HomeMy WebLinkAbout57-37 - issuance of bonds - sewer revenue bonds of 1957RESOLUTION NO. 57-37
A RESOLUTION PROVIDING FOR THE ISSUANCE
OF SEWER REVENUE BONDS, FIXING THE FORM
OF BONDS AND PROVIDING COVENANTS FOR
THEIR PROTECTION
SEWER REVENUE BONDS 0F 19 57
RESOLVED, by the City Council of the City of ~iah, Mendocino County,
California, as follows:
WHEREAS, the City of Ukiah, in the County of Mendo¢ino, State of
California~ herein called "Entity", is a General Law City duly organized
and now existing under and pursuant to the provisions of the Government
Code of the State of California~
WHEREAS, the Entity proposes herein to issue revenue bonds to finance
the cost of the acquisition~ construction, improving and financing of an
Enterprise, including expenses incidental thereto, said Enterprise to con-
~ist of additions, extensions and improvements to the City sanitary sewer-
age and sewage disposal works and system, including all parts of the Enter-
prise, all appurtenances thereto, and lands, easements, rights in land, con-
tract rights, franchises and equipment, and to provide that the principal
of and interest on said bonds shall be paid from an interest and redemption
fund and that their payment be further secured by a reserve fund, both of
which funds are herein created and will be maintained from the gross rev-
enues, and the revenues will be such that the Entity can and does herein
~etermine that the principal of and interest on said bonds, together with
the payment of all other obligations which are a charge against the reve-
nues, and the costs of the maintenance and operation of said system, can
be financed solely from the revenues and to which its tax fund need not
make any contribution at all;
NOW~ THEREFORE, IT IS DETERMINED and ORDERED, as follows:
1o Bond Law. These proceedings have been had and said bonds are be-
ing issued pursuant to the provisions of the Revenue Bond Law of 19~1.
2. Conditions Precedent. All acts~ conditions and things required
by law to exist, happen and be performed precedent to and in the issuance
of said bonds have existed, have happened and have been performed in due
time, form and manner as required by law, and the Entity is now authorized
pursuant to each and every requirement of law, to issue revenue bonds in
the manner and form as provided herein.
3. Definitions. As used herein the terms herein have the following
meanings:
(a) Annual means the fiscal year of the Entity, which is
from July 1 to June 30, both inclusive.
(b) Bonds mean the bonds herein authorized to be issued.
(c) Bondholder means the holder of a bearer bond or the
registered owner of a registered bond.
(d) Charges mean fees, tolls, rates and rentals pre-
scribed by the Legislative Body for the use of the services
and facilities of the City sewerage system.
(e) Clerk means the person elected or appointed as the
Secretary or Clerk of the Entity and of its Legislative Body.
~f) Entity means the public entity named herein
(g) Enterprise means the project, the cost of acquiring,
constructing, improving and financing of which the bonds here-
in authorized are to be issued. When used herein with refer-
ence to other than the project it includes the existing City
sewerage system and all additions, extensions and improvements
which may hereafter be made thereto.
(h) Gross Revenues mean annual revenues of the Enterprise.
(i) Improve means reconstruct, replace~ extend, repair,
better, equip, develop, embellish or otherwise improve.
(j) Legislative Body means the Council, Board of Directors
or other legally provided governing body of the Entity.
(k) Net Revenues mean annual gross revenues of the Enter-
prise after deducting all sums expended therefrom for the an-
nual management, operation, maintenance and repair of the Enter-
prise, including all incidental costs, fees and expenses proper-
ly chargeable thereto.
(1) Presiding Officer means the Mayor, President, Chair-
man or other legally provided person elected by the Legislative
Body as principal officer of the Entity.
(m) Project means the acquisition and construction of
the improvements described herein.
(n) Revenues mean all charges received for, and all other
income and receipts derived from the operation of the Enter-
prise, including revenues deposited in the Bond Interest and
Redemption Fund to provide the payment of the bonds, and Bond
Reserve Fund to secure the payment of the bonds, and interest
received on any invested moneys of the Enterprise.
(o) Treasurer or Auditor means the officer designated
by law to h~andl& the funds 'oLf the Entity.
4. Project. The public interest, economy and general welfare will
be served by the acquisition, construction, improving and financing of a
Project, including expenses incidental thereto, said project to consist
of additions~ extensions and improvements to the City sanitary sewerage
and sewage disposal works and system, including all parts thereof, all ap-
purtenances thereto, and lands, easements, rights in land, contract rights,
franchises and equipment.
5. Proposition. Revenue bonds of the Entity shall be issued to pay
the cost of the acquisition, construction, improvement and financing of
the Enterprise as set forth in the following measure submitted to the vot-
ers of the Entity at an election duly called and held therein:
"Shall the City of Ukiah issue revenue bonds in the
principal amount of $800,000 for the acquisition,
construction, improving and financing of additions,
extensions and improvements to the City sewerage system
consisting of sewage treatment and disposal facilities,
pumping stations, force mains, sewer mains, interceptor
and outfall sewers, and all work auxiliary to any of the
above which may be required to carry out the same, and
the acquisition of lands and easements necessary there-
for, together with all costs and expenses incidental
thereto, pursuant to the Revenue Bond Law of 19~17"
6. Issuance of Bonds. Revenue bonds of the Entity shall be issued
to pay the cost of the acquisition~ construction~ improving and financing
of the Enterprise.
7. Project Cost. The total estimated cost of the Enterprise, in-
cluding the engineering fees~ legal fees~ acquisition of lands and ease-
ments, construction of improvements~ and all other expenses incidental
thereto, including bond discount~ if any, and bond reserve funds, working
capital and estimated interest during construction~ is the sum of
$1~834,597~ which will be financed $604,320 payable to the City by Ukiah
Valley County Sanitation District under written contract (from moneys of
the District from $486,000 proceeds of general obligation bonds recently
sold, $113~620 subvention under Public Law 650 of the 84th Congress and
$4,700 general fund) and $1~230~277 by the City, consisting of $800,000
proceeds of these bonds,$250~000 subvention under Public Law 660 of the
84th Congress~ and $180,277 available City funds.
8. Complete Project. It is hereby found and determined that the
Entity has made all necessary arrangements for the financing of the
Enterprise. Accordingly~ it is hereby found and determined that:
(a) Adequate Funds. The Enterprise can be accomplished
as a complete system from 'the funds available and to be avail-
able from the proceeds of the sale of the bonds, and from the
other sources set forth above~
(b) Adequate RatesG Charges have been and will be fixed,
levied and collected for the services and facilities to be
furnished by the Enterprise; and
(c) Bond Paz~aent~ The sewer charges shall constitute
the revenues of the Enterprise pledged to service the revenue
bonds as provided herein.
9. Single Transaction~ The project is one transaction, complete in
and of itself~ and the proceeds of bonds of this issue will be applied to
the cost thereof as herein provided.
10. Separate Fund. The Entity~ during the term of the bonds to be
issued hereunder~ will operate the Enterprise as a separate and distinct
agency, and will create and maintain a separate and distinct special fund
and account for the Enterprise into which all revenues to be received are
to be deposited and from which all costs of management, maintenance,
operation~ repair and improvements of the Enterprise are to be paid during
the term of the bonds°
11. Revenue Bonds. The bonds of said issue shall be in the aggregate
amount of' SUbo'~o00: shall be dated July 1, 1957, shall each be in the de-
nomination of $1,000~ and shall mature serially in the order of serial
numbers on the 1st day of July in the years and amounts as follows:
Bond Numbers
(Both Inclusive)
Principal Year of
Amount Maturity
1 - 5 $ 5,000 1960
6 - !0 5~000 1961
11 - 15 5,000 1962
16 - 20 5,000 1963
21 - 30 10~ 000 1964
31 - 40 10,000 1965
41 - 50 10,000 1966
51 - 65 15,000 1967
66 - 80 15,000 1968
Bond Numbers Principal Year of
(Both Inclusive ) Amount Maturity
81 - 100 $ 20,000 1969
101 - 120 20,000 1970
121 - 145 25~000 1971
146- 170 25,000 1972
171 - 195 25,000 1973
196 - 225 30~000 1974
226 - 255 30~000 1975
256 - 285 30,000 1976
286 - 320 35,000 1977
321 - 355 35~000 1978
356 - 39~ 40,000 1979
396 - 435 40,000 1980
~36 - 480 45,000 1981
481 - 525 50~000 1982
526 - 575 50,000 1983
576 - 625 50,000 1984
626 - 680 55~000 1985
681 - 740 60,000 1986
741 - 800 60~000 1987
12. Callable Bonds. None.
13. Purchase of Bonds. The Entity may also~ from time to time,
purchase any or all outstanding bonds at prices offered, at or below
par, plus an allowance of six (6) months' interest from the date of
purchase. Ail bonds purchased or called shall be cancelled and shall
not again be reinstated.
