Loading...
HomeMy WebLinkAboutORDINANCE 0180-1970ORDINANCE NO. ~_ AN ORDINANCE of the City of Kenai, Alaska, authorizing the issuance and sale of $275,000 principal amount of electric light and power revenue bonds of the city for the purpose of providing funds to pay the cost of acquiring, constructing, installing and making certain additions, improvements and repairs to and extensions of the electric light and power system of the city as authorized by Ordinance No. 170-69 of the city, and by the qualified electors of the city at a special election held therein on May lb, 1969; fixing the date, form, terms, maturity and covenants of said bonds; creating a construction fund; creating a bond redemption fund for the payment of the principal of and interest on said bonds, and a reserve account therein; providing and adopting certain covenants and protective features safeguarding such payments; reserving the right in the city to issue revenue bonds on a parity with out- standing light and power revenue bonds of the city and such bonds to be issued, upon compliance with certain conditions; and declaring an emergency. WHEREAS, at a special election held in the City of Kenai, Alaska (hereinafter called the "City"), on May 13, 1969 pursuant to the City Charter, to Ordinance No. 170-6~ and ~ther ordinances and resolutions of the Council of the City, the qualified electors thereof authorized the issuance of its electric light and power revenue bonds in the principal amount of $450,000 for the purpose of providing funds to pay part or all of the costs of acquiring, constructing, installing and making certain additions, improvements and repairs to and ex!eh- sions of the City's light and power system, all as more specifically provided in said Ordinance No. 170-69; and WH~RhAS, pursuant to Ordinance No. 174 of the City passed and approved February 4, 1970, $25,000 principal amount of such bonds were issued and sold as bonds Junior in llen upon the moneys in the Revenue Fund of the City to the lien upon thc ,~oneys in such !{evenue Fund for thc payment of the principal of and interest on the Outstandiog Parity Bonds of the City and any bonds issued on a parity therewith; and WIiEREAS, it is deemed necessary that the City now issue and sell $275,000 principal amount of said remaining $425,000 of bonds so authorized in order to provide funds to pay the cost of acquiring, constructing, installing and making part of those certain additions, improvements and repairs to and extensions of the City's light and power system provided for in said Ordinance No. 170-69; and WHEREAS, the City has issued and now has outstanding its electric light and power revenue bonds (hereinafter defined as "Out- standing Parity Bonds" and described in ~ubparagraph c of Section i of ~hts ordinance), which bonds have a first and prior lien for the pay- ment of the principal thereof and interest thereon (subject only to the necessary costs of maintenance and operation of the System) upon the g:~oss earnings and revenues of the System which are required to De paid into the Kenai 1963 Electric Light and Power Revenue Fund of the City; and WHEREAS, Ordinances No. 54, No. 70 and No. 124 of the City, under which such Outstanding Parity Bonds were issued, provided in Sect.ions 12, 12 and ll thereof respectively, that additional electric light and power revenue bonds payable out of the money in such Light and Power Revenue Fund could be issued on a parity with said Out- standing Parity Bonds if certain conditions were met; and WHEREAS, it appears to this Council that said cond]tion,'~ may be met and that it is to the best interest of thc City, its inhabitants and the customers of its light and power system that t~'~c bonds author- ized herein be Issu¢,d on a parity with the Outstandin~ Parity Bonds: and WHEREAS, the City has heretofore agre~.~d to sell the bonds authorized here~n to Marshall ~! Meyer Incorporated, an investment bankinf; corporation of Seattle, ¥lashington, at par p~us accrued interest to date c.f delivery and under the terms and conditions thereof as set forth NOW, TH~REFORE, BE IT ORDAINED by the Council of the City of Kenai, Alaska, as follows: Section 1. Ac used in this ordinance the following words shall have the following meanings: a. The word "Bonds" shall mean the $275,000 principal amount of Electric Light and Power Revenue Bond~, 1970 of the City issued for the purposes and as provided in this ordinance. b. The word "System" shall mean the existing electric light and power system of the City as the same may be added to, improved and extended out of the proceeds of the sale of the Bonds and as the same may be later added to, improved and extended for as long as any of the Outstanding Parity Bonds, the Bonds, and any Future Parity Bonds are outstanding. c. The words "Outstanding Parity Bonds" shall mean the electric light and power revenue bonds of the City issued under dates of October 1, 1963, September 1, 1964, and October l, 1967 pursuant to Ordinances No. 5q, No. ?0, and No. 12q respectively, of which there are now outstand- ing bonds in the total principal amount of d. The words "Junior Lien Bonds" shall mean the Electric Light and Power Revenue Bonds, 196~ of the City issued under date of November 1, 1969 pursuant to Ordinance No. 17~ of the City, of which there are now outstanding bonds in the total principal amount of $25,000. The Outstanding Parity Bonds and thc Junior Lien Bonds are the only bonds of the City outstanding at this time to which the moneys in such Light and Power Revenue Fund have been pted~cd for the payment of' the principal thereof and Interest ther'eo~. e. The word:; "Revenue Fund" shall mean ti~e fund of the City desliw:ated "Renal. 1963 Electric Light and Power Revenue Fund" created by Section 7 of said Ordinance No. 54. into which fund al.[ of the gross earnings and revenue of the System mus~ be paid. f. The words "Parity Bond Redemption Funds" shall mean the bond redemption funds created by Section 8 of Ordinance No. §4 and Section 8 of Ordinance No. 124 for the purpose of paying and securing the payment of the principal of and interest on the Outstanding Parity Bonds, and shall include the reserve accounts therein created by Sections 9 of said ordinances. g. The words "Future Parity Bonds" shall mean any electric light and power revenue bonds of the City other than the Outstanding Parity Bonds, the Junior Lien Bonds and the Bonds, the principal of and interest on which shall be payable out of the money in the Revenue Fund on a parity with the payments required to be made out of such fund for the payment of the principal of and interest on the Outstanding Parity Bonds and the Bonds, Section 2. The Council hereby finds and determines, as re- qui~ed b'y Sections 12 of Ordinances No. 54 and No. 70 and Section 11 of Ordinance Nc. 124: First, that the Bonds have been authorized by the qualified electo~-s of the City and are being issued for the purpose of acquiring, constructing, installing and. making additions and improvements to and extensions of the System; Second, that at the time of the adoption of this ordinance and at. the time of the issuance and delivery of the Bonds there is' not nor will there be any deficiency in the Parity Bond Hedemption Fund:: and the reserve accountz therein; Third, that at the time of the delivery of the Bonds the City will have on file a certificate from Crews, Maclnnes & Hoffman, an independent llc~nsed profe:~slcnal cn;]tneering firm of AnchoraL'~, Alaska, showing that In the opinion of said firm thc annual t. ncor. e of tho l;y:;tom as added to, improved or exterld,,,! out of the proceeds of ~ale of' the Bonds, after expenses of maintenance and operation 4. paid to the City, wfll equal at least 1.4 times the average annual amount requtred thereafter to pay the i~rincipal of and interest on the Outstanding Parity Bonds and the Bonds. The conditions contained in Sections 12 of Ordinances and 70 and in Section 11 of Ordinance No. 124 having been complied with o~ assu~ed, the payments ~equi~ed in this ord~.nance to be made out of the Revenue Fund into the Bond Redemption Fund and Reserve Account herein- afte~ e~eated to pay and secure the payment of the principal of and interest on the Bonds shall constitutc a llen and charge upon the money in the Revenue Fund equal In rank with the lien and cha~ge thereon the payments required $o be made into the Parity Bond Redemption Funds to pay and secure the payment of the p~incipal of and interest on the Outstanding Pa~ity Bonds. The City hereby furthe~ ~ovenants and agrees that the Bonds will not be issued and delivered to the purchasers thereof as bonds on a parity with the Outstanding Parity Bonds until the above-described ee~tificate has been filed with the City. Section 3. Fo~ the purpose of providing funds to pay of acquiring, const~u~ting, installing and making part of those ce~tatn additions, improvements and ~epairs to and extensions of the System p~ovided fo~ In O~dlnance No. 1~0-69 and authorized by the q%~a!!f~ed eiec~ors of $~e City a~ a special election held therein on May 13, 196~, the City shall issue the Bonds. The Bonds shall be dated June 1, 1970, shall be in the denom~nation of $5,000 each, shall be in the aggrc;~ate prlnclpal amount of $2~,000, shall bear interest at the rabe of Y 1/2% per annum payable on the f1~:3% day of Ocbobe~, 19'~0 and semiannually on the flr'~b days o~' AD~I1 and Oc$obe~ of each yea~ the~eaf$e~ as evidenced by coupons to be attached thereto, shall be numbered consecublvely f~om 1 to ~9 inclusive, and shall mature on October 1, 1993. In addlbion ~o the above the ].