Ordinance 859 - Sewage System Revenue Bonds411
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ORDINANCE NO. 859
AN ORDINANCE DIRECTING THE ACQUISITION AND
CONSTRUCTION OF IMPROVEMENTS TO THE SEWERAGE
SYSTEM OF THE CITY OF KALISPELL, CREATING
SPECIAL FUNDS AND ACCOUNTS FOR THE ADMINI-
STRATION OF THE MONEYS DERIVED THEREFROM,
AUTHORIZING AND DIRECTING THE ISSUANCE AND
SALE 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
REPEALING RESOLUTIONS 2686 AND 2861
BE IT ORDAINED BY THE COUNCIL OF THE CITY OF KALISPELL; MONTANA,
AS FOLLOWS:
Section 1. Findings and Authorization.
1.01 The Sewef System. The City of Kalispell (the City),
pursuant to authority conferred by Title 11, Chapter 24 Revised
Codes of Montana 1947, as amended (the Act) and other laws of the
State of Montana has established and presently owns and operates
a municipal sewerage system consisting of facilities for the collec-
tion and disposal of sewerage and storm waters. The existing
sewerage system and all extensions, improvements and betterments
thereof hereafter constructed and acquired are collectively referred
to in this ordinance as the System.
1.02 The Improvement Program. This Council has caused its
consulting engineer, Thomas, Dean & Hoskins, Inc., of Great Falls,
Montana, to study the System and advise the City as to necessary
improvements thereto. The study has been conducted and a report
thereon has been prepared and submitted to and approved by this
Council. The report outlines a seven phase program, to be com-
pleted over a period of seven years, for the separation of -the
collection and disposal of sanitary sewage from the collection and
disposal of storm and surface waters. Plans and specifications for
phase I (herein referred to as the Project) of the Program
have been prepared and approved and the City will forthwith call
for construction bids thereon and use its best efforts to enter
into a contract for the acquisition and construction of the
Project in accordance with the plans and specifications, subject to
such amendments thereof as this Council shall deem necessary or
desirable. The total cost of the Project, including construction
costs, engineering, legal and administrative expenses and incidental
costs and contingency allowances is presently estimated to be
5445,000.
1.03 Authority for Bonds. The City is duly authorized by the
provisions of the Act to issue revenue bonds in the aggregate prin-
cipal amount of $445,000 for the purpose of paying part of the cost
of acquiring and constructing the Project; 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; and to pledge and appropriate to the
payment of the bonds any net revenues to be derived from the opera-
tion of the System, including improvements, betterments or extentions
thereof hereafter constructed or acquired.
1.04 Outstanding Bonds. The City presently has outstanding
$58,000 Sewerage System Revenue Bonds of 1968, dated May 1, 1968
(hereinafter the 1968 Bonds), and $160,000 Sewerage System Revenue
Bonds, Series 1972, dated January 1, 1972 (hereinafter the 1972
fonds). The 1968 Bonds and 1972 Bonds were issued pursuant to
Resolutions No. 2686 and 2861, respectively, and are payable on a
parity from the net revenues of the System. Pursuant to Section
6.02 of Resolution No. 2686 and Section 8.03 of Resolution No. 2861
the City reserved the right to issue additional bonds .for the improve-
ment, betterment and extension of the System and payable from the net
revenues of the System on a parity with the 1968 Bonds and the 197-2
Bonds,.provided the conditions set forth in Sections 6.02 and 8.03
are satisfied. It is hereby found, determined and declared, with
respect to the Series 1976 Bonds herein authorized, that all condi-
tions set forth in Sections 6.02 and 8.03 are fully satisfied and
more particularly that:
(1) the Series 1976 Bonds are issued to provide funds
for the improvement, betterment and extension of the System;
(2) the City is not in default under any of the
provisions of Resolution Nos. 2686 and 2861;
(3) there is no deficiency in the Operation and
Maintenance Account or the Revenue Bond Account estab-
lished by said Resolutions;
(4) the City has provided in this.Ordinance that
the net revenues of the municipal sewerage system for
each calendar year following the issuance of the Series
1976 Bonds herein authorized will be at least equal to
the maximum amount of principal and interest coming due
in any future calendar year on the 1968 Bonds, the 1972
Bonds and the Series 1976 Bonds authorized herein; and
(5) the City has obtained a certificate from an
independent licensed professional engineer stating that
in his opinion Lhe net revenues of the municipal sewer-
age system, including the improvements and extensions
to be financed by the bonds herein authorized, to be
received each calendar year during the remaining term
of the 1968 Bonds and 1972 Bonds will be at least equal
to the maximum amount of priniipal and interest to come
due during any such year on the 1968 Bonds, the 1972
Bonds:+ and the Series 1976 Bonds herein authorized.
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1.05 Security For OutstandingBonds. It is further found,
determined and declared that it is i� n the best interests of the
City and the holders of the 1968 Bonds, the 1972 Bonds and the
Series 1976 Bonds to provide for the issuance of and security
for the Series 1976 Bonds pursuant to this ordinance and to
further provide that the 1968 Bonds and 1972 Bonds shall, upon
this ordinance taking effect, be secured by and subject to all
of the terms and provisions hereof to the same extent as if
originally issued hereunder. The holders of all outstanding
1968 Bonds and 1972 Bonds have consented to the adoption of this
ordinance and the terms and conditions hereof. The City Clerk is
directed to imprint on each of the outstanding 1968 Bonds and 1972
Bonds an appropriate legend referring to the adoption of this
ordinance and its effect on the security of said Bonds.
1.06 Issuance and Sale of Series 1976 Bonds. This Council
has by resolutions adopted June 7 1976, and June 21, 1976,
offered for sale and sold at public sale $,445,000 Sewerage System
Revenue Bonds, Series 1976, for the purpose of paying the costs
of the Project. The Series 1976 Bonds shall be issued and secured
pursuant to and in accordance with the terms and provisions of this
ordinance. In addition, all outstanding 1968 Bonds and 1972 Bonds
shall upon this ordinance taking effect, be secured by and subject
to the terms and conditions of this ordinance to the same extent as
if originally issued hereunder. For purposes of this ordinance, the
term Bonds shall mean and refer to all outstanding 1968 Bonds and 1972
Bonds, the Series 1976 Bonds and all additional Bonds issued here-
under and made payable from the Revenue Bond Account. The term
Authorizing Ordinance shall mean and refer to this Ordinance No. 859
and all amendments hereto authorized by Section 6 hereof.