14. Interest. The bonds shall bear interest at the rate of not
to exceed six percent (6~) per annum from their date until paid. Said
interest shall be payable semi-annually on the 1st days of January
and July of each year to the date of maturity. Attached to each bond
shall be interest coupons payable at the times the respective interest
payments thereon become due and for the amount thereof, as determined
from the accepted bid for the purchase of the bonds.
15. Interest After Maturity. If at the maturity date, payment
of any bond or any interest coupon is not made in full compliance
with the terms of this indenture~ said bond or coupon shall then
continue to bear interest at the rate stated in the bond until paid.
16. Where Bonds Payable. The bonds and the interest thereon shall
be payable in lawful money of the United States of America at the office
of the City Treasurer of the City of Ukiah, Ukiah, California.
17o Negotiable Instruments. The bonds of this issue are negotiable
instruments and title thereto~ unless registered~ shall pass by physical
delivery thereof. The holders of these bonds shall have all of the rights
possessed by holders of negotiable instruments payable to bearer.
18. Execution of Bonds. When the bonds of this issue have been pre-
pared in accordance with this indenture, they shall be executed on behalf
of the Entity by the Presiding Officer by his printed, engraved or litho-
graphed signature and by the manual signature of the Clerk~ who shall affix
thereto the corporate seal of the Entity, and the interest coupons shall
be executed and authenticated by the printed, engraved or lithographed fac-
simile signature of the Clerk~ who by such signatures shall ratify the exe-
cution of same.
19. Record of Bonds. The Treasurer shall keep a record of the names
of the purchasers of the bonds and of all successive holders of the bonds
issued hereunder so far as such information is furnished to him.
20. Registration of Bonds. The bonds of this issue shall be subject
to registration as to pr'~n'6'~Pal and interest upon written request of the
owner and presentation of any such bond to the Treasurer for registration.
Upon such presentation and request~ the Treasurer shall cut off the coupons
and preserve them in his office. The Treasurer shall maintain a book in
which he shall enter the numbers of all registered bonds and the names and
addresses of the holders of registered bonds. Until such registration is
cancelled as herein provided, the interest and principal thereof shall be
payable only to the registered holder or to his duly registered transferee.
There shall be provided on the back of each bond a suitable blank showing
the name of the registered owner, the date of registration or transfer and
the signature of the Treasurer. Registered bonds shall be transferred at
the office of the Treasurer in the same manner as the original registra-
tion and the name of the new registered owner shall be entered on the bond
register and on the back of the bonds.
(a) Id. - Principal Only. The bonds may be registered as to
principal only. When bonds are registered as to principal only,
a notation shall be made to that effect in the registration book
and on the bond. The coupons shall not be detached and the in-
terest on such bonds shall be paid upon presentation of such cou-
pons in the same manner as unregistered bonds. Principal~ how-
ever, shall be paid only to the registered owner upon presenta-
tion of such bond.
(b) De-Registration. The registration of any unmatured
bond may be cancelled upon written request of the registered
holder. Upon receipt of such request the Treasurer shall cancel
the registration in the bond register book and on the back of
the bond, re-attach all unmatured coupons to the bond, and de-
liver the bond and attached coupons to the holder. Until such
bond is re-registered~ the principal thereof shall be payable
to bearer~ and the interest shall again be paid upon surrender
of proper coupons.
(c) Re-Registration. De-registered bonds are subject to
re-registration in the same manner as previously unregistered
bonds.
21. Delivery of Bonds. The 'bonds to be issued hereunder shall be de-
livered to the purchasers thereof. The Entity shall deliver the bonds upon
receipt of the purchase price and shall credit the proceeds to the special
fund and account for the payment of the cost of the Enterprise, as provided
herein, but the purchasers shall not be required to see to the proper ap-
plication thereof.
22. Transcript° The Clerk is hereby authorized to prepare and fur-
nish to the purchasers of the bonds issued hereunder and attorneys examining
the same a complete set of certified copies of all ordinances, resolu-
tions and documents of the Entity relating to the Enterprise and to the
issuance of bonds and of all other proceedings and records of the Legis-
lative Body showing the right, power and authority to issue the bonds
and to provide the security therefor, and such certified copies and
certificates shall be deemed representations of the Legislative Body as
to all facts stated therein.
23. Proceeds of Bonds. There is hereby created a special fund to
be designated /Name of Entity) Sewer Construction Fund~ herein called
"Construction Fund"~ which shall be maintained and operated by the Treas-
urer. The proceeds of the bonds~ or any part thereof, other than accrued
interest, sold by the Entity~ shall be deposited in said Fund and shall
be expended to pay the following:
(a) Reserve Fund. $33,000 to the Reserve Fund;
(b) Bond Discount. $20,000 for Bond Discount;
(c) Revenue Fund. Such amount to the Revenue Fund as may
be required for 'Estimated net revenues to equal 1.35 times the
bond interest to accrue the first five years, the total of which
shall not exceed bond interest to accrue during the period of
construction (estimated to be twelve (12) months) and for a period
of not to exceed twelve (12) months after completion of construc-
tion, said moneys to be used for interest to accrue during said
period;
(d) Acquisition Costs. The cost of acquiring any facili-
ties or proper'tY'for which a contract has been or shall be made~
or any interlocutory decree in eminent domain had and taken;
(e) Construction Costs. The costs due under contracts
for construction work, on certificates of the Engineer as to
the work completed substantially in accordance with the plans
and specifications to be adopted by the Legislative Body there-
for and as said certificates are approved by it;
(f) Incidental Expenses. The incidental expenses of said
proceedings, consisting of all engineering, inspection, legal
and financial fees and the costs of authorizing and issuing the
bonds as approved by the Legislative Body;
(g) Reserve Fund. To tlhe Reserve Fund any balance that
shall remain, to an amount that shall equal the maximum amount
required to be paid for bond principal and interest in any
fiscal year during the term of the bonds;
(h) Additional Improvements. For the cost of additional
acquisitions and constructions of the Enterprise~ and the ex-
penses incidental thereto for which no plans are now prepared.
Interest accrued on said bonds from their date to date
of delivery~ and any premium on their sale, shall be deposited
in the Revenue Bond Interest and Redemption Fund.
24. Pledge of Revenues. Ail of the revenues are hereby pledged to
provide:
a Revenue Bond Interest and Redemption Fund,
a Revenue Bond Reserve Fund,
Operation and Maintenance Funds,
a Surplus Fund.
25. First Lien on Revenues. The sums required to meet the payment
of interest on and principal of the bonds of this issue shall be secured
by a direct and exclusive first charge and lien upon all of the gross
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revenues of the Enterprise, including the gross revenues of improvements~
extensions and additions thereto together with any interest accrued there-
on.
26. Equal Parity. Ail of the bonds hereby authorized to be issued
shall be equally and ratably secured~ without preference or priority by
reason of number, date, date of sale or of execution or delivery of the
bonds, by said lien upon the revenues of the Enterprise in accordance
with the law and this indenture. Said lien shall be prior and paramount
to any and all other claims and obligations that have arisen or may arise
or be incurred against said revenues.
