ day of ________, 19 __.
CITY OF SODAVILLE, LINN COUNTY, OREGON
BY: __________________________
Mayor
ATTEST:
__________________________
Recorder
__________________________
BOND REGISTRATION
DATE: __________________________
Registered in name of:
United States of America, Farmers Home Administration
__________________________
City Recorder
__________________________
Section 3. (Pledge of Revenue).
The unobligated net revenues of the water system after payment from gross revenue of the system of the ordinary operation and Maintenance expenses thereof, hereby is pledged to the payment of the principal of and interest upon the said bonds. The Council of said City, each year, shall include in the General Tax Levy of the City a special levy sufficient with other monies available therefor, to pay promptly when due, the principal of interest upon said bonds. The funds derived from such sources shall be carried by the Recorder of the City in a separate book account to be designated DEBT SERVICE FUND, WATER BOND ACCOUNT and shall be expended only in the payment of the principal of and interest on said City of Sodaville, Oregon Water Bonds until all of said obligations and any that may be issued to refund them have been fully paid and redeemed or until the provisions for the payment or redemption thereof has been made.
Section 4. (Protection and Disposition of Funds).
The City Recorder shall be the custodian of all funds of the Facility and all funds shall be deposited in a bank which is a member of the Federal Deposit Insurance Corporation. The Recorder shall execute a Fidelity Bond in an amount not less than $20,000.00 with a Surety company approved by the Farmers Home Administration and the United States of America shall be named as co-obligee in such bond and the amount thereof shall not be reduced without the prior written consent of Farmers Home Administration. The City Recorder is hereby directed to establish the following accounts into which the current funds of the Facility bond proceeds, the revenues from the Facility and other income shall be deposited, which accounts shall be continually maintained, except as otherwise provided, so long as the bonds hereby authorized remain unpaid.
(a) Water Improvements Account. The proceeds of the bonds hereby authorized and any interim financing acquired shall be deposited in the Water Improvements Account. Amounts in the Water Improvements Account exceeding $40,000.00 shall be secured by the depository bank in advance in accordance with State and Federal law. Withdrawal from the Water Improvements Account shall be made only on checks signed by the City Recorder of the City as authorized by the City Council, only for the purposes for which said bonds were signed as specified in the estimate of costs. The City's share of any liquidated damages and other monies paid by defaulting contractors or their sureties will be deposited in the Water Improvements Account to assure completion of the project. When the construction of the Facility has been completed or all construction costs have been paid for in full, any balance remaining in the Water Improvements Account shall be used to pay outstanding interest on the bond except that any balance in an amount insufficient to pay a whole installment of interest will be transferred to the Reserve Account. The FmHA Water Improvements Account shall then be closed.
(b) Enterprise Fund, Water Revenue Account. As soon as the Facility becomes revenue producing, the gross revenues shall be set aside into a Separate account to be designated the Enterprise Fund, Water Account, and monies so deposited therein shall be expended and used only in the manner and order as follows:
1. Operation and Maintenance Account (bookkeeping account). There shall be set aside and deposited each month before any other expenditures therefrom, sufficient portion of the income and revenue in the Water Revenue Account to pay the reasonable and necessary current expenses of operating and maintaining the Facility for the current month.
2. Debt Service Fund, Water Account (bookkeeping account). After the transfer required in item 1 above, there shall be transferred each quarter from the Enterprise Fund, Water Revenue Account, before any other expenditures or transfer therefrom, and deposited in the Debt Service Fund, Water Account for payment of the annual installment of the bond, a sum equal to at least one-quarter of the annual installment becoming due on the next succeeding 15th day of June.
If the City for any reason shall fail to make such monthly deposit, then an amount equal to the deficiency shall be set apart and deposited in the Debt Service Fund, Water Account out of the gross revenues in the ensuing month or months, which amount shall be in addition to the regular monthly deposit required during each succeeding month or months.
