HomeMy WebLinkAbout~Master - Authorizing Issuance of Sewer Revenue Bonds ORDINANCE NO. 677
AN ORDINANCE AUTHORIZING AND PROVIDING FOR THE ISSUANCE
AND SECURING THE PAYMENT OF $250,000 SEWER REVENUE BONDS
OF THE CITY OF AMES, IOWA, UNDER THE PROVISIO�TL, OF CHAP-
TER 394 OF THE CODE OF IOWA, FOR THE PURPOSE OF DEFRAY-
ING THE COST, TO THAT AMOUNT, INCIDETT TO CONSTRUCTING
A SEWAGE TREATMENT PLANT AS AN INTEGRAL PART OF THE
SEJAGE COLLECTION, TREATMENT, PURIFICATION AND DISPOSAL
SYSTEM OF SAID C I'T Y .
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
has been heretofore determined to be necessary and advisable that
said City construct a sewage treatment 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 $1,070,875 and to pay such cost to the
amount of $250,000 it is necessary that said City currently issue
i-�s revenue bonds in that amount as authorized and permitted by
Chapter 394 of the Code of Iowa, 1946, without 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 $250,000 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 by Ordin-
ance No. 637 adopted November 3, 1947, there were heretofore issued
Sewer Revenue Bonds of said City dated November 1, 1947, bearing
interest at the rate of two and one-half per cent per annum, of
which bonds in the principal amount of $110,000 are now outstanding
maturing serially on November 1 of each of the years 1949 to 1967,
inclusive, which by their terms are payable from and se*ured by
net income and revenues to be derived from the operation of said
plant and system, but in and by Section 9 of said Ordinance No. 63
said City reserved the right and privilege of issuing additional
bonds payable from said net income and revenues and ranking on a
parity with said Sewer` Revenue Bonds dated November 1, 1947; and
WHEREAS all of the conditions and restric*ions whereunder said Cit
reserved said right and privilege of issuing such additional bonds !
ranking on a parity with said Sewer Revenue Bonds dated November l
1947, presently prevail, or are to prevail at or before the time o_�
the issuance of the bonds hereby authorized, all as hereinafter
more specifically provided;
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, 40 i'.z
amount of $250,000, 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
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there be and there are hereby authorized to be issued the negotiab e
interest bearing revenue bonds of said City of Ames in the princip I
amount of $250,000, each of which shall be known and designated as
a "Sewer Revenue Bond, bearing date of July 1, 1949, of the de-
nomination of $1000 each and bearing interest at the rate of two E
and one half per cent (22%) per annum, payable November 1, 1949,
and semi-annually thereafter on May 1 and November 1 of each year.
Said bonds shall be numbered consecutively from 1 to 250, inclusivol,
and shall mature in numerical order on November 1 of the respectiv
years, as follows :
Year Amount Year Amount
1950 1951 $lo'000 oo0 1960 $15,000
1961 15,000
1952 10,000 1962 15,000
1953 10,000 1963 15,000
1954 10,000 1964 15,000
1955 15,000 1965 15,000
1956 10,000 1966 20,000
1957 15,000 1967 15,000
1958 10,000 1968 10,000
1959 15,000
provided, however, said city will reserve the right and option to
call and redeem saidl,bonds numbered 116 to 250, inclusive, :.zpocl
terms of par and accrued interest prior to maturity on any interest
payment date on or after November 1, 1959, in whole or from time t
time in part in the inverse order of their numbering, and it is
agreed that notice of any such intended redemption identifying the
bonds to be redeemed will be given by publication at least once no
less than thirty days prior to the redemption date in a newspaper
of general circulation throughout the State of Iowa.
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 bond
and the interest thereon, together with such of said Sewer Revenue
Bonds dated November 1, 1947, ranking on a parity therewith as may
be outstanding from time to time shall be payable solely from the
bond and interest redemption sinking funds as hereinafter provided
and shall be a valid claim of the holder thereof only against said
fund, and none of said bonds shall be a general obligation of said
City nor payable in any manner by taxation, nor shall the City be
in any manner liable by reason of the failure of the earnings of
said plant and system to be sufficient for the payment in whole or
in part of said bonds and interest thereon, but all of said bonds
as may be outstanding from time to time shall be secured and payab e
on a parity, both as to principal and interest, solely and only
from the future net earnings of said plant and system pledged there-
for 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, and thereafter the principal of such registere
bonds shall be payable 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.