27. Ratio of Net Revenue Coverage. The Entity covenants that it
will at all times establish~ maintain and collect sewer service charges
sufficient~ with other revenues received, to provide net operating reve-
nues equal to not less than 1.35 times the aggregate amount of the prin-
cipal of and interest on the bonds of this issue which shall become due
and payable within the next succeeding twelve (12) months.
28. Bonds Not a Debt. The bonds and interest thereon shall not be
a debt of the Entity~ nor a charge~ lien or encumbrance~ legal or equit-
able, upon any of its property or upon any of its income or receipts or
revenues, other than the revenues of the Enterprise which have been
pledged to the payment thereof as herein provided.
29. Entity Credit Not Encumbered. No recourse shall be had for
the payment of the bonds, or the interest thereon~ or any part thereof,
against the General Fund of the Entity~ nor shall its credit or taxing
power be deemed to be pledged thereto, and the holders of the bonds~ or
the coupons thereof, shall never have the right to compel the exercise
of the taxing power of the Entity or the forfeiture of any of its prop-
erty for the payment of the bonds or the interest thereon.
30. Bonds a Special Obligation. The bonds hereby authorized to be
issued and all additional bonds which may be issued in accordance with
the terms and conditions hereof, shall be special obligations of the
Entity and shall be payable from and secured by a lien upon the gross
revenues of the Enterprise~ as herein provided.
31. Revenues a Trust Fund. The revenues here pledged and any other
funds that may hereafter be created from said revenues for the payment of
the principal of or interest on the bonds of this issue~ or the better se-
curing of the payment thereof, shall constitute a trust fund for the se-
curity and payment thereof~ and except as otherwise specifically author-
ized by this indenture~ shall not be used for any other purpose so long
as any of the bonds or any interest thereon are outstanding and unpaid;
except that out of such revenues there may be apportioned, so long as all
of the principal of and interest on the bonds are paid as the same become
due and payable together with all other charges required for the protec-
tion or better security of such bonds, such sums as may be required there-
from to payne costs of proper and reasonable maintenance and operation of
the said Enterprise~ and all such principal of and interest on these bonds
and all sums required for said security funds and any other funds that may
hereafter be created for the better securing of these bonds shall be paid
from said revenues prior to the application of any of said moneys to the
payment of the cost of operation or maintenance of said Enterprise.
32. Sewer Revenue Fund. There is hereby created a special fund to
be designated Sewer Revenue Fund~ herein called "Revenue Fund", which
shall be maintained and operated by the Treasurer as a separate fund~
agency and account, independent of all other funds and accounts of the
City, into which shall be paid on or before the first day of each month
following the receipt thereof~ all fees, tolls~ rates and other charges
and all other revenues, income and profits of any kind howsoever derived
from the services and facilities of the Enterprise, together with any in-
terest earned thereon, including revenues of improvements~ additions or
extensions thereto that may hereafter be constructed or acquired.
So long as any bonds of this issue or any additional bonds author-
ized hereunder are outstanding or any interest thereon is unpaid, said
fund shall be administered by the Treasurer and disbursements shall be
made therefrom in the manner and in the order progressively set forth in
sections 33~ 34, 35 and 36 hereof.
33. Bond Fund. There is hereby created a special fund designated
(Name of Entity) 1957 Sewer Revenue Bond Interest and Redemption Fund~
herein called "Bond Fund"~ which shall be maintained and operated by the
Treasurer~ as a separate and distinct fund and bank account, independent
of all other funds and accounts of the City~ to cover the payment of the
principal of and interest on all of the bonds of this issue.
(a) Forthwith upon receipt of the proceeds of the bonds
of this issue~ the Treasurer shall pay therefrom to the Bond
Fund any funds received on account of premium, if any, and
interest accrued on said bonds from their date to the date of
their delivery.
(b) On the first day of each calendar month beginning
with the date of the bonds the Treasurer shall pay out of the
Revenue Fund for the Bond Fund an equal aliquot part of the
amount necessary to pay the next maturing installment of in-
terest on said bonds.
(c) On the first day of each calendar month commencing
twelve(12) months prior to the first maturity of the bonds,
the Treasurer shall pay out of the Revenue Fund into the Bond
Fund an amount equal to an equal aliquot part of the aggre-
gate yearly amount necessary to pay the next maturing install-
ment of principal of the bonds of this issue.
Any amount required to be set aside~ transferred to and
placed in the Bond Fund may be prepaid in whole or in part by
being earlier set aside~ transferred to and placed in the
Bond Fund and in that event the monthly transfer which has
been so prepaid need not be made at the time appointed there-
for. In any event~ at least one month prior to the due date
of any maturity or installment of principal of or interest
on the bonds, all sums required for the payment thereof must
be in such Bond Fund in cash.
Ail moneys in this Fund shall be used and withdrawn sole-
ly for the purpose of paying the principal of and interest on
the bonds as the same shall become due and payable. After full
payment of the bonds and interest, any balance in the Fund shall
be returned to the Revenue Fund.
34. Revenue Bond Reserve Fund. There is hereby created (Name of
Entity) 1957 Sewer Revenue Bond' Reserve Fund~ herein called "Reserve
Fund"~ which shall be maintained and operated by the Treasurer as a
separate and distinct fund and bank account, independent of all other
funds and accounts of the City.
(a) The Treasurer shall transfer the sum of $33,000 from
the proceeds of the bonds to the Reserve Fund.
(b) Upon completion of the project, the Treasurer shall
transfer from the Construction Fund to the Reserve Fund any
moneys remaining after paying the amounts required to be paid
from the proceeds of the bonds under subsections (a)~(b)~(c)~
(d), (e) and (f) of section 23 of this indenture.
(c) Commencing on August 1~ 1957 and on the first day of
each calendar month thereafter~ the Treasurer shall transfer
from the Revenue Fund to the Reserve Fund the sum of $500, or
an amount equal to one-half of the net surplus for the prior
monthly sewer service charge collection period (as to revenues
derived commencing July 1~ 1957)~ whichever sum shall be great-
er~ until there has been accumulated therein the maximum amount
of the principal and interest to be paid during any fiscal year
within the bond term.
(d) Whenever moneys are withdrawn from the Reserve Fund
to pay principal and interest of bonds, the amount so with-
drawn shall be restored by monthly transfers from the Revenue
Fund on the first day of each calendar month thereafter in the
manner and amounts provided in subdivision (c) of this section.
Moneys in the Reserve Fund shall be used solely for the
purpose of paying the principal of and interest on the bonds
in the event that the moneys in the Bond Fund are insufficient
therefor and for that purpose may be withdrawn and transferred
to the Bond Fund.
The moneys in this Fund shall be transferred to the Bond
Fund at the times and for the purposes necessary to pay the
last remaining installments of principal and interest of the
bonds. Any balance thereafter shall be transferred to the
Revenue Fund.
35. Maintenance and Operation Funds. From the moneys in the Reve-
nue Fund the Treasurer shall pay the reasonable expenses of operation,
repair~ replacement and maintenance of the Enterprise.
36. Sewer Surplus Fund. There is hereby created a special fund
designated (Name 'of En~itY)1957 Sewer Revenue Bond Surplus Fund~ herein
called "Surplus Fund"~ which shall be maintained and operated by the
Treasurer as a separate and distinct fund and account independent of all
other funds and accounts of the ~ntity.
(a) To this Fund there shall be transferred monthly all
moneys remaining in the Revenue Fund over and above the amounts
transferred or disbursed under sections 33~ 34 and 35 hereof~
excepting the sum of Two Thousand Dollars ($2~000) which shall
be retained in the Revenue Fund to cover the unforeseen ex-
penditures~ unless any amount is required for payments under
subdivision (c) of section 34.
(b) The moneys in this Fund may be used for any of the
following purposes:
i. To improve the Enterprise.
ii. To pay for bonds of this issue purchased
in the open market and retired.
iii. To pay the principal and interest of
general obligation bonds or other revenue bonds
which have been or may hereafter be issued for
sewer purposes.