Whenever there shall accumulate in the Debt Service Fund, Water Account amounts in excess of the requirements during the next twelve months for paying principal and interest on outstanding bond installments, and in the Operation and Maintenance Account and the Reserve Fund, Water Account hereinafter established, amounts in excess of the requirements thereof, such excess may be used by the City to make prepayments on the bond.
3. Reserve Fund, Water Account (bookkeeping account). Out of the balance of income and revenue in the Enterprise Fund, Water Revenue Account remaining after the transfers required in item 1 and 2 above have been made, there shall annually be set aside and deposited in the Reserve Fund, Water Account the minimum sum of $765.00. The Reserve Fund, Water Account shall be used and disbursed only for the purposes of paying the cost of repairing or replacing any damage to the Facility which may be caused by any unforeseen catastrophe and major maintenance and replacement, and when necessary, for the purpose of making payments of principal and interest on the bonds hereby authorized in the event the amount of the Debt Service Fund, Water Account is insufficient to meet such payments. Whenever disbursements are made from said account, and the balance falls below the FmHA required balance of $765.00, additional deposits shall be made until there is again accumulated the amount of $765.00, at which time the additional deposits may be discontinued.
Section 5. (Other Covenants and Agreements of the City).
The City covenants and agrees that so long as the bond hereby authorized remains unpaid:
(a) It will indemnify the Government for any payments made or losses suffered by the Government as a result of or in connection with the Facility.
(b) It will comply with applicable State Laws and regulations and continually operate and maintain the Facility in good condition.
(c) It will impose and collect such rates and charges for use of the Facility that gross revenues will be sufficient at all times to provide for the operation and maintenance thereof and the payments of the bonds hereby authorized and the maintenance of the various funds herein created; that all use of the Facility shall be subject to the full rates prescribed in the rules and regulations of the City; and that no free use of the Facility will be permitted.
(d) It will maintain complete books and records relating to the operation of the Facility and its financial affairs and will cause such books and records to be audited annually at the end of each fiscal year and an audit report prepared, and will furnish Farmers Home Administration, without request, with a copy of each annual audit report. At all reasonable times Farmers Home Administration shall have the right to inspect the Facility and the records, account and data of the City relating thereto.
(e) It will maintain such insurance coverage as may be required by Farmers Home Administration.
(f) It will not borrow money from any source or enter into any contract or agreement or incur any other liabilities in connection with making extensions or improvements to the Facility exclusive of normal maintenance without obtaining the prior written consent of Farmers Home Administration.
(g) It will not dispose of or transfer its title to the Facility or any part thereof, including lands and interest in lands, by sale, mortgage, lease, or other encumbrance, without obtaining prior written consent of Farmers Home Administration.
(h) It will cause to be levied and collected such assessments as may be necessary to operate and maintain the Facility in good condition and meet payments on the bonds when the same become due if, for any reason, gross revenues are insufficient.
Section 6. (Refinancing).
If at any time it shall appear to the Government that the City is able to refinance the amount of the bond then outstanding, in whole or in part, by obtaining a loan for such purposes from responsible cooperative or private credit sources, at reasonable rates and terms for loans for similar purposes and periods of time, the City will, upon request of the Government, apply for and accept such loan in sufficient amount to repay the Government and will take all such actions as may be required in connection with such loan.
Section 7.
The Mayor and the City Recorder are hereby authorized and directed to execute for and on behalf of the City, Form FmHA 400-1 entitled "Equal Opportunity Agreement", Form FmHA 400-4 entitled "Nondiscrimination Agreement", as required by the provisions of Title VI of the Civil Rights Act of 19674, and Form FmHA 442-47, “Loan Resolution".
Section 8. (Emergency Clause).
The Council desires and deems it necessary and advisable for the immediate preservation of the health, peace, and safety of the City of Sodaville that this Ordinance become effective at once, for the reason that the water system of said town is inadequate to meet its needs and plans for new construction and improvements must be commenced at once in order to be ready for use as soon as possible and, therefore, an emergency is hereby declared to exist and this Ordinance shall be in full force and effect from and after its passage and approval.