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ORDINANCE NO. 637
AN ORDINANCE AUTHORIZING AND PROVIDING FOR THE
ISSUANCE AND SECURING THE PAYMENT OF $115,000
SEWER REVENV(JE BONDS OF THE CITY OF AMES, IOWA,
UNDER THE PROVISIONS OF CHAPTER 394 OF THE CODE
OF IOWA, FOR THE PURPOSE OF DEFRAYING THE COST,
TO THAT AMOUNT, INCIDEN^1 TO CONSTRUCTING A SEW-
AGE ^REATMENT - PLANT AS AN INTEGRAL PART OF THE
SEWAGE COLLECTION, TREATMENT, PURIFICATION AND
DISPOSAL SYSTEM OF SAID CITY
WHEREAS, in order to adequately provide for the collection, treat-
ment, purification and disposal in a sanitary manner of waste and
sewage in and adjacent to the City of Ames, Story County, Iowa, it
is necessary and advisable that said City construct a sewage treat-
ment plant, together with all appurtenances necessary or useful in
connection therewith, as an essential part of the municipal sewage
system of said City; and
WHEREAS the cost of said sewage treatment plant and appurtenances
has been estimated to be $778,548. 15 and to pair such cost it is neces-
sary that said City currently issue its revenue bonds in the amount
of $115,000 as authorized and permitted 'by Chapter 394 of the Code
of Iowa, 1946, reserving the right to issue additional revenue bonds
from time to time ranking on a parity therewith; and
WHEREAS a notice of the intention of this City Council to take ac-
tion for the issuance of $115,000 Sewer Revenue Bonds of said City
has heretofore been duly published and no petition setting forth
objections to such proposed action has been filed in the office of
the City Clerk; and
WHEREAS said City has heretofore by Ordinance No. 621, adopted
June 3, 1946, established charges, rates or rentals for sewer ser-
vices which are presently, and will continue to be, collected as
revenues of the municipal sewer system of said City and said reve-
nues have not been heretofore pledged but are available for payment
of the revenue bonds hereinafter authorized:
NOW, THEREFORE, Be It and It Is Hereby Ordained by the City Council
of the City of Ames, Iowa, as follows :
Section 1. That .for the purpose of defraying the cost, to the
amount of $115,000, incident to constructing a sewage treatment
plant with appurtenances necessary or useful in connection there-
with as an integral and necessary part of the municipal sewage col-
lection, treatment, purification and disposal system of said City
there be and there are hereby authorized to be issued the negoti-
able interest bearin revenue bonds of said City of Ames in the
principal amount of115,000, each of which shall be known and desig-
nated as a "Sewer Revenue Bond", bearing date of November 1, 1947,
of the denomination of $1000 each and bearing interest at the _rate
of two and one-half per cent (2%j per annum, payable semi-annually
on May 1 and November 1 of each ,year. Said bonds shall be numbered
consecutively from 1 to 115, inclusive, and shall mature in numerical
order, $5000 on November l� of each of the years 1948 to 1964, inclu-
sive, and $10000 on November 1 of each of the .yeas 1965 to 1967,
inclusive; provided, however, any or all of said bonds numbered 51
to 115, inclusive, shall be optional for redemption by said City
prior to maturity upon terms of par and accrued interest on any in-
terest payment date on or after November 1, 1957, and in the event
of the exercise of such right notice thereof, identifying the bonds
to be redeemed shall be given by publication at least once not less
than thirty (30) days p..°ior to such redemption date, in a newspaper
of general circulation within the State of Iowa.
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Both principal and :interest of said bonds shall be payable in
lawful money of the United States of America, at the office of the
City Treasurer in and of the City of Ames, Iowa. All of said bonds
and the interest thereon, together with such additional bonds ranking
on a parity therewith as may be issued and outstanding from time to
time under the conditions hereinafter set forth, shall be payable
solely from the bond and interest redemption sinking fund herein-
after created and shall be a valid claim of the holder thereof only
against said fund, and none of said bonds shall be a general obliga-
tion of said City nor payable in any manner by taxation, nor shall
the City be in any manner liable by reason of th2 failure of the
earnings of said plant and s -stem to be sufficient for the payment
in whole or in part of said bonds and interest thereon, but said
bonds and such additional bonds as may be issued on a parity there-
with shall be payable, both as to principal and :interest, solely
and only from the future net earnings of said plant and system
pledged therefor as hereinafter provided°
Section 2. That upon presentation at the office of the City
Treasurer of said City of any of said 'bonds same may be registered
as to principal in the name of the owner on the books in his office,
such registration to be noted on the reverse side of the bonds by
the City Treasurer, aril thereafter the principal of such registered
bonds shall be parable only to the registered holder, his legal
representatives or assigns. Such registered bonds shall be trans-
ferable to another registered holder, or back to bearer, only upon
presentation to said City Treasurer with a legal assignment duly
acknowledged or proved. Registration of any of such bonds shall
not affect the negotiability of the coupons thereto attached, but
such coupons shall be transferable by delivery merely.