No moneys shall be otherwise paid or trans-
ferred therefrom until and unless full compliance
has been had with all of the provisions of this in-
denture.
37. Feeding Higher Priority. In the event that the balance in any
fund is below its requirements~ moneys from a fund of lower priority shall
be transferred up to fill such deficiency in said fund, and said higher
fund shall have a first claim on the moneys of said lower fund for said
purpose.
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38. Investment of Surplus Funds. Ail moneys that are not required
to be used within such time may be invested in authorized negotiable
direct obligations of the United States of America~ maturing not more
than the following period with moneys of the following funds:
(a) Construction Fund, six months.
(b) Bond Fund, eighteen months.
(c) Reserve Fund, twenty-five percent (25~) for a period
of five years and seventy-five percent
(75~) for a period of twelve years.
(d) Surplus Fund~ five years.
39. Treasurer. The Treasurer shall be the custodian of all funds
under this indenture.
40. Covenants. For the protection and security of the bonds issued
hereunder, it is covenanted and agreed to and with the holders of the
bonds from time to time, that the Entity will:
(a) Acquire Enterprise. Commence the acquisition, con-
struction and completion of the Enterprise and continue the
same with all practical dispatch and in a sound and economical
manner;
(b) Operate Enterprise. Operate the Enterprise in an
efficient and economical manner and prescribe, revise and
collect such fees, tolls, rates and other charges in connec-
tion therewith that the services and facilities of the Enter-
prise may be furnished to its inhabitants and other users at
the lowest possible cost consistent with sound economy and
prudent management;
(c) Good Repair. Operate, maintain, preserve and keep
the Enterprise and every part thereof in good repair, working
order and condition;
(d) Preserve Security. Preserve and protect the security
of the bonds and the rights of the holders thereof, and warrant
and defend such rights against the claims and demands of all
persons whomsoever;
(e) Collect Revenues. Collect and hold in trust the
revenues and other funds pledged to the payment of the bonds
and apply such revenues or other funds only as provided in
this indenture;
(f) Service Bonds. Pay and cause to be paid punctually
the principal of the bonds and the interest thereon on the
date or dates and at the place or places and in the manner men-
tioned in the bonds and in the coupons thereto appertaining and
in accordance with this indenture;
(g) Pay Claims. Pay and discharge any and all lawful
claims for labor, materials and supplies which~ if unpaid,
might by law become a lien or charge upon the revenues of the
Enterprise, or any part of said revenues, or any funds in the
hands of the Treasurer~ prior or superior to the lien of the
bonds or which might impair the security of the bonds, to the
end that the priority and security of the bonds shall be fully
preserved and protected;
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(h) Encumbrances. Not mortgage or otherwise encumber,
sell~ lease or dispose of the Enterprise or any part thereof,
nor enter into any lease or agreement which would impair or
impede the operation of the Enterprise or any part thereof
necessary to secure adequate revenues for the payment of the
principal and interest of the bonds, or which otherwise would
impair or impede the rights of the holders of the bonds with
respect to such revenues or the operation of the Enterprise
without provision for the retirement of the bonds of this is-
sue then outstanding from the proceeds thereof~ provided~ how-
ever~ that material and equipment worn out or not needed for
the efficient and proper operation of the Enterprise may be
sold without the consent of the bondholders if the proceeds
thereof are applied to the improvement or extension of the
Enterprise or to the retirement of the bonds~
(i) No Free Service. Not permit any part of the Enter-
prise to be used or taken advantage of free of charge by any
person, firm or corporation or by the State of California or
the United States of America~ or by any public corporation~
political subdivision~ city, county, district or agency of
either~ including this Entity;
(j) No Competition. Not acquire, construct~ operate
or maintain or permit any other public or private corporation
or agency or any persons whatsoever to acquire~ construct~
operate or maintain within its boundaries or within any part
thereof, any system or utility competitive with the Enterprise;
(k) Insurance. Procure and keep in force insurance upon
all buildings and structures of the Enterprise and the machin-
ery and equipment therein, which are usually insured by compan-
ies engaged in a similar business. The amount of the insurance
shall be such as may be required to adequately protect it and
the holders of the bonds from loss due to any such casualty~
and in the event of any such loss, the proceeds shall be used
to repair or restore the Enterprise or for the payment of the
bonds issued hereunder~
(1) Fidelity Bonds. Procure suitable fidelity bonds
covering all of its officers and other employees charged with
the operation of the Enterprise and the collection and disburs-
ing of revenues therefrom;
(m) Engineers. Employ consulting engineers of acknowl-
edged reputation, skill and experience in the construction and
operation of the Enterprise for any unusual or extraordinary
items of maintenance, repair~ extensions or betterments as
shall be required from time to time~ all reports~ estimates
and recommendations of such consulting engineers to be filed
with the Clerk and furnished to the purchasers of the bonds
issued hereunder if requested~ and
(n) Audit and Report. Employ a certified public account-
ant who shall prepare and file with the purchaser of the bonds~
with the Treasurer, the Fiscal Agency~ if any, and with the
California Districts Securities Commission if the bonds shall
at any time be certified by it, annually within one hundred
twenty (120) days after the close of each fiscal year on June
30th, commencing in the year 1958~ an annual audit for the
preceding year which shall include:
i. Balance Sheet. A balance sheet includ-
ing balances of all funds herein created~
11
ii. Revenue and Payments. A statement in
detail of the cash receipts and disbursements of
the income and expenses of the Enterprise;
iii. Insurance. A statement as to the insur-
ance carried by it~ including a brief description
of each policy as to its coverage and name of com-
pany issuing it;
iv. Customers. The number of customers,
classified by rate or charge for service groups,
the number of properties connected to the Enter-
prise and the number of applications for service
on hand but not connected;
v. Billing. The annual billings and the
average monthly billing per user;
vi. Rate Schedules. The ~chedules of the
rates and charges prescribed by the'rate ordinance
then in effect;
vii. Recapitulation. A recapitulation of funds
and accounts created by this indenture into which
are put moneys derived from the operation of the
Enterprise and from the sale of the securities herein
authorized, which shall show balances at the beginning
of the period, deposits and withdrawals made during
the period and balances at the end of the period; and
also monthly deposit requirements for funds during
the next succeeding fiscal period;
viii. Comments. Comments of the accountant
relative to the-fulfillment of'the provisions of this
indenture and the manner in which the Enterprise has
been operated, and his recommendations for improving
the operation of the Enterprise; and
ix. Monthly Statements. The Entity shall also
send to the underwriter o'f'this issue on forms to be
provided by it, monthly statements of operation from
the month in which operations commence for a period
of time ending with the report for the month of June,
1961.
41. Additional Bonds. No additional bonds shall be issued or other
obligations incurred which shall be payable from the revenues and con-
stitute a lien thereon which shall have priority over the bonds of this
issue. The Entity may issue additional bonds payable as to principal
and interest from the revenues and on parity but not superior as to lien
on the revenues, under the following conditions and not otherwise:
(a) Net Income. The net revenues, before depreciation,
amortization and interest chargeable to revenues, as shown
by the books of the Entity for the latest prior fiscal year
with respect to which such books have been examined and re-
ported upon by an independent certified public accountant
employed by the Entity, plus, at the option of the Entity,
either or both of the items hereinafter in this section
designated (A) and (B), shall have amounted to:
i. Ratio to Bond Service. At least 1.5
times the aggregate of the average annual amount
of interest to accrue and payments of principal
required to be made in the fiscal years to accrue
12
thereafter during the term of the bonds of this
issue~ on all indebtedness to be outstanding im-
mediately subsequent to the incurring of such ad-
ditional indebtedness.
(b) Estimated Additional Net Income. The items either
of both of which may be added to such net revenues for the
purpose of applying the restriction contained in this section
are the following:
(A) Earnings. The revenues for the fiscal
year immediately preceding may be revised in a
written report of an independent engineer and cer-
tified as correct by an independent certified pub-
lic accountant, adjusting such earnings to reflect
the net revenues of all of the users connected to
the system at the end of such fiscal year~ had such
users been on the system for the entire fiscal year.