{o~d:; :~h;lll [,ea~ Inter. cst evidenced l,y sul,plementai unattached coupons in the amount of $25 per Bond payable on October 1, 1970, April 1 and October l, 19?l, and April l, 1972. Both principal of and interest on the Bonds shall be payable In lawful money of the United States of America at the main office of the Seattle Trust and Savings Bank, Seattle, Washington, or at the option of the holder at the Kenai Branch, National Bank of Alaska, Kenai, Alaska, and shall be obligations only of the Bond Redemption Fund hereinafter created. Sectio~,4. The City hereby covenants and a~rees that it will call for payment and retirement at par the following amounts of the Bonds on October 1 of the following years, from mandatory payments made to said Bond Redemption Fund from thc Revenue Fund: 1986 $25,000 1990 $35,000 1987 30,000 1991 40,000 1988 30,000 1992 40,000 1989 30,000 1993 45,000 The Bonds to be so called and retired each year shall be de- termined by lot by the paying agent for the Bonds, which is hereby designated as the Seattle Trust and Saving~ Bank. The City reservcs the right to use any surplus unpledged funds in the Revenue Fund or in such Bond Hedemptlon Fund lemally avail- able for such purpose to purchase any of the Bonds in the open market for retirement only, !f the zame may b~.. purchased at a price not ex- ceeding that at which they could be called for redemption on the first succeeding date at which they may be called as provided in the following section of this ordinance. If any of such Bond:~ are purchased or called and retired in an amount greater than the amount above ~equired to be called and retired on October 1 of such yenr, then the amount of suel~ Bonds that must be called and retired on October 1 of the sueeeedin~, year (or .years) ma:¢ b~? ,educed by the amount of such additional Bonds r.o prcv~.ously called and retired· Notice of any such call for retirement shall be given by one publication thereof in a financial Journal or new~paper of general circulation in the ~lty of Seattle, Washington not more than 40 nor less than 30 days prior to said retirement date, and by mailing a like notice at the same time to Marshall and Meyer Incorporated at its main place of business or to the business successor of said company, if any, at its main place of business. Section~5_. The City hereby reserves the right to redeem the Bonds outstanding in whole, at the following times and at the followtn;~ prices expressed as a percentage of the principal amount, plus accrued interest to the date of redemption: On October 1, 1985 and April 1, 1986, On October 1, 1986 and April 1, 1987, On October 1, 1987 and April 1, 1988, On October 1, 1988 and April 1, 1989, at 105 at 104 at at 102 On October 1, 1989 and April 1, 1990, at 101 On October 1, 1990 and any interest payment date thereafter, at 100. Notice of any such intended redemption shall ~e given by one publication thereof in a financial Journal or newspaper of general cir- culation in the City of Seattle, Washington not more than 40 nor less e than 30 days prior to said redemptiondate, and by mailing a.ltke notice at the same time to Marshall and'Meyer Incorpgrated at its ma~n place of business ox to the business successor of said company, if any, at its main place of business. Section 6. The Bonds shall be in substantially the following form: NO. $5,000 STATE OI,' ALASKA CITY OF KENAI ELECTHIC LIGIIq' AND POWER REVENUE BOND, 1970 '/'he City of Kenai, a municipal ccrporation of the Statc of hla:tka (hereinafter called the "Ci$y"), hereby acknowledges .Itself to owe and For value received pr~)m.t.::,2,o to pay ~u bearer on the first day of October, 1993, the principal sum of FIVE TIiOUSAHD DOLLARS together with interest thereon at the rate of 7 1/2% per annum payable on the firct day of October, 1970 and semiannually on the first days of April and October of each year thereafter to date of maturity as evidenced by coupon:; attached hereto, and f~om date he~eof to April 1, 1972 at the additional ~ate of 1.091% per annum ac evidenced by supplemental unattached coupons, upon presentation and surrender of such interest coupons as they severally become due or until such principal sum shall have been paid or duly provided for. Both pvine!pa! of and interest on this bond are payable in lawful money of the United States of America at the main office of the Seattle Trust and Savings Bank, Seattle, Washington, at the option of the holder at the Kenai Branch, National Bank of Alaska, Kenai, Alaska, solely out of the special fund of the City known as the "Kenai 1970 Electric Light and Powe~ Hevenue Bond Redemption Fund" created by O~dinance No. ~ of the City (hereinafter called the "Bond Ordinance"). The City has covenanted and agreed that. it will call for payment and retirement at par the