ORDINANCE NO. 0207013-3
ORDINANCE NO. 0207013-3
AN ORDINANCE AUTHORIZING AND PROVIDING FOR THE ISSUANCE AND SALE OF NOT EXCEEDING ONE MILLION THREE HUNDRED FORTY- FIVE THOUSAND AND NO/100 DOLLARS ($1,345,000) UTILITIES REVENUE REFUNDING BONDS, SERIES 2013 (THE “BONDS”), OF THE CITY OF GRAMBLING, STATE OF LOUISIANA; PRESCRIBING THE FORM, TERMS AND CONDITIONS OF SAID BONDS; DESIGNATING THE DATE, DENOMINATION AND PLACE OF PAYMENT OF SAID BONDS; PROVIDING FOR THE PAYMENT THEREOF IN PRINCIPAL AND INTEREST; ENTERING INTO CERTAIN OTHER COVENANTS AND AGREEMENTS IN CONNECTION WITH THE SECURITY AND PAYMENT OF SAID BONDS; AND PROVIDING FOR OTHER MATTERS IN CONNECTION THEREWITH.
WHEREAS, the City of Grambling, State of Louisiana (the “Issuer”), now owns and operates a combined waterworks system and sewerage collection and treatment system (the “System”); and WHEREAS, the Issuer previously issued its Utilities Revenue Bonds, Series 1993, in the original principal amount of $1,170,000 and its Utilities Revenue Bonds, Series 1995 in the original principal amount of $1,250,000 (collectively referred to herein as the “Prior Bonds”); and WHEREAS, the Prior Bonds were issued pursuant to separate resolutions (the “Prior Bond Resolutions”) for the purpose of constructing and acquiring extensions and improvements, including all appurtenant equipment, accessories and properties to the System and are secured by a pledge of net income and revenues derived or to be derived from the operation of the System; and WHEREAS, the Bonds are being issued for the purpose of (a) refunding the remaining principal balance of the Prior Bonds and (b) paying the costs of issuance thereof, pursuant to Chapter 14-A of Title 39 of the Louisiana Revised Statutes of 1950, as amended (the “Act”), and other constitutional and statutory authority: and WHEREAS, pursuant to the provisions of the Act, this Mayor and the Board of Aldermen of the City of Grambling, State of Louisiana, acting as the governing authority (the “Governing Authority”) of the Issuer, adopted a Resolution on November 1, 2012, granting preliminary approval for the consent and authority to issue and sell not exceeding $1,345,000 Utilities Revenue Refunding Bonds, Series 2012; and WHEREAS, it is now the desire of this Governing Authority to issue not to exceed One Million Three Hundred Forty-Five Thousand and no/100 Dollars ($1,345,000) Utilities Revenue Refunding Bonds; and WHEREAS, the Act grants authority to political subdivisions to issue refunding bonds for the refunding of debt previously issued for works of public improvements such as the System. NOW, THEREFORE, BE IT ORDAINED by the Mayor and Board of Aldermen of the City of Grambling, State of Louisiana, acting as the Governing Authority thereof, that:
DEFINITIONS AND INTERPRETATION
SECTION 1.01. Definitions. As used herein, the following terms used herein shall have the following meanings hereto, unless the context otherwise requires:
“Act” shall mean the applicable provisions of Chapter14-A of Title 39 of the Louisiana Revised Statutes of 1950, as amended.
“Additional Parity Bonds” shall mean any pari passu indebtedness hereafter issued on a parity basis with the Bonds with respect to the lien on the Net Revenues in accordance with Article VIII hereto.
“Bond” or “Bonds” shall mean One Million Three Hundred Forty-Five Thousand Dollars ($1,345,000) original principal amount of the City of Grambling, State of Louisiana Utilities Revenue Refunding Bonds, Series 2013, authorized to be issued pursuant to this Bond Ordinance as the same may be amended from time to time, whether initially delivered or issued in exchange for, upon transfer of, or in lieu of any Bonds previously issued.
“Bond Counsel” shall mean an attorney or firm of attorneys whose experience in matters relating to the issuance of obligations by states and their political subdivisions is nationally recognized.
“Bond Holder” or “Registered Owner” or “Owner” when used with respect to any Bond, shall mean the Person in whose name such Bond is registered in the Bond Register maintained by the Paying Agent, initially Purchaser.
“Bond Ordinance” shall mean this ordinance, as further amended and supplemented as herein provided.
“Bond Register” shall mean the records kept by the Paying Agent at its principal corporate trust office in which the registration of the Bonds and transfer of the Bonds shall be made as provided herein.
“Bond Year” shall mean the one year period ending on the principal payment date on the Bonds March 1 of each year.
“Business Day” shall mean a day of the year other than a day on which banks located in New York, New York and the cities in which the principal offices of the Paying Agent are located are required or authorized to remain closed and on which the New York Stock Exchange is closed.
“Code” shall mean the Internal Revenue Code of 1986, as amended.
“Costs of Issuance” shall mean all items of expense, directly or indirectly payable or reimbursable and related to the authorization, sale and issuance of the Bonds, including but not limited to printing costs, costs of preparation and reproduction of documents, filing and recording fees, initial fees and charges of any fiduciary, legal fees and charges, fees and disbursements of consultants and professionals, including financial advisors, costs of credit ratings, fees and charges for preparation, execution, transportation and safekeeping of the Bonds, and any other cost, charge or fee paid or payable by the Issuer in connection with the original issuance of the Bonds.
“Debt Service” for any period shall mean, as of the date of calculation, an amount equal to the sum of (i) interest payable during such period on Bonds and (ii) the principal amount of Bonds which mature during such period.
“Defeasance Obligations” shall mean
(a) Cash, or
(b) Government Securities, or
(c) Evidences of ownership of proportionate interests in future interest and principal payments of Government Securities. Investments in such proportionate interests must be limited to circumstances wherein (i) a bank or trust company acts as custodian and holds the underlying Government Securities; (ii) the owner of the investment is the real party in interest and has the right to proceed directly and individually against the obligor of the underlying Government Securities; and (iii) the underlying Government Securities are held in a special account separate from the custodian's general assets, and are not available to satisfy any claim of the custodian, any person claiming through the custodian, or any person to whom the custodian may be obligated.
“Executive Officers” shall mean, collectively, the Mayor and the Clerk of the Issuer.
“Financial Advisor” shall mean Comer Capital Group, LLC of Jackson, Mississippi.
“Fiscal Year” shall mean the one-year period commencing on January 1 of each year, or such other one year period as may be designated by the Governing Authority as the fiscal year of the Issuer.
“Governing Authority” shall mean the Board of Aldermen of the City of Grambling, the governing authority of the Issuer.
“Government Securities” shall mean direct general obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America, which may be United States Treasury Obligations such as the State and Local Government Series and may be in book entry form.
“Interest Payment Date” shall mean March 1 and September 1 of each year, commencing September 1, 2013, whether or not such day is a business day.
“Issuer” shall mean the City of Grambling, Louisiana.
“Net Revenues” shall mean the income and revenues derived or to be derived from the operation of the System of the Issuer after provisions have been made for payment therefrom of the reasonable and necessary expenses of operating and maintaining the System.
“Outstanding”, when used with reference to the Bonds, shall mean, as of any date, all Bonds theretofore issued under this Bond Ordinance, except:
1. Bonds theretofore canceled by the Paying Agent or delivered to the Paying Agent for cancellation;
2. Bonds for the payment or redemption of which sufficient Defeasance Obligations have been deposited with the Paying Agent or an escrow agent in trust for the owners of such Bonds with the effect specified in this Bond Ordinance, provided that if such Bonds are to be redeemed, irrevocable notice of such redemption has been duly given or provided for pursuant to this Bond Ordinance, to the satisfaction of the Paying Agent, or waived;
3. Bonds in exchange for or in lieu of which other Bonds have been registered and delivered pursuant to this Bond Ordinance;
4. Bonds alleged to have been mutilated, destroyed, lost, or stolen which have been paid as provided in this Bond Ordinance or by law; and
5. Bonds for the payment of the principal (or redemption price, if any) of and interest on which Defeasance Obligations are held by the Paying Agent or an escrow agent with the effect specified in this Bond Ordinance.
“Paying Agent” shall mean initially Regions Bank, Baton Rouge, Louisiana, until a successor Paying Agent shall have become such pursuant to the applicable provisions of this Bond Ordinance, and thereafter “Paying Agent” shall mean such successor Paying Agent.