Section 3 . That said bonds and coupons shall be in substan-
tially the following form:
UNITED STATES OF AMERICA
;STATE OF IOWA COUNTY OF STORY
CITY OF AMES
SEVER REVENUE BOND
No. $1000
KNOW ALL 14EN BY THESE PRESENTS: That tile City of Ames, in the
County of Story, and State of Iowa, for value received, hereby
promises to pay from the special fund provided therefor, as herein-
after_ set Forth, to the bearer or, if this bond be registered as to
principal, to the registered holder hereof, on the first day of
November, 19 , the sum of One Thousand Dollars ($1000) and from
said special fund to also pay interest on said sum from the date
hereof until paid at the rate of two and one-half per cent (2�%)
per annum semi-annually on the first days of May and November in
each year except as the provisions hereinafter set forth may be and
become applicable hereto, all such i_ntF^est as may accrue on and
prior to the maturity date hereof to be payable only upon presenta-
tion and surrender of the coupons hereto appertaining as they
severally become due, both the principal of and interest on this bon
being passable in lawful money of the United States of America at the
office of the City Treasurer in and of the City of Ames, Iowa.
This bond is one of a series issued by said City pursuant to
an ordinance duly enacted on the third day of November, 1947, for
the purpose of defraying a portion of the cost incident to construct-
ing a sewage treatment plant and appurtenances necessary and useful
in connection therewith as an integral and necessary part of the
municipal sewage collection, treatment, purification and disposal
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system of said City under and in full compliance with the Constitution
and statutes of the State of Iowa, including, among others, Chap-
ter 394 of the Code of Iowa, 1946.
The City of Ames hereby reserves the .right to call and redeem
any or all of the bonds of this issue numbered 51 to 115, inclusive,
prior to maturity upon terms of par and accrued interest on any in-
terest payment date on or after November 1, 1957, and in event such
right is exercised notice of such redemption identifying the bonds
to be redeemed will be given by publication at least once not less
than thirty days prior to such :redemption date in a newspaper of
general circulation within the State of Iowa. All such bonds thus
called for redemption and for the retirement of which funds are duly
provided will cease to bear interest on such redemption date .
This bond and the series of which it is one, together with such
additional bonds as may be issued and outstanding from time to time
on a parity therewith under tiie conditions set forth in the ordi-
nance hereinbefore referred to, are payable only from and secured
by net income and revenues to be derived from the operation of said
plant and system, which shall be sufficient to pay the principal of
and interest upon said bonds as and when the same become due and
payable, and which shall be set aside as a special fund)and is here-
by pledged for that purpose . This bond is not a general obligation
of said City nor payable in any manner by taxation or from other
funds . Said City covenants it will fix such rates for service of
said plant and system and will collect and account for income and
revenues therefrom sufficient to promptly pay the principal of and
interest on this bond, the series of which it is one and such addi-
tional bonds as may from time to time be outstanding on a parity
therewith as the same will become due .
This bond is fully negotiable but may be registered as to
principal only in the name of the holder on the books of said City
in the office of its City Treasurer, such registration to be evi-
denced bT notation on the back hereof by the Treasurer, after which
no transfer shall be valid unless made on said books and similarly
noted hereon, but it may be discha-�,gam: . from such registration by
being transferred to bearer, after which it shall be transferable
by delivery but it may be again registered as before. The registra-
tion of this bond as to principal shall not restrain the negotia-
bility of the coupons by delivery merely.
IT IS HEREBY CERTIFIED, RECITED AND DECLARED that all acts,
conditions and things required to exist, happen and be performed
precedent to and in the issuance of this bond, have existed, have
happened and have been performed in due time, form and manner as
required by law, and that the issuance of this bond does not exceed
or violate any constitutional or statutory limitation or provision
and that a sufficient amount of the income and revenues of said
sewage disposal plant and system of said City has been pledged to
and will be set aside into said special fund by said City for the
prompt payment of the principal of and interest on this bond and
the series of which it is one
IN TESTIMONY WHEREOF said City of Ames, by its City Council,
has caused this bond to be signed by its Mayor and attested by its
City Clerk and the coupons hereto attached to be executed with the
facsimile signatures of the said Mayor and City Clerk, which offi-
cials by the execution of this bond do adopt as and for their own
proper signatures their respective facsimile signatures appearing
on said coupons, this first day of November, 1947.