following amounts of the bonds of this issue on October 1 of the following years: 1986 $25,000 1990 $35,000 198~ 30,000 1991 40,000 1988 30,000 1992 40 1989 ~0,000 1993 45,000 The bet,ds to I.,c so called and ret'irm{ each year st2oll, be determined by lot by the pay]niZ aizent, whl. ch has b(.en a:: the Seattle Tru:;t nnd Sav~nK:; bani<. The City }lng; ~eserv,d the r{f~ht to reduces the bon(l:~ of tht;; lssu~ out:;tandl{uZ In whole, at th(~ l'ollowJnz tlm(:[{ and at plnl) tleCrti(~d interest to the date of r~demptlon: On October 1, 1985 and April 1, 1986, On October 1, 1986 and April 1, 1987, On October 1, 1987 and April 1, 1988, On October 1, 1988 and April 1, 1989, On October 1, 1989 and April 1, 1990, On October 1, 1990 and any interest payment date thereafter, at 10~ at 103 at at !01 at 100. Notice of such call or of any such intended redemption shall be given by one publication thereof in a financial Journal or newspaper of general circulation in the City of Seattle, Washington, not more than hO nor less than 30 days prior to said retirement or redemption date, and by mailing a llke notice at the same time to Marshall and Meyer Incorporated at its main place of business or to the business successor of said company, if any, at its main place of business. This bond is one of an i~sue of 55 bonds of the City of like amount, date and tenor except as to number, a~,grogating the prin- cipal amount of $275,000, which bonds are issued pursuant to the law~ of the State of Alaska, the Charter of the City, a vote of the duly qualified electors of the City, and duly adopted ordi- nances and resolutions of the C=uncil thereof, for the purpose of providing funds to pay the cost of acquiring, constructing, installing and making certain additions .and improvement.~ to and e~tensions of the light and power system of the City, and are payable solely out of the gross earnings and revenue of said ~-~ystem'and all additions and improvements thereto and extensions thereof. The City hereby covenant~ and agree:; with the owner and holder of th[:~ bond that it will l;(:cp and per. i'orm all the covenants of this bond and of the Bend Ordinance to be by it kept and Der- formed. The City doel~ ht:reby pledge and bind tt:;elf to set a:;[de from Its gunal 1963 Electric Light and Power Hcvonue Fund creatud by Oriil~lance No. b// el' the City, and to pay ~rlto said Bond ]{edemption Fund and the Reserve Account created therein, the variou~ amounts required by the Bond Ordinance to be paid into and maintained in said fund and account, al! within the times provided by said ordinance. The City haw further pledged and bound itself to pay into ~uch Revenue Fund as collected all of the gross earnings and revenue derived by it from the operation of its light and power system. Said amounts so pledged to be paid out of such Revenue Fund into said Bond l{edemption Fund and Reserve Account are hereby declared to be a prior lien and charge upon the money in said Revenue Fund superior to all other charges of any kind or nature except the necessary costs of maintenance and operation of said system, and equal in rank to the charges on the money in said Revenue Fund for the payment of the principal of and interest on all cf the presently outstanding electric light and power revenue bonds of the City issued under dates of October l, 1963, September 1, 196h and October l, 1967 and to any charges that may later be made on said fund to pay and secure the payment of the principal of and interest on any electric light and power revenue bonds which the City may issue later on a parity with such out- standing electric light and power revenue bonds and the bonds of this issue. The City has further bound itself to m~int~in said sys~om in good condition and repair, to operate the nnme in an efftcient manner a;~(i at a reasonable co~t;, and tn e~'tabli:~h, maintain and colJ. eet i:att, s and charl~es for light and power that ~lll provide r'ov~rme ava.[]abl~ for revcnuu bond debt service in ~n amount equal to at ~e~;t 1.~ time~ tho average annual amount required to Oay the principal of and intere:~t on all of tho out~tandim: bonds of the City which are payable from such revenue, after necessary costs of main- i;enn~m~ ami opel'at.Ion of ~a'Id ;;yt~tem h;tv(, be~m pa~d but beforu 10. depreciation and before any taxes or payments in lieu of taxes have been paid to the City. It is hereby certifled and declared that this bond and the bonds of this Issue are issued pursuant to and in strict compll- ante with the laws of the State of Alaska and the Charter, ordinances and resolutions of the City, and that all acts, conditions ~nd things required to be done precedent to and in the issuance of this bond have happened, been done and performed. IN WITNESS WtlEREOF, the City of Kenai, Alaska, has caused this bond to be signed by its Mayor, to be attested by its Clerk, the official seal of the City to be impressed hereon, and the interest coupons pertaining hereto to be signed with the fac- simile signatures of said officials, this 1st day of June, 1970. CITY OF KENAI, ALASKA Mayor ATTEST: City Clerk The interest coupons to be attached to the Bonds shall be in substantially the following fcrm: NO. (Coupon No. 1) On the first day of $~.