Section 2. Series 1976 Bonds.
2.01 Date, Amount, Denomination and Maturity. The Series 1976
Bonds shall be in the aggregate principal amount of $445,000, shall
be designated Sewerage System Revenue Bonds, Series 1976, shall be
6� dated as of July 1, 1976, shall be 109 in number and numbered from
1 through 109, in the denomination of $5,000 each, shall mature in
order of serial numbers on July 1 in the years and amounts set forth
below and shall bear interest at the rates set forth opposite such
years and amounts, as follows:
Interest
Interest
Year
Amount
Rate
Year
Amount
Rate
1983
$15,000
6.50•%
1990
$30,000
6.60%
1984
15,000
6.50%
1991
30,000
6.70%
1985
20,000
6.50%
1992
35,000
6.709/o
1986
20,000
6.50%
1993
45,000
6.70%
1987
20,000
6.50'%
1994
50,000
6.75%
1988
25,000
6.50%
1995
55,000
6.75%
1989
25,000
6.50%
1996
60,000
6.75%
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2.02 Interest Payment Dates. Interest on the Series 1976 Bonds
shall be payable on each January 1 and July 1, commencing January 1,
1977.
2.03 Redemption. Series 1976 Bonds maturing in the years 1983
through 1986 shall be payable at their respective stated maturity
dates without option of prior payment, but those having stated mat-
urity dates in the years 1987 through 1996 shall each be subject to
redemption and prepayment at the option of the City on July 1, 1986,
and any interest payment date thereafter, at 102% of par plus accrued
interest to the date fixed for redemption thereof, and in inverse
order of their serial numbers. Not less than 30 days before the date
specified for redemption of any Bonds, notice of the call thereof
shall be mailed by the City Treasurer, by registered mail, to the
holder, if known, and to the bank at which principal and interest
are then payable, and shall also be published in one issue of the
official newspaper of the City and in one issue of a financial news-
paper published in the city of New York, New York. The City Treasurer
is directed to maintain a record of the names and addresses of the
holders of prepayable Bonds so far as such information is made avail-
able to him, for the purpose of mailing such notices.
2.04 Place of Payment. The princip 1 f nd nt egt on the
rla.rl7A� .,
Series 197 B nds shall be payable at the mzzcs-or-�rc,�ix�asrr_c�s
in , in any coin or currency of the United States of
America w ich on the respective dates of payment is legal tendor for
public and private debts. Upon merger or consolidation of a paying
agent, if the resulting corporation is a bank or trust company aut:.:;
ized by .law to conduct such business, such corporation shall be
authorized to act as successor paying agent., Upon the resignation, of
a paying agent, which shall be communicated in writing to the City
not less than ninety days before it shall become effective, the
City reserves the power to appoint a successor paying agent. No
resignation and no appointment of a successor paying agent shall be-
come effective until the date specified in a notice of the resigna-
tion and appointment, which the City shall cause to be published in
a financial newspaper of national circulation published in New York
City, New York, not less than thirty days before said effective date.
2.05 Form. The Series 1976 Bonds and the interest coupons
appurtenant thereto shall be in substantially the following form:
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UNITED STATES OF AMERICA
STATE OF MONTANA
COUNTY OF FLATHEAD
CITY OF KALISPELL
SEWERAGE SYSTEM REVENUE BONDS, SERIES 1976
No.
$5,000
KNOW ALL MEN BY THESE PRESENTS that the City of Kalispell
(the City), a duly organized municipal corporation of Flathead County,
Montana, for value received promises to pay to bearer, solely from
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 Bonds is
prepayable as stated below, on a date prior thereto on which it shall
have been duly called for redemption, and to pay interest on said
principal sum from said account from the date hereof until the prin-
cipal sum is paid or, if this Bond is prepayable, until it has been
duly called for redemption, at the rate of.
percent ( %) per annum, payable semiannually on January 1 and July 1
in each year, commencing January 1, 1977, interest to maturity being
represented by and payable in accordance with and upon presentation
and surrender of the interest coupons appurtenant hereto. Both prin-
cipal and interest are payable at the main office of the
, in , , or at the office
of a duly appointed successor paying agent, 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.
This Bond is one of an issue in the principal amount of
$445,000 (the Series 1976 Bonds), all of li':e date and tenor except
as to serial number, interest rate, maturity date and redemption
privilege, issued for the purpose of providing money to finance the
acquisition and construction of improvements to the City's municipal
sewerage system (the System), 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 Title 11, Chapter 24,
Revised Codes of Montana 1947, as amended, and Ordinance No. of
the City, duly enacted on , 1976 (the Authorizing Ordin-
ance) .
The Series 1976 Bonds maturing in the years 1983 through
1986 are payable on their respective stated maturity dates without
option of prior payment but those matuiring in the years 1987 through
1996 are each subject to redemption and prepayment at the option of
the City at 102% of par plus accrued interest, and in inverse order
of their serial numbers, on July 1, 1986, and on any interest payment
date thereafter. 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 thereof t
at which principal and inter
such notice to be published
and in a financial newspaper
York. Holders of prepayable
names and addresses and the
o the holder, if known, and to the bank
est are then payable, and will cause
in the official newspaper of the City
published in the city of New York, New
Bonds of this issue may register their
serial numbers of their Bonds with the
City Treasurer for the purpose of receiving such mailed notice.