“Paying Agent Agreement” shall mean the agreement to be entered into between the Issuer and the Paying Agent pursuant to this Bond Ordinance.
“Prior Bond Resolutions” shall have the meaning set forth in the Recitals to this Bond Ordinance.
“Prior Bonds” shall have the meaning set forth in the Recitals to this Bond Ordinance.
“Person” shall mean any individual, corporation, partnership, joint venture, association, limited liability company, trust, unincorporated organization, or government or any agency or political subdivision thereof.
“Principal Payment Date” shall mean March 1 of each year, commencing March 1, 2014.
“Purchaser” shall mean Capital One Public Funding, LLC, a New York limited liability company.
“Qualified Investments” means the following, provided that the same are at the time legal for investment of the Issuer's funds:
(a) Government Securities, including obligations of any of the Federal agencies set forth in clause (ii) below to the extent unconditionally guaranteed by the United States of America, and CATS, TIGRS and/or STRIPS;
(b) direct obligations and fully guaranteed certificates of beneficial interest of the Export-Import Bank of the United States; senior debt obligations of the Federal Home Loan Banks; debentures of the Federal Housing Administration; guaranteed mortgage-backed bonds and guaranteed pass-through obligations of the Government National Mortgage Corporation; guaranteed Title XI financings of the U.S. Maritime Administration; mortgage- backed securities and senior debt obligations of the Federal National Mortgage Association; and participation certificates and senior debt obligations of the Federal Home Loan Mortgage Corporation (collectively, “Agency Obligations”);
(c) certificates of deposit, savings accounts, deposit accounts or money market deposits of any bank or trust company organized under the laws of the State or any national banking association having its principal office in the State which has a combined capital surplus and undivided profit of not less than three million dollars ($3,000,000) (including the Paying Agent) which are fully insured by the Federal Deposit Insurance Corporation or fully collateralized in the manner provided by Louisiana law;
(d) general obligation bonds or other direct obligations of any state or a political subdivision or public corporation of any state, the interest on which is exempt from federal income taxes, provided that such bonds are rated at the time the investment is made by Moody's Investors Service and Standard & Poor's Corporation in one of the two highest rating categories;
(e) Money market funds registered under the Federal Investment Company Act of 1940, whose shares are registered under the Federal Securities Act of 1933, and having a rating of S&P of AAAm-G; AAAm; or AAm; and
(f) Any other investment as permitted in R.S. 33:2955.
“Record Date” shall mean, with respect to an Interest Payment Date and Principal Payment Date, the close of business on the fifteenth day of the calendar month next preceding such respective Interest Payment Date or Principal Payment Date.
“Redemption Price” shall mean, when used with respect to a Bond, the principal amount thereof plus the applicable premium, if any, payable upon redemption thereof pursuant to this Bond Ordinance.
“State” shall mean the State of Louisiana.
“Subordinated Indebtedness” shall have the meaning set forth in Section 11.06 hereof.
“Superior Indebtedness” shall have the meaning set forth in Section 11.06 hereof.
“System” shall mean the combined revenue producing public utilities system of the Issuer consisting of the Issuer's waterworks system and wastewater collection and treatment sewer system as said system now exists and as it may be hereafter improved, extended or supplemented while any of the Bonds herein authorized remain outstanding, including specifically all properties of every nature owned, leased or operated by the Issuer and used or useful in the operation of said revenue producing utility, and including real estate, personal and intangible properties, contracts, franchises, leases and choses in action, whether lying within or without the boundaries of the Issuer.
SECTION 1.02. Interpretation. In this Bond Ordinance, unless the context otherwise requires, (a) words importing the singular include the plural and vice versa, (b) words of the masculine gender shall be deemed and construed to include correlative words of the feminine and neuter genders and (c) the title of the offices used in this Bond Ordinance shall be deemed to include any other title by which such office shall be known under any subsequently adopted charter.
AUTHORIZATION AND ISSUANCE OF BONDS
SECTION 2.01. Authorization of Bonds.
(a) This Bond Ordinance creates a series of Bonds of the Issuer to be designated “Utilities Revenue Refunding Bonds, Series 2013 of the City of Grambling, State of Louisiana,” and provides for the full and final payment of the principal and redemption price, if any, of and interest on all the Bonds.
(b) The Bonds issued under this Bond Ordinance shall be issued for the purpose of (a) refunding the remaining principal balance of the Prior Bonds; and (b) paying the costs of issuance of the Bonds, for, on behalf of and in the name of the Issuer, and to represent said indebtedness, this Governing Authority does hereby authorize the issuance of the Bonds.
SECTION 2.02. Bond Ordinance to Constitute Contract. In consideration of the purchase and acceptance of the Bonds by those who shall own the same from time to time the provisions of this Bond Ordinance shall be a part of the contract of the Issuer with the Owners of the Bonds and shall be deemed to be and shall constitute a contract between the Issuer and the Owners from time to time of the Bonds. The provisions, covenants and agreements herein set forth to be performed by or on behalf of the Issuer shall be for the equal benefit, protection and security of the Owners of any and all of the Bonds, each of which Bonds, regardless of the time or times of its issue or maturity, shall be of equal rank without preference, priority or distinction over any other thereof except as expressly provided in this Bond Ordinance.
SECTION 2.03. Obligation of Bonds. The Bonds shall be secured by and payable in principal, premium, if any, and interest solely from an irrevocable pledge and dedication of the Net Revenues after there have first been paid the reasonable and necessary costs and expenses of operations and maintenance of the System. The proceeds of the Net Revenues are hereby irrevocably pledged and dedicated in an amount sufficient for the payment of the Bonds in principal, premium, if any, and interest as they shall respectively become due and payable, and for the other purposes hereinafter set forth in this Bond Ordinance, and the moneys in the Revenue Fund, described in Article IV hereof shall be held by the regular fiscal agent bank of the Issuer for the Owners. All of the avails or proceeds of the Net Revenues shall be set aside in a separate fund, as hereinafter provided, and shall be and remain pledged for the security and payment of the Bonds and any Additional Parity Bonds issued pursuant to Article VIII hereof, in principal, premium, if any, and interest and for all other payments provided for in this Bond Ordinance until such bonds shall have been fully paid and discharged.
SECTION 2.04. Form of Bonds. The Bonds shall be in substantially the form set forth in Exhibit “A” hereto, with such necessary or appropriate variations, omissions and insertions as are required or permitted by the Act and this Bond Ordinance as well as any changes required by Bond Counsel.
SECTION 2.05. Denominations, Dates, Maturities and Interest. The Bonds will be issued in the form of a single fully registered term bond numbered R-1 with a pay down feature in the denominations of $100,000/$5,000 principal amount or any integral multiple thereof.
The R-1 Bond shall be dated the date of delivery and shall be paid down in the years and in the principal amounts set forth below:
INSERT TABLE 1
The Bonds shall bear interest from the date of delivery, payable on March 1 and September 1 of each year, commencing September 1, 2013 (each an “Interest Payment Date”), calculated on a basis of 12 months of 30 days each, at the rate of four and twenty-five hundredths percent (4.25%) per annum and shall mature no later than March 1, 2033. Interest on the Bonds will be payable by check mailed by the Paying Agent to the Registered Owner (determined at the close of business on the Record Dates), which is the 15th calendar day of the month next preceding an Interest Payment Date, whether or not such day is a business day, at the address of such registered owner as it appears on the registration books of the Paying Agent. Except as otherwise provided in this Section, the Bonds bear interest from the date thereof or from the most recent Interest Payment Date to which interest has been paid or duly provided for, provided, however, that if and to the extent the Issuer shall default in the payment of the interest on any Interest Payment Date, then all such Bonds shall bear interest from the most recent Interest Payment Date to which interest has been paid on the Bonds, or if no interest has been paid on such Bonds, from the date of delivery. The person in whose name any Bond is registered at the close of business on the Record Date with respect to an Interest Payment Date shall be entitled to receive the interest payable with respect to such an Interest Payment Date notwithstanding the cancellation of such Bond upon any registration of transfer or exchange thereof subsequent to such Record Date and prior to such Interest Payment Date.
SECTION 2.06. Term Sheet and Other Documents. The Mayor is hereby authorized to execute the Term Sheet with the Purchaser. The Mayor is further authorized to sign any and all documents, instruments or agreements of any nature required by Purchaser upon advice of Bond Counsel.