(B) Rate Increase. An allowance for net reve-
nues in written form~ computed and prepared by an
independent engineer and approved by an independent
certified public accountant~ to reflect the increase
in charges which had become effective during any
part of the fiscal year prior to the issuance of the
additional bonds. 0nly 75~ of such estimated in-
crease in annual net revenues shall be recognized in
the adjusted revenues for such preceding fiscal year
to arrive at the total net revenues~ which shall be
a part of the criteria for computing whether such
additional issue may be parity bonds.
(c) Bond Terms~ The additional bonds, irrespective of
priority of lien~ shall be payable serially with principal
and interest amortized over a period not shorter than the re-
maining life of any of the then outstanding bonds of this
series~ with principal payments beginning not more than three
(3) years from the date of the additional bonds~ in such man-
ner that the total amount of principal of and interest on the
additional bonds shall be due in each year approximately in
the same proportion and payable at the same times as on the
then outstanding bonds.
(d) Use of Proceeds. The proceeds of the sale of the
additional bonds must be used exclusively for the costs of
acquisition, construction~ improving and financing of ex-
tensions to and improvements of the sewer system of the Entity.
(e) Additional Reserve, A reserve fund shall be cre-
ated for such additional bonds which shall be in the same
proportion and upon the same terms as provided for the re-
serve fund for this series.
42. Modifications. All of the provisions of this indenture shall
constitute a contract between the Entity and the holder or holders of
the bonds hereby authorized~ and from and after the sale and delivery
of any of the bonds~ no amendment~ alteration or modification of the
bonds or of the coupons appertaining thereto or of this indenture which
shall impair~ impede or lessen the rights of the holders of the bonds or
the coupons appertaining thereto then outstanding shall be made without
the prior written consent of the holders of at least seventy-five percent
(75~) of the aggregate principal amount of bonds then outstanding. Any
such amendment, alteration or modification which shall have received the
written consent of the holders of said percentage of said outstanding
bonds as provided in this section shall be binding on the holders of all
of the bonds and coupons appertaining thereto, either attached to or
detached from said bonds.
13
43. Refunding. If~ prior to the payment of the bonds herein au-
thorized, it shall be found desirable to refund the bonds under the pro-
visions of any law then available~ said bonds or any part thereof may be
refunded with the consent of the holders thereof and the refunding obli-
gations so issued shall enjoy complete equality of lien with the portion
of the bonds which is not refunded, if any there be, and the refunding
obligations shall continue to enjoy whatever priority of lien over sub-
sequent issues which may have been enjoyed by the bonds refunded~ pro-
vided, however, that if only a portion of the outstanding bonds is so
refunded and if such bonds are refunded in such manner that the interest
rate thereof is increased or that any of the refunding obligations ma-
ture at a date earlier than the maturity date of any of the bonds not
refunded, then such bonds may not be refunded without the consent of the
holders of the unrefunded portion of said bonds.
~. Default.
(a) Event of. If one or more of the following events
(herein called "events of default") shall happen:
i. Principal. If default shall be made
in the due and punctual payment of the principal
of any bond when and as the same shall become due
and payable whether at maturity as therein ex-
pressed, by proceedings for redemption, by decla-
ration or otherwise; or
ii. Interest. If default shall be made in
the due and punctual payment of any installment
of interest of any bond when and as such interest
installment shall become due and payable; or
iii. Covenants. If default shall be made
in the observation of any of the covenants, agree-
ments or conditions on its part herein or in the
bonds contained, and any of such defaults shall
have continued for a period of thirty (30) days; or
iv. Bankruptcy. If the Entity shall file
a petition or answer seeking reorganization or ar-
rangement under the Federal Bankruptcy laws or other
applicable laws or statutes of the United States of
America, or if a court of competent jurisdiction
shall approve a petitions filed with or without the
consent of the Entity seeking reorganization under
the Federal Bankruptcy laws or any other applicable
laws or statutes of the United States of America, or
if under the provisions of any other law for the re-
lief or aid of debtors any court of competent juris-
diction shall assume custody or control of the Entity
or of the whole or any substantial part of its prop-
erty;
(b) Acceleration. Then and in each and every such case
the holders of not less than seventy-five percent (75~) in ag-
gregate principal amount of the bonds at the time outstanding
shall be entitled, upon notice in writing to the Entity, to de-
clare the principal of all of the bonds then outstanding here-
under and the interest accrued thereon to be due and payable
immediately~ and upon any such declaration the same shall be-
come and shall be immediately due and payable, anything in
this indenture or in the bonds contained to the contrary not-
withstanding.
14
(c) Application of Funds. All of the gross revenues
of the Enterpr'ise, including all sums in all of the funds
provided for in any section hereof upon the date of the
happening of any event of default and all sums thereafter
received by the Entity hereunder shall be applied by it,
upon presentation of the several bonds and coupons, and
the stamping thereon of the payment if only partially paid,
or upon the surrender thereof if fully paid, in the follow-
ing order:
i. Costs and Expenses. To the payment of
the costs aH-d"expenses 'o'~Jthe bondholders in de-
claring such event of default, including reasonable
compensation to their agents, attorneys and counsel,
and to the payment of the costs and expenses of the
Fiscal Agency~ if any, in carrying out the provisions
of this section, including reasonable compensation
to its agents, attorneys and counsel;
ii. Interest on Undue Bonds. In case the
principal of the bonds shall not have become due
and shall not then be due and payable~ to the payment
of the interest in default in the order of the ma-
turity of the installments of such interest, with
interest on the overdue installments at the same rate,
such payments to be made ratably to the persons en-
titled thereto without discrimination or preference;
iii. Principal and Interest on Due Bonds. In
case the principal of the bonds shall have become
and shall be then due and payable, to the payment
of the whole amount then owing and unpaid upon the
bonds for the principal and interest, with interest
on the overdue principal and installments of inter-
est at the same rate;
iv. Insufficient Funds. In case such moneys
shall be insufficient to pay in full the whole amount
so owing and unpaid upon the bonds, then to the pay-
ment of such principal and interest without preference
or priority of principal over interest, or of interest
over principal, or of any installment of interest over
any other installment of interest, ratably to the ag-
gregate of such principal and interest then due.
(d) Refunding Defaulted Bonds. The Entity may, with the
consent of the holder thereof, refund any defaulted bonds by
the issuance of a new bond maturing after the maturity of the
last bond issued hereunder, but otherwise on a parity as to
payment of interest with the bonds issued hereunder, and ex-
change such bond for such matured bond, and in such event such
action shall not be deemed as a default hereunder.
45. Bondholder Remedies. Subject to any contractual limitations
binding upon the holders of any of the bonds (including but not limited
to, any limitations upon the exercise of any remedy to the bondholders
holding a specific proportion or percentage of such bonds), any holder
of bonds shall have the right, for the equal benefit and protection of
all holders of bonds of said authorized issue similarly situated, in ad-
dition to those provided in the Bond Act:
(a) Accounting. By action or suit in equity to require
the Entity and its Legislative Body and other officers,
agents and employees to account as the trustee of an express
trust;
15
(b) Injunction. By action or suit in equity to en-
join any acts or things which may be unlawful or in viola-
tion of the rights of the bondholders; or
(c) Mandamus. By mandamus or other suit, action or
proceeding at law or in equity to enforce his rights against
the Entity and its and any of its officers, agents and em-
ployees, and to require and compel it or them to perform and
carry out its and their duties and obligations under the law
and its and their covenants and agreements with bondholders
as provided herein.
46. Regulations for Collecting Charges. By ordinance duly adopted
the Entity has and shall establish, maintain and diligently enforce valid
regulations for billing and collecting the charges for the use of the
services and facilities of the Enterprise which may generally provide as
herein set forth. To the extent that such ordinance does not contain any
provisions included in this section, it is supplemented by the provisions
hereof.
(a) Collecting Charges with Other Utility Charges.
The Entity may provide for the collection of charges with
other utility charges as herein provided.