~? US ($i 5.00) , 19__, the City of Kenai, Alaska, will pay to bearer at the main office of the Seattle 'i'rust and Savings Bank, Seattle, Washington, or at the option of the holder at the Kena] Branch, National Ba~l~ of Alaska, Kenal, Alaska, the amount shcwn hereon in lawful money of the United States of America out of the special fumd of the City known as the "Kenai lPY0 Electrl.; Light and Power Revenue Bond Hedemptlon I.'und," satd amount being interest due that day on its klectrlc Lit, bt and Power Revenue. Bond, 1970 dated June 1, 11. 1970, ano numbered __ ATTEST: CITY OF KENAI, ALASKA By Mayor City Clerk Tile supplemental unattached interest coupons shall be in sub- stantially the following form: NO. $25.00 On' the first day of ., 19__, the City of Kenai, Alaska, will pay to bearer at thc main office of the Seattle Trust and Savings Bank, Seattle, Washington, or at the option of the holder at the Kenai Branch, National Bank of Alaska, Kenai, Alaska, the amount shown hereon in lawful money of the United States of America out of the special fund of the City known as the "Kenai 1970 Electric Light and Power Revenue Bond Redemption Fund," said amount being interest due that day on its Electric Light and Power Revenue Bond, 1970 dated June 1, 1970, and numbered __. CITY OF KENAI, ALASKA By ATTEST Mayor ~'ty Clerk Sectton 7. The Bonds shall he signed oil behalf of the City by its Mayor, shall be attestc, d by its Cleric, and shall have the official seal of the City lmpr'essed ti~ercon. In the event the Clerk Is unable to sign the t~onds, the Deputy City Clerk is hereby authorized to attest the Bonds a:~ City Clerk. Tl~e interest coupons perta~nl, ng to the Bonds shall be signed with the facsimile sil;natures of sai~d off'ictal:~. 12. Section 8. There is hereby created a special fund of the City to be known as the "Kenai 1970 Electric Light and Power System Construction Fund" (herein called the "Construction Fund"). All of the proceeds of sale of the Bonds (except £or accrued interest, which shall be paid into the Bond Redemption Fund hereinafter created) shall be paid into the Construction Fund and shall be used for the sole purpose of paying the cost of acquiring, constructing, installing and making additions and improvements to and extensions of the System authorized herein and in Ordinance No. 170-69 of the City or for repaying any advances which shall have been made for the purpose of paying any of such costs, and for paying all costs incidental thereto, including the issuance of the Bonds. Any moneys remaining in the Construction Fund after all of such payments have been made shall be transferred to such Bond Redemption Fund for the uses and purposes herein provided. Section 9. There has heretofore been created by Section 7 of Ordinance No. 54 another special fund of the City known as the "Kenai 1963 Electric Light and Power Revenue Fund" (herein called the "Revenue Fund"), into which fund shall be deposited as collected all of the gross earnings and revenue of the System. All costs of maintaining and operating the System. all payments required to be made t. nto the Parity Bond Re'demption Funds, the Bond Redemption Fund hereinafter created and the reserve accounts in such f~nds, all payment:; requlrcd by Ordinance No. 174 to be paid into the bond fund created therein for the payment of the Junior Lien Bonds, all payments which may hereafter be required to be made to pay and secure the pn.¥ment of the principal oI' an(l interest on a~y electric light and power revenue bonds which the City may issue late. r, all co:3ts of additions, betterments, tmorovcments and repairs to and replacements and exten:;lons of the System (except when the same are financed by the issuance of bonds), any payment:~ which re]gilt I,o made to the C~ty for taxes or in lleu of taxes, and ali other legal and proper expon:~es o1' the :;y:~t~.m ~lnd charge,-; a~al.n;:t the rc.w.nue th~:reof' shall be: 13. paid out of said fund. Section 10. There is hereby created anothdr special fund of the City to be known as the "Kenai 1970 Electric Light and Power Revenue Bond Redemption Fund"), which fund is to be drawn upon for the sole purpose of paying the principal of and interest on the Bonds as the same shall become due and payable. The City hereby obligates and binds itself to set aside and pay into the Bond Redemption Fund out of the money in the