GENERAL TERMS AND PROVISIONS OF THE BONDS
SECTION 3.01. Exchange of Bonds, Persons Treated as Owners. The Issuer shall cause the Bond Register utilized for the registration and for the registration of transfer of the Bonds as provided in this Bond Ordinance to be kept by the Paying Agent at its principal corporate trust office and the Paying Agent is hereby constituted and appointed the registrar for the Bonds. At reasonable times and under reasonable regulations established by the Paying Agent said list may be inspected and copied by the Issuer or by the Owner (or a designated representative thereof) of 15% of the outstanding principal amount of the Bonds. Upon surrender for registration of transfer of any Bond, the Paying Agent shall register and deliver in the name of the transferee(s) one or more new fully registered Bonds of authorized denomination of the same maturity and like aggregate principal amount. At the option of the Owner, Bonds may be exchanged for other Bonds of authorized denominations of the same maturity and like aggregate principal amount, upon surrender of the Bonds to be exchanged at such office. Whenever any Bonds are so surrendered for exchange, the Paying Agent shall register and deliver in exchange therefor the Bond or Bonds which the Owner making the exchange shall be entitled to receive. All Bonds presented for registration of transfer or exchange shall be accompanied by a written instrument or instruments of transfer in form and with a guaranty of signature satisfactory to the Paying Agent, duly executed by the Owner or his attorney duly authorized in writing. No service charge to the Owner shall be made by the Paying Agent for any exchange or registration of transfer of Bonds. The Paying Agent may require payment by the person requesting an exchange or registration of transfer of Bonds of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto. The Issuer and the Paying Agent shall not be required (a) to issue, register the transfer of or exchange any Bond during a period beginning at the opening of business on the 15th calendar day of the month next preceding an Interest Payment Date or any date of selection of Bonds to be redeemed and ending at the close of business on the Interest Payment Date or day on which the applicable notice of redemption is given or (b) to register the transfer of or exchange any Bond so selected for redemption in whole or in part. All Bonds delivered upon any registration of transfer or exchange of Bonds shall be valid obligations of the Issuer, evidencing the same debt and entitled to the same benefits under this Bond Ordinance as the Bonds surrendered.
Prior to due presentment for registration of transfer of any Bond, the Issuer and the Paying Agent, and any agent of the Issuer or the Paying Agent may deem and treat the person in whose name any Bond is registered as the absolute owner thereof for all purposes, whether or not such Bond shall be overdue, and shall not be bound by any notice to the contrary.
SECTION 3.02. Bonds Mutilated, Destroyed, Stolen or Lost. In case any Bond shall become mutilated or be improperly canceled, or be destroyed, stolen or lost, the Issuer may in its discretion authorize the issuance and delivery of a new Bond in exchange for and substitution for such mutilated or improperly canceled Bond, or in lieu of and substitution for the Bond destroyed, stolen or lost, upon the Owner (i) furnishing the Issuer and the Paying Agent proof of his ownership thereof and proof of such mutilation, improper cancellation, destruction, theft or loss satisfactory to the Issuer and the Paying Agent, (ii) giving to the Issuer and the Paying Agent an indemnity bond in favor of the Issuer and the Paying Agent in such amount as the Issuer may require, (iii) compliance with such other reasonable regulations and conditions as the Issuer may prescribe, and (iv) paying such expenses as the Issuer and the Paying Agent may incur. All Bonds so surrendered shall be delivered to the Paying Agent for cancellation pursuant to Section 3.04 hereof. If any Bond shall have matured or be, about to mature, instead of issuing a substitute Bond, the Issuer may pay the same, upon being indemnified as aforesaid, and if such Bond be lost, stolen or destroyed, without surrender thereof. Any such duplicate Bond issued pursuant to this Section shall constitute an original, additional, contractual obligation on the part of the Issuer, whether or not the lost, stolen or destroyed Bond be at any time found by anyone. Such duplicate Bond shall be in all respects identical with those replaced except that it shall bear on its face the following additional clause:
“This bond is issued to replace a lost, canceled or destroyed bond under the authority of R.S. 39:971 through 39:974.”
Such duplicate Bond may be signed by the facsimile signatures of the same officers who signed the original Bonds, provided, however, that in the event the officers who executed the original Bonds are no longer in office, then the new Bonds may be signed by the officers then in office. Such duplicate Bonds shall be entitled to equal and proportionate benefits and rights as to lien and source and security for payment as provided herein with respect to all other Bonds hereunder, the obligations of the Issuer upon the duplicate Bonds being identical to its obligations upon the original Bonds and the rights of the Owner of the duplicate Bonds being the same as those conferred by the original Bonds.
SECTION 3.03. Preparation of Definitive Bonds, Temporary Bonds. Until the definitive Bonds are prepared, the Issuer may execute, in the same manner as is provided in Section 3.05 hereof, and deliver, in lieu of definitive Bonds, but subject to the same provisions, limitations and conditions as the definitive Bonds except as to the denominations, one or more temporary typewritten Bonds substantially of the tenor of the definitive Bonds in lieu of which such temporary Bond or Bonds are issued, in authorized denominations, and with such omissions, insertions and variations as may be appropriate to temporary Bonds.
SECTION 3.04. Cancellation of Bonds. All Bonds paid or redeemed either at or before maturity together with all Bonds purchased by the Issuer, shall thereupon be promptly canceled by the Paying Agent.
SECTION 3.05. Execution. The Bonds shall be executed in the name and on behalf of the Issuer by the manual or facsimile signature of the Mayor and by the manual or facsimile signature of the Clerk of the Issuer, and the corporate seal of the Issuer (or a facsimile thereof) shall be thereunto affixed, imprinted, engraved or otherwise reproduced thereon. In case any one or more of the officers who shall have signed or sealed any of the Bonds shall cease to be such officer before the Bonds so signed and sealed shall have been actually delivered, such Bonds may, nevertheless, be delivered as herein provided, and may be issued as if the person who signed or sealed such Bonds had not ceased to hold such office. Said officers shall, by the execution of the Bonds, adopt as and for their own proper signatures their respective facsimile signatures appearing on the Bonds or any legal opinion certificate thereon, and the Issuer may adopt and use for that purpose the facsimile signature of any person or persons who shall have been such officer at any time on or after the date of such Bond, notwithstanding that at the date of such Bond such person may not have held such office or that at the time when such Bond shall be delivered such person may have ceased to hold such office.
SECTION 3.06. Registration by Paying Agent. No Bond shall be valid or obligatory for any purpose or entitled to any security or benefit under this Bond Ordinance unless and until a certificate of registration on such Bond substantially in the form set forth on Exhibit “A” hereto shall have been duly executed on behalf of the Paying Agent by a duly authorized signatory, and such executed certificate of the Paying Agent upon any such Bond shall be conclusive evidence that such Bond has been executed, registered and delivered under this Bond Ordinance.
SECTION 3.07. Regularity of Proceeding. The Issuer, having investigated the regularity of the proceedings had in connection with the issuance of the Bonds, and having determined the same to be regular, each of the Bonds shall contain the following recital, to wit:
“It is certified that this Bond is authorized by and is issued in conformity with the requirements of the Constitution and statutes of this State.”
PAYMENT OF BONDS; DISPOSITION OF FUNDS
SECTION 4.01. Security for Bonds.
(a) The Bonds are payable as to both principal and interest solely from the Net Revenues.
(b) Payment of principal of and interest on the Bonds will be paid in accordance with their terms.
(c) The Issuer hereby unconditionally pledges the Net Revenues to the full and prompt payment of principal of and interest on the Bonds.
(d) The Issuer represents and warrants: (i) that, other than with respect to the Prior Bonds which are being defeased with the proceeds of the Bonds, it has not heretofore made a pledge of, granted a lien on or security interest in, or made an assignment or sale of the Net Revenues that ranks on a parity with or prior to the pledge granted under this Bond Ordinance; (ii) the Issuer shall not hereafter make or suffer to exist any pledge or assignment of, lien on, or security interest in the collateral that ranks prior to or on a parity with the pledge granted hereunder, except as expressly permitted under this Bond Ordinance; and (iii) under the laws of the State, the pledge of Net Revenues is and shall be prior to any judicial lien imposed after closing of the issuance of the Bonds on the Net Revenues to enforce a judgment against the Issuer on a simple contract.