(1) With Utility Charges of Entity. Where
the person charged is a user of another utility
owned and operated by the Entity, the charges
shall be collected together with and not sepa-
rately from the charges for the other utility ser-
vice rendered by it. They shall be billed upon
the same bill and collected as one item.
io Discontinuance of Service Upon
Delinquency. Upon 'delinquency, the other
Utility service shall be discontinued until
full payment of the dual charges and penal-
ties thereon and the charges for recontinu-
ance of service.
ii. Id. - Time. The time for the
discontinuance of such other service shall
not exceed forty-five (45) days from the
date the sewer service charges are provided
to become delinquent.
(2) With Utility Charges of Department of
Entity. Where the person charged is the user of
another utility owned or operated by a department
or agency of the Entity~ the charges shall be col-
lected with the charges for the other utility ser-
vices and the provisions of subsection (1) of this
subsection shall apply.
i. Utility Not Under Control of Legis-
lative Body. When the other u¥iliby service
is furnished by a department or agency of the
Entity over which the Legislative Body of the
Entity does not exercise control, it shall
diligently endeavor to obtain the written con-
sent and agreement of said department or agency
to collect such charges and upon terms and con-
ditions which as nearly as may be obtained shall
conform to subsection (1) of this subsection.
16
(3) With Utility Charges of Another. When the
Entity or department or agency thereof does not own
or operate another utility~ and the person charged is
a user of a publicly or privately owned utility~ the
Entity shall diligently endeavor to obtain the written
consent and agreement of such owner or operator to col-
lect such charges and upon terms and conditions which
as nearly as may be obtained shall conform to subsec-
tion (1) of this subsection.
(b) Direct Billing. Where the person charged is not a
user of another utility of the Entity or the necessary consent
and agreement cannot be obtained under subdivision (i) of sub-
division (2) or under subdivision (3) of subdivision (a) of this
section, statements of charges for services to be rendered shall
be mailed at the beginning of each billing period~ which shall
be not to exceed bi-monthly.
(1) Delinquency. Statements which have not
been paid withLi'n' thirty (30) days after the date of
billing shall be delinquent.
(2) Penalties. If the charge is not paid with-
in said thirt'~ (30) day period, a penalty of 10~ of
the amount of the delinquent charge shall be added
and become due. An additional penalty of 1/2 of 1~
shall accrue on the first day of each calendar month
thereafter until full payment has been made.
(3) Action to Collect. An action may be brought
by the Entity against the person or persons who occu-
pied the premises when the service was rendered, for
the collection of the amount of the delinquent rate
and all penalties and costs of collection including
reasonable attorney's fee.
(4) Lien for Delinquency. It is hereby declared
that when a statement of delinquent charges and all
penalties and other charges which have accrued there-
on has been recorded~ the same shall constitute a lien
upon the real property receiving or to receive the
services, excepting publicly owned property.
i. Contents of Statement. The statement
shall contain a description of the property
served, the period of the service or proposed
service~ the amount of the charges, and a ref-
erence to the rate ordinance and this indenture
by numbers and dates of adoption.
ii. Execution, Acknowledgment and Filing.
The statement shall Ye exeCuted by the person
having charge of the billing and collection of
such charges or his deputy. His signature shall
be acknowledged. It shall be filed with the
County Recorder of Mendocino County~ at least
once each six months.
iii. Continuance of Penalties. Penalties
shall continue to accrue during the period of
non-payment.
iv. Duration of Lien. Such lien shall con-
tinue until the charges and all penalties there-
on have been fully paid or the property subject
thereto has been sold to satisfy the lien.
(5) Connections Mandatory. The further mainten-
ance or use of cesspools or other means of sewage dis-
posal shall constitute a public nuisance. Ail buildings
inhabited or used by human beings shall be connected
with the sewerage system within 30 days from the time
said facilities are completed if the building to be
served is within 200 feet of the system.
(6) Disconnection of Service. Premises as to
which charges have become delinquent may be discon-
nected.
i. Estimate of Cost. The person in
charge of the Enterprise shall estimate the
cost of disconnection and of reconnection.
ii. Deposit. The amount of the estimate
shall be deposited with the Entity before the
premises will be reconnected to the Enterprise.
iii. Balance. The amount of the cost of
disconnection and reconnection over the deposit
shall constitute a charge and be collected as
such. The amount of the deposit not used shall
be repaid or applied as a credit.
iv. Abatement. During the period of non-
connection or disconnection, inhabitation of
the premises by human beings shall constitute
a nuisance and the Entity shall diligently
prosecute to conclusion proceedings for the
abatement of such occupancy. In such action,
a reasonable attorney's fee shall become due
as a penalty for non-payment.
(c) Collecting Delinquent Charges on Tax Roll. Nothing
herein shall prevent the collection of delinquent charges on the
tax roll on which general taxes of the Entity are collected, in
the manner provided in Article 4, Chapter 6, Part 3, Division 5
of the Health and Safety Code, to the extent that the same is
therein or otherwise lawfully provided.
(1) Filing and Posting. The person or his
deputy who bills and collects the charges shall sign
a statement of the amount of the charges and the pen-
alties.which have accrued and which shall accrue there-
on to the next succeeding April 20, and shall file it
with the officer whose duty it is to post the tax roll,
and said officer shall post the amounts thereof in the
column on the roll where improvement assessments are
posted and opposite the property affected.
(2) Manner of Collection. The amounts so post-
ed shall be payable at the same times and in the same
amounts and manner, and be subject to the same provi-
sions for redemption and sale for non-payment as are
provided for general taxes of the Entity.
(d) Nature of Procedure. The procedures of this section
shall have the effect provided in this subsection.
(1) Alternative. The procedures provided in
subsections (a), (b) and (c) of this section are
alternative to each other. The separate procedures
under each of subsections (a) and (b) are alterna-
tive to each other.
18
(2) Cumulative. The procedures provided in
subsections [a)~ ~('b') and (c) of this section are
cumulative with each other. More than one or all
thereof may be utilized at the same time as to the
same charges.
(3) Supplemental. The procedures provided in
subsections ~a)~ [b) and (c) of this section are
supplemental to each other.
(4) Procedures Non-Exclusive. The procedures
provided in this section are not exclusive. Not-
withstanding any provisions herein~ the Entity may
utilize any procedures provided in any law or which
are a legal incident to its powers~ and any remedy
in law or in equity~ to collect the charges and pen-
alties.
(5) Intention. It is the intention of this
section that there shall be available to the Entity
all procedures and that they shall be diligently ex-
ercised, that all charges and the penalties thereon
or other charges incident thereto shall be promptly
and effectively collected~ to the end that full com-
pliance shall be had with each and all of the cove-
nants~ provisions~ duties and obligations of the En-
tity in this indenture or in law provided.
47. Unconditional Obligation. Except only as provided herein for
alteration of the bonds or this indenture~ nothing in this indenture or
in the bonds or in the coupons contained shall affect or impair the ob-
ligation of the Entity~ which is absolute and unconditional~ to pay the
principal of and interest on the bonds to the respective holders of the
bonds and coupons at the respective dates of maturity~ or upon prior re-
demption as herein provided~ and out of the revenues herein pledged for
such payment, or affect or impair the right of action~ which is also ab-
solute and unconditional~ of such holders to institute suit to enforce
such payment by virtue of the contract embodied in the bonds and coupons.
48. Performance of Essence. The performance of the duties pre-
scribed in this indenture and in the law pursuant to which it was adopted~
by the Entity or its proper officers, agents or employees, is of the es-
sence of Entity's contract with the bondholders.
49. Revenue Bond Law. Each taker and subsequent holder of the
bonds and attached or detached coupons has recourse to all of the provi-
sions of this indenture and of the Revenue Bond Law of 19~1~ and is bound
by their terms.
50. Indenture is Covenant. Each and all of the terms of this in-
denture shall be and constitute a covenant on the part of the Entity to
and with each and every bondholder from the time the bonds are issued
hereunder.
