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HomeMy WebLinkAboutO-672ORDINANCE NO. (o BE IT ORDAINED by the Mayor and City Council (herein to- gether called "the Council") of the City of Fairhope, Alabama (herein called "the City") as follows: Section 1. The Council has ascertained and found and does hereby declare that it is necessary and desirable and in the public interest that the City acquire and construct certain extensions and improvements (herein called "the Improvements" and consisting of 14.2 miles of 8" lines, 36 miles of 6" lines, 3.8 miles of 3" lines, two 500 gpm wells, two 300,000 gallon elevated storage tanks, 55 6" fire plugs, and 600 customer connec- tions) to the existing water works plant and distribution system of the City (herein called "the System"); that the estimated total cost of acquiring and constructing the said Improvements to full completion, including the costs of acquiring real property or interests therein for location of parts of the Improvements thereon or thereunder, will be not less than $2,192,000; and that in order to finance the costs of acquiring and constructing the Improvements, including the costs of acquiring real property or interests therein, it will be necessary for the City to borrow the sum of $2,192,000 and in evidence thereof to issue $2,192,000 principal amount of Water Revenue Bonds (herein called "the Bonds"), payable serially in installments over a period of years, solely out of revenues to be derived from the operation of the System; that the pledge of the said revenues for the benefit of the Bonds will be subordinate to the pledge thereof heretofore made for the benefit of (i) the Water, Gas and Sewer Revenue Bonds, Series 1961, of the City, dated December 1, 1961, presently outstanding in the aggregate principal amount of $495,000, (ii) the Water, Gas and Sewer Revenue Bonds, Series 1972, of the City, dated December 1, 1972, presently outstanding in the aggregate principal amount of $680,000, (iii) the Water, Gas and Sewer Revenue Bonds, Series 1978, of the City, dated December 1, 1978, presently outstanding in the aggregate principal amount of $360,000, and (iv) the Water and Sewer Revenue Bonds, Second Series, issued by The Water Works and Sewer Board of the City of Fairhope, dated July 1, 1953, which have been assumed by the City and which are now outstanding in the aggregate principal amount of $25,000 (herein together called "the Prior Pledge Bonds"); that the City is not now, and will not be for some months, in a position to proceed with the issuance and sale of the Bonds; that the City does not now have, and will not have prior to the completion of said construction of the Improvements, funds sufficient to pay all the costs thereof; that in order to provide for the payment of a portion of said costs, it will be necessary for the City to borrow the principal sum of not exceeding $2,192,000 temporarily, in anticipation of the sale of the Bonds, and in evidence of such borrowing to issue the Water Revenue Bond Anticipation Note hereinafter authorized. Section 2. Pursuant to the applicable provisions of Article 5 of Chapter 81 of Title 11 of the Code of Alabama of 1975, as amended, and for the purpose of paying a portion of the costs to be incurred in acquiring and constructing the Improvements, the City is hereby authorized to borrow from The First National Bank of Baldwin County, Fairhope, Alabama (herein sometimes called "the Lender Bank"), the aggregate principal amount of $2,192,000 and, in evidence of the money so borrowed, is authorized to issue and deliver to the Lender Bank, its Water Revenue Bond Anticipation Note (herein called "the Note"). The Note shall be in the principal amount of $2,192,000, shall be dated the date of its issuance (which shall be the date on which the loan evidenced thereby is made); shall be payable to the Lender Bank or order; shall mature and come due on May 1, 1983; shall bear interest from its date until its maturity at a per annum rate of 8.5%, payable quarterly on August 1, 1981, and on each August 1, November 1, February 1, and May 1 thereafter until and including May 1, 1983; and shall be payable (as to both principal and interest) at the office of the Lender Bank in Fairhope, Alabama. Section 3. The City reserves and shall have the privilege of prepaying all or any part of the principal of the Note at any time and from time to time, without penalty or premium and without any prior notice, provided that at the time of each such prepayment, the City pays the interest which shall have accrued, to the date of such prepayment, on the principal to be so prepaid with respect to such Note. Section 4. The Note shall be executed on behalf of the City by its Mayor and shall have affixed thereto the corporate seal of the City which shall be attested by the City Clerk. Said officers are hereby authorized and directed to execute the Note, all in accordance with the provisions of this section and Section 8 hereof. Section 5. The principal of and the interest on the Note shall be payable solely out of the revenues derived from the operation of the System as it may at any time and from time to time exist subject to the prior pledge of the said revenues for the benefit of -the Prior Pledge Bonds. Neither the Note nor any of the agreements herein contained shall consti- tute indebtedness of the City within the meaning of any state constitutional or statutory provision or limitation, and the general faith and credit of the City are not pledged for payment of the Note, which shall not be a general obligation of the City. Neither this Ordinance nor the Note issued hereunder shall be deemed to impose upon the City any obligation to pay the principal of or the interest on the Note, or any other sum, except with revenues derived from the operation of the System. None of the agree- ments, representations or warranties made or implied in this Ordinance, or in the issuance of the Note, shall ever impose any personal or pecuniary liability or charge upon the City, whether before or after any breach by the City of any such agreement, representation or warranty, except with re- spect to the revenues derived from the operation of the System. Nothing contained in this section shall, however, relieve the City from the perfor- mance of the several agreements and representations on its part herein con- tained so long as such performance does not impose a personal, pecuniary or general liability or charge upon the City. Section 6. The revenues derived from the operation of the System are hereby irrevocably pledged for payment of the principal of and the interest on the Note. The City represents