(e) At the closing of the issuance of the Bonds, and thereafter, the Issuer will, to the extent required by law, cause this Bond Ordinance and all supplements thereto, to be recorded and filed in such manner and in such places as may be required by law in order to create, perfect, preserve and protect fully the security of the Bond Holders in the Net Revenues and any other collateral and the rights of any trustee for the Bond Holders. The Issuer will covenant that it will do, execute, acknowledge and deliver or cause to be done, executed, acknowledged and delivered such further acts, instruments and transfers as may be required for the better securing, assuring, continuing, transferring, conveying, pledging, assigning and confirming unto the Bond Holders or any trustee for the Bond Holders, the Net Revenues and any other collateral pledged to the payment of the principal of, premium, if any, and interest on the Bonds. Except to the extent it is exempt therefrom, the Issuer will pay or cause to be paid all filing fees incident to such filing and all expenses incident to the preparation, execution and acknowledgment of such instruments of further assurance, and all federal or State fees and other similar fees, duties, imposts, assessments and charges arising out of or in connection with the execution and delivery of such instruments of further assurance.
SECTION 4.02. Funds and Accounts. In order that the principal of and the interest on the Bonds will be paid in accordance with their terms and in order to identify the monies that are subject to the terms and conditions of the Bond Ordinance, and to the lien of the Bond Holders, and for the other objects and purposes hereinafter provided, the Issuer further covenants as follows: That all of the income and revenues derived or to be derived by the Issuer from the operation of the System shall be deposited as the same may be collected to the credit of the Issuer, in a separate and special bank account heretofore established by the Prior Bond Resolutions and maintained with the regularly designated fiscal agent bank of the Issuer (the “Fiscal Agent”), which account is to be known and designated as the “Water and Sewer Revenue Bond Account” (hereinafter, the “Revenue Fund”), said Revenue Fund to be maintained, administered and used each month and the Fiscal Agent shall withdraw from the Revenue Fund and deposit to the credit of several funds the following amounts, in the following order of priority and for the following express purposes:
(a) The payment of all reasonable and necessary expenses of operating and maintaining the System.
(b) The maintenance of the various funds as required by this Bond Ordinance to the extent not otherwise covered by this Bond Ordinance.
(c) The establishment and maintenance of the Utilities Revenue Refunding Bond Sinking Fund (the “Sinking Fund”) established by this Bond Ordinance to be held by the Paying Agent, sufficient in amount to pay promptly and fully the principal of and the interest on the Bonds and any Additional Parity Bonds, as they severally become due and payable, by transferring from the Revenue Fund to the Sinking Fund, monthly in advance on or before the 20th of each month of each year, commencing April 20, 2013, a sum equal to one-sixth (1/6th) of the interest falling due on the next Interest Payment Date and a sum equal to one-twelfth (1/12th) of the principal falling due on the next Principal Payment Date with regards to the Bonds. If Additional Parity Bonds are hereafter issued by the Issuer in the manner provided in this Bond Ordinance, moneys in the Sinking Fund shall be equally available to pay principal and interest on such Additional Parity Bonds, and payments into the Sinking Fund shall be increased as provided in the ordinance authorizing the issuance of such Additional Parity Bonds. Said Paying Agent shall transfer and utilize from the Sinking Fund, funds fully sufficient to pay promptly the principal and/or interest so falling due on such date.
(d) The establishment of a Utilities Revenue Refunding Costs of Issuance Account (the “Costs of Issuance Account”) to be held and kept separate by the Paying Agent. The Paying Agent shall deposit into the Costs of Issuance Account a sum from the proceeds of the Bonds required to pay the Costs of Issuance of the Bonds in accourdance with the Closing Order presented by the Issuer to the Paying Agent upon delivery of the Bonds. Any amounts attributable to the Bonds remaining in the Costs of Issuance Account 180 days after the date of issuance of the Bonds shall be transferred to the Sinking Fund. Subject to the foregoing, which are cumulative, any excess funds on deposit in the Revenue Fund may be used by the Issuer for the purpose of calling and/or paying bonds payable from the income and revenue of the System, subject to redemptive provisions, or for such other lawful corporate purposes as the Governing Authority may determine, whether or not such purposes are or are not related to the System.
SECTION 4.03. Investment of Funds. All or any part of the moneys in any of the aforesaid funds and accounts shall, at the written request of the Issuer, be invested in Qualified Investments. Such investments shall, to the extent at any time necessary, be liquidated and the proceeds thereof applied to the purposes for which said respective funds are maintained. Investments on deposit in all funds and accounts shall be valued at market value at least monthly. No forward delivery agreements, hedge, purchase and resale agreements or par-put agreements may be used with respect to the investment of any fund or account with respect to the trust estate pledged to the Bonds without the prior written request.
SECTION 4.04. Funds to Constitute Trust Funds. The Revenue Fund, Sinking Fund and Reserve Fund provided for in Section 4.02 hereof shall all be and constitute trust funds for the purposes provided in this Bond Ordinance, and Bonds issued pursuant to this Bond Ordinance be and they are hereby granted a lien on all such funds until applied in the manner provided herein. The moneys in such funds shall at all times be secured to the full extent thereof by the bank or trust company holding such funds in the manner required by the laws of the State. The Mayor and Clerk are hereby authorized and directed to execute any instrument necessary to effectuate this Section.
REDEMPTION OF BONDS
SECTION 5.01. Optional Redemption of Bonds. The Bonds maturing on and after March 1, 2024 may be callable for redemption at the option of the Issuer in full or in part at any time on or after March 1, 2023, upon not less than thirty (30) days written notice, at a redemption price equal to 100% of the principal amount of the Bonds to be redeemed plus accrued interest on the Bonds, if any, to the redemption date, and if less than all of the Bonds of a particular maturity are to be redeemed then by lot within such maturity or by such other method as the Paying Agent shall deem fair and appropriate. Notwithstanding other provisions of the Bond Ordinance, the Issuer agrees to cause any money to be used for the optional redemption of the Bonds to be held uninvested or invested only in United States Government Securities from the date of notice of such redemption until the redemption date, to the extent the Issuer may direct such investment. The notice of redemption shall also state that the redemption shall occur only to the extent of moneys available for said redemption.
SECTION 5.02. Notice of Redemption of Bonds. In the event any of the Bonds are called for redemption, the Paying Agent shall give notice, in the name of the Issuer, of the redemption of such Bonds, which notice shall (i) specify the Bonds to be redeemed, the redemption date, the redemption price, and the place or places where amounts due upon such redemption will be payable (which shall be the principal corporate trust office of the Paying Agent) and, if less than all of the Bonds are to be redeemed, the numbers of the Bonds, and the portions of the Bonds, so to be redeemed, (ii) state any condition to such redemption, and (iii) state that on the redemption date, and upon the satisfaction of any such condition, the Bonds to be redeemed shall cease to bear interest. Such notice may set forth any additional information relating to such redemption. Such notice shall be given by mail, postage prepaid, at least thirty (30) days prior to the date fixed for redemption to each Owner of the Bonds to be redeemed at its address shown on the Bond Register kept by the Paying Agent; provided, however, that failure to give such notice to any Bond Holder or any defect in such notice shall not affect the validity of the proceedings for the redemption of any of the other Bonds.
PARTICULAR COVENANTS; RATES AND CHARGES; COVENANTS AS TO MAINTENANCE AND OPERATION OF THE SYSTEM
SECTION 6.01. Application of the Proceeds of the Bonds. As a condition of the issuance of the Bonds, the Issuer hereby binds and obligates itself to:
(a) Deposit the prior Debt Service Reserve Funds and amounts in any other Prior Bond funds into the Refunding Fund (as defined below).
(b) Deposit the Bond proceeds into a special fund to be designated the Refunding Bond Proceeds Fund (the “Refunding Fund”) to be held by the Paying Agent and used immediately for the redemption of the Refunded Bonds.
(c) Transfer a portion of the Refunding Fund into the Costs of Issuance Account as provided in Section 4.02(e).
SECTION 6.02. Payment of Bonds. The Issuer shall duly and punctually pay or cause to be paid as herein provided, the principal or redemption price, if any, of every Bond and the interest thereon, at the dates and places and in the manner stated in the Bonds according to the true intent and meaning thereof.
