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HomeMy WebLinkAboutOrdinance 161ORDINANCE NO. 141 AN ORDINANCE AUTHORIZING THE ISSUANCE OF WATER REVENUE BONDS OF THE TOWN OF FIRESTONE, COLORADO, IN THE PRINCIPAL AMOUNT OF $240,000, FOR THE PURPOSE OF IMPROVING THE MUNICIPAL WATER SYSTEM OF THE TOWN, BY ACQUIRING WATER RIGHTS; PRESCRIBING THE FORM OF SAID BONDS AND PROVIDING FOR A PLEDGE OF THE NET INCOME AND REVENUE OF THE WATER SYSTEM OF THE TOWN FOR THE PAYMENT OF SAID BONDS AND THE INTEREST THEREON; PROVIDING OTHER DETAILS IN CONNECTION THEREWITH; AND DECLARING AN EMERGENCY. WHEREAS, the Board of Trustees of the Town has deter- mined that it is necessary to improve the municipal water system of the Town by acquiring water rights; and WHEREAS, the Board has determined that it is neces- sary to issue revenue bonds pursuant to Title 31, Article 35, Part 4, Colorado Revised Statutes 1973, as amended, for the payment of the cost of acquiring such water rights; and WHEREAS, the Board has entered into a loan agreement with the United States Department of Agriculture, Farmers Home Administration, (the "FmHA") whereby the FmHA will purchase the water revenue bonds in the principal amount of $240,000, at an interest rate of 5% per annum; and WHEREAS, in accordance with Section 31-35-404, such bonds may be sold to the United States of America, or any agency thereof, without the requirement of having a public sale; and WHEREAS, it is necessary to authorize the issuance of said bonds and to provide for the form and payment thereof; BE IT ORDAINED BY THE BOARD OF TRUSTEES OF THE TOWN OF FIRESTONE, WELD COUNTY, COLORADO: Section 1. Improvements to the Water System. The + Board of Trustees has previously determined that it is in the best interest of the Town to improve the municipal water system by acquiring water rights. The total estimated cost of the acquisi- tion of water rights is $400,000. The method of payment is as follows: (approximate amounts) (a) FmHA Loan $240,000 (b) FmHA Grant $160,000 - 2 - Section 2. Authorization. That for the purpose of providing funds to pay part of the cost of improving the municipal water system by acquiring water rights, there are hereby authorized Water Revenue Bonds, Series 1981.(the "Series 1981 Bonds" or "bonds") of the Town of Firestone, in the total amount of $240,000, both the principal thereof and the interest thereon to be payable solely and only out of .the net revenue and income to be derived by the Town from and through the operation of its water system. It is hereby determined that the estimated life of the water facilities to be acquired by the proceeds of this bond issue is not less than forty years. Section 3. Bond Details. The bonds shall be dated as of the date of the issuance and delivery of the bonds, will be numbered from 1 to 480, inclusive, and will be in the de- nomination of $500 each. The net effective interest rate of this issue of bonds is 5.00%; said bonds shall bear interest at the rate of 5% per annum, payable on the 1st day of January next following the date of the issuance and delivery of the bonds, and annually thereafter on January 1 each year, and mature serial- ly on January 1, as follows: Amount Maturity $ 3,000 1982 4,000 1983 4,000 1984 4,000 1985 4,500 1986 4,500 1987 5,000 1988 5,000 1989 5,500 1990 5,500 1991 6,000 1992 6,000 1993 6,500 1994 7,000 1995 7,000 1996 (Continued) - 3 - Amount Maturity 7,500 1997 8,000 1998 8,500 1999 8,500 2000 9,000 2001 9,500 2002 10,000 2003 10,500 2004 11,000 2005 11,500 2006 12,000 2007 13,000 2008 13,500 2009 14,000 2010 16,000 2011 Bonds of this issue maturing on or before January 1, 1991 shall not be redeemable prior to their respective maturity dates. Bonds maturing on January 1, 1992 and thereafter, shall be redeemable at the option of the Town on January 1, 1991, and on any interest payment date thereafter, in inverse numerical order, upon payment of par and accrued interest, without redemp- tion premium. If, however, all of the bonds are held by the Farmers Home Administration, all or any number of the bonds may be redeemed at the option of the Town at any time in inverse numer- ical order, upon payment of par and accrued interest to the date of redemption, without redemption premium. Notice of prior redemption shall be given by publication at least one time in a newspaper having general circulation in the Town, not less than thirty days prior to the date of redemption. If any of the bonds to be redeemed are registered as to principal and interest, then notice shall also be given by mailing a copy of the notice by registered, first class mail, to the registered owner or owners of such bonds, at least thirty days prior to the date of redemp- tion. The principal of and interest on said bonds shall be payable at the office of the Town Treasurer, in Firestone, Colorado, or as to any bond or interest coupon owned by the United - 4 - States Department of