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HomeMy WebLinkAboutO-482AN ORDINANCE AUTHORIZING AND PROVIDING FOR THE ISSU- ANCE, SALE AND DELIVERY OF INTEREST BEARING TEMPO- RARY REVENUE ANTICIPATION NOTES OF THE CITY OF FAIji- \�� HOPE IN A PRINCIPAL'AMOUNT NOT,TO EXCEED $500,000 1\ BE IT ORDAINED BY THE CITY COUNCIL (herein called the "Gov- erning Body") OF THE CITY OF FAIRHOPE (herein called the "City") as follows: Section 1. The Governing Body does hereby find and deter- mine, warrant and represent as follows: (a) The Governing Body has determined to acquire and con- struct improvements to its sewer system for the purpose of supply- ing sanitary sewer service to users in the City and surrounding territory, and to that end the Governing Body has determined to issue $500,000 principal amount of its Water, Gas and Sewer Revenue Bonds, Series 1972 (herein called the "Permanent Bonds") to pay the cost of acquiring and constructing the said improve- ments under the provisions of Sections 308 to 340, inclusive, of Title 37 of the Code of Alabama of 19401, as amended. (b) The Permanent Bonds will be issued under the Trust Indenture between the City and The Merchants National Bank of Mobile dated December 1, 1961 (herein called the "1961 Inden- ture") and will be payable from and secured by a pledge of the revenues of the City's water and sewer systems and its gas sys- tem (herein and in the 1961 Indenture called the "Systems") on a parity lien with the pledge in the 1961 Indenture to the City's Water, Gas and Sewer Revenue Bonds, Series 1961, dated December 1, 1961 (herein called the "Series 1961 Bonds"). (c) Some time will be required to complete the sale and delivery of the Permanent Bonds, and it is necessary now to make provision for payment of the costs of construction as work pro- gresses. Temporary or interim financing as hereinafter provided is necessary for and is in the best interest of the City. Section 2. For the purpose of providing funds for teri-- porary use and in anticipation of the sale and issuance of the Permanent Bonds, to pay the cost of construction of the said r improvements, the City shall issue, sell and deliver to the First National Bank of Fairhope its Temporary Water, Gas and Sewer Revenue Anticipation Notes (herein called the "Notes") in a principal amount not to exceed $500,000 bearing interest at the rate of three and three -fourth per cent (3-3/4%) per annum. The Notes shall be payable as to both principal and interest on November 1, 1972, subject, however, to optional prior redemp- tion by the City as provided in the form of Note hereinafter authorized, and shall be payable as to both principal and in- terest at the principal office of the First National Bank of Fairhope in the City of Fairhope, Alabama. Each Note shall be dated as of the date of the sale and delivery thereof. The prin- cipal of and interest on the Notes shall be payable solely out of the revenues derived from the operation of the City's Sys- tems as at any time constituted or from the proceeds of the Per- manent Bonds, and the City hereby covenants and agrees to have available adequate funds from the said revenues or proceeds at said office for such purposes, when the Notes mature and come due. The Notes are subject to registration in the manner stated on the face of the Notes. The issuance, sale and delivery of said Notes as herein provided is hereby authorized. Section 3. Each Note shall be in substantially the fol- lowing form: UNITED STATES OF AMERICA STATE OF ALABAMA CITY OF FAIRHOPE TEMPORARY WATER, GAS AND SEWER REVENUE ANTICIPATION NOTE No. THE CITY OF FAIRHOPE, a municipal corporation organized and existing under and by virtue of the laws of the State of Alabama (herein called the "City") for value received, hereby promises to pay to the order of First National Bank of Fairhope, but solely out of the revenues or bond proceeds hereinafter de- scribedj the principal sum of DOLLARS on or before November 1, 1972, together with interest on the said principal sum from the date hereof at the rate of 3-3/4% per annum. Both the principal of and interest on this Note are payable in lawful money of the United States of America, at the principal office of First National Bank of Fairhope in the City of Fairhope, Alabama, at par and without discount, exchange, deduction or charge therefor. The City reserves the right to prepay this Note at any time before maturity, at its option, by the payment of the prin- cipal amount hereof plus accrued interest to the date of such prepayment, and without prepayment penalty. This Note is one of a duly authorized issue of Notes lim- ited to the aggregate principal amount of $500,000, issued or to be issued by the City pursuant to the Constitution and laws of the State of Alabama, and an ordinance and proceedings of the governing body of the City duly held, passed and conducted, for the lawful purpose of providing funds to pay the cost of constructing improvements to a sewer system, under Sections 308 to 340, inclusive, of Title 37 of the Code of Alabama of 1940, as amended, and Act No. 96 enacted at the 1963 Second Special Session of the Legislature of Alabama. The principal of and interest on the Notes are payable solely out of the net revenues derived from the operation of the City's water, gas and sewer systems (herein called the "Systems") subject to all prior pledges of and charges on said revenues, or the proceeds derived from the sale of the City's $500,000 Water, Gas and Sewer Revenue Bonds, Series 1972, in anticipation of the sale and issuance of which this Note is issued. No transfer of this Note shall be valid unless made on the books of the City kept for that purpose, and noted hereon by the City