SECTION 6.03. Tax Covenants. To the extent permitted by the laws of the State, the Issuer will comply with the requirements of the Code to establish, maintain and preserve the exclusion from “gross income” of interest on the Bonds under the Code. The Issuer shall not take any action or fail to take any action, nor shall it permit at any time or times any of the proceeds of the Bonds or any other funds of the Issuer to be used directly or indirectly to acquire any securities or obligations the acquisition of which would cause any Bond to be an “arbitrage bond” as defined in the Code or would result in the inclusion of the interest on any Bond in “gross income” under the Code, including without limitation, the failure to comply with the limitation on investment of the proceeds of the Bonds, the payment of any required rebate of arbitrage earnings to the United States of America, or the use of the proceeds of the Bonds in a manner which would cause the Bonds to be “private activity bonds” under the Code.
SECTION 6.04. Rates and Charges. The Issuer, through its Governing Authority, covenants to fix, establish and maintain such rates and collect such fees, rents or other charges for the services and facilities of the System, and all parts thereof, and to revise the same from time to time whenever necessary, as will always provide revenues in each year sufficient to pay the reasonable and necessary expenses of operating and maintaining the System in each year, the principal and interest maturing on the Bonds in each year, all other payments required for such year by this Bond Ordinance, and all other obligations or indebtedness payable out of the Net Revenues of the System for such year, and which will provide Net Revenues in each year, at least equal to 125% of the largest amount of principal and interest maturing in any future fiscal year on the Bonds and on any Additional Parity Bonds hereafter issued; and such rates, fees, rents or other charges shall not at any time be reduced so as to be insufficient to provide adequate revenues for such purposes. In no event shall the revenues from the System provide Net Revenues in each year less than an amount equal to 125% of the largest amount of principal and interest maturing on the Bonds and on any Additional Parity Bonds hereafter issued. The Issuer agrees that the failure of any Person to pay the charges for any service rendered by the System within thirty (30) days of the date on which it is due shall cause such charge to become delinquent; that if such delinquent charge, with interest and penalties accrued thereon, is not paid within thirty (30) days from the date on which it became delinquent, the Issuer will shut off or cause to be shut off sewer services to the affected premises, and that the Issuer and this Governing Authority and its officials, agents and employees will do all things necessary and will take advantage of all remedies afforded by law to collect and enforce the prompt payment of all charges made for services rendered by the System. All delinquent charges for water shall on the date of delinquency have added thereto a penalty of ten percent (10%) of the amount of the charge and the amount so due, including the penalty charge, shall, after thirty (30) days from the date of delinquency, bear interest at the rate of at least six per centum (6%) per annum. If services shall be discontinued as above provided, the customer shall, in addition to paying the delinquent charges, penalties and interest, pay, as a condition precedent to the resumption of service, a reasonable reconnection charge.
SECTION 6.05. Right to Pledge Net Revenues; Rank in Lien. In providing for the issuance of the Bonds, the Issuer does hereby represent and covenant that it is lawfully seized and possessed of the System, that it has a legal right to pledge the Net Revenues as herein provided, that the Bonds will have a lien and privilege on the Net Revenues, subject only to the prior payment of all reasonable and necessary expenses of operation and maintenance of the System and that the Issuer will at all times maintain the System in first class repair and working order and condition.
SECTION 6.06. Insurance. So long as any of the Bonds are outstanding and unpaid in principal or interest, the Issuer shall carry full coverage of insurance on the System at all times against those risks and in those amounts normally carried by privately owned public utility companies engaged in the operation of such utilities. Said policies of insurance shall be issued by a responsible insurance company or companies duly licensed to do business under the laws of the State. In case of loss, any insurance money received by the Issuer shall be used for the purpose of promptly repairing or replacing the property damaged or destroyed.
SECTION 6.07. Records and Accounts; Audit Reports. As long as any of the Bonds are outstanding and unpaid in principal or interest the Issuer shall maintain and keep proper books of records and accounts separate and apart from all other records and accounts in which shall be made full and correct entries of all transactions relating to the System. Not later than six (6) months after the close of each Fiscal Year the Issuer shall cause an audit of such books and accounts to be made by the Legislative Auditor of the State of Louisiana (or his successor) or a recognized independent firm of certified public accountants, showing the receipts of and disbursements made for the account of the System. Such audit shall be available for inspection by the Owner of any of the Bonds. Each such audit, in addition to whatever matters may be thought proper by the accountant to be included therein, shall include the following:
(a) A statement in detail of the income and expenditures of the System for such Fiscal Year;
(b) A balance sheet of the System as of the end of such Fiscal Year;
(c) The accountant's comments regarding the manner in which the Issuer has carried out the requirements of this Bond Ordinance, and the accountant's recommendations for any changes or improvements in the operation of the System or the method of keeping the records relating thereto;
(d) A list of the insurance policies in force at the end of the Fiscal Year, setting out as to each policy the amount of the policy, the risks covered, the name of the insurer and the expiration date of the policy;
(e) The number of System customers;
(f) An analysis of additions, replacements and improvements to the physical properties of the System;
(g) An analysis of all funds created pursuant to this Bond Ordinance (less and except the Revenue Fund) , setting forth all deposits and disbursements made during the Fiscal Year as to said funds; and
(h) A statement of all schedules of rates in effect during the Fiscal Year, the aggregate dollar amount billed for services rendered during such year and the average monthly billing per user.
All expenses incurred in the making of the audits required by this Section shall be regarded and paid as a maintenance and operating expense of the System. The Issuer further agrees that the Paying Agent and the Owner of the Bonds shall have the right to discuss with the accountant making the audit the contents of the audit and to ask for such additional information as they may reasonably require. The Issuer further agrees to furnish to the Owners of the Bonds, upon request therefor, a monthly statement itemized to show the income and expenses of the operation of the System and the number of connections for the preceding month. The Issuer further agrees that the Paying Agent and the Owners of the Bonds shall have at all reasonable times the right to inspect the System and the records, accounts and data of the Issuer relating thereto.
SECTION 6.08. Rights of Bond Holders: Appointment of Receiver in Event of Default. The Owners of the Bonds from time to time shall be entitled to exercise all rights and powers for which provision is made in the laws of the State. Any Owners of the Bonds or any trustee acting for such Owners in the manner hereinafter provided, may, either at law or in equity, by suit, action, mandamus or other proceeding in any court of competent jurisdiction, protect and enforce any and all rights under the laws of the State, or granted and contained in this Bond Ordinance, and may enforce and compel the performance of all duties required by this Bond Ordinance, or by any applicable statutes to be performed by the Issuer or by any agency, board or officer thereof, including the fixing, charging and collecting of rentals, fees or other charges for the use of the System, and in general to take any action necessary to most effectively protect the rights of the Owners. In the event that default shall be made in the payment of the interest on, or the principal of, any of the Bonds as the same shall become due, or any other payments required to be made by this Bond Ordinance, or in the event that the Issuer or any agency, board, officer, agent or employee thereof shall fail or refuse to comply with the provisions of this Bond Ordinance or shall default in any covenant made herein and therein, and in the further event that any such default shall continue for a period of thirty (30) days after written notice, any Owner or any trustee appointed to represent such Owners as hereinafter provided shall be entitled as of right to the appointment of a receiver of the System in an appropriate judicial proceeding in a court of competent jurisdiction. The receiver so appointed shall forthwith directly or by his agents and attorneys, enter into and upon and take possession of the System, and each and every part thereof, and shall hold, operate and maintain, manage and control the System, and each and every part thereof, and in the name of the Issuer shall exercise all the rights and powers of the Issuer with respect to the System as the Issuer itself might do. Such receiver shall collect and receive all fees, rentals and other revenues, maintain and operate the System in the manner provided in this Bond Ordinance, and comply under the jurisdiction of the court appointing such receiver, with all of the provisions of this Bond Ordinance. Whenever all that is due upon the Bonds and interest thereon, and under any covenants of this Bond Ordinance for other funds, and upon any other obligations and interest thereon having a charge, lien or encumbrances upon the Net Revenues of the System, shall have been paid and made good, and all defaults under the provisions of this Bond Ordinance shall have been cured and made good, possession of the System shall be surrendered to the Issuer upon the entry of an order of the court to that effect. Upon any subsequent default, any Owner of Bonds, or any trustee appointed for Owners as hereinafter provided, shall have the same right to secure the further appointment of a receiver upon any such subsequent default. Such receiver shall in the performance of the powers hereinabove conferred upon him be under the direction and supervision of the court making such appointment, shall at all times be subject to the orders and decrees of such court, and may be removed thereby and a successor receiver appointed in the discretion of such court. Nothing herein contained shall limit or restrict the jurisdiction of such court to enter such other and further orders and decrees as such court may deem necessary or appropriate for the exercise by the receiver of any function not specifically set forth herein. Any receiver appointed as provided herein shall hold and operate the System in the name of the Issuer and for the joint protection and benefit of the Issuer and Owners of the Bonds. Such receiver shall have no power to sell, assign, mortgage or otherwise dispose of any property of any kind or character belonging or pertaining to the System but the authority of such receiver shall be limited to the possession, operation and maintenance of the System for the sole purpose of the protection of both the Issuer and Owners and the curing and making good of any default under the provisions of this Bond Ordinance, and the title to and the ownership of the System shall remain in the Issuer, and no court shall have any jurisdiction to enter any order or decree permitting or requiring such receiver to sell, mortgage or otherwise dispose of any property of the System except with the consent of the Issuer and in such manner as the court shall direct. The Owner or Owners of Bonds in an aggregate principal amount of not less than twenty-five percent (25%) of Bonds issued under this Bond Ordinance then outstanding may by a duly executed certificate appoint a trustee for the Owners with authority to represent such Owners in any legal proceedings for the enforcement and protection of the rights of such Owners. Such certificate shall be executed by such Owners, or by their duly authorized attorneys or representatives, and shall be filed in the office of the Clerk of the Governing Authority. Until an event of default shall have occurred, the Issuer shall retain full possession and control of the System with full right to manage, operate and use the same and every part thereof with the rights appertaining thereto, and to collect and receive, and, subject to the provisions of this Bond Ordinance, to take, use and enjoy and distribute the earnings, income, rent, issue and profits accruing on or derivable from the System.