Agriculture, Farmers Home Administration, then at the FmHA Finance Office, 1520 Market Street, St. Louis, Missouri 63103, or at such other place as may be indicated by the Farmers Home Administration. Section 4. Registration as to Principal and Interest. Each of the bonds of this issue may be registered for payment as to both principal and interest (but not as to principal only or to interest only) and any bond so registered may be discharged from registration as hereafter provided in this Ordinance. At the option of the bearer, any bond of this issue may be registered as to both principal and interest upon presenting the same to the Treasurer of the Town, (designated as and referred to herein as the Registrar for purposes of registration) accompanied by all unmatured coupons. The Registrar shall make a notation of such registration thereon and detach and cancel all unmatured interest coupons. Any bonds so registered may thereafter be transfered only upon a duly executed assignment of the registered owner or his legal representative in such form as shall be satisfactory to the Registrar. Such transfer shall be made on the registration books kept by the Registrar and shall be endorsed on the bond. The principal of and interest on any bond registered as to both principal and interest shall be payable only to, or upon the order of, the registered owner or his legal representative. Section 5. Conversion of Registered Bonds. Any bond registered as to both principal and interest may be reconverted into a coupon bond payable to bearer upon presentation thereof to the Registrar accompanied by an instrument duly executed by the registered owner or his legal representative, in such form as is acceptable to the Registrar. The Registrar shall attach thereto new coupons representing the interest to become due thereafter on the bond to the date of maturity and shall make notation thereon that the bond is payable to bearer. Such new coupons shall bear the facsimile signature of the officer signing the coupons as herein provided at the time of the execu- tion of the bond, i.e., the Treasurer of the Town. Upon recon- verting the bonds in accordance with this Ordinance, the Registrar - 5 - shall require the payment of all expenses incurred by it in connection with such reconversion, payment of which together with any tax or other governmental charge required to be paid, shall be made by the holder requesting such reconversion. Section 6. Form and Execution of Bonds. Said bonds shall be signed by the manual signature of the Mayor of the Town, sealed with a facsimile of the seal of the Town, attested and countersigned with the facsimile signature of the Town Clerk and Treasurer, and the interest coupons attached thereto shall bear the facsimile signature of the Town Treasurer. When issued as aforesaid as part of said bonds, such interest coupons shall be the binding obligations of the Town according to their import. Should any officer whose manual or facsimile signature appears ,on said bonds, or the interest coupons attached thereto, cease to be such officer before delivery of the bonds to the purchaser, such manual or facsimile signature shall nevertheless be valid and sufficient for all purposes. Said bonds, interest coupons and registration grid shall be in substantially the following form: (Form of Bond) UNITED STATES OF AMERICA STATE OF COLORADO COUNTY OF WELD TOWN OF FIRESTONE WATER REVENUE BOND, SERIES 1981 No. $500 The Town of Firestone, in the County of Weld and State of Colorado, hereby promises to pay to the bearer hereof, or if this Bond be registered, then to the registered owner hereof, out of the special fund or funds hereinafter designated, but not otherwise, the principal sum of . FIVE HUNDRED DOLLARS on the 1st day of January, 19 , with interest thereon at the rate of five per centum (5%) per annum, payable on the lst day of January next following the date of the issuance and delivery of this Bond, and annually thereafter on the 1st day of January each year, as evidenced by interest coupons attached hereto, upon presentation and surrender of the.annexed coupons and this Bond as they severally become due, or if this Bond be registered, then to the registered owner hereof, both principal and interest being payable in lawful money of the United States of America, at the office of the Town Treasurer, in Firestone, Colorado, or as to any bond or coupon owned by the United States Department of Agricul- ture, Farmers Home Administration, then at the FmHA Finance Office, in St. Louis, Missouri. Bonds of this issue maturing on or before January 1, 1991, shall not be redeemable prior to their respective matur- ity dates. Bonds maturing on January 1, 1992 and thereafter, are redeemable in inverse numerical order, at the option of the Town, on January 1, 1991, and on interest payment dates there- after, upon payment of par and accrued interest, without redemp- tion