Revenue Fund the following fixed amounts necessary to pay the interest on the Bonds as the same becomes due and payable and to call and retire the Bonds as provided in Section 4 of this ordinance. The City shall pay into the Bond Redemption Fund the accrued interest, if any, received at the time of the delivery of the Bonds, and on or before the 10th day of the months of June, July, AUgus~ and September of 1970, one-fourth of the amount which with such accrued interest will at least equal the interest to become due on the Bonds on October 1, 1970. The City further covenants that it shall pay into the Bond Redemption Fund on or before the 10th day of each month beginning with the month of October, 1970 and continuing for as long as any of the Bonds 'are outstanding and unpaid, an amount equal to at least one-sixth of the interest to become due and payable on tile nexb interest payment date on ali. of the Bonds then outstanding. The City further covenants that it shall pr, y into the Bond J/edemption Fund on or before the 10th day of each month bci;inning w~tn the month of October, 1985 an amount equal to at least one-twelfth of the principal amount necessary to retire such portion of tho Bonds as are required to bo rotlrod according to the schedule set forth in Section Il of this ordinance on thc next succeedtn~ O,.tober 1 of the years 1986 throu;~h 1993. Said amounts :;o pledged to bc paid out of the l~cvenue Fund ] 4. and the amounts hereinafter required to be paid into the Reserve Account therein are hereby declared to be a prior lien and charge upon the money in said Revenue Fund superior to all other charges of any kind or nature (including any taxes or payments in lieu of taxes to the City) except the charges required to pay the necessary costs of maintenance and operation of the System, and equal in rank to the charges required to pay and secure the payment of the principal of and interest on the Outstanding Parity Bonds and to any charges which may later be made thereon to pay and secure the payment of the principal Of and interest on any Future Parity Bonds. In the event that money and/or direct obligations of the United States of America maturing at such time or times and bearing interest to be earned thereon in amounts sufficient to redeem and retire the Bonds in accordance with their terms are set aside in the Bond Redemption Fund to effect such redemption and retirement and such money and/or the principal of and interest on such obligations are irrevocably set aside and pledged for such purpose, then no further pa½ments need be made into the Bond Redemption Fund for the payment of the principal of and interest on the Bonds, and the Bonds and ap- purtenant coupons shall cease to be entitled to any lien, benefit or security of this ordinance except the right to receive the funds so set aside and pledL'ed, and the Bonds and such coupons shall be deemed not to be outstanding hereunder. Section 11. A Heserve Account is hereby cre~ted in the Bond Redemption Fund, and the City hereby covenants and agrees that it will :3et aside a;~d pay into said Hcserve Account, out of the money In the !{~v,3r:,~e ~.'.]:)~1 ,stud out of any other money:; which it may now or later have on hand and le;;ally available for such purposes, monthly payments of SUU0 bez~nntn;~ with the month of June, 1970, until theme has been paid Into tt~e Heserve Account a total sum of at lea:;t $48,000. Thc City furt}~er agrees that it will at all times thereafter 15. maintain such sanount in the Reserve Account until there is a sufficient amount in the Bond Redemption Fund and Reserve Account to p. ay the principal of, premium if any, and interest on all of the Bonds out- standing, at which time the money in the Reserve Account may be used to pay such principal, premium if any, and interest. In the event the Bonds outstanding are ever refunded, the money in such Reserve Account may be used to retire Bonds or may be transferred to any reserve account which may be created to secure the payment of the bonds issued to refund the outstanding Bonds. in the event the moneys in the Bond Redemption Fund, over and above the amount therein set aside and credited to the Reserve Account, are insufficient to meet maturing installments of either interest on or principal of and interest on the Bonds outstanding, -~uch deficiency shall be made up from the Reserve Account by the with- drawal of cash therefrom. Any deficiency created in the Reserve Account by reason of any such withdrawal shall then be made up from the money in the Revenue Fund first available after making necessary provision for the required payments into the Bond Redemption Fund. All money in the Reserve Account may be kept in cash or invested in direct obligations of the United States of America having a guaranteed