51. Period of Agreement. Whenever all of the bonds and all inter-
est then accrued thereon shall have been fully paid and discharged~ the
agreements in this indenture contained shall cease and terminate~ and
the Entity shall be under no further obligation to apply the revenues of
the Enterprise as herein required~ or otherwise to do or perform any of
the covenants~ conditions or agreements in this indenture contained.
52. Form of Bond. The bonds and the coupons representing interest
thereon sha~l be in substantially the following form:
UNITED STATES OF AMERICA
STATE OF CALIFORNIA
COUNTY OF MENDOCIN0
CITY OF UKIAH
SEWER REVENUE BOND OF 1957
No. $
KNOW ALL MEN BY THESE PRESENTS, that the City of Ukiah, a municipal
corporation, in the County of Mendocino, State of California, hereinafter
referred to as "City", for value received, has obligated itself to pay to
the bearer (or if this bond is registered, to the registered owner here-
of), from the 1957 Sewer Revenue Bond Interest and Redemption Fund of the
City, on the 1st day of July 19 ~ the sum of ONE THOUSAND DOLLARS,
with interest thereon from date at the rate of ~% per annum as evi-
denced by interest coupons attached hereto at the time of issuance, (plus
additional interest represented by separate detachable coupons at the
rate of ... % per annum from ~ 19 to and in-
cluding .... ,'"19 ~ ) said 'intere§t payable semi-annu-
ally on the 1st day of January an'd the 1st day of July in each year, all
as more particularly set forth in the resolution providing for the issu-
ance of this bond.
The City may also, from time to time, purchase any or all of said
outstanding bonds at prices offered, at or below par, plus an allowance
of six months' interest from the date of purchase. Ail bonds purchased
shall be cancelled and shall not again be reinstated.
If at the maturity date, payment of any .bond or any interest coupon
is not made in full accordance with the terms hereof, said bond or coupon
shall continue to bear interest at the rate stated in the bond until paid.
Both principal and interest are payable in lawful money of the
United States of America at the office of the City Treasurer of the City
of Ukiah, Ukiah, California.
This bond is one of an issue in the total principal amount of $800,000
all of like date and tenor except as to maturity (and interest rate), all
issued by the City for the purpose of providing money to finance an Enter-
prise consisting of additions, extensions and improvements to the City
sanitary sewerage and sewage disposal works and system, as set forth and
described in Resolution No. 57-37 entitled "A Resolution Providing for
the Issuance of Sewer Revenue Bonds, Fixing the Form of Bonds and Pro-
viding Covenants for Their Protection", adopted May 9, 1957, to which
reference is hereby made for the obligations, duties, rights and privi-
leges hereby created, and as authorized by law and in strict accordance
with the General Law City Charter of the City and the Revenue Bond Law of
1941, and in accordance with a resolution of the City Council of the City
submitting the question of its issuance to the qualified voters of the
City at an election held for that purpose and as authorized by the vote
of more than the requisite majority of the voters of the City voting on
the proposition.
The holder of this bond has all the rights of a holder of a negoti-
able instrument payable to bearer. Both principal and interest are pay-
able solely from the revenues of the Enterprise hereinabove referred to
and the City is not obligated to pay the principal hereof or interest
hereon except from the revenues of said Enterprise. The bonds of this
issue constitute a first and prior lien upon the said revenues except that
additional bonds may be issued on a parity of lien in accordance with the
resolution hereinbefore'referred to.
Ail of the revenues to be derived from the sewer service charges im-
posed for the use of the Enterprise and the services and facilities there-
of, including revenues from improvements, additions and extensions there-
to which may hereafter be constructed or acquired, and from other revenues
2O
of such sewer system from sources not from sewer service charges~ are
pledged to pay the principal of and interest on the bonds issued here-
under, and to provide (1) a Revenue Bond Interest and Redemption Fund~
(2) a Revenue Bond Reserve Fund, (3) Operation and Maintenance Funds~
and (4) a Surplus Fund.
The bonds and coupons appertaining thereto~ and the resolution~ may
be amended, altered or modified with the consent of the holders of seven-
ty-five percent (75~) of the aggregate principal amount of bonds then
outstanding, in the manner~ to the extent and upon the terms provided in
the resolution.
Bonds issued hereunder shall be subject to registration as to princi-
pal and interest upon written request of the owner and presentation of
the bond to the Treasurer for registration. Thereafter, the principal
hereof and interest hereon shall be payable only to such registered owner.
Bonds may also be registered as to principal only in which event the cou-
pons shall not be removed. Registered bonds may be de-registered and
against become payable to bearer.
IT IS HEREBY CERTIFIED AND RECITED that all acts~ conditions and
things required by the Constitution and laws of the State of California
to be done, to happen and to be performed precedent to and in the issu-
ance of this bond have been done, have happened and have been performed
in regular and due form, time and manner as required by law; that the
City is authorized by law to operate the Enterprise herein referred to
and the City Council, by resolution duly adopted~ established and has cov-
enanted to maintain rates and charges for the services thereof sufficient,
with other revenues received~ to provide net operating revenues equal to
not less than 1.35 times the aggregate amount of the principal of and in-
terest on the bonds of this issue which shall become due and payable with-
in the next succeeding twelve (12) months; and the City has created a
special 1957 Sewer Revenue Bond Interest and Redemption Fund for the pay-
ment of said principal and interest and has agreed to set aside in said
fund each month not less than an equal aliquot part of the amount neces-
sary to pay interest which shall become due on the next succeeding inter-
est payment date~ and an equal aliquot part of ~he amount necessary to,pay
the installment of principal which shall fall due at the next ensuing
principal payment date.
IT IS FURTHER CERTIFIED AND RECITED that for the further protection
of the payment of the bonds of this issue and the interest thereon when
due, the City has created a special 1957 Sewer Revenue Bond and Interest
Reserve Fund, into which it has agreed to transfer from the Construction
Fund the sum of $33~000 from the proceeds of the bonds, any balance there-
in after paying all costs of acquisition, construction and incidental ex-
penses~ and from the Revenue Fund commencing on August 1, 1957 and on the
first day of each calendar month thereafter, the sum of $500 or an amount
equal to one-half of the net surplus for the prior monthly sewer service
charge collection period (as to revenues derived commencing July 1, 1957),
whichever shall be greater, until there has been accumulated therein the
maximum amount of the principal and interest to be paid during any fiscal
year within the bond term~ and~ in the event that any of said moneys are
used to pay principal and interest of bonds~ to make like transfers to
said Fund to restore it to its maximum amount. Said Fund shall be main-
tained at said sum by similar monthly transfers.
IN WITNESS WHEREOF, the City of Ukiah~ by its City Council, has caused
this bond to be executed in its behalf by the Mayor~ by his printed~ litho-
graphed or engraved signature hereon~ and by the manual signature of the
City Clerk, who has affixed hereto the corporate seal of the City~ and has
caused the interest coupons to be executed and authenticated by the fac-
simile signature of said Clerk, all as of July 1, 1957.
Mayor~ Cit~ of Ukiah
21
53. Form of Cg..upon. The coupons shall be substantially in the fol-
lowing form:
(form of coupon)
No. $
On the 1st day of January (July), 19 the City of Ukiah will
pay to bearer, at the office of the City Treasurer, Ukiah, Cali-
fornia, out of the Sewer Revenue Bond Interest and Redemption
Fund of said City and not out of any other fund or moneys of the
City, the sum of Dollars ($ )
in lawful money of the United States of America, being the 'in-
terest then due on its Sewer Revenue Bond dated July l, 1957.
Bond No.
Clerk
City of Ukiah
54. Registration Form. The form of endorsement on said bond for
registration shall be as follows:
This bond is registered in the name of the registered
owner whose name and address appears last in the space below
and both the principal of and interest on this bond are pay-
able to such registered owner.
Note: There must be no writing in the space below except by
the City Treasurer.