that the pledge and agreements made herein constitute the only outstanding pledge and agree- ments made by it with respect to the revenues derived from the operation of the System other than the pledge and agreements made for the benefit of the Prior Pledge Bonds. In order to safeguard the pledge and agreements on the part of the City herein contained, the City does hereby declare that it is the intention hereof that the revenues from the System shall be and the 2 same hereby are severed from the physical properties comprising the System to such extent as shall be necessary to fulfill and preserve inviolate the pledge and agreements on the part of the City herein contained. Section 7. The Note shall be in substantially the following form, with appropriate insertions, omissions and other changes to comply with the provisions hereof and to reflect the appropriate date: $2,192,000 UNITED STATES OF AMERICA STATE OF ALABAMA CITY OF FAIRHOPE WATER REVENUE BOND ANTICIPATION NOTE $2,192,000 On the 1st day of May, 1983, for value received, the CITY OF FAIRHOPE, a municipal corporation under the laws of Alabama (herein called "the City"), will pay to The First National Bank of Baldwin County, or order, solely out of the revenues hereinafter referred to, the sum of TWO MILLION ONE HUNDRED NINETY-TWO THOUSAND DOLLARS with interest thereon from the date hereof until the maturity hereof at a per annum rate of 8.5% payable quarterly on August 1, 1981, and on each August 1, November 1, February 1, and May 1 thereafter, to and including May 1, 1983. Both the principal hereof and the interest hereon are payable in lawful money of the United States of America at the principal office of The First National Bank of Baldwin County, in Fairhope, Alabama. The City reserves the privilege of prepaying all or any part of the principal of this note at any time or from time to time, without premium or penalty and without any prior notice, provided that at the time of each such prepayment the City pays the interest which shall have accrued, to the date of such prepayment, on the principal to be so prepaid with respect to this note. The principal hereof and the interest hereon are payable solely out of revenues from the water works plant and distribution system of the City as presently or hereafter constituted (herein called "the System") and are secured by a valid pledge of the said revenues out of which they are payable, subject to all prior charges thereon. This Note is authorized to be issued for the purpose of pro- viding funds with which to pay a portion of the costs to be incurred in acquiring and constructing certain extensions and improvements to the Sys- tem. The covenants and representations herein contained or contained in the proceedings authorizing this Note do not and shall never constitute a personal or pecuniary liability or charge against the general credit of the City, and in the event of breach of any such covenant or representation no personal or pecuniary liability or charge payable directly or indirectly from the general revenues of the City shall arise therefrom. No holder of this Note shall ever have the right to compel the exercise of the taxing power of the City for payment of the principal of or the interest on the Note, and this Note does not constitute a debt of the City within any state constitutional provision or statutory limitation. It is hereby certified that all conditions, actions and things required by the constitution and laws of Alabama to exist, be performed or happen precedent to or in the issuance of this Note exist, have been per- formed and have happened in due and legal form. 4 dt— IN WITNESS WHEREOF, the City has caused this Note to be executed in its name and behalf by its Mayor, has caused its corporate seal to be hereunto affixed and attested by its City Clerk, both of said officers being hereunto duly authorized, and has caused this note to be dated , 198_. Attest: City Clerk CITY OF FAIRHOPE By Its Mayor 5 !--a Section 8. The Mayor is hereby authorized to effect the bor- rowing authorized in this Ordinance at any time on or after the date of the meeting at which this Ordinance is approved. The proceeds derived from the loan evidenced by the Note shall be used solely for the purpose for which said money was borrowed and the Note authorized to be issued. To that end, there is hereby created a separate special account which shall be designated the Water System Construction Account (herein called "the Construction Account"). The First National Bank of Baldwin County, Fairhope, Alabama, shall be and remain the depository for the Construction Account. The entire proceeds from the borrowing effected pursuant to the provisions of this Ordinance shall be immediately paid into the Construction Account. The depository for the Construction Account will, to the extent practicable, keep all moneys on deposit in the Construction Account invested in (i) any securities that are direct obligations of the United States of America, (ii) any securities with respect to which payment of the principal of and the interest on which is unconditionally guaranteed by the United States of America, and (iii) any interest -bearing certificates of deposit issued by either the said depository or by any bank organized under the laws of the United States of America or any state thereof having, at the time of the acquisition of the said certificate, combined capital and surplus of not less than $10,000,000; provided, however, that no investment shall be made in any securities or certificates of deposit which bear interest or have a yield at a per annum interest rate less than the rate of interest borne by the Note. In the event of any such investment, the securities in which any such moneys are invested, together with all income derived therefrom, shall become a part of the Construction Account to the same extent as if they were moneys on deposit therein. Moneys may be withdrawn from the Construction Account only on checks (1) signed by a duly authorized officer of the City and (2) countersigned (or otherwise approved in writing) by the District Director of Farmers Home Administration in Baldwin County, Alabama. The said depository shall be fully protected in honoring any check so signed and countersigned or approved regardless of the person to whom it may be payable. The City will promptly proceed with, and will complete as soon as practicable, the construction of the Improvements and will proceed with the issuance of the Bonds (in anticipation of the issuance and sale of which the Note is being issued) as promptly as practicable. ADOPTED AND APPROVED this // day of May, 1981.