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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
SEWER REVENUE BOND
No.
$1000
KNOW ALL MEN BY THESE PRESENTS: That the 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, of, 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 at the rate of two and one half per cent (22%) per annum on
November 1, 1949, and semi-annually thereafter on the first days
of May and November in each year until paid except as the provisio s
hereinafter set forth with respect to redemption prior to maturity ll
may be and become applicable hereto, all such interest as may ac-
crue on and prior to the maturity date hereof to be payable only
upon presentation and surrender of the coupons hereto appertaining
as they severally become due, both the principal of and interest
on this bond being 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.
This bond is one of a series numbered 1 to 250, inclusive,
issued by said City pursuant to an ordinance duly enacted on the
1st day of August, 1949, for the purpose of defraying a n
of
the cost incident to constructing a sewage treatment plantrand ap-
purtenances necessary and useful in connection therewith as an in-
tegral and necessary part of the municipal sewage collection, trea -
ment, purification and disposal system of said City under and in
full compliance with the Constitution and statutes of the State of
Iowa, including, among others, Chapter 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 116 to 250,
inclusive, upon terms of par and accrued interest prior to maturit on any interest payment date on or after November 1, 1959, in whol ,or from time to time in part in the inverse order of their number-
ing, and in event such right is exercised notice of such redemptio.
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 throughout the State of
Iowa. All such bonds thus called for redemption and for the retir -
ment 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 of the Sewer Revenue Bonds dated November 1, 1947, as may be
outstanding from time to time are secured and payable on a parity
only from the net income and revenues to be derived from the opera-tion of said plant and system, which shall be sufficient to pay th principal of and interest upon all of said bonds, as and when the
same become due and payable, and which shall be set aside as a
special fund and is hereby pledged for that purpose. This bond is
not a general obligation of said City nor payable in any manner by
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taxation or from other funds . Said City covenants it will fix suc
rates for service of said plant and system and will collect and ac
count for income and revenues therefrom sufficient to promptly pay
the principal of and interest on all of said bonds as the same wil
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 by notation on the back hereof by the Treasurer, after whic
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no transfer shall be valid unless made on said books and similarly
noted hereon, but it maT be discharged 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 regisi-_^ -
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 ex-
ceed or violate any constitutional or statutory limitation or pro-
vision and that a sufficient amount of the income and revenues of
said sewage disposal plant and system of said City has been pledge
to and will be set aside into said special fund by said City for
the prompt payment of the principal of and interest on all of the
bonds which by their terms are payable therefrom.
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 July, 1949•
v
Attest:
Mayor
i
Clty Clerk
(Form of Coupon)
No.
On the first day of 19 the City of Ames, Iowa,
will pay to bearer Dollars
C$ 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
July 1, 1949, No.
Attest:
Mayor
City Clerk
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On the back of each bond there shall be printed the certifi-
cate 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 July, 1949.
Treasurer of the Gity 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
coupons attached thereto, which shall be executed with the fac-
simile signatures of said Mayor and City Clerk, and said officials
by the execution of said bonds shall adopt as and for their own
proper signatures their facsimile signatures on said coupons. Whe
and as executed said bonds shall be delivered to the City Treasure
to be by him duly registered as to issuance as provided b
y l
said Treasurer shall sign the certificate hereinbefore set out;inn
Section 3 and endorsed upon the back of each bond and shall there-
upon deliver said bonds to Weeden & Co. , 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 confirmed 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 .