Mayor
Attest:
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City Clerk
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(Form of coupon)
No. $12- 50
On the first day of 19 , the City of Ames, Iowa,
will pay to bearer Twelve and 50 100 Dollars ($12050) out of the
special fund provided therefor, at the office of the City Treasurer,
Ames, Iowa, as provided in and for semi-annual interest then due on
its Sewer Revenue Bond, dated November 1, 1947, No.
Mayor
Attest:
City Clerk
On the back of each bond there shall be printed the certificate
of the City Treasurer in the following form!
"The issuance of this bond has been duly and
properly registered in my office as of the First
day of November, 19470
Treasurer of the City of Ames"
(Form for Registration to be
printed on back of each bond)
Date of In Whose Name Signature of
Registration Registered City Treasurer
Section 4. That said bonds shall be signed by the Mayor and
attested by the City Clerk and sealed with the corporate seal of
said City and the interest on said bonds shall be evidenced by cou-
pons attached thereto, which shall be executed with the facsimile
signatures of said Mayor and City Clerk, and said officials by the
execution of said bonds shall adopt as and for their own proper sig-
natures their facsimile signatures on said coupons. When and as
executed said bonds shall be delivered to the City Treasurer to be
by him duly registered as to issuance as provided by law; and said
Treasurer shall sign the certificate hereinbefore set out in Section
3 and endorsed upon the back of each bond and shall thereupon deliver
said bonds to Carleton Do Beh Co. and others, the purchaser thereof,
upon payment of the purchase price, same being at least par and
accrued interest, and all action heretofore taken in connection with
the sale of said bonds to said purchaser is hereby ratified and con-
firmed in all respects. The proceeds received by the sale of said
bonds, exclusive of accrued interest, shall be applied to defraying
the cost incident to constructing said sewage treatment plant and
appurtenances .
Section 5e That upon the issuance of the bonds hereby authorize,
and thereafter so long as any of said bonds or any additional bonds
ranking on a parity therewith are outstanding the municipal sewage
plant and system of said City of Ames shall be operated as a revenue
producing and self-liquidating undertaking and the revenues derived
from the rates and charges for sewer services furnished by and through
said plant and system shall be set aside into a separate special
fund to be used (1) to pay the reasonable expenses of operation, re-
pair and maintenance of the plant and system; (2) to pay when due the
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interest on and principal of the bonds hereby authorized and any ad-
ditional bonds on a parity therewith from time to time outstanding;
and (3) to accumulate and maintain a margin of safety and reserve
for the payment of said bonds and interest thereon.
There is hereby created a special fund, into which there shall
be paid at least quarterly from said revenues the amoun cf the rea-
°ionable expenses of operation, repair and maintenance of the plant
and system, and said special fund shall be used and disbursed only
for that purpose.
There is hereby created a special fund (hereinafter sometimes
referred to as the Sinking Fund) into which there shall be paid all
or such portion of the balance of said revenues as shall be suffi-
cient to pay the interest upon and principal of the bonds hereby
authorized and such additional bonds ranking on a parity therewith
as may be issued and outstanding under the restrictions and condi-
tions specified in Section 9 hereof as the same become due, and it
is hereby determined that the minimum amount so to be paid into said
Sinking Fund during the periods of twelve months preceding Novem-
ber 1 of each year shall be not less than as follows:
A sum equal to 100% of the principal of all bonds
maturing on or prior to November 1 next succeeding, plus
a sum equal to 100% of the interest becoming due on and
to No ember 1 next succeeding on all of said out-
standing bonds; provided, that until there has been
accumulated in such Sinkin Fund as a reserve an amount
equal to interest for two years on the bonds then
outstanding, the amounts to be so set apart and paid
shall be 110 % of said principal and interest instead of
100%; and provided also, that no further payments need
be made into said Sinking Fund when and so long as the
amount therein is sufficient; to retire all of said bonds
then outstanding and to pay all interest to become due
thereon prior to such retirement.
All sums received as accrued interest on the issuance and sale
of the bonds hereby authorized shall be paid into said Sinking Fund
so as to meet the payment of the interest then due on the bonds
hereby authorized.