redemption price prior to maturity, maturing not laker than ten years from the date ~f purchase, and in no event maturing later than the last maturity of the Bonds outstanding at the time of such purchase. Inberest enrned on any such investments and/or any profits realized from the sale thereof shall be deposited in and become a par~ of the Revenue I,'und. Section 12. The corporate authorities of tile City hereby declare, in fixing the amounts to be paid into the Bond Redemption Fund and the Reserve Account therein as aforesaid, that they have exercised due regard to the costs of maintenance and operation of the System and the amou~ts nece:;sary to pay the princlpal of and interest on the 16. Outstanding Parity Bonds, and have not obligated the City to set aside and pay into said fund and account a greater amount df tho revenue of the System than in their Judgment will be available over and above such costs of maintenance and operation and the charges necessary to pay the principal of and interest on such Outstanding Parity Bonds. Section 13. The City hereby covenants and agrees with the owner and holder of each of the Bonds for as long as any of the same remain outstanding: a. That it will establish, maintain and collect rates and charges for electric light and power for as long as any of the Bonds are outstanding that will provide revenue available for revenue bond debt service in an amount equal to at least 1.4 times the average annual amount required to pay the principal of and interest on the Outstanding Parity Bonds, to pay interest on the Bonds as the same shall become due, to call and retire the Bonds as provided in Section 4 hereof, after necessary costs of maintenance and operation of the System have been paid, but before depreciation and before any taxes or payments in lieu of taxes have been paid to the City· b. The provisions, covenants and ~greements of the City contained in Sections ?, 8, 9, ll and t2 of Ordinance No. 54, Sections 9, 10 and 12 of Ordinance No. ?0, and Sections 8, 9 and ll of Ordinance No. 124, constituting covenants and agreements of the City protecting and safeguarding the security and rights of the holders of the Out- standing Parlty Bonds, are hereby incorporated tn th~.s ordinance as if set forth herein and by such incoruoration are made applicable to the Bonds as well as the Outstanding Parity Bonds, and shall inure to the benefit of the owners and holders from ~ime to time of the Bonds in addition to the covenants contained in this ordinance. c. The City hereby reserves the right to issue Future Parity Bonds under the same terms, condIUons and requir~ments and with the same l[m.ltations and restrictions as provided in Sections 12 of l?. Ordinances No. ~ and 70 reopectively and Section 11 of Ordinance Mo. 124 for the issuance of revenue bonds on a parity with the Out- standing Parity Bonds, which terms, conditions and requirements are hereby incorporated in this ordinance as if set forth herein and by such incorporation are made applicable to the Bonds as well as to the Outstanding Parity Bonds. The City hereby further covenants and agrees that in the event any Future Parity Bonds are issued, it will establish a reserve account to secure the payment thereof, will require that an amount equal to the average annual debt service on such Future Parity Bonds shall be paid therein within 5 years from the date of their issuance, and that such amount shall be maintained therein until all of such Parity Bonds shall have been retired, and further covenants that the debt service coverage covenants contained in Section 13 a hereof shall be extended to include the debt service on such Future Parity Bonds. Section 14. The sale of the Bonds to Marshall and Meyer Incorporated of Seattle, Washington, at par plus accrued interest, and upon the terms and at the interest rates herein set forth, is hereby in all respects confirmed. The proper City officials are hereby authorized and directed to uo everything necessary for the prompt execution, issuance and delivery of the Bond~ and for the proper use and application of the proceeds of such sale. Section-15. An emergency is hereby declared to exist, and in the Judgment of this Council it is necessary for the immediate preserva- tion of the public peace, health or safety that this ordinance become effective prior to the time when an ordinary ordinance shall become effective. The rules governing thc introduction, readin[~, passage and approval of this ordlnance are hereby suspended, and this ord[nance shall become effective immediately upon its passage, approval and pubilcation as required by the Ci'y Charter. 18. PASSED by the Council of the City of Kenai, Alaska, and approved by its Mayor thi~ ~ fH ~ O day of , 1970. ' vt e ~. '- Ma~A~r ATTEST: Deputy ~lty Clerk · City Attorney .19.