Date of
Registry
Name of Registered
Owner
Address of
Registered Owner
Signature of
Treasurer
55. Legality. If any section, paragraph, subdivision, sentence,
clause or phrase of this indenture shall for any reason be adjudged by
any court of competent Jurisdiction to be unconstitutional, unenforce-
able or invalid, such judgment shall not affect the validity of the re-
maining portion of this indenture. The Legislative Body hereby declares
that it would have adopted this indenture and each and every other sec-
tion, paragraph, subdivision, sentence, clause or phrase hereof and would
have authorized the issuance of the bonds pursuant hereto, irrespective
of the fact that any one or more sections, paragraphs, subdivisions, sen-
tences, clauses or phrases of this indenture may be held to be unconsti-
tutional, unenforceable or invalid.
22
I hereby certify that the foregoing resolution was
duly and regularly adopted and passed by the City Council
of the City of Ukiah, California~ at a meeting thereof
held on the 9th day of May~ 1957, by the following vote
of the members thereof:
AYES~ and in favor thereof~ Councilmen:
Rones~ Mazzoni~ Runkel~ Wagner
NOES, Councilmen: None
ABSENT~ Councilmen: Mercer
APPROVED:
/s/ Caroline M. Church
City Clerk of the City of Ukiah
Donald E. Rones
Mayor
RESOLUTION NO. 57- 37
A RESOLUTION
PROVIDING FOR THE ISSUANCE
OF SEWER REVENUE BONDS~
FIXING THE FORM OF BONDS
AND
PROVIDING COVENANTS FOR THEIR PROTECTION
SEWER REVENUE BONDS OF 1957
CITY OF UKIAH
MENDOCINO COUNTY, CALIFORNIA
Adopted
May 9~ 1957
t O
RESOLUTION NO. 57-37
A RESOLUTION PROVIDING FOR THE ISSUANCE
OF SEWER REVENUE BONDS, FIXING THE FORM
OF BONDS AND PROVIDING COVENANTS FOR
THEIR PROTECTION
SEWER REVENUE BONDS OF 1957
1. Bond Law ..........................
2. Conditions Precedent ....................
3. Definitions ........................
a Annual ........................
b Bonds ........................
c Bondholder ......................
d Charges .......................
e Clerk ........................
f Entity ........................
g Enterprise ......................
h Gross Revenues ....................
i Improve .......................
j Legislative Body ...................
k Net Revenues .....................
1 Presiding Officer ..................
m Project .......................
n Revenues .......................
o Treasurer or Auditor .................
4. Project ..........................
5. Proposition ........................
6. Issuance of Bonds .....................
7. Project Cost ........................
8. Complete Project ......................
(a) Adequate Funds ....................
I b) Adequate Rates ....................
c) Bond Payment .....................
9. Single Transaction .....................
10. Separate Fund .......................
11. Revenue Bonds .......................
12. Callable Bonds .......................
13. Purchase of Bonds .....................
14. Interest ..........................
15. Interest After Maturity ..................
16. Where Bonds Payable ....................
17. Negotiable Instruments ...................
18. Execution of Bonds .....................
19. Record of Bonds ......................
20. Registration of Bonds ...................
(a) Id. - Principal 0nly .................
-
De Registration ...................
(c Re-Registration ...................
21. Delivery of Bonds .....................
22. Transcript .........................
23. Proceeds of Bonds .....................
a) Reserve Fund .....................
b) Bond Discount ....................
c) Revenue Fund .....................
d) Acquisition Costs ..................
e) Construction Costs ..................
f) Incidental Expenses .................
g) Reserve Fund .....................
h) Additional Improvements ...............
24. Pledge of Revenues .....................
25. First Lien on Revenues ...................
Page
Page
26. Equal Parity ........................ 7
27. Ratio of Net Revenue Coverage ............... 7
28. Bonds Not a Debt ...................... 7
29. Entity Credit Not Encumbered ................ 7
30. Bonds a Special Obligation ................. 7
31. Revenues a Trust Fund ................... 7
32. Sewer Revenue Fund ..................... 7
33. Bond Fund ......................... 8
34. Revenue Bond Reserve Fund ................. 8
35. Maintenance and Operation Funds .............. 9
36. Sewer Surplus Fund .................... 9
37. Feeding Higher PrioLity .................. 9
38. Investment of Surplus Funds ................ 10
(a) Construction Fund .................. 10
b Bond Fund ...................... 10
c Reserve Fund ..................... 10
d Surplus Fund ..................... 10
39. Treasurer .......................... 10
40. Covenants ......................... 10
a) Acquire Enterprise .................. 10
b) Operate Enterprise .................. 10
cl Good Repair ..................... 10
d Preserve Security .................. 10
e Collect Revenues ................... 10
f) Service Bonds .................... 10
g) Pay Claims ...................... 10
h Encumbrances ..................... 11
i No Free Service ................... 11
j No Competition .................... 11
k Insurance ...................... 11
1 Fidelity Bonds .................... 11
m Engineers ...................... 11
n) Audit and Report ................... 11
i. Balance Sheet ................. 11
ii. Revenue and Payments ............. 12
iii. Insurance ................... 12
iv. Customers ................... 12
v. Billing .................... 12
vi. Rate Schedules ................ 12
vii. Recapitulation ................ 12
viii. Comments ................... 12
ix. Monthly Statements .............. 12
41. Additional Bonds ...................... 12
(a) Net Income ...................... 12
i. Ratio to Bond Service .............. 12
(b) Estimated Additional Net Income ........... 13
(A) Earnings .................... 13
(B) Rate Increase ................. 13
ct Bond Terms ......................
d Use of Proceeds ................... 1
e) Additional Reserve .................. 13
42. Modifications ....................... 13
43. Refunding .........................
44. Default ..........................
(a) Event of .......................
i. Principal ................... 14
ii. Interest .................... 14
iii. Covenants ...................
iv. Bankruptcy ...................
(b) Acceleration .....................
(c) Application of Funds ................. 15
i. Costs and Expenses ............... 15
ii. Interest on Undue Bonds ............ 15
iii. Principal and Interest on Due Bonds ...... 15
iv. Insufficient Funds ............... 15
(d) Refunding Defaulted Bonds .............. 15
ii
Page
45. Bondholder Remedies ..................... 15
a Accounting ...................... 15
b Injunction ...................... 16
c Mandamus ....................... 16
46. Regulations for Collecting Charges .... ~ ...... 16
(a) Collecting Charges with Other Util~t~ Charges ..... 16
(1) With Utility Charges of Entity .......... 16
i. Discontinuance of Service Upon Delinquency . 16
ii. Id. - Time ......... . . 16
(2) With Utility Charges ~f'Depar~m~n~ ~f Entity . . . 16
i. Utility Not Under Control of Legislative
Body ............. 16
(3) With Utility Ch~rge~ ~f A~o~h~r ......... 17
(b) Direct Billing .................... 17
1 Delinquency ................... 17
2 Penalties .................... 17
Action to Collect ................ 17
Lien for Delinquency ............... 17
i. Contents of Statement ........... 17
ii. Execution~ Acknowledgment and Filing .... 17
iii. Continuance of Penalties .......... 17
iv. Duration of Lien .............. 17
(5) Connections Mandatory .............. 18
(6) Disconnection of Service ............. 18
i. Estimate of Cost .............. 18
ii. Deposit .................. 18
iii. Balance .................. 18
iv. Abatement ................. 18
(c) Collecting Delinquent Charges on Tax Roll ....... 18
(1) Filing and Posting ................ 18
( )2 Manner of Collection ............... 18
(d) Nature of Procedure .................. 18
1 Alternative ................... 18
Cumulative .................... 19
Supplemental ................... 19
t~l Procedures Non-Exclusive ............. 19
Intention ................... 19
47. Unconditional ObligatiOn .................. 19
48. Performance of Essence ................... 19
49. Revenue Bond Law ...................... 19
50. Indenture if Covenant .................... 19
51. Period of Agreement ..................... 19
52. Form of Bond ........................ 19
53. Form of Coupon ....................... 22
54. Registration Form ...................... 22
55. Legality .......................... 22
iii