IT IS CERTIFIED, RECITED, COVENANTED AND AGREED that the
City has duly authorized and will forthwith construct and complete
the improvements to the System hereinabove described, has fixed and
established and will collect reasonable rates and charges for the
services and facilities afforded by the System and has created a
special Sewerage System Fund into which the gross revenues of the
System, including all additions thereto and replacements and improve-
ments thereof, will be paid, and a separate and special Revenue Bond
Account in that fund, into which will be paid each month, from and as
a first and prior lien on the net revenues of the System then on hand,
an amount equal to not less than the sum of one -sixth of the interest
due within the next six months and one -twelfth of the principal due
within the next twelve months with respect to all Bonds secured by the
Authorizing Ordinance and payable from that account, and into which --
shall be paid each month additional net revenues equal to one -sixtieth
of the maximum amount of priniipal and interest to fall due within any
subsequent fiscal year on all such Bonds until a reserve equal to such
maximum amount of principal and interest is established,which rese. ,
shall thereafter be maintained; that the Revenue Bond Account will. .
used only to pay the principal of and interest on the Series 1975
Bonds, outstanding Sewerage System Revenue Bonds, dated as of May L
1968, and January 1, 1972 (herein after referred to as the Outstaring
Bonds), and all other Bonds issued pursuant to and secured by the
Authorizing Ordinance, and such rates and charges will from time to time
be made and kept sufficient to provide gross income and revenues ade-
quate to pay promptly the reasonable and current expenses of operating
and maintaining the System and to produce in each fiscal year net
revenues in excess of such current expenses, equal to 125% of the max-
imum amount of principal and interest payable from the Revenue Bond -
Account in any subsequent fiscal year; that additional Bonds and
refunding Bonds may be issued and made payable from the. Revenue Bond
Account on a parity with the Series 1976 Bonds and Outstanding Bonds,
upon certain conditions set forth in the Authorizing Ordinance but no
obligation will be otherwise incurred and made payable from the net
revenues of the System, whether or not such obligation shall also con-
stitute a general obligation and indebtedness of the City, unless the
lien thereof shall be expressly made subordinate to the lien of the
Series 1976 Bonds,.Outstanding Bonds and parity Bonds on such net
revenues; that all provisions for the security of the holder of this
Bond set forth in the Authorizing Ordinance 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 and resolutions of the City 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 this Bond and the interest hereon are payable solely
from the net revenues of the System pledged and appropriated to the
Revenue Bond Account and do not constitute a debt of the City within
the meaning of any constitutional or statutory limitation or provision
and the issuance of this Bond does not cause either the general or the
special indebtedness of the City to exceed any constitutional or statu-
tory limitation.
IN WITNESS WHEREOF the City of Kalispell, Flathead County,
Montana, by its City Council, has caused this Bond and the certifi-
cate on the reverse side hereof and the coupons appurtenant hereto
to be executed in its behalf by the signature of the Mayor and City
Treasurer and countersigned by the City Clerk, and its corporate
seal to be affixed hereto, both such signatures and the seal being
authentic facsimiles authorized by the officers to be printed hereon,
except for the manual signature of one officer on the face of this
Bond , and has caused this Bond to be dated as of July 1, 1976.
Mayor
City Treasurer
' City Clerk
(Facsimile Seal)
(Form of Coupon)
No. $
On the 1st day of July (January), 19 , unless the Bond.
described below is subject to and has been called for earlier re-
demption, the City of Kalispell, Flathead County, Montana, will pay
to bearer at the main office of the , in
, from the Revenue Bond Account in
its Sewerage System Fund, the amount shown hereon in lawful money of
the United States of America for interest then due on its Sewerage
System Revenue Bonds, Series 1976, dated July 1, 1976, No.
(Facsimile signature) (Facsimile signature) (Facsimile signature)
City Clerk City Treasurer Mayor
(Form of certificate to be printed on the re-
verse side of each Bond, following a full copy
of the legal opinion on the issue)
We certify that the above is a full, true and correct copy
' of the legal opinion rendered by bond counsel on the issue of Bonds
of the City of Kalispell, Flathead County, Montana, which includes
the within Bond, dated as of the date of delivery of and payment for
the bonds. .
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2.06 Preparation and Delivery. The Series 1976 Bonds shall be
prepared under the direction of the City Clerk and shall be executed
on behalf of the City by the signature of the Mayor and City Treasurer
and countersigned by the City Clerk; provided, that the signature of
one of such officers shall be a printed facsimile. The interest
coupons appurtenant to the Series 1976 Bonds shall be executed and
authenticated by the printed facsimile signatures of such officers
and on the reverse side of each Bond shall be printed a copy of the
legal opinion to be rendered by bond counsel, authenticated by the
certificate and facsimile signatures of such officers. The Series
1976 Bonds shall be sealed with a printed facsimile of the corporate
seal of the City. After registering the Series 1976 Bonds in the
manner specified in Section 11-2318, Revised Codes of Montana 1947,
the City Clerk shall cause them to be delivered to the purchasers
thereof, upon payment of the purchase price as specified in the con-
tract of sale, and the purchasers shall not be obligated to see to
the application of the purchase price.
Section 3. Sewerage System Fund.
3.01 Pledge and Appropriation. There is hereby created a
Sewerage System Fund of the City which shall be maintained as a
separate and special bookkeeping account in the City's financial
records until all Bonds secured hereby and interest and redemption
premiums due thereon have been fully paid, or the City's obligation
with reference to the Bonds has been discharged as provided in
this Authorizing Ordinance. All moneys.and investments on hand
in the Sewerage System Fund created by ResolutionSNo. 2686 & 2861.
effective date of this Authorizing Ordinance shall be forthwith
transferred to the Fund and credited to the respective accounts
provided in this Section 3. All proceeds of Bonds issued hereunder,
and all gross revenues derived from the operation of the System, are
irrevocably pledged and appropriated and shall be credited to the
Fund as received. Such gross revenues include all income and receipts
from rates, fees, charges and rentals imposed for connections with
and for the availability, benefit and use of the System, and from
penalties and interest thereon, and from any sales of property acquired
for the System and all income received from the investment of such
revenues, but not ,any special assessments or taxes levied for con-
struction of any part of the System. The Fund shall be subdivided
into separate accounts as designated and described in Sections 3.02
to 3.06, to segregate income and expenses received, paid and accrued
for the respective purposes described in those sections. The revenues
received in the Fund shall be apportioned monthly to the respective
accounts, commencing August 1, 1976.