The amount by which any such payment in any year exceeds the
aggregate amount properly payable from said fund in such. year shall
be held in said Sinking Fund as a reserve for contingencies and used
solely as herein provide.'. T" in any year the City shall for any
reason fail to pay into said Sinking Fund the full amount above
stipulated, then an amount equivalent to such deficiency shall be
set apart and paid into said fund from the first available revenues
of the following year or years, as the case may be, and same shall
be in addition to the amount otherwise herein provided to be so set
apart and paid during such succeeding year or years.
If for any reason the City shall fail to make any such payment
into said Sinking Fund, as aforesaid, during any such year, any sums
then held as a reserve for contingencies shall be used for the pay-
ment of any portion of the interest on or principal of said bonds
as to which there would otherwise be default, but such reserve shall
be reimbursed therefor from the first available payments made into
the Sinking Fund in the following year or years in excess of the re-
quired payment for the then current year.
Such annual payments provided to be made into said fund preced-
ing each November 1 shall be made in equal quarterly installments on
or before the fifteenth days of the months of October, January,
April and July preceding each such November 1. Such Sinking Fund
shall be used solely and only and is hereby pledged for the purpose
of servicing the said bonds and for no other purpose. Interest on
the bonds hereby authorized accruing during the construction period
of said works may be paid from the proceeds of said bonds to the ex-
tent such interest is not available from funds received as accrued
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interest.
a,i_ money held in said Sinking Fund shall be deposited in banks
and all such deposits exceeding $5000 in any one bank shall be con-
tinuously secured by a valid pledge of direct obligations of the
United States Government having an equivalent market value or may
be invested in direct obligations of the United States Government;
provided, however, that sale shall be made of a sufficient amount
of such obligations in the event that it shall prcve necessary to
draw upon said reserve so invested.
Section 6. The rates for all services rendered by the plant
and system shall be equitable, reasonable and just, taking into ac-
count and consideration the cost and value of said plant and system
and the cost of maintaining, repairing and operating the same and
the proper and necessary allowances for depreciation thereof and the
amounts necessary for the retirement of all outstanding bonds and
the accruing interest on all such bonds, and there shall be charged
such rates and amount as shall be adequate to meet the requirements
of this and the preceding section hereof.
In so far as consistent with the laws of the State of Iowa said
City agrees that so long as any of the bonds hereby authorized or
any additional bonds issued on a parity therewith remain outstanding
it will keep proper books of record and account, separate from all
other municipal records and accounts, sho-4%,::=;_.�j complete and correct
entries of all transactions relating to said sewage disposal plant
and system, and that the holders of any of said bonds shall have the
right at all reasonable times to inspect the system and all records,
accounts and data relating thereto.
It is hereby represented and certified that pursuant to Ordi-
nance No. 621 adopted June 3, 1946, by the Council of said City,
just and equitable rates, charges or rentals for the use of and ser-
vice rendered by said plant and system have been established and are
being collected by said City for services of said plant and system
and that copies of such rates, charges and rentals will be continu-
ously on file in the office of the City Clerk of said CitT which
shall be open to inspection by all parties interested. The schedule
of rates, charges and rentals shall at all times be adequate to pro-
duce gross revenues and income from said plant and system to pay the
expenses of operation, repair and maintenance thereof and leave a
balance of net revenues and income sufficient to make the prescribed
payments into the Sinking Fund, as hereinbefore set forth and such
schedule shall be revised, changed and readjusted whenever necessary
so that the aggregate of the rates or charges will be sufficient for
such purposes . All rates or charges if not paid when due shall con-
stitute a lien upon the premises served and shall be collected in
the same manner as taxes.
Section 7. The City of Ames hereby covenants and agrees with
the holder or holders of the bonds herein authorized to be issued,
or any of them, that it will faithfully and punctually perform all
duties with reference to said sewage plant and system required by
the Constitution and laws of the State of Iowa, including the making
and collecting of reasonable and sufficient rates for services ren-
dered by said plant and system, and will segregate the revenue there-
from and make application thereof consistent with and as provided by
this ordinance; and said City hereby irrevocably covenants, binds
and obligates itself not to sell, lease, mortgage or in any manner
dispose of any integral part of said plant and system, including any
and all appurtenances thereto and extensions and additions that may
be made thereto, until all the bonds herein authorized to be issued
and such additional bonds as may be issued on a parity therewith
shall have been pa4.d in full, both principal and interest, or legal
and sufficient provision for such payment shall have been mad,",
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further covenants and agrees with the holders of said bonds to main-
tain in good condition and continuously operate said plant and sys-
tem and appurtenances and to charge and collect such rates and
charges for services rendered thereby so that the gross revenues
will be sufficient at all times to provide for the payment of the
operation, repair and maintenance of said plant and system and leave
net amounts to be paid into the bond and interest redemption fund
as provided herein.