SECTION 6.09. Limitations on Sale, Lease or Other Disposition of Property. As long as any of the Bonds are outstanding and unpaid in principal or interest, the Issuer shall be bound and obligated not to sell, lease, encumber or in any manner dispose of the System or any substantial part thereof, provided, however, that this covenant shall not be construed to prevent the disposal by the Issuer of property which in its judgment has become worn out, unserviceable, unsuitable or unnecessary in the operation of the System.
SECTION 6.10. Prohibition Against Encumbrances. Except as hereinafter provided in Section 8.01 of this Bond Ordinance, the Issuer hereby covenants that it will not voluntarily create or cause to be created any debt, lien, pledge, mortgage, assignment, encumbrance or any other charge whatsoever having priority over or a parity with the lien of the Bonds and the interest thereon upon the Net Revenues pledged as security therefor in this Bond Ordinance.
SECTION 6.11. Competitive Franchises. As long as any of the Bonds are outstanding and unpaid in principal and interest, the Issuer obligates itself not to grant a franchise to any utility for operation within the boundaries of the Issuer which would render services or facilities similar to those of the System, and also obligates itself to oppose the granting of any such franchise by any other public board having jurisdiction over such matters. Further, the Issuer shall maintain its corporate identity and existence as long as any of the Bonds remain outstanding.
SECTION 6.12. Fidelity Bonds. As long as any of the Bonds are outstanding and unpaid, the Issuer, in operating the System, shall require all of its officers and employees who may be in a position of authority or in possession of money derived from the operation of the System, to obtain or be covered by a blanket fidelity or fidelity or faithful performance bond, or independent fidelity bonds written by a responsible indemnity company in amounts adequate to protect the Issuer from loss.
SECTION 6.13. Consulting Engineer. (a) It is recognized and understood that in purchasing and accepting delivery of the Bonds and the Owners of the Bonds from time to time will rely, upon representations made by the Issuer that its System will be economically and efficiently operated so that both the Issuer and the Owners of the Bonds may benefit through the production of maximum Net Revenues. To this end, the Issuer covenants and agrees to retain a Consulting Engineer (the “Consulting Engineer”) to report annually on (i) the condition and operation of the System; and (ii) on the sufficiency of any maintenance reserved in the Revenue Fund which shall be required to be funded by any additional amounts recommended by the Consulting Engineer.
(b) In the event the Issuer should fail to derive sufficient income from the operation of the System to make the required monthly payments into the funds established by Section 4.02 hereof, the Consulting Engineer shall be retained on a continuous basis until all defaults are cured for the purpose of providing for the Issuer continuous engineering counsel in the operation of its System.
(c) The Consulting Engineer shall be retained under contract at such reasonable compensation as may be fixed by this Governing Authority, and the payment of such compensation shall be considered to be one of the costs of maintaining and operating the System. Any Consulting Engineer appointed under the provisions of Section 6.13(b) hereof may be replaced at any time by another Consulting Engineer appointed or retained by the Issuer, with the consent and approval of any subsequent Owners of the Bonds.
SECTION 6.14. Duties of Consulting Engineer in Event of Failure to Make Required Payments. In the event the Issuer is required to engage a Consulting Engineer pursuant to Section 6.13(b) hereof:
(a) the Consulting Engineer shall prepare within ninety (90) days after the close of each Fiscal Year a comprehensive operating report, which report shall contain therein or be accompanied by a certified copy of an audit of the preceding year's business prepared by the Legislative Auditor of the State (or his successor) or the Issuer's certified public accountants, and in addition thereto, shall report upon the operations of the System during the preceding year, the maintenance of the properties, the efficiency of the management of the System, the proper and adequate keeping of books of record and account, the adherence to budget and budgetary control provisions, the adherence to the provisions of this Bond Ordinance and all other things having a bearing upon the efficient and profitable operation of the System, and shall include whatever criticism of any phase of the operation of the System the Consulting Engineer may deem proper, and such recommendations as to changes in operations and the making of repairs, renewals, replacements, extensions, betterment and improvements as the Consulting Engineer may deem proper. Copies of such report shall be placed on file with the Clerk of the Issuer and shall be open to inspection by any subsequent Owners of any of the Bonds.
(b) It shall be the duty of the Consulting Engineer to pass on the economic soundness or feasibility of any extensions, betterments, improvements, expenditures or purchases of equipment and materials or supplies, which will involve the expenditure of more than Ten Thousand Dollars ($10,000.00), whether in one or more than one order, and whether authorized by a budget or not, and the Consulting Engineer shall devise and prescribe a form or forms wherein shall be set forth his or its approval in certificate form, copies of which shall be filed with the Clerk of the Governing Authority.
(c) Sixty (60) days before the close of each Fiscal Year, the Consulting Engineer shall submit to the Governing Authority a suggested budget for the ensuing Fiscal Year's operation of the System and shall submit recommendations as to the schedule of rates and charges for services supplied by the System. A copy of said suggested budget and recommendations shall also be furnished by said Consulting Engineer directly to the Owners. Such recommendations as to rates and charges, consistent with the requirements relating thereto contained herein, shall be followed by the Governing Authority insofar as practicable and all other recommendations shall be given careful consideration by the Governing Authority and shall be substantially followed, except for good and reasonable cause. No expenditures for the operation, maintenance and repair of the System in excess of the amounts stated in said budget shall be made in any year, except upon the certificate of the Consulting Engineer that such expenditures are necessary and essential to the continued operation of the System. It shall be the duty of the Consulting Engineer to prescribe a system of budgetary control along with forms for exercising of such control which shall be utilized by the manager or superintendent of the System and his staff, and the manager or superintendent shall cause to be prepared monthly reports not later than the twentieth day of each month, for the preceding month's business and operation of the System, which reports shall be submitted to the Consulting Engineer, who shall prepare an analysis of each such report, which analysis shall be filed monthly as expeditiously as possible with the Clerk of the Issuer, the manager or superintendent of the System. In the event this Governing Authority shall fail to select and retain a Consulting Engineer in accordance with Section 6.13(b) within thirty (30) days after the occurrence of the conditions prescribed thereby, then upon the petition of the Owners of twenty-five percent (25%) of the aggregate principal amount of the Bonds then outstanding, this Governing Authority shall select and retain such Consulting Engineer as is named in the petition of said Owners.