3.02 Construction Account. The Construction Account Shall be
used only to pay as incurred and allowed costs which under accepted
accounting practice are capital costs of the Project, and of such
future reconstructions, improvements, betterments or extensions of ,
the System as may be authorized in accordance with law; including
but not limited to payments due for work and materials performed and
delivered under construction contracts, architectural, engineering,
inspection, supervision, fiscal and legal expenses, the cost of lands
and easements, interest accruing on Bonds issued hereunder curing
the period of construction of facilities financed thereby and for
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six months thereafter, if and to the extent that the Revenue Bond
' Account is not sufficient for payment of such interest, reimbursement
of any advances made from other City funds, and all other expenses
incurred in connection with the construction and financing of any
such undertaking.. To the Construction Account shall be credited as
received all proceeds of Bonds issued hereunder, except amounts appro-
priated to the Revenue Bond Account in Section 3.04 and all other
funds appropriated by the City for the Project and other improvements,
extensions or betterments to the System and all income received from
.the investment of the Construction Account
3.03 Operating Account. All moneys and investments in the
Operating Account created by Resolutions No..2686_&-2861 shall be credited
to the Operating Account of the Fund. On each monthly apportion-
ment, 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
monthly apportionment. The term "operating expenses" shall mean the
current expenses, paid or accrued, of operation, maintenance and
current repair of the 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 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
practices. Such expenses shall not include any allowance for depreciatioi
or renewals or replacements 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 rea-
sonable compensation for the performance of duties necessary to the
operation of the System. There shall also be credited to the Operating
Account an Operating Reserve equal to one month's operating expenses,
which sum shall be maintained by additional transfers upon each monthly
apportionment whenever necessary, or may be augmented by transfers of
additional amounts from the Surplus Account described below if deter-
mined by the City Council to be necessary to meet contingencies arising
in the operation and maintenance of the System. Money in the Operating
Account shall be used solely for the payment of current operating
expenses of the System as herein defined. The net revenues of the
System, as referred to in this Authorizing Ordinance, are defined to
include the entire amount of such gross revenues remaining upon each
such monthly apportionment, after crediting to the Operating Account
the amount required thereby, including sums required to maintain the
operating reserve in the minimum amount herein stated.
' 3.04 Revenue Bond Account. All moneys and investments, including
the reserve, in the Revenue Bond Accounty created by Resolutions No. 2686 r_'
shall be credited to the Operating Account of the Fund. Upon each 286:.
monthly 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 the sum of one -sixth of the interest to become due withir�
the next six months plus one -twelfth of the principal to become due
within the next twelve months with respect to the outstanding
1968 Bonds and 1972 Bonds, the Series 1976 Bonds, and all other
Bonds payable from the Revenue Bond Account.. The City shall also
credit to the Revenue Bond Account upon each monthly apportionment,
commencing August 1, 1976,from an amount equal to one -sixtieth of the
remaining net revenues maximum amount of principal and interest
coming due in any future fiscal year on all of the Bonds payable
from the account to increase the reserve balance transferred from
the Revenue Bond Account created by Resolution No. 2686 to such
maximum amount of principal and interest which reserve shall there-
after be maintained in such amount by additional credits of remaining
net revenues; save and except that the net revenues in excess of the
minimum monthly credits may be appropriated to the Construction
Account if and to the extent needed to pay claims due for necessary
expenses of construction, in excess of the balance available in that
account. Money from time to time held in the Revenue Bond Account
shall be disbursed only to meet payments of principal and interest
on the outstanding 1968 Bonds and 1972 Bonds, the Series 1976 Bonds
and all other Bonds payable therefrom as such payments become due,
and the reserve therein shall be used only to pay such maturing
principal and interest when other moneys within the account are
insufficient therefor; provided, that on any date when all out-
standing Bonds are due or prepayable by their terms, if the amount ,
then on hand in the Revenue Bond Account, including the reserve, .i..
sufficient, with any other moneys available for the purpose, to
all such Bonds and the interest accrued thereon in full, it may t7:
used for that purpose; and provided further that so long as the
amount of the reserve is not less than the amount herein required to
be maintained, the City may credit earnings on investment of the
reserve to the Replacement and Depreciation Account. If any payment
of principal or interest becomes due when money in the Revenue Bond
Account is temporarily insufficient therefor, such payment shall be
advanced out of any net revenues theretofore segregated and then on
hand in the Replacement and Depreciation Account or the Surplus
Account.
3.05 Replacement and Depreciation -Account- All of the moneys
and investments in the.Replacement and Depreciation Account created
by Reoslutiors 2686 &2861 shall be credited to the Replacement and
Depreciation Account of the Fund. There shall be set aside and
credited, upon each monthly apportionment, to the Replacement and
Depreciation Account such portion of the net revenues of the System,
in excess of the current requirements of the Revenue Bond Account,
including the Bond reserve therein (which portion of the net revenues
is referred to herein as "surplus net revenues"), such amount as
the City Council shall determine to be required for the accumulation
of a reasonable allowance for depreciation of the System and for '
replacement or renewal of worn out, obsolete or damaged 'properties
and equipment thereof. Money in this account shall be used only for
the purposes above stated or, if so directed by the Council, to re-
deem Bonds which are prepayable according to their terms, to pay
principal or interest when due thereon as required in Section 3.04
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hereof, or to pay the cost of improvements to the System; provided,
that in the event that the City shall hereafter issue Bonds for the
purpose of financing the construction and installation of additional
improvements or additions to the System, other than Bonds payable
from the.Revenue Bond Account, surplus 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 Replace-
ment and Depreciation Account.
3.06 Surplus Account. All moneys and investments in the Surplus
Account created by Resolutions 2681 &2861shall be credited to the Sur-
plus Account in the Fund. 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 money from
time to time in that account, when not required to restore a current
deficiency in the Revenue Bond Account as provided in Section 3.04
hereof, may be used for any of the following purposes and not other-
wise:
(a) to redeem and prepay Bonds payable from the
net revenues when and as such Bonds become prepayable
according to their terms; or
(b) to purchase such Bonds on the open market,
' whether or not the Bonds or other such Bonds may then
be prepayable according to their terms; 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
i
(d) to pay for repairs of or for the construction
and installation of improvements or additions to the
System; or
(e) to restore the operating reserve or increase
the same when determined to be necessary by the City
Council. .
No money shall at any time be transferred from the Surplus Account
or any other account of the Sewerage System Fund to any other fund of
the City, nor shall such money at any time be loaned to other muni-
cipal funds.or invested in warrants, special improvement bonds or
other obligations payable from other funds, except as provided in
Section 3.07.
