HomeMy WebLinkAboutORDINANCE 0181-1970ORDII~ANCE ;~0.
AN ORDINANCE of the City of Kenai, Alaska,
authorizing the purchase for retirement
of $177,000 principal amount of electric
light and power revenue bonds of the city
issued under date of October 1, 1967;
amending Section 9 of Ordinance No. 124
of the city passed and approved September 20,
1967; and declaring an emergency.
WHEREAS, pursuant to Ordinance No. 107-67 of the City of
Eenai, Alaska (hereinafter called the "City"), passed and approved
January 18~ 1967, a special election was held within the City on
February 28, 1967 on a proposition of whether or not the City should
issue its light and power revenue bonds in the principal amount of
$300,000 for the purpose of providing funds to acquire, construct and
install certain additions and improvements'to and extensions of the
light ~nd power ~ystem of the City, including the acquisition of
certain properties and other assets of the Homer Electric Association,
Inc., an Alaska corporation, pursuant to a contract entered into between
the City and such corporation; and
WHEREAS, said proposition was ratified by the required number
of voters voting at said election, and pursuant to Ordinance No.
of the City passed and approved September 20, 1967, said $300,000 of
electric light and power revenue bonds were sold by the City under date
of OctOber l, 1967 to provide funds for the purposes for which they
were authorized; and
WHEREAS, the proceeds of such sale were paid into the Renal
1967 Electric Light and Power Construction Fund created by Section 7 of
said Ordinance No. 124, and approximately $180,000 of said proceeds
have been held in said fund since they were so set aside in order to
enable the City to effectuate such purchase; ~nd
WlIEREAS, since said election the City and llomer Electric
i
Association, Inc. nave not been able to agree upon the final terms
of such purchase and ib now appears beyond question that said con-
tract will not be carried out and that the City will not be able to
complete such purchase even though it desires to do so; and
WtlEREAS, the City has been offered the opportunity to buy
back $177,000 principal amount of such bonds so issued at par plus
accrued interest thereon to the date of such purchase; and
WIIEREAS, it appears to this Council that it is to the best
interest of the City, its inhabitants, and the customers of its light
and power system that such bonds be bought back out of the money still
held in said Construction Fund and be canceled and retired; and
WHEREAS, because of the retirement of said bonds the City
will be legally able to reduce the payments required by Section 9 of
said Ordinance No. 124 to be made into the Reserve Account created in
such section;
NOW, THEREFORE, BE IT ORDAINED by the Council of the City
of Kenai, Alaska, as follows:
Section 1. The City shall purchase, at par and ~ccrued in-
terest to date of purchase, bonds numbered 124 to 300 inclusive, in the
principal amount of $177 ~ ~
,u0.~ of that certain issue of electric light
and power revenue bonds of the City issued under date of October 1, 1967
as soon a~ reasonably possible after this ordinance becomes effective,
and in any event no later than July £, 1970. Upon receiving said bonds
the City shall cancel and ru, tire all of the same, including all coupons
attached thereto.
Section 2. That Sectlon 9 of Ordinance No. 124 of the City
passed and approved September 20, 1967, be and tile same fs hereby
amended to read as follows:
"Section 9. A Reserve Account is hereby created in the
Bond H6demptlo~ Fund, and tile City hereby covenants and agrees
that it will set aside and pay into said Reserve Account out
of the money in the Revenue Fund, and out of any other moneys
whleh 'It ~nny n~ or ~"~
.............. ,~-~ have on liand and ]el~ally available
for such purposes, monthly payments of $475 commencing wi~h
the month of October, 1967 through the month of r~.ay, 1970,
and thereafter monthly payments of $120 commencing with
the month of June, 1970 through tile month of September,
1972, until there has been paid into the Heserve Account
a total sum of at least $18,560.
"The City further agrees that it will at all times
thereafter maintain such amount in the Reserve Account until
there is a sufficient amount in the Bond Redemption Fund and
Reserve Account to pay the principal of, premium if any, and
interest on all of the Bonds outstanding, at which time the
money in the Reserve Account may be used to pay such prin-
cipal, 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
Bends, or may be transferred to any reserve account which
may be created to secure the payment of the bonds issued to
refund the Bonds outstanding.
"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, such deficiency shall
be made up from the Reserve Account by the withdrawal 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.
"Ail 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 pric~ prior to
maturity, maturing not later than ten years from the'date
of purchase, and in no event maturing later than the last
maturity of the Bonds outstanding at the time of such
purchase. Interest earned on any such investments and/or
any profits realized from the sale thereof shall be
deposited in and become a part of the Revenue Fund."
Section 3. An emerge,~,.~y is hereby declared to exist, and
in the Judgment of this Council it is necessary for the immediate
preservation of the public peace, health or safety that this ordinance
becom..c effective prior to the time when an ordinary ordinance shall
become, effective. The rules governing the introduction, reading,
paosage and approval of this ordinance are hereby suspended, and tt'~i.;
ordinance shall become effective immediately upon its pas,~;aF, e, approval
and puolic~,tlon ns requlrcd by tho City Charter.
PASSED by the Council of the City of Konai, Alaska, and
l
approved by its Mayor this ~'day of ~~ , 1970.
CITY O~.~KEN~tI, ALASKA
ATTEBT:
Depu~
cit~ ~tto~
I, ~'~ ,~. ~/D~__~(/F_~ , the duly chosen, qualified
and acting Deputy City Clerk of the City of Kenal, Alaska, DO HEHEBY
CEI~TIFY that th- foregoing is a true and correct copy of
Ordinance No. ~2/ of said city, duly passed by its Council and
approved by its Mayor at a regular meeting of said Council held on
DepUty Cit~ Cl'~