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HomeMy WebLinkAbout01-23-1950 Regular MeetingEXCERPTS FROM THE MINUTES OF A REGULAR MEETING OF THE CITY COUNCIL OF THE CITY OF FAIR - HOPE, ALABAMIA9 HELD ON THE 23RD DAY OF JANUARY, 1950 The City Council of the City of Fairhope, Ala- bama, met in regular session at the city hall in said city on January 23, 1950, at 0/•'3 o ofclock, P.M. The meeting was called to order by the mayor and upon roll call the following were found to be present: Mayor T.J. Klumpp, and the following members of the city council: Messrs. M. 0. Berglin, J. T. Bradford, R. H. Brown, Edward B. Overton and Ira-N. Steele; and the following members of the city council were found to be absent: The mayor presided at the meeting and announced that a quorum was present and that the meeting was open for the transaction of business. Marie Moore, the city clerk, was also present at the meeting and acted as -clerk thereof. The minutes of the preceding meeting were read and approved. Discussion was had of the proposal which had been considered by the council for some time to authorize the construction of a gas distribution system for the city and neighboring territory and the financing thereof. As a result of such discussion it developed that a number of ordinances and resolutions would have to be adopted in connection therewith. • Councilman then introduced the following ordinance in wri ng which w s read to the meeting: r"" r. 2 i ORDINANCE NO. y AN ORDINANCE TO PROVIDE FOR THE ISSUANCE OF FIRST MORTGAGE GAS REVENUE BONDS OF THE CITY OF FAIRHOPE FOR THE PURPOSE OF DEFRAYING THE COST OF CONSTRUCT- ING A GAS DISTRIBUTION SYSTEM TOGETHER WITH THE NECESSARY TRANS- MISSION MAINS AND OTHER AP- PURTENANCES IN CONNECTION THEREWITH, AND TO PROVIDE FOR A MORTGAGE AND DEED OF TRUST AS SECURITY THEREFOR BE IT ORDAINED by the City Council (herein called tithe council") of the City of Fairhope (herein called tithe city") in the State of Alabama as follows: Section 1. There is hereby authorized to be constructed by the city a gas distribution system to- gether with transmission mains and other appurtenances in connection therewith (herein together called tithe systemtt) in the city and in nearby territories, which system.is more particularly referred to in the mortgage and deed of trust (herein called tithe indenture") pro- vided for in Section 9 of this ordinance. The council has caused an estimate to be made of the cost of con- structing the system, including the acquisition of real estate in connection therewith, financing costs, and the interest which will accrue during such construction and for six months thereafter. According to such esti- mate the total of said costs will be $755,000. In order to raise the funds required therefor it will be necessary that the city sell and issue its bonds hereinafter au- thorized in anticipation of the revenues that will be derived from the operation of the system. The period of usefulness of the system is hereby estimated to be not less than forty years from the completion thereof, and it is hereby further estimated that it will require twelve months to complete such construction. Section 2. Pursuant to the provisions of Chapter 6, Article 2, Subdivision 3, of Title 37 (Sections 308 to 340, inclusive) of the Code of Alabama of 1940, as amended, there are hereby authorized to be issued the First Mortgage Gas Revenue Bonds (herein called tithe bonds") of the city in the aggregate principal amount of Seven Hundred Fifty-five Thousand DoMa.rs ($755,000), consisting of seven hundred fifty-five coupon bonds numbered from 1 to 755, inclusive, each in the principal amount of $1,000, which shall bear interest from their date until their respective maturities at such rate or rates and for such period or periods of time as may be fixed by ordinance of the city at the time of the sale thereof. Such interest payable at and prior to maturity of the bonds shall be payable semi-annually on February 1 and Au ust 1 gs shall be evidenced by separate interest couponsherein called tithe coupons") attached thereto, and both the bonds and the coupons shall bear interest after their respective maturities at the rate of 6% per annum. The provisions and details pertaining to the bonds and the coupons shall be as is provided for in the indenture. Section 3. The principal of and interest on the bonds and the coupons shall be payable solely from the -3- revenues derived from the operation of the system, includ- ing all additions thereto and extensions thereof which may hereafter be made. The general faith and credit of the city are not pledged to the payment of the bands and the coupons, and they shall not be general obligations of the city. Neither this ordinance nor any of the bonds or the coupons shall be deemed to impose upon the city any obli- gation to pay the principal of or interest on the bonds and the coupons except with the moneys directed to be paid into the Gas System Bond and Interest Redemption Fund created in the indenture, and shall not constitute an in- debtedness of the city within the meaning of any