premium. If, however, all of the bonds are held by the Farmers Home Administration, then all or any number of the bonds may be redeemed at the option of the Town at any time in inverse numerical order, upon payment of par and accrued interest to the date of redemption, without redemption premium. - 7 - This Bond is issued by the Board of Trustees of the Town of Firestone, Colorado, for the purpose of paying part of the cost of improving the municipal water system of the Town by acquiring water rights, under the authority of and in full con- formity with the Constitution and Laws of the State of Colorado, particularly the provisions of Title 31, Article 35, Part 4, Colorado Revised Statutes 1973, as amended, and all other laws thereunto enabling, and pursuant to Ordinance No. of said Town, adoe� tc and approved by the Board of Trustees of the Town on the h day of February, 1981. Pursuant to Section 31-35-413 of said Part 41 such recital shall conclusively impart full compliance with all of the provisions of said Part, and this Bond issued containing such recital is incontestable for any cause, whatsoever after its delivery for value. Both the principal of and the interest on this Bond are payable solely out of a special fund created in full con- formity with law and designated as the "Water Revenue Bond Fund", of the Town, which Fund shall contain the net income and revenue derived by the Town from the operation of the muni- cipal water system, after payment of the necessary and reasonable costs and expenses of the operation and maintenance of the water system, or if necessary from the Bond Reserve Account created for such purpose, all as is more particularly set forth in the Ordi- nance authorizing the issuance of this Bond. The bonds of this issue are equitably and ratably secured by a lien on the net income and revenue of said water system, and constitute an irre- vocable and first lien on said net revenues and Fund, although not necessarily an exclusive first lien. It is hereby recited, certified and warranted that for the payment of this Bond, the Town of Firestone. has created and will maintain said Fund and will deposit therein out of the income and revenue of the water system, the amounts and revenue specified in said Ordinance, and out of said Fund, as an irrevocable charge thereon, will pay this Bond and the interest thereon, in the manner provided by said Ordinance. For a descrip- tion of said Fund and the nature and extent of the security afforded thereby for the payment of this Bond, reference is made to that Ordinance. This Bond does not constitute a debt of the Town of Firestone within the meaning of any constitutional or statutory limitation, and shall not be considered or held to be a general obligation of the Town. It is hereby certified and recited that all the re- quirements of law have been fully complied with by the proper officers of the Town in the issuance of this Bond. For the payment of this Bond and the interest thereon, the Town of Firestone pledges the exercise of all its lawful powers. This Bond may be registered in the name of the holder thereof in conformity with the provisions endorsed hereon and subject to the terms and conditions set forth in the Ordinance authorizing its issuance, and unless so registered, this Bond shall be transferable by delivery. This Bond may be registered as to both principal and interest, but not as to principal only or to interest only; and if this Bond be registered as to both principal and interest, it may be reconverted into a coupon bond in accordance with the provisions endorsed hereon and subject to the provisions set forth in said ordinance. IN TESTIMONY WHEREOF, the Board of Trustees of the Town of Firestone, Colorado, has caused this Bond to be signed by the manual signature of the Mayor, sealed with a facsimile of the seal of the Town, attested and countersigned with the facsimile signature of the Town Clerk and Treasurer, and the attached coupons to be signed with the facsimile signature of the Town Treasurer, as of the day of , 1981. (FACSIMILE S E A L ) ATTESTED AND COUNTERSIGNED: _ (Facsimile Signature) Town Clerk -Treasurer TOWN OF FIRESTONEI.ADO By (Manual Signature) Mayor (Form of Registration Panel on Back of Bond) PROVISION FOR REGISTRATION AND RECONVERSION This bond may be registered as to both principal and interest, but not as to principal alone nor as to interest alone, on the books of the Town of Firestone, Colorado, kept by the Treasurer of the Town as Registrar, upon presentation hereof to the Registrar, who shall detach and cancel all unmatured coupons and shall make notation of such registration as to both principal and interest on the registration blank below. After registration this bond may be transferred only upon a duly exe- cuted assignment of the registered owner or his legal repre- sentative in such form as shall be satisfactory to the Registrar, such transfer to be made on