3.07. Deposit and Investment of Funds. The City Treasurer
shall cause all money pertaining to the Sewerage System Fund to be
deposited as received with one or more depository banks duly quali-
fied 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
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other bank accounts of the City of Kalispell, so long as any of the
Bonds secured hereby and the interest thereon shall remain un-
paid; and the balance in such accounts, except such portion there-
of 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. Any of such money not
necessary for immediate use may be deposited with such depository
bank in savings or time deposits. No money shall at any time be
withdrawn from such deposit accounts except for the purposes of
the Sewerage System Fund as defined and authorized in this Authorizing
Ordinance; except that money from time to time on hand in this Fund
may at any time, in the discretion of the City Council, be invested
in securitites which are direct, general obligations of the United
States of America maturing and bearing interest at the times and in
the amounts estimated to be required to provide cash when needed
for the purposes of the respective accounts; provided that the re-
serve in the Revenue Bond Account, the Replacement and Depreciation
Account, and the Surplus Account may be invested in said securities
maturing not later than five years from the date of the investment;
and provided further, that money pertaining to the Surplus Account
of the Fund may, in the discretion of the Council, be invested in
any securities which are direct, general obligations of the City of
Kalispell. Income received from the deposit or investment of money
in said accounts shall be credited to the account from whose money
the deposit was made or the investment was purchased, and handled
and accounted for in the same manner as other money in that account.
Section 4. Priorities and Additional Bonds.
4.01. Priority of uBond Pavments. Each and all of the Bonds
secured hereby or herein authorized shall be equally and ratably
secured by and payable out of the net revenues of the System without
priority of any one Bond over any other; provided that if at any
time the net revenues on hand in the Sewerage System Fund as defined
in Section 3.03 hereof are insufficient to pay principal and
interest then due on all such Bonds, the money on hand shall be
first used to pay the interest accrued on all outstanding Bonds,
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.
4.02. Refunding Revenue Bonds. The City reserves the right
and privilege of refunding any or all of the Bonds herein author-
ized and referred to, but only subject to the following terms and
conditions:
(a) Any matured Bonds may be refunded if money
available for the payment thereof at maturity, within I
the limitation prescribed in Section 4.01 hereof,
should at any time be insufficient to make such pay-
ment in full.
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(b) Any Bonds may be refunded prior to maturity,
as and when they become prepayable according to their
terms.
(c) Provision may be made for the payment and
refunding of any unmatured Bonds by the deposit with
a duly qualified depository bank, as escrow agent, of
cash sufficient, or of securities of the kinds author-
ized by law, the agreed payments of interest and prin-
cipal with respect to which are sufficient, to pay the
principal amount of such Bonds with interest to matur-
ity or to any prior date or dates on which they have
been duly called for redemption, and any premium re-
quired for such redemption.
(d) Any refunding revenue Bonds issued for the
above purposes may be made payable from the net reve-
nues on a parity as to interest with all then out-
standing Bonds, provided that (1) the maturity of
each refunding revenue Bond shall be subsequent to
the last maturity of any then outstanding Bonds
which are not refunded or to be refunded out of
money on deposit with such escrow agent, and (2)
no bondholder shall be required to accept a
refunding'revenue Bond in exchange for any Bond
owned by him.
.4.03 Other Parity Bonds. The City reserves the right to is-
sue additional Bonds, payable from the Revenue Bond Account of the
Sewerage System Fund on a parity as to both principal and interest with
the Outstanding Bonds payable from said account, ,if the net revenues of
the System for the last complete fiscal year preceding the issuance of
such additional Bonds have equaled at least 125% of the maximum
amount of principal and interest payable from said Revenue Bond
Account in any subsequent fiscal year during the term of the then
outstanding Bonds, with respect to all such Bonds and the additional
Bonds proposed to be issued. For the purpose of the foregoing com-
putation, the net revenues shall be those shown by the financial
reports caused to be prepared by the City pursuant to Section 5.06,
except that if the rates and charges for sewerage service have been
changed since the beginning of the preceding fiscal year, then the
rates and charges in effect at the time of issuance of the addi-
tional Bonds shall be applied to the quantities of service actu-
ally rendered and made available during such preceding fiscal year
to ascertain the gross revenues, from which there shall be deducted,
to determine the net revenues, the actual operation and maintenance
cost plus any additional annual costs of operation and maintenance
which an independent consluting engineer for the City estimates
will be incurred because of the improvement or extension of the
System to be constructed from the proceeds of the additional
Bonds proposed to be issued. In no event shall any such addi-
tional Bonds be issued and made payable therefrom if there then
exists any deficiency in the balances required by this Authorizing
Ordinance to be maintained in any of the accounts of the Fund or
if the City is in default in any of the other porvisions of this
Authorizing Ordinance.
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4.04 Subordinate Lien Bonds. Nothing in this Authorizing
Ordinance shall preclude the City from issuing additional 'ponds
which are expressly made a charge on only the surplus net revenues
of the System as defined in Section 3.05 of this Authorizing Ordin-
ance, subordinante to the pledge of net revenues to the Revenue
Bond Account.
Section 5. Covenants.
5.01 General. The City covenants and agrees with the pur-
chasers and the holders from time to time of all Bonds issued under
or secured by the provisions of this Authorizing Ordinance that-therecitals contained in Section 1 hereof are correct; that until all such
Bonds are fully paid or the City's liability with reference thereto
is fully discharged as.provided in Section 7, it will continue to
hold, maintain and operate its System as a public utility and con-
venience, free from all liens thereon or on the income therefrom
other than the liens herein granted or provided for, and will
maintain, expend and account for its Sewerage System Fund and the
several accounts therein as provided in Section 3, and will not
incur a futher lien or charge on the income or revenues of the
System except upon the conditions and in the manner prescribed in
Section 4, and will perform and cause all other officers and
employees of the City to perform and enforce each and all of the
additional covenants and agreements set forth in this Section 4; ,
and that it will complete the construction, furnishing and equip-
ping of the Project described in Section 1.02 as expeditiously as
practical.
5.02 Competing Service. The City will not establish or au
thorize the establishment of any other system for the public supply
of service in competition with any or all of the services supplied
by the facilities of the System.
5.03 Property Insurance. The City will cause all buildings,
properties, fixtures and equipment constituting a part of the
System to be kept insured with a reputable insurance carrier or
carriers, qualified under the laws of Montana, in such amounts as
are ordinarily carried, and against loss or damage by fire, explo-
sion, and such other hazards and risks as are ordinarily insured
against, by public utilities owning and operating properties of a
similar character and size, provided that if at any time the City
isunableto obtain such insurance, it will obtain insurance in
such amounts and against such risks as is reasonably obtainable.