In conformity with the restrictions and conditions for the
issuance of parity bonds as contained in said Ordinance No. 637,
it is hereby found and declared that the bonds hereby authorized
are to be issued in order to pay additional costs in connection
with the construction of said sewage treatment plant and appurte-
nances, and that said city has entered into written contracts for
the immediate acquisition of substantially all of the necessary
materials for the works to be constructed or acquired through the
application of the proceeds of the bonds hereby authorized; and it
is ordered that before any of the bonds hereby authorized are is-
sued there shall be procured and filed with the City Clerk of said
city a statement by an independent engineer not in the regular em-
ploy of the city and not otherwise interested in the construction
of the plant and appurtenances reciting the estimate based upon
necessary investigations that the net annual revenues of said plan
and system throughout the life of the bonds presently outstanding
will be equal to at least 125% of the maximum amount that will be-
come due in any calendar year for both principal and interest on
the bonds presently outstanding and the binds herein authorized to
be issued.
Section 5. That upon the issuance of the bonds hereby author
ized and thereafter so long as any of said bonds or any bonds rank
ing on a parity therewith are outstanding the municipal sewage p 1 a t
and system of said City of Ames shall be operated as a revenue pro
ducing and self-liquidating undertaking and the revenues derived
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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 opera-
tion, repair and maintenance of the plant and system; (2) to pay
when due the interest on and principal of the bonds hereby author-
ized and any bands ranking 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.
The provisions in and by said Ordinance No. 637 whereby there
has been created a special fund, into which there shall be at least quarterly from said revenues the amount of the re_ap ),1able
expenses of operation, repair and maintenance of the plant and sys
tem is hereby ratified and confirmed, and said special fund shall
be used and disbursed only for that purpose .
The provisions in and by said Ordinance No. 637 whereby there
has been 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 sufficient to
pay the interest upon and principal of the bonds thereby authorize
and such additional bonds ranking on a parity therewith including
the bonds hereby authorized as may be outstanding from time to time
are hereby ratified and confirmed, and it is hereby determined tha
the minimum amount so to be paid into said Sinking Fund during the
periods of twelve months preceding August 1 of each year shall be
not less than as follows :
A sum equal to l00% of the principal of all bonds ma-
turing on or prior to November 1 next succeeding, plus a
sum equal to 100% of the interest becoming due on and prior
to November 1 next succeeding on all of said outstanding
bonds; provided, that until there has been accumulated in
such Sinking Fund as a reserve an amount equal to .interest
for two (2) 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 fur-
ther 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 be-
come due thereon prior to such retirement.
All sums received as accrued interest in the issuance and sal
of the bonds hereby authorized shall be paid into said Sinking Fun
so as to meet the payment of the interest then accrued on the bond
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 provided. If in any year the City shall for
any reason fail to pay into said Sinking Fund the full amount abov
stipulated, then an amount equivalent to such deficiency shall be
set apart and paid into said fund from the first available revenue
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 se
apart and paid during such succeeding year or years.
If for any reason the City shad fail to make any such paymen
into said Sinking Fund, as aforesaid, during any such year, any
sums then held as a reserve for contingencies shall be used for th
payment o:, any portion of the interest on or principal of said bon s
as to which there would otherwise be default, but such reserve sha 1
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be reim'sursed therefor from the first available payments made into
the Sinking Fund in the following year or years in excess of the
required payment for the then current year.
Such annual payments provided to be made into said fund
ceding each November 1 shall be made in equalpre-
e
install-
ments on or before the fifteenth days of the months Ofy
January, April and July preceding each such November 1. Such Sink-
ing 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 con-
struction period of said works may be paid from the
proceeds
said bonds to the extent such .interest is not available from funds
received as accrued interest.
All money held in said Sinking Fund shall be deposited in
banks and all such deposits exceeding $5000 in any one bank shall
be continuously 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 Govern-
ent; provided, however, that sale shall be made of a sufficient
amount of such obligations in the event that it shall prove neces-
sary to draw upon said reserve so invested.