state constitutional or statutory limitation. None of the agreements, representations or warranties made or implied in this ordinance, or in the issuance of the bonds and the coupons, shell ever impose any personal, pecuniary ibr general liability or charge upon the city, whether before or after any breach by the city of any such agree- ment, representation or warranty of the city, except with the moneys herein provided. Nothing contained in this section, however, shall relieve the city or its officers from the performance of the several agreements and representations on the part of the city contained in this ordinance so long as such performance does not impose a personal, pecuniary, or general liability or charge upon the city. Section 4. The gross revenues derived from the operation of the system shall be deposited by the city, daily as collected by it, into the Gas System Gross Revenue Account -(herein called tithe gross revenue account") created in Article V of the indenture. The depository for the gross revenue account shall make the transfers there- from provided for in said Article V of the indenture at the times and to the respective extents therein provided and to'the extent that the moneys on deposit in the gross revenue account shall be available therefor. All liability of the depository of the gross revenue account shall cease as and to the extent to which the moneys on deposit therein shall be so transferred by it. So long as any of the moneys are held by the said depository in the gross revenue account, the same shall constitute a trust fund for the benefit of the city and the holders of the bonds and the coupons as their respective -interests may appear. Acceptance of appointment as a depository of the gross revenue ac- count by any such depository shall be signified by indi- cating its acceptance on a copy of this ordinance. Section 5. All remittances of principal of and interest on the bonds and the coupons to the holders thereof shall be made at par without any deduction for exchange or other costs, fees or expenses. The bank or banks at which the bonds or the coupons shall at any time be payable shall be considered, by acceptance of their duties hereunder, to have agreed that they will make or cause to be made, out of the moneys supplied to them for that purpose, remittances of principal of and interest on the bonds and the coupons to the holders thereof in bankable funds at par without any deduction for exchange or other costs, fees or expenses. CO a o rl U UN .� O\ to Cd •rf w N MO CO Crq C: 1-, o 0 aAiq� a H 00 w4) A, aV O U fr 4� x wCdso �o"1,CA U Cd 00010 .SC •ri tCuo� as a Z :> ZC ao 0 +) •ri +3 Ua MZOld 1:40$4N 0 Ei 0 -P O _P H Cd CO — 4 — The city will pay to such bank or banks all reason-. able charges made and expenses incurred by them in making such remittances in bankable funds at par. Section 6. The bonds shall be sold at public sale as may be authorized from time to time by the council, and the proceeds received therefrom shall be applied as provided in Article VI of the indenture. Section 7. The provisions of this ordinance shall constitute a contract between the city and each holder of the bonds and the coupons. Section 8. The city hereby creates a statutory mortgage lien upon the system to and in -P favor of the holders of the bonds, and each of them, H without priority or preference of one bond over y, another, which lien shall take effect immediately upon the delivery of any of the bonds authorized to be issued hereunder; provided, however, that said statutory mortgage lien shall not be construed to give any authority to compel the sale of the system or any part thereof at a foreclosure sale, and no foreclosure proceedings shall ever be had-' with re- spect to the system or any part thereof. Section 9. As additional security for the payment of the principal of and interest on the bonds, pro rata and without preference or priority of one over another, the city does hereby authorize and direct the mayor to execute and deliver the indenture in the name of and in behalf of the city covering all properties of any kind whatsoever now or hereafter constituting the system and all ex- tensions thereof and additions thereto, and does hereby authorize and direct the city clerk to affix to the indenture and attest the corporate seal of the city. The indenture shall be in substantially the following form, it being hereby specifically declared and agreed by the city that all the provisions contained therein shall constitute a part of this ordinance: - 5 - INDIVTUXE between THE CITY OF FAIRHOPE, a municipal corporation under the laws of the State of Alabama, party of the first part, and THE MERCHANTS NATIONAL BANK OF MOBILE, a national banking corporation authorized to administer trusts, party of the second part; D E F I N I I I O N A The following words and phrases and others evidently intended as the equivalent thereof shall, in the absence of clear implication herein otherwise, be given the following respective interpretations herein: "Cityit means the party of the first part hereto and, subject to the provisions