Clerk, who is the Registrar. The principal of this Note shall be payable only to the registered owner hereof or his legal rep- resentative. Interest accruing on this Note will be paid only on presentation and surrender of the Note. This Note and the interest hereon do not constitute a charge on the general credit or revenues of the City, but are payable solely out of revenues and bond proceeds as aforesaid. This Note and the interest hereon do not constitute an indebtedness of the City within the meaning of any State constitutional provi- sion or statutory limitation. The general faith and credit of the City are not pledged to the payment of the principal of or interest on this Note. It is hereby recited, certified and declared that the ob- ligation evidenced by this Note will be lawfully due, without condition, abatement or offset of any description; that all con- ditions, acts and things required by the Constitution and laws of the State of Alabama to happen, exist or be performed prece- dent to or in the issuance of this Note and the adoption of the ordinance authorizing its issuance have happened, do exist and have been performed as so required. IN WITNESS WHEREOF, the City of Fairhope, acting by and through its governing body, has caused this Note to be executed in its name and on its behalf by the Mayor and its City Treas- urer and to be attested by its City Clerk, and has caused this Note to be dated , 1972. Attest: CITY OF FAIRHOPE, ALABAMA By May or City Clerk By Its Treasurer (Form of) REGISTRATION CERTIFICATE (No writing on this Bond except by Registrar) Date of Registered Signature of Registration Owner Registrar Section 4. The Notes shall be executed in the name and on behalf of the City by the Mayor and the City Treasurer and attested by the City Clerk. Each Note shall be dated on the date of its issuance and shall be in the principal amount of the sum received therefor. Notes shall be sold and delivered as funds are needed for the aforesaid construction. The said officers are hereby authorized and directed to date, execute and attest the Notes. Section 5. Each Note, duly executed as aforesaid, shall be sold and delivered to the above named payee upon payment to the City of the face amount thereof. The Mayor, the City Clerk and Treasurer of the City, or any of them, are hereby authorized and directed to effect such delivery when funds are required for the acquisition and construction of the said improvements, and in connection therewith, to deliver such closing papers con- taining such representations as are required to demonstrate the legality of the Note being delivered, the validity of the pledge to the payment thereof, and the absence of any pending or threat- ened litigation with respect thereto. The Treasurer of the City shall give a receipt to said purchaser for the purchase price paid for each Note and the said receipt shall be full acquittal to the said purchaser, who shall not be required to see to or be responsible for the application of the proceeds of the Notes. The proceeds from the sale of the Notes, however, shall be held in trust by the Treasurer of the City and disposed of only for the purpose for which the Notes are issued. Section 6. The Notes and interest thereon are made payable solely out of the revenues derived from the operation of the Systems and from the proceeds of the Permanent Bonds. The Notes and the interest thereon shall not constitute a debt of the City, but are obligations in accordance with their respective terms and the terms of this ordinance. Section 7. For the purpose of securing the payment of both the principal of and interest on the Notes, to secure for the benefit of the holders of the Notes the faithful perform- ance of all of the covenants and provisions contained herein, in the manner and to the extent herein provided, the City does hereby pledge and assign a sufficient amount of the revenues of the Systems after the payment of only the reasonable and nec- essary costs of operation of the Systems and the administration, maintenance and repair thereof, and all prior charges on such revenues. The City hereby warrants and represents that the afore- said pledge of revenues is a first and preferred pledge of and lien on said revenues, subject only to the pledges thereof for the benefit of the City's Series 1961 Bonds and the other out- standing obligations of the City as set forth in the 1961 Inden- ture. The City also warrants and represents that it has the rightful power and lawful authority to pledge the revenues from the Systems as provided in this ordinance. Section 8. Until the principal of and interest on the Notes shall have been paid in full, or provision shall have been made for such payment, the City hereby covenants and agrees as follows: (a) The City shall not mortgage the Systems or pledge or encumber the income or revenues therefrom, except for the benefit of the Permanent Bonds, unless such mortgage and pledge are made secondary and subordinate in all respects to the pledge herein made for the benefit of the Notes. (b) The City shall fix and maintain such reasonable rates and charges for the services supplied or furnished,by the Systems, and make such collections from the users thereof as to produce revenues sufficient to pay all expenses reasonably necessary for the reasonable and proper operation, administration, main- tenance and repair of the Systems, to comply with the 1961 In- denture and the payment of all obligations referred to therein, and to provide for the payment of the principal of and interest on the Notes on the due date thereof. (c) The City will exercise its best efforts to effect the issuance, sale and delivery of the Permanent Bonds. (d) The City shall at all