Section 8. That any holder of said bonds or of any of the cou-
pons may either at law or in equity, by suit, action, mandamus or
other proceedings protect and compel performance of all duties im-
posed or required by this ordinance or the law pursuant to which
said bonds are to be issued, including the making and collecting of
sufficient rates and the segregation of the income and revenues and
the application thereof.
Section g. The bonds hereby authorized and from time to time
outstanding shall not be entitled to priority or preference, one
over the other, in the application of the net earnings of said plant
and system, regardless of the time or times of the issuance of such
bonds, it being the intention that there shall be no priority among
the bonds authorized to be issued under this ordinance regardless of
the fact that they may have been actually issued and delivered at
different times . Said City hereby covenants and agrees that so long
as any of the bonds issued pursuant to this ordinance are outstandin
and unpaid no other bonds or obligations payable from the revenues
of said plant and system will be issued having a priority in any
respect to the bonds herein authorized; provided, however, that said
City hereby reserves the right and privilege of issuing additional
bonds from time to time payable from the revenues of said plant and
system ranking on a parity with the bonds herein authorized in order
to pay additional costs in connection with the construction of said
sewage treatment plant and appurtenances, or to pay the cost of fu-
ture improvements and extensions to said plant and system, but that
before any such bonds ranking on a parity are issued there will have
been procured and filed with the City Clerk of said City a statement
by an independent engineer not in the regular employ of the City and
not otherwise interested in the construction of the plant and appur-
tenances or the construction of improvements or extensions to said
plant and system, reciting the estimate based upon necessary investi-
gations that the net annual revenues of said plant and system, in-
cluding any then contemplated improvements or extensions, throughout
the life of the bonds then outstanding, will be equal to at least
125% the maximum amount that will become due in any calendar year
for both principal of and interest on the bonds then outstanding and
the bonds then proposed to be issued, and provided also that the
interest pa- ment 'o.r- such additional bonds shall be semi-
annually on May 1 and November 1 of each year, and the principal
maturities of such additional bonds shall be on November 1 of the
year in which any of such principal is scheduled to become due, and
provided also, that at the time the City issues any such additional
bonds it has entered into written contracts for the immediate acquis ' -
tion of substantially all of the necessary materials for the works to
be constructed or acquired through the application of the proceeds
of such additional bonds .
Section 10. The provisions of this ordinance shall constitute
a contract between the City of limes and the holders of the bonds
herein authorized to be issued, and after the issuance of any of the
bonds no change, variation, or alteration of any kind of the provi-
sions of this ordinance shall be made in any manner except as herein
provided, until such time as all of said bonds issued hereunder and
the interest thereon have been paid in full,
Section 11. If any section, paragraph, clause or provision of
this ordinance shall be held invalid, the invalidity of such section,
paragraph, clause or provision shall not affect any of the remaining
provisions of this ordinance.
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Section 12. All ordinances, resolutions and orders, or parts
thereof, in conflict with the provisions of this ordinance are, to
the extent of such conflict, hereby repealed.
Passed and approved November 3, 1947.
Attest! Clinton J. Ada , Mayor
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W. Prather, City Clerk
Moved by Palmer, seconded by McCormick, that Ordinance No. 637 be
passed on its first reading.
Voting Aye: Gray, Knight, McCormick, MacDonald, Palmer
Voting Nay: None
Moved by MacDonald, seconded by Gray, that the rules be suspended,
the second and third readings omitted and Ordinance No. 637 be
placed on final passage.
Voting Aye: Gray, Knight, McCormick, MacDonald, Palmer
Voting Nay: None
Moved by Knight, seconded by Palmer, that Ordinance No. 637 do now
pass.
Voting Aye: Gray, Knight, McCormick, MacDonald, Palmer
Voting Nay: None
Mayor declared Ordinance No. 637 passed.
I, J. W. Prather, City Clerk of the City of Ames, Iowa, do hereby
certify that the above and foregoing Ordinance No. 637 was duly and
properly passed at a meeting of the City Council on the 3rd day of
November, 1947, and was published in the Ames Daily Tribune on the
13th day of November, 1947
. W Prather, City Clerk
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