of Section 8 of Article VII hereof, includes its successors and assigns and any corporation resulting from any merger or consoli- dation to which it or its successors may be a party. "Trustee" means the party of the second part hereto and its successors and any corporation result- ing from any merger or consolidation to which it or its successors may be a party. "Council" means the governing body of the city as from time to time constituted. "Resolution" means a resolution duly adopted by the council and duly certified under the seal of the city by the clerk of the city: "Bondst' means those issued hereunder. "Coupons" means those issued in pursuance hereof and evidencing the interest on the principal evidenced by the applicable bond or bonds. "Registered bonds" means those bonds registered pursuant hereto. "Callable bonds" means those of the bonds maturing in 1960 and thereafter. "Redemption date" means the date fixed for the redemption of callable bonds in the published notice of redemption. "Redemption price" means the price at which the callable bonds called for redemption may be redeemed y otr the -redemption date T ttHolder" when used in conjunction with bonds or coupons means the person in possession and the apparent owner of the designated item. "Indenture" means these presents and every supplemental agreement with the trustee in pursuance hereof. t'Mortgaged property" includes all property and rights of every kind described or referred to or intended -6- so to be in the granting clauses hereof (including the after -acquired property -clauses hereof) or in any way subject to the lien hereof. "The system", where said words are used to- ge'rher, mean the natural gas system required to be constructed by the city under the provisions of Aritcle VI hereof. 1 "Gross Revenue Account" means the Gas System. G:o„s Revenue Account created in Section 1 of Article V hereof. "Bond fund" means the Gas System Bond and Interest Redemption Fund created in Section 2 of Article V hereof. "Operation and Maintenance Fund" means the Gas System Operation and Maintenance Fund created in Section 3 of Article V hereof. "Depreciation fund" means the Gas System Depreciation Fund created in Section 4 of Article V hereof. "Contingent fund" means the Gas System Con - tinge -It Fund created in Section 5 of Article V hereof. "Surplus fund" means the Gas System Surplus Fund created in Section 6 of Article V hereof. "Fiscal year" means the period beginning on October 1 of one calendar year and ending on September 30 of the following calendar year. "Newspaper" means a newspaper published not less than six days during each calendar week in the locality specified. "Financial journal" means a journal devoted primarily to news of financial matters and having general circulation -among those interested in financial matters. "Herein", "hereby", "hereunder", "hereof", "hereir_before", "hereinafter" refer to the indenture and not solely to the particular portion thereof in which such word is used. Definitions include both singular and plural. Pronouns include both singular and plural and cover all genders. _ Any percentage of bonds is to be figured on the unpaid principal amount thereof then outstanding. R .1 Q 1: .1 A L S The city makes the following recitals of facts as the basis of the undertaking following: By proper corporate action the -city has duly author- ized the issuance of the bonds, payable solely from the limited source hereinafter referred to, in the principal amount of $755,000. To secure the repay- 7- ment of the principal thereof and the interest thereon the city has by proper corporate action duly authorized the execution and delivery of the indenture. GRAM TINTG C L AUSE S NOW, THEREFORE, THIS INDENTURE WITNESSETH: In order to secure to the holders thereof the payment of the principal of and interest on the bonds and the coupons and the performance and observance of the covenants and conditions therein and herein con- tained, and in consideration of their purchase and acceptance of the -bonds and of the acceptance by the trustee of the trusts -herein provided, -the city does hereby grant, bargain, sell and convey, assign, transfer and pledge to and with the trustee the following de- scribed properties of the city now owned or hereafter acquired: The entire gas system -of the city situated in Baldwin County, Alabama, including odorizing station, regulator or pressure reduction•stations, mains, pipes, regulators, meters, valves, fittings, and services in connection therewith, and all of the cityts other properties, real, personal and mixed, tangible and intangible, forming a part of or appertaining to or used in connection with said gas system, whether any of said properties are now owned by the city or may be hereafter acquired, including particularly but without limiting the generality of the language hereinbefore or hereinafter contained, the following described real estate located in Baldwin County, Alabama: A parcel of land located in the City of Fairhope described as follows: Begin at the Northwest corner of Lot 11 in Block 5 of Di- vision 