times operate the Systems as provided in and will comply with all provisions of the 1961 Indenture. (e) The City shall permit the payee of the Notes to exam- ine and inspect the Systems and all papers, books, records, ac- counts and data of the City required to be maintained hereby at all reasonable times, and shall permit copies or transcripts thereof to be made at all reasonable times. (f) The City shall faithfully and punctually perform all duties with reference to the Systems, the revenues derived there- from, and the Notes, as required by the Constitution and laws of the State of Alabama and by this ordinance. All covenants by the City set forth in the 1961 Indenture are hereby incorpo- rated by reference herein and the City hereby agrees to comply with said covenants fo'r the benefit of the holders of the Notes. All obligations imposed by law upon the City by reason of the issuance of the Notes are hereby recognized and assumed by the City whether or not set forth herein. None of the foregoing covenants shall be construed as re- quiring the City to expend any funds other then the revenues derived from the operation of the Systems. Section 9. The City hereby covenants and agrees that, if the principal of and interest on the Notes are not paid promptly on the due date thereof, it will pay to the payee of the Notes all expenses incident to the collection of any unpaid portion thereof, including a reasonable attorney's fee, but solely out of the revenues of the Systems. The Notes shall bear interest at the rate of 8% per annum from and after their maturity if not then paid. Section 10. The terms, provisions and conditions set forth in this ordinance constitute a contract between the City and the payee or holder of the Notes, and shall remain in effect until the principal of and interest on the Notes shall have been paid in full. No contractual or other obligation herein under- taken or imposed upon the City shall be construed as imposing any pecuniary obligation, other than to apply the revenues of the Systems as herein provided. Section 11. The Mayor, City Clerk and the Treasurer of the City are hereby authorized to effect the borrowing author- ized herein at any time, from time to time and in such amounts as they in their sole discretion deem advisable for the purpose for which such borrowing is herein authorized and, at the time of each such borrowing, to deliver to the aforesaid lender a Note in the principal amount of such loan, when such Note is executed and attested as herein specified; provided, however, that the total amount of money borrowed and the total principal amount of Notes issued hereunder shall not exceed $500,000. The proceeds derived from each loan evidenced by the Notes shall be used solely for the purpose for which said money was borrowed and the Notes authorized to be issued. The City will complete the construction of the aforesaid improvements with all reason- able dispatch and will proceed with the issuance of the Permanent Bonds (in anticipation of the issuance and sale of which the Notes are being issued) as promptly as practicable. Section 12. The provisions of this ordinance are sever- able. In the event that any one or more of such provisions or the provisions of the Notes shall for any reason be held ille- gal or invalid, such illegality or invalidity shall not affect the other provisions of this ordinance or the Notes, and this ordinance shall be construed and enforced as if such illegal or invalid provision had not been contained herein. Duly adopted this day of , 1972. May or Attest: City Clerk It was moved by Mr. Nix that all rules and regulations which, unless suspended, would prevent the immediate consideration and adoption of said ordinance be suspended and that unanimous con- sent to the immediate consideration and adoption of said ordinance be given. The motion was seconded by Mr. Box and on roll call was unanimously adopted, those answering aye being: Mayor R. C. Macon Councilmen: Henry G. Bishop Sam E. Box kXkXr:k-X-KX-]9X XX John A. Robertson James P. Nix Nays: None - The Mayor declared the motion carried. After said ordinance had been discussed and considered in full by the Council, it was moved by Mr. Box that said ordinance be now placed upon its final passage and adopted. The motion was seconded by Mr. Nix The -question being put as to the adoption of said motion and the Snal passage of said ordinance, the roll was called with the following results: Mayor R. C. Macon Councilmen: Xrxx21zimqcx Sam E. Gox FQDinrx%txJmexf3DXn James P. Nix John A. Robertson Nays: None Henry G, Bishop" abstained The Mayor declared the motion carried and said ordinance passed and adopted as introduced and read, and he signed the same in approval thereof. There being no further business to come before the meeting, it was moved and seconded that the meeting be adjourned. Motion carried. Minutes appro' jed: r. S E A L Attest: City Cle k Mayor -- ------ / Councilman / Councilman Councilman ­ Councilman Councilman I STATE OF ALABAMA ) BALDWIN COUNTY ) CERTIFICATE OF CITY CLERK I, the undersigned duly elected, qualified and acting Clerk of the City of Fairhope, Alabama, do hereby certify that the above and foregoing pages constitute a complete, verbatim and compared copy of extracts from the minutes of a regular meeting of the Council of said municipality duly held at the time and place therein stated; that the ordinance set forth therein is a true and correct copy of the original ordinance introduced, read and adopted at said meeting and on file and of record in the Minute Book of the municipality. IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official corporate seal of the City of Fairhope, Alabama. S E A L Citg Clerk