SUPPLEMENTAL BOND ORDINANCES
SECTION 7.01. Supplemental Bond Ordinances Effective Without Consent of Bondholders. For any one or more of the following purposes and at any time from time to time, a Bond Ordinance supplemental hereto may be adopted, which, upon the filing with the Paying Agent of a certified copy thereof, but without any consent of the Owners, shall be fully effective in accordance with its terms:
(a) to add to the covenants and agreements of the Issuer in this Bond Ordinance other covenants and agreements to be observed by the Issuer which are not contrary to or inconsistent with this Bond Ordinance as theretofore in effect;
(b) to add to the limitations and restrictions in this Bond Ordinance other limitations and restrictions to be observed by the Issuer which are not contrary to or inconsistent with this Bond Ordinance as theretofore in effect;
(c) to surrender any right, power or privilege reserved to or conferred upon the Issuer by the terms of this Bond Ordinance, but only if the surrender of such right, power or privilege is not contrary to or inconsistent with the covenants and agreements of the Issuer contained in this Bond Ordinance; and/or
(d) to cure any ambiguity, supply any omission, or cure or correct any defect or inconsistent provision of this Bond Ordinance, or to insert such provisions clarifying matters or questions arising under this Bond Ordinance as are necessary or desirable and are not contrary to or inconsistent with this Bond Ordinance as theretofore in effect.
SECTION 7.02. Supplemental Bond Ordinances Effective With Consent of Owners. Except as provided in Section 7.01, any modification or amendment of this Bond Ordinance or of the rights and obligations of the Issuer and of the Owners hereunder, in any particular, may be made by a supplemental Bond Ordinance, with the written consent of the Owners of a majority of the outstanding principal amount of the Bonds at the time such consent is given. No such modification or amendment shall permit a change in the terms of redemption or maturity of the principal of any outstanding Bond or of any installment of interest thereon or a reduction in the principal amount or the redemption price thereof or in the rate of interest thereon without the consent of the Owner of such Bond, or shall reduce the percentages of Bonds the consent of the Owners of which is required to effect any such modification or amendment, or change the obligation of the Issuer to charge rates and receive revenues for the payment of the Bonds as provided herein, without the consent of the Owners of all of the Bonds then outstanding, or shall change or modify any of the rights or obligations of the Paying Agent without its written assent thereto. For the purposes of this section, Bonds shall be deemed to be affected by a modification or amendment of this Bond Ordinance if the same adversely affects or diminishes the rights of the Owners of said Bonds.
SECTION 8.01. Issuance of Parity Bonds. All of the Bonds shall enjoy complete parity of lien on the Net Revenues despite the fact that any of the Bonds may be delivered at an earlier date than any other of the Bonds. The Issuer shall issue no other bonds or obligations of any kind or nature payable from or enjoying a lien on the Net Revenues having priority over or parity with the Bonds, except that bonds may hereafter be issued on a parity with such Bonds (“Additional Parity Bonds”) under the following conditions:
1. The Bonds or any part thereof, including interest and redemption premiums thereon, may be refunded and the Bonds so issued shall enjoy complete equality of lien with the portion of the Bonds which is not refunded, if there be any, and the refunding bonds shall continue to enjoy whatever priority of lien over subsequent issues may have been enjoyed by the Bonds refunded, provided, however, that if only a portion of Bonds outstanding is so refunded and the refunding bonds require total principal and interest payments during any bond year in excess of the principal and interest which would have been required in such bond year to pay the Bonds refunded thereby, then such Bonds may not be refunded without the consent of the Owners of the unrefunded portion of the Bonds issued hereunder (provided such consent shall not be required if such refunding bonds meet the requirements set forth in clause 2 of this Section 8.01).
2. Additional Parity Bonds may also be issued on a parity basis with the Bonds herein authorized if all of the following conditions are met:
(a) The average Net Revenues derived by the Issuer from the System when computed for the last two (2) completed Fiscal Years immediately preceding the issuance of the Additional Parity Bonds must have been not less than 1.25 times the highest combined principal and interest requirements for any succeeding Fiscal Year on all bonds then outstanding, including any pari passu bonds theretofore issued and then outstanding and any other bonds or other obligations whatsoever then outstanding which are payable from said Net Revenues (but not including bonds which have been refunded or provision otherwise made for their full and complete payment and redemption) and the bonds so proposed to be issued. In making the calculation required by this subparagraph 2(a), if the Issuer has adopted higher rates for sewer services on or before the date of issuance of any Additional Parity Bonds, the calculation of average annual Net Revenues (net after payment of all reasonable and necessary expenses of operating and maintaining the System) for the previous two completed Fiscal Years may be made assuming such rates had been in effect during such period.
(b) The payments to be made into the various funds provided for in Section 4.02 hereof must be current, including the funding of the Reserve Fund.
(c) The existence of the facts required by paragraphs (a) and (b) above must be determined and certified to by the Legislative Auditor, by an independent firm of certified public accountants as may have previously audited the books of the City, or by the Financial Advisor.
(d) The Additional Parity Bonds must be payable on March 1 of each year in which principal falls due beginning not later than three (3) years from the date of issuance of said additional bonds and payable as to interest on March 1 and September 1 of each year.
(e) No Event of Default shall have occurred or be continuing with respect to the Bonds.
(f) The proceeds of the Additional Parity Bonds must be used solely for the making of additions, improvements, extensions, renewals, replacements or repairs to the System, or to refund bonds issued therefore.
3. Subordinated Indebtedness may be issued at any time in accordance with Section 11.06 hereof.
EVENTS OF DEFAULT
SECTION 9.01. Events of Default. One or more of the following events shall be an event of default (“Event of Default”) under this Bond Ordinance:
(a) if default shall be made in the due and punctual payment of the principal or redemption price of any Bond when and as the same shall become due and payable, whether at maturity or upon call for redemption, or otherwise; or
(b) if default shall be made in the due and punctual payment of interest on any Bond when and as such interest shall become due and payable; or
(c) if default shall be made by the Issuer in the performance or observance of any other of the covenants, agreements or conditions on its part in this Bond Ordinance, any supplemental Bond Ordinance or in the Bonds contained; or
(d) if the Issuer shall file a petition or otherwise seek relief under any Federal or State bankruptcy law or similar law; The Issuer must cure an Event of Default set forth in (c) hereof within thirty (30) days after notice of such default. Any default set forth in (a), (b) or (d) hereof shall be an immediate Event of Default. Upon the happening and continuance of any Event of Default, the Owners of the Bonds shall be entitled to exercise all rights and powers for which provision is made in the Act or in any provision of law.
SECTION 10.01. Paying Agent; Appointment and Acceptance of Duties. The Issuer will at all times maintain a Paying Agent meeting the qualifications herein described for the performance of the duties hereunder. The initial Paying Agent appointed hereunder is Regions Bank, Baton Rouge, Louisiana. The Paying Agent shall signify its acceptance of the duties and obligations as Paying Agent imposed on it by this Bond Ordinance by executing and delivering a Paying Agent Agreement in form and substance satisfactory to the Issuer.
SECTION 10.02. Successor Paying Agent. Any successor Paying Agent shall be a trust company or bank in good standing, located in or incorporated under the laws of the State, duly authorized to exercise trust powers and subject to examination by federal or state authority and have a reported capital and surplus of not less than Fifty Million Dollars ($50,000,000).
SECTION 11.01. Defeasance. (a) If the Issuer shall pay or cause to be paid to the Owners of all Bonds then outstanding, the principal and interest and redemption price, if any, to become due thereon, at the times and in the manner stipulated therein and in this Bond Ordinance, then the covenants, agreements and other obligations of the Issuer to the Owners shall be discharged and satisfied. In such event the Paying Agent shall, upon the request of the Issuer, execute and deliver to the Issuer all such instruments as may be desirable to evidence such discharge and satisfaction and the Paying Agent shall pay over or deliver to the Issuer all moneys, securities and funds held by them pursuant to this Bond Ordinance which are not required for the payment or redemption of Bonds not theretofore surrendered for such payment or redemption.