The proceeds of all such insurance shall be available for the re-
pair, replacement and reconstruction of damaged or destroyed prop-
erty, and until paid out in making good such loss or damage, are
pledged as security for the outstanding bonds issued hereunder.
All insurance proceeds received in excess of the amount required
for restoration of the loss or damage compensated thereby shall
be and become part of the revenues appropriated to the Sewerage Sys-
tem Fund. If for any reason insurance proceeds are insufficient
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for the repair, replacement and reconstruction of the insured
property, the City shall supply the deficiency from revenues on
hand in the Replacement and Depreciation Account and Surplus Ac-
count,
5.04 Liability Insurance and Surety Bonds. The City will
carry insurance against liability of the City and its employees
for damage to persons and property resulting from the operation
of the System in such amounts as the City determines from time to
time to be necessary or advisable by reason of the character and
extent of such operation. It will also cause all persons handling
money and other assets of the Sewerage System Fund to be adequately
bonded for the faithful performance of their duties and to account
for and pay over such money to the City. All amounts received
under such insurance and bonds shall be applied to the payment of
the loss or damage covered thereby. The premiums for all insurance
and bonds required by this section and Section 5.03 constitute part
of the operating expenses of the System, but no insurable liabili-
ties of the City in excess of amounts received under such insurance
and bonds shall constitute a lien or charge on revenues or any other
assets herein or otherwise pledged to the Sewerage System Fund.
5.05 Disposition of Property.. The City will not mortgage,
lease, sell, or otherwise dispose of any real or personal proper-
ties.of the System, unless:
(a) prior to or simultaneous with such mortgage,
' lease, sale or other disposition, all of the Bonds is-
sued hereunder and then outstanding shall be discharged
as provided in Section 7; or
(b) the properties to be mortgaged, leased, sold
or otherwise disposed of are unserviceable, inadequate,
obsolete or no longer required for use in connection
with the System; or
(c) the mortgage, lease, sale or other disposition
will not prevent the City from complying with the pro-
visions of this ordinance; and
(d) in any event referred to in clauses (b) or
(c), all proceeds of the mortgage, lease, sale or other
disposition of such properties are deposited into the
Sewerage System Fund.
5.06 Books and Records. The City will cause proper and ade-
quate books of record and account to be kept showing complete and
correct entries of all receipts, disbursements and other transac-
tions relating to the System, the monthly gross revenues derived
from its operation, and the segregation and application of the
gross revenues in accordance with this Authorizing Ordinance, in such
reasonable detail as may be determined by the City in accordance
with generally accepted accounting practices and principles. It
will cause such books to be maintained on the basis of the same
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.... ,�:[�3Fe�x,'. .: ':,.. i^.yF' YET"._:. .• Y. y - +T � xA � _'_J
M�
fiscal year as that utilized by the City. The City shall, with-
in 120 days after the close of each fiscal year, cause to be pre-
pared and supply to the original purchaser or purchasers of Bonds
issued hereunder and the bank or banks designated as agent for
the payment of principal of and interest thereon a financial re-
port with respect to the System for such fiscal year. The
report shall be prepared at the direction of -the City
Treasurer by an independent certified public accountant in ac-
cordance with applicable generally accepted accounting principles
and, in addition to whatever matters may be thought proper by the
City Treasurer or accountant to be included therein, shall include
the following:
(a) a statement in detail of the income and ex-
penditures of the System for the fiscal year,
identifying capital expenditures and separating them
from operating expenditures;
(b) a balance sheet as of the end of the fiscal
year;
(c) the number of premises connected to the
System at the end of the fiscal year;
(d) the amount on hand in each account of the
Sewerage System Fund at the end of the fiscal year;
(e) 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 ex-
piration date of the policy or bonds; and
(f) a determination that the report shows full
compliance by the City with the provisions of this
ordinance during the fiscal year covered thereby, in-
cluding proper segregation of the capital expenditures
from operating expenses, maintenance of the required
balance in the Revenue Bond Account, and receipt of
net revenues during each fiscal year at least equal
to 125% of the maximum amount of principal and inter-
est payable from the Revenue Bond Account in any sub-
sequent fiscal year; or, if the report should reveal
that the revenues have been insufficient for compli-
ance with this ordinance, or that the methods used
in accounting for such revenues were contrary to any
provision of this Authorizing Ordinance, the report
of audit shall include a full explanation thereof,
together with the recommendations for such change
in rates or accounting practices or in the opera-
tion of the System as may be required.
MCM
- . - _: ...
5.07. Cost of Insurance and Accounting. Theinsurance and
fidelity bond premiums and the cost of the bookkeeping and audits
herein provided for and of the billing and collection of the sewer
' rates, charges and rentals shall be payable from the Operating Ac-
count.
5.08 Handling of Eunds. The employees of the City, under
the direction and control of the City Treasurer, shall keep
books of account, issue statements and collect bills for the rates,
charges and rentals for the services and facilities provided by
the System and for other money currently receivable
.on account of the System, and shall, to the extent required by
Section 5.10, provide for the discontinuance of service in cas(,
of nonpayment for services or noncompliance with regulations.
All money collected with respect to the System shall be deposited
daily with the City Treasurer. The Treasurer 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 Treasurer to comply and to enforce compliance
on the part of all officers and employees concerned with the pro-
visions of this ordinance, and with the City's other regulations
respecting the System, shall constitute malfeasance for
which the Treasurer and the surety on his bond shall be
personally 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 Council will appoint a special superintendent
for the System, with the power and responsibility to operate the
System for the City of Kalispell, and to recommend to the Council
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.
5.09 Rules and Regulations. The rules and regulations for
operation of the System and the use of water service from
the System shall be as provided in the existing ordinances of the
City, and any ordinances subsequently adopted amendatory thereof
or supplemental thereto.