Section 6. The rates of all services rendered by the plant
and system shall be equitable, reasonable and just, taking into
account and consideration the cost and value of said plant and sys-
tem and the cost of maintaining, repairing and o
peratinD, the
and the proper and necessary allowances for depreciation thereof same
and the amounts necessary for the retirement of all outstanding
onds and the accruing interest on all such bonds, and there shall
e charged such rates and amounts as shall be adequate to meet the
equirements 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
nd any bonds ranking on a parity therewith remain outstanding it
ill keep proper books of record and account, separate from all
ther municipal recordo and accounts, showing complete and correct
ntries of all transactions relating to said sewage disposal plant
nd system, and that the holders of any of said bonds shall have
he right at all reasonable times to inspect the system and all
ecords, accounts and data relating thereto.
It is hereby represented and certified that pursuant to Ordin-
nce No. 621 adopted June 3, 1946 by the Council of said City,
nd equitable rates, charges or rentals for the use of and servicet
endered by said plant and system have been established and are be-
'ng collected by said City for services of said plant and system
nd that copies of such rates, charges and rentals will be continu-
usly on file in the office of the City Clerk of said City which
hall be open to inspection by all parties interested. The schedul
f rates, charges and rentals shall at all times be adequate to pro
uce gross revenues and income from said plant and system to pay
he expenses of operation, repair and maintenance thereof and leave
balance of net revenues and income sufficient to make the pre-
cribed payments into the Sinking Fund, as here.inbefore set forth
nd such schedule shall be revised, changed and readjusted whenever
ecessary so that the aggregate of the rates or charges will be suf
icient for such purposes. All rates or charges if not
ue shall constitute a lien upon the g paid when
ollected in the same manner as taxesPremises served and shall be
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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 mak-
ing and collecting of reasonable and sufficient rates for services
rendered by said plant and system, and will segregate the revenue
therefrom and make application thereof consistent with and as con-
templated and provided by this ordinance; and said City hereby irr -
vocably 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 said bonds ranking on a
parity therewith shall have been paid in full, both principal and
interest, or legal and sufficient provision for such payment shall
have been made, and further covenants and agrees with the holders
, Of said bonds to maintain in good condition and continuously opera e
said plant and system 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 9. The bonds hereby authorized and the bonds ranking
on a parity therewith from time to time outstanding shall not be
entitled to priority or preference, one over the other, in the ap-
plication of the net earnings of said plant and system, regardless
of the time •r times of the issuance of such bonds, it being the
intention that there shall be no Priority among said bonds regardle s
of the fact that they may have beer 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 or any
of the bonds ranking on a parity therewith are outstanding and un-
paid no other bonds or obligationspayable from the revenues of sai
plant and system will be issued unless the security and source of
payment is made subject to the priority of the security and source
Of payment of said bonds hereby authorized and said parity bonds.
Section 10. The provisions of this ordinance shall constitute
a contract between the City of Ames and the holders of the bonds
herein authorized to be issued, and after the issuance of any of th
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 sec-
tion, 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.
Introduced August 1, 1949.
Passed and
approved August 1, 1949.
1 a�el
W. L. Allan, Mayor
Attest:
J ra , City Clerk
Recorded August 1, 1949.
Prat er, City Clerk
T . k
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Moved by Griffith, seconded by Bauge, that Ordinance No. 677 be
passed on its first reading.
Voting Aye: Griffith, Bauge, McCormick, Molleston, Moore
Voting Nay: None
Absent: MacDonald
Moved by McCormick, seconded by Molleston, that the rules be sus-
pended, the second and third readings omitted, and Ordinance No. 6 7
placed on final passage.
Voting Aye : Griffith, Bauge, McCormick, Molleston, Moore
Voting Nay: None
Absent: MacDonald
Moved by Maoi,�, seconded by Griffith, that Ordinance No. 677 do
now pass.
Voting Aye : Griffith, Bauge, McCormick, Molleston, Moore
Voting Nay: None
Absent: MacDonald
Mayor declared Ordinance Ino. 677 passed.
I, J. W. Prather, City Clerk of the City of Ames, Iowa, do hereby
certify that the above and foregoing Ordinance No. 6
77 uly and
properly passed at a meeting of the City Council on thewas lstdday of
August, 1949, and published in the Ames Daily Tribune on the /z�
day of August, 1949.
Prather, City�Cle`rk �