(b) Bonds or interest installments for the payment or redemption of which Defeasance Obligations shall have been set aside and shall be held in trust by the Paying Agent or an escrow trustee (through deposit by the Issuer of funds for such payment or redemption or otherwise) at a maturity or redemption date thereof shall be deemed to have been paid within the meaning and with the effect expressed in paragraph (a) of this Section. Any Bond shall, prior to maturity or the redemption date thereof, be deemed to have been paid within the meaning and with the effect expressed in paragraph (a) of this Section if (i) in case such Bond is to be redeemed on any date prior to its maturity, the Issuer shall have given to the Paying Agent in form satisfactory to it irrevocable instructions to give notice of redemption as provided in Article V of this Bond Ordinance, (ii) there shall have been deposited with the Paying Agent or an escrow trustee Defeasance Obligations, in the amounts and having such terms as are necessary to provide moneys (whether as principal or interest) in an amount sufficient to pay when due the principal or applicable redemption price thereof, together with all accrued interest and (iii) the adequacy of the Defeasance Obligations so deposited to pay when due the principal or applicable redemption price and all accrued interest shall have been verified by an independent certified public accountant.
(c) Neither Defeasance Obligations deposited with the Paying Agent or an escrow trustee pursuant to this Section nor principal or interest payments on any such securities shall be withdrawn or used for any purpose other than, and shall be held in trust for, the payment of the principal or redemption price, if applicable, and interest on said Bonds; provided that any cash received from such principal or interest payments on such Defeasance Obligations deposited with the Paying Agent or an escrow trustee shall, if permitted by the Code, and to the extent practicable, be reinvested in Defeasance Obligations maturing at times and in amounts sufficient to pay when due the principal or redemption price, if applicable, and interest to become due on said Bonds on and prior to such redemption date or maturity date thereof, as the case may be.
SECTION 11.02. Evidence of Signatures of Bondholders and Ownership of Bonds. (a) Any requests, consents, revocation of consent or other instrument which this Bond Ordinance may require or permit to be signed and executed by the Owners may be in one or more instruments of similar tenor, and shall be signed or executed by such Owners in person or by their attorneys-in-fact appointed in writing. Proof of (i) the execution of any such instrument, or of an instrument appointing any such attorney, or (ii) the ownership by any person of the Bonds shall be sufficient for any purpose of this Bond Ordinance (except as otherwise therein expressly provided) if made in the following manner, or in any other manner satisfactory to the Paying Agent, which may nevertheless in its discretion require further or other proof in cases where it deems the same desirable:
(1) the fact and date of the execution by any Owner or his attorney-in-fact of such instrument may be proved by the certificate, which need not be acknowledged or verified, of an officer of a bank or trust company or of any notary public or other officer authorized to take acknowledgments of deeds, that the person signing such request or other instrument acknowledged to him the execution thereof, or by an affidavit of a witness of such execution, duly sworn to before such notary public or other officer. Where such execution is by an officer of a corporation or association or a member of a partnership, on behalf of such corporation, association, limited liability company or partnership, such certificate or affi¬davit shall also constitute sufficient proof of his authority; or
(2) the ownership of Bonds and the amount, numbers and other identification, and date of owning the same may be proved by the Bond Register.
(b) Any request or consent by the Owner of any Bond shall bind all future Owners of such Bond in respect of anything done or suffered to be done by the Issuer or the Paying Agent in accordance therewith.
SECTION 11.03. Moneys Held for Particular Bonds. The amounts held by the Paying Agent for the payment due on any date with respect to particular Bonds shall, on and after such date and pending such payment, be set aside on its books and held in trust by it, without liability for interest, for the Owners of the Bonds entitled thereto.
SECTION 11.04. Parties Interested Herein. Nothing in this Bond Ordinance expressed or implied is intended or shall be construed to confer upon, or to give to, any person or corporation, other than the Issuer, the Paying Agent and the Owners of the Bonds any right, remedy or claim under or by reason of this Bond Ordinance or any covenant, condition or stipulation thereof, and all the covenants, stipulations, promises and agreements in this Bond Ordinance contained by and on behalf of the Issuer shall be for the sole and exclusive benefit of the Issuer, the Paying Agent and the Owners of the Bonds.
SECTION 11.05. No Recourse on the Bonds. No recourse shall be had for the payment of the principal of or interest on the Bonds or for any claim based thereon or on this Bond Ordinance against any member of the Governing Authority or officer of the Issuer or any person executing the Bonds.
SECTION 11.06. Subordination Provisions Applicable to Subordinated Debt. (a) The indebtedness evidenced by any subordinated debt and any renewals or extensions thereof (herein called “Subordinated Indebtedness”), shall at all times be wholly subordinate and junior in right of payment to any and all indebtedness of the Issuer under the Bond Ordinance or the Bonds (herein called “Superior Indebtedness”), in the manner and with the force and effect hereafter set forth.
(b) Any debt of the Issuer which is subordinate to the lien of the Bonds and the Parity Bonds on the Net Revenues, and any renewals or extensions thereof, shall have the same payment dates as the Bonds and provide that such debt may not be accelerated.
(c) In the event that the Subordinated Indebtedness is declared or becomes due and payable because of the occurrence of any event of default thereunder or otherwise than at the option of the Issuer, the holders of the Subordinated Indebtedness shall be entitled to payments only after there shall first have been paid in full all Superior Indebtedness outstanding at the time the Subordinate Indebtedness so becomes due and payable because of any such event, or payment shall have been provided for in a manner satisfactory to the holders of such Superior Indebtedness, provided, however, that, except for Net Revenues, this sentence shall not apply to payments made on such Subordinated Indebtedness from the proceeds of collateral specifically securing such Subordinated Indebtedness.
(d) The Issuer agrees, for the benefit of the holders of Superior Indebtedness, that in the event that any Subordinated Indebtedness is issued, the Issuer will give prompt notice in writing of such issuance to the holders of Superior Indebtedness.
(e) If the holder of the Subordinated Indebtedness is a commercial bank, savings bank, savings and loan association or other financial institution which is authorized by law to accept and hold deposits of money or issue certificates of deposit, such holder must agree to waive any common law or statutory right of setoff with respect to any deposits of the Issuer maintained with or held by such holder.
SECTION 11.07. Successors and Assigns. Whenever in this Bond Ordinance the Issuer is named or referred to, it shall be deemed to include its successors and assigns and all the covenants and agreements in this Bond Ordinance contained by or on behalf of the Issuer shall bind and inure to the benefit of its successors and assigns whether so expressed or not.
SECTION 11.08. Severability. In case any one or more of the provisions of this Bond Ordinance or of the Bonds issued hereunder shall for any reason be held to be illegal or invalid, such illegality or invalidity shall not affect any other provision of this Bond Ordinance or of the Bonds) but this Bond Ordinance and the Bonds shall be construed and enforced as if such illegal or invalid provisions had not been contained therein. Any constitutional or statutory provision enacted after the date of this Bond Ordinance which validates or makes legal any provision of this Bond Ordinance or the Bonds which would not otherwise be valid or legal shall be deemed to apply to this Bond Ordinance and to the Bonds.
SECTION 11.09. Execution of Documents. In connection with the issuance and sale of the Bonds, the Executive Officers are each authorized, empowered and directed to execute on behalf of the Issuer such documents, certificates and instruments as they may deem necessary, upon the advice of Bond Counsel, to effect the transactions contemplated by this Bond Ordinance, the signatures of the Executive Officers on such documents, certificates and instruments to be conclusive evidence of the due exercise of the authority granted hereunder.
SECTION 11.10. Publication. A certified copy of this Bond Ordinance shall be published as soon as possible in the official journal of the Issuer.
SECTION 11.11 Bonds are “Qualified Tax-Exempt Obligations.” The Bonds are designated as “qualified tax-exempt obligations” within the meaning of Section 265(b)(3) of the Code. In making this designation, the Issuer finds and determines that:
(a) the Bonds are not “private activity bonds” within the meaning of the Code; and
(b) the reasonably anticipated amount of qualified tax-exempt obligations which will be issued by the Issuer and all subordinate entities in calendar year 2013 does not exceed $10,000,000.
This Bond Ordinance, having been duly introduced on January 31, 2013, the title of this Bond Ordinance was duly published in accordance with law and then duly read and adopted on the 7th day of March, 2013 by the following votes:
Yea Nay Abstain Absent
Council member Birdex Copeland, Jr.
Council member Yanise Days
Council member Cathy Holmes
Council member Cullen Jackson
Council member Roy Jackson And this Bond Ordinance was declared adopted on this, the 7th day of March, 2013.
/s/ Pamela J. Stringfellow, Clerk
Presented to Mayor Edward R. Jones on March 7, 2013 for action as evidenced by his signature.
Approved: /s/Edward R. Jones
1td: March 25, 2013