5.10 Billing. The charges for sewerage services will be billed
at 1e�st bi-monthly;. and if the bill is not paid within sixty days of
the date of billing, or if the customer fails to comply with all
rules and regulations established for the System within sixty
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 sewerage service and
compliance with all such rules and regulations. The Citr shall
take appropriate legal action to collect the unpaid charges, in-
cluding, to the extent now or hereafter authorized by law, making
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the charge a lien against the real property served :by the System
for which the charge remains unpaid and causing charges
with respect to such properties to be collected in the same manner
as taxes levied against property within the City.
5.11 Remedies. The holders of not less than 25% in princi-
pal amount of the outstanding Bond issued and secured under the
provisions of this ordinance shall have the right, either at law
or in equity, by suit, action or other proceeding, to protect and
enforce the rights of all holders of such Bond and to compel the
performance of any and all of the covenants required herein to be
performed by the. City, and its officers and employees, including
but not limited to the fixing and maintaining of rates, fees and
charges and the collection and proper segregation of gross reve-
nues and the application and use thereof. No holders of less than
this principal amount may institute any such proceeding, except
that nothing herein shall impair the absolute and unconditional
right of the holder of each Bond to receive payment of the prin-
cipal of and interest on such Bond as such principal and interest
respectively become due, and to institute suit for any such pay-
ment. The holders of a majority in principal amount of such out-
standing bonds shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the
bondholders or the exercise ofi'any power conferred to them, and the
right to waive a default in the performance of any such covenant,
and its consequences, except a default in the payment of the prin-
cipal of or interest on any Bond when due. Any court having juris-
diction of the action may appoint a receiver to administer the
System on behalf of the City with power to charge and collect
rates, fees and charges sufficient to provide for the payment of
the operating expenses and for the payment of any Bonds or obli-
gations outstanding against the System, and to apply the revenues
in conformity with this ordinance and the laws of the State of
Montana.
5.12 Rate Covenant. While any Bonds payable from the Reve-
nue Bond Account are outstanding and unpaid, the rates, charges
and rentals for all services and facilities furnished and made
available by the System to the City and 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. It is covenanted and agreed
that the rates, charges and rentals to be charged shall be main-
tained, and shall be revised whenever and as often as may be
necessary, according to schedules such that the revenues in the
fiscal year ending June 30, 1977, and in each fiscal year there-
after will be at least sufficient to pay the operating expenses
as defined in Section 3.03, to maintain the operating reserve
therein established, and to produce net revenues fulfilling each
of the following conditions:
(a) the net revenues received during each fiscal
' year commencing with the fiscal year beginning July 1,
1976, shall be not less than 125% of the sum of the
maximum amount of principal and interest payable from
the Revenue Bond Account during any subsequent fiscal
year; and
(b) if at the close of any fiscal year the net
revenues actually received during such year have been
less than required in clause (a) hereof, the City will
forthwith prepare a schedule of altered rates, charges
and rentals which are just and equitable and sufficient
to produce net revenues in such amount and do all other
things necessary to the end that such schedule will be
pleaced in operation at the earliest possible date.
The establishment of a ratio of net revenues available for the
Revenue Bond Account at least equal to 125% of the sum of the maxi-
mum amount of principal and interest to become due in subsequent
fiscal years on the Bonds has been deemed necessary in order to sell
the Bonds upon 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 be used as authorized in Section 3 of
' this Authorizing Ordinance. The 1111 Bonds are presently prepayable
according to their terms and the 1972 Bonds and Series 1976 Bonds
may be prepaid according to their terms on January 1, 1977, and
July 1, 1976, respectively. in the estimation of the Council, any
excess of net revenues over principal and interest payments actually
due and the reserve required to be maintained therefor, will be
needed to pay.or to provide reserves for payment of replacements,
renewal and improvement costs, in order to provide adequate service
for the present population and the increase thereof reasonably to
be expected; and any excess not required for such purposes in the
judgment of the Council may be used to prepay Bonds and thereby
reduce the interest cost thereon to the City and to the persons
served by the System.
Section 6. Amendments.
6.01 Amendments Without Bondholder Consent. The City re-
serves the right to amend this ordinance from time to time and at
any time for the purpose of curing any ambiguity; curing; correct-
ing or supplementing any defective provision; making such provi-
sions with regard to iaatters or questions arising hereunder as the
City Council may deem necessary or desirable, and are not incon-
sistent with this ordinance and do not adversely affect the inter-
est of the holders of Bonds issued hereunder; adding to the cove-
nants and agreements herein contained, or to the revenues herein
pledged, other covenants and agreements thereafter to be observed
and additional revenues thereafter appropriated to the Sewerage
System Fund; surrendering any right or power herein reserved to or
conferred upon the City; and authorizing the issuance of Additional
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4�0
VW a:
Bonds in the manner and subject to the terms and conditions pre-
scribed in Section 4. Any such amendment may be adopted by ordi-
nance, without the consent of the holders of any of the Bonds
issued hereunder.
6.02 Amendments With Bondholder Consent. With the consent
of holders of Bonds issued hereunder as provided in Section 6.03,
the City may from time to time and at any time amend this ordinance
by adding any provisions hereto or changing in any manner or elim-
inating any of the provisions hereof, or of any amending ordinance;
except that no amendment shall be adopted at any time without the
consent of the holders of all. Bonds issued hereunder which are then
outstanding, if it would extend the maturities of any such Bonds,
would reduce the rate or extend the time of payment of interest
thereon, would reduce the amount or extend the time of payment of
the principal or redemption premium thereof, would give to any Bond
or Bonds any privileges over any other Bond or Bonds, would reduce
the sources of revenues appropriated to the Sewerage System Fund, would
authorize the creation of a pledge of said revenues prior to or on
a parity with the Bonds (except as is authorized by Section 4), or
would reduce the percentage in principal amount of such Bonds re-
quired to authorize or consent to any such amendment.
6.03 Notice and Consent. Any amendment adopted pursuant to
Section 6.02 shall be made by ordinance, published in a financial
newspaper of national circulation purblished in New York City, New
York, and shall be come effective only upon the filing of written
consents with the City Clerk, signed by the holders of not less
than two-thirds in principal amount of the Bonds issued hereunder
which are then outstanding or, in the case of an amendment not
affecting all outstanding Bonds, by the holders of not less than
two-thirds in principal amount of the Bonds affected by such
amendment. Any written consent to an amendment may be embodied
in and evidenced by one or any number of concurrent written instru-
ments of substantially similar tenor signed by bondholders in
person or by agent duly appointed in writing, and shall become
effective when delivered to the City Clerk. Any consent by the
holder of any Bond shall bind him and every future holder of the
same Bond with respect to any amendment adopted by the City pur-
suant to such consent, provided that any bondholder may revoke
his consent with reference to any Bond by written notice received
by. the City Clerk before the amendment has become effective. In
the event that unrevoked consents of the holders of the required
amount of Bonds have not been received by the City Clerk within one
year after the publication of any amendment, the amendment and all
consents theretofore received shall be of no further force and
effect.