4 of the Fairhope Single Tax Property in the City of Fairhope, Alabama, run thence % SQuth parallel with Bancroft Street a distance / of*30 feet; run thence East parallel with the Northern line of said lot a distance of 60 feet; run thence Forth parallel with Bancroft Street a distance of 30 feet.to the Northern line of said lot; run thence West along the said Northern line 60 feet to the point of beginning; Together with all lands and interests in lands which are used in the operation of the gas system now or hereafter owned -by the city, and all franchises, permits, easements, rights of way, crossing agreements, privileges, immunities and licenses of the city under and pursuant to which the city is authorized to engage in the operation in the city, in the Town of Daphne, and in -the County of Baldwin of a gas distribution system, including particularly that certain franchise for thecperation.of a gas system heretofore granted to the city by the Town of Daphne by ordinance adopted by the town council of the Town of Daphne on January 23, 1950; Also together with that certain gas supply agreement dated January 23, 1950, between United Gas Pipe Line Company and the city; Also together with all personal property, and all tolls, rents, revenues, issues, earnings, income and profits from the gas system now or hereafter owned by the city; Also together with all franchises, licenses and privileges and real and personal property which the city might hereafter acquire as a part of or an improvement to or extension of the gas system of the city, and any extensions thereof and additions there- to; it being the intention hereof that all property, rights and privileges acquired by the city after the date hereof for use as a part of its gas system shall be fully covered hereby as if such property, rights and privileges were now owned by the city and were specifically described herein and conveyed hereby. Saving and excepting, however, from the property hereby mortgaged and pledged, all of the following (whether now owned by the city or hereafter acquired by it): Cash on hand and on deposit (but moneys or securities in the Bond -Fund hereinafter referred to are not so excepted), accounts and notes receivable, choses in action, customerst service and extension deposits, and gas and other properties acquired for sale in the ordinary course of business or for consumption in the operation of the mortgaged property. TO HAVE AND TO HOLD the same unto the trustee, its successor trustees and assigns forever; IN TRUST, NEVERTHELESS, upon the terms and trusts herein set forth for the equal and pro rata protection and benefit of the holders, present and future, of the bonds and the coupons equally and ratably, without preference, priority or distinction of any over others by reason of priority in issuance or acquisition or otherwise, as if all of the bonds at any time outstanding had '-'been executed, sold, certified, delivered and ., negotiated simultaneously with the execution and de- livery hereof. For the aforesaid consideration and the mutual covenants herein contained, it is hereby agreed r�Z between the city, the trustee and the bondholders (the bondholders evidencing their consent hereto by their acceptance of the bonds), each with each of the others as follows (provided, that in the performance of any of the agreements of the city herein contained any obligation it may thereby incur for the payment of money shall not be a general debt of the city but shall be payable solely out of the revenues from the mortgaged property): ARTICLE I AMOUNT, MATURITIES, AND FORM OF AND INTEREST ON THE BONDS Section 1. The total principal amount of bonds authorized to be issued hereunder is limited to $'755 000.00. The bonds shall be dated February 1, 1950, s':ali be numbered from 1 to 755, inclusive, shall be in the principal amount of $1,000 each, and shall be pa:Table as follows: Bond Numbers Aggregate Principal (bath inclusive) Maturity Date Amount Maturinz 1 to 11� February 1; 1953 $14;000 15 to 28 February 1; 1954 14;000 29 to 44 February 1; 1955 16;000 45 to 60 February 1; 1956 16;000 61 to 78 February 1; 1957 1$;000 79 to 96 February 1; 1958 1$0000 97 to 116 February 1; 1959 20;000 117 to 136 February 1; 1960 20;000 137 to 158 February 1; 1961 22;000 159 to 180 February 1; 1962 22;000 181 to 204 February 1; 1963` 24;000 - 205 to 228 February 1; 1964 24;000- 229 to 254 February 1; 1965- 26;000- 255 to 280 February 1; 1966- 26,000- 281 to 308 February 1; 1967- 2$000- 309 to 336 February 1; 1968 2$;000 337 to 366 February 1; 1969 30i000 367 to 396 February 1; 1970 30;000 397 to 428 February 1; 1971 32.000 429 to 460 February 1; 1972 32.000 461 to 494 February 1; 1973 34;000 to 528 February 1; 1974 34;000 -05 529 to 564 February 1; 1975 36;000 565 to 600 February 1; 1976 36;000 601 to 638 February 1; 1977 3$;000 639 to 676 February 1; 1978 3$;000 677 to 715 February 1; 1979 39;000 716 to 755 February 1, 1980 40,000 Section 2. The bonds shall bear interest from their date until their respective maturities at the following per annum rates: (Here will be inserted the