6.04 Proof. Proof of the execution of any consent, or of a
writing appointing any agent to execute the same, or of the owner-
ship by any person of Bonds, shall. be sufficient for any purpose
of this ordinance and shall be conclusive in favor of the City if
made in the manner provided in this Section 6.04. The fact and
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date of the execution by any person of any such consent or appoint-
ment may be proved by the affidavit of a witness of such execution
or by the certificate of any notary public or other officer author-
ized by law to take acknowledgments of deeds, certifying that the
person signing it acknowledged to him the execution thereof. The
amount of Bonds held by any person by or for whom a consent is given,
the serial numbers of such Bonds, and the date of his holding the
same, may be proved by a certificate executed by any trust company,
bank or other depository, wherever situated, if such certificate
is deemed satisfactory by the City Clerk, showing that at the
date therein mentioned such person had on deposit with such de-
pository, or exhibited to it, the Bonds therein described; or such
facts may be proved by the certificate or affidavit of the person
executing such consent, if such certificate or affidavit is deemed
satisfactory by the City Clerk. The City may conclusively assume
that such ownership continues until written notice to the contrary
is received by the City Clerk. The fact and date of execution of any
such consent and the amount and serial numbers of. Bonds held by the
person executing the same may also be proved in any other manner
which the City Council may deem' sufficient, but the Council may
nevertheless, in its discretion, require further proof in cases
where it deems further proof is desirable.
Section 7. Defeasance.
7.01 General. When the liability of the City on any Bond
issued under and secured by this ordinance and all coupons apper-
taining thereto has been discharged as provided in this section,
all pledges, covenants and other rights granted by this ordinance
to the holder of such Bond shall cease.
7.02 Payment. The City may discharge its liability with
reference to all Bonds and coupons which are due on any date by
depositing with the paying agent or agents for such Bonds on or
before that date a sum sufficient for the payment thereof in full;
or if any Bond or coupon shall not be paid when due, the City may
nevertheless discharge its liability with reference thereto by de-
positing with the paying agent or agents a sum sufficient for the
payment thereof in full with interest accrued to the date of such
deposit.
7.03 Prepayable Bonds. The City may also discharge its lia-
bility with reference to any prepayable Bonds which are called for
redemption on any date in accordance with their terms, by deposit-
ing with the paying agent or agents on or before that date an
amount equal to the principal, interest and redemption premium,
if any, which are then due thereon, provided that notice of such
redemption- has2 been duly given.
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7.04 Escrow. The City may also at any time discharge its
liability in its entirety with reference to any Bond or Bonds, '
subject to the provisions of law now or hereafter authorizing and
regulating such action, by depositing irrevocably in escrow, with
a bank qualified by law as an escrow agent for this purpose, cash
or securities which are authorized by law to be so designated,
bearing interest payable at such times and at'such rates and ma-
turing on such dates as shall be required to provide funds suffi-
cient to pay all principal, interest and redemption premiums to
become due on all Bonds of the issue on and before maturity or,
if the Bond has been duly called for redemption, on and before the
designated redemption date.
8.01 Arbitrage Certificate. The Mayor, City Clerk and City
Treasurer, being the officers of the City charged with the respon-
sibility for issuing the Bonds pursuant to this ordinance, are
authorized and directed to execute and deliver to the purchaser a
certification in order to satisfy the provisions of Section 1.103-13
of the amended Income Tax Regul,'ations (26 CFR Part 1) published in
the.Federal Register May 5, 197J. Such certification shall state
that on the basis of the facts, estimates and circumstances in
existence on the date of issue and delivery of the Bonds as therein
set forth, it is not expected that the proceeds of the Bonds will
be used in such a manner that would cause the Bonds to be arbitragf•
bonds, and the certification shall further state that to the best
of the knowledge and belief of the certifying officers there are
no other facts, estimates or circumstances in existence that would
materially change such expectation.
8.02 Transcript. The officers of the City are hereby author'_.ad
and directed to prepare and furnish to the purchasers of the Bonds and
to the attorneys approving the legality of the issuance thereof, certi-
fied copies of all proceedings and recoreds of the City relating to
the Bonds and to the organization and financial condition and affairs
of the City, and such affidavits and other information as may be re-
quired to show the facts relating to the legality and marketability
of the Bonds as the same appear from the books and records under their
Bonds as the same appear from the books and records under their
custody and control or as otherwise known to them; and all such
certified copies, certificates, and affidavits, including any
heretofore furnished, shall constitute representations of the
City as to the truth of the facts purported to be shown thereby.
FI
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Section 9. Repeals and Effective Date.
9.01 Repeal. All provisions of ordinances, resolutions and
other actions and proceedings of the City of Kalispell and of the
City Council including Resolutions Nos. 2686 and 2861 which are in
any way inconsistent with the terms and provisions of this Authorizing
Ordinance are repealed, amended and rescinded to the full extent
necessary to give full force and effect to the provisions of this
Authorizing Ordinance; provided, however, no such ordinances, resolu-
tions and other actin and proceedings 1 be repealed, amended
and rescinded unti sugh time as this utho izing Ordinance shall be
in full force a effect according to law.
9.02Effect
full force and of
accor/ding to law.
Pass
the( City of al' s
ivej Date. This,.Authorip,ing Ordinance shall be in
feet from and te/it final passage and approval
City it and approved by the Mayor of
Pell, Mon , this 21st day of June , 1976.
Mayor Norma .' Happ
I, George Beardslee, City Clerk of the Ci*of'-f<Alispell, Nk n na, do certify that on
the 24th day of June , 19 6 posted a copy]/of t e foregoing ordinance
in my office, and the same remained post d fqr a period ofifive ays, and ghe foregoing
Is a true and correct copy of the ordinance as passed by 09 CI y Council