interest rates on the bonds when such rates shall have been fixed at the sale of the bonds.) - 10 - Such interest shall be payable semi-annually on February 1 and August 1 in each year and shall be evidenced by the coupons attached to the bonds. Each bond and coupon shall bear interest at the rate of 6% per annum after its maturity and shall be payable in lawful money of the United States of America at the principal office of The Merchant3 National Bank of Mobile, in the City of Mobile in the State of Alabama. Section 3. The bonds, the coupons, the certificate of registration and the trustee's certifi- cate shall be in substantially the•following forms, respectively, with such insertions, omissions, and other variations as may be necessary to conform to the provisions hereof: No. (Form of Bond) UNITED STATES OF AMERICA STATE OF ALABAMA CITY OF FAIRHOPE FIRST MORTGAGE GAS REVENUE BOND $1,000 •On the 1st day of February, 19. , for value received, the City of Fairhope (herein called "the city"), -a municipal corporation under the laws of Alabama, hereby promises to pay to the bearer hereof, or if this bond be registered then to the registered holder hereof, solely out of the revenues hereinafter referred to, the sum of O N E T H O U S A N D D 0 L L A R S with interest thereon from the date hereof until the maturity hereof at the rate of per annum, pay- able semi-annually on February.l and August 1 in each year until and at the maturity hereof upon surrender of the annexed interest coupons as they severally mature. Both the principal hereof and interest hereon are payable in lawful money of the United States of America at the principal office of The Merchants National Bank of Mobile,�n the City of Mobile in the State of Alabama. This bond is one of a duly authorized issue limited to the aggregate principal amount of $?55,000 and numbered from 1 to 755, inclusive (herein called "the bonds"). The principal of and interest on the bends are payable solely out of the revenues from the gas system of the city as presently or hereafter constituted (herein called "the system"), and are equally and ratably secured by a valid pledge of the said revenues for payment of the principal of and interest on the bonds without priority of one bond tv over another by reason of prior issuance or otherwise. The bonds are further equally and ratably secured by a mortga a and deed of trust (herein called "the in- denturellf from the city to The Merchants National Bank of Mobile (herein called "the trustee") of Mobile, Alabama, dated as of February 1, 1950, covering the system. The indenture provides, inter alia, that in the event of default by the city- in the manner and for the time therein provided the trustee may declare the principal of this bond as immediately due and pay- able, whereupon the same shall thereupon become im- mediately due and payable and the trustee shall be entitled to pursue the remedies provided in the indenture, but the indenture shall not be subject to foreclosure. Those of the bonds maturing in 1960 and there- after are subject to redemption prior to their re- spective maturities at the option of the city on February 1; 1955, and on any interest payment date thereafter, as a whole or in part in inverse numerical order, after not less than thirty days' prior notice given in the manner provided in the indenture, at tht face value of the bonds redeemed plus accrued interest thereon to the redemption date and a premium equal to twelve months# interest on the bonds redeemed computed at the rate they would bear on the redemption date if they had not been called for redemption; provided, that any such redemption prior to February 1, 1960; may be effected solely out of either surplus revenues derived from the operation of the system while the amounts on deposit in the bond fund and the contingent fund created in the indenture shall be not less than the maximum amounts respectively required to be paid therein and while all special funds created in -the indenture are in current condition, or out of the proceeds received by the city from the sale of that portion of the system which may be purchased by the Town of Daphne pursuant to an option granted to it. The covenants and representations herein con- tained or contained in the indenture 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 the bonds or the coupons shall ever have the right to compel the exercise of the taxing power of the city for pay- ment of the principal of or interest on the bonds, and this bond does not constitute a debt of the city within any state constitutional provision or statutory limi- tation. The bonds are issued pursuant to the provisions of Chapter-6 of Title-37 (including particularly Sections 308 to 340, inclusive, of said titlof the Code of Alabama of 1940, as amended, and an ordinance of the city duly enacted, for the purpose of raising funds to' , construct -the system, to acquire properties in connection therewith, and to pay the costs of financing the same and the interest which will accrue on the bonds during such construction and for six months thereafter.