said books and endorsed hereon by the Registrar. The principal of and interest on this bond, if registered, shall be payable only to, or upon the order of, the registered owner or his legal representative. This bond, if converted into a bond registered as to both principal and interest, may be reconverted, at the expense of the registered owner, into a coupon bond, upon presentation hereof to the Registrar, accompanied by an instrument duly exec- uted by the registered owner, or his legal representative, in such form as shall be satisfactory to the Registrar, who shall attach hereto new coupons representing the interest to become due thereafter on this bond to the date of maturity, and shall make notation in the registration blank below that this bond is payable to bearer. Such coupon bond may again be registered as to both principal and interest as hereinabove provided. Any registration, transfer, or discharge from registra- tion is subject to such reasonable rules and regulations as the authorizing ordinance, the Board of Trustees or the Registrar may prescribe and upon payment of a charge sufficient to reim- burse the Town and the Registrar for any tax or other governmental charge to be paid by them in connection therewith. Except as - 10 - _otherwise provided in the authorizing ordinance, no charge shall be made to the holder hereof for the privilege of registration, transfer or discharge from registration. Every privilege of registration, transfer or discharge from registration, or con- version hereinabove provided shall be exercised only in accordance with and subject to the terms and provisions of that ordinance. The registration books shall be closed for a period of fifteen (15) days next preceding any interest payment date or after the first publication of any notice of prior redemption of any bond has been made. Date of Name of Signature of Registration Registered Owner Registrar United States of America Farmers Home Administration (End of Form of Registration Panel on Back of Bond) (Form of Interest Coupon) No. On the 1st day of January, 19 , unless the Bond to which this coupon is attached, if redeemable, has been called for prior redemption, the Town of Firestone, in the County of Weld and State of Colorado, will pay to bearer the amount shown hereon, in lawful money of the United States of America, at the office of the Town Treasurer, in Firestone, Colorado, or as to any bond or coupon owned by the United States Department of Agriculture, Farmers Home Administration, then at the FmHA Finance Office, in St. Louis, Missouri, out of the Water Revenue Bond Fund or if necessary from the Bond Reserve Account, of said Town, but not otherwise, being interest then due on its Water Revenue Bond, Series 1981, bearing No. (Facsimile Signature) Town Treasurer - 12 - Section 7. Issuance of Single Bond. Notwithstanding the provisions of this ordinance relating to the issuance of serial bonds, the amount of any loan from the Farmers Home Administration shall be evidenced by a single bond, as authorized by Title 31, Article 35, Part 4, Colorado Revised Statutes 1973, as amended. Such single bond shall be numbered R-1 and mature in installments of principal, substantially as provided in Section 3 hereof. The interest on said bond shall begin to accrue from the date of the issuance and delivery of the bond, and will not be evidenced by any interest coupons. The principal of and interest on said bond shall be payable to the registered holder of said bond at the address shown on the registration books of the Town. The single bond shall be registered as to principal and interest in the same manner and subject to the same terms and conditions as provided herein for the registration of serial bonds. The single bond shall be signed by the manual signature of the Mayor, sealed with an impression of the seal of the Town, and attested and countersigned by the manual signa- ture of the Town Clerk and Treasurer. At the request of the holder and owner of the single bond, the Town may issue negotiable coupon bonds or serial registered bonds without coupons, in exchange for and upon surrender of the single bond, in the denomination of $500 each, in the aggregate principal amount equal to the amount of the unpaid principal of the outstanding single bond, such bonds to be in the form provided by Section 6 of this Ordinance. The cost and expense of such conversion to serial bonds shall be paid by the holder and owner of the single bond. Section 8. Form of Single Bond. The form of the single bond shall be as follows: - 13 - (Form of Bond) UNITED STATES OF AMERICA STATE OF COLORADO TOWN OF FIRESTONE WATER REVENUE BOND, SERIES 1981 COUNTY OF WELD No. R-1 $240,000 The Town of Firestone, in the County of Weld and State of Colorado, hereby promises to pay to the registered owner hereof, out of the special fund.or funds hereinafter desig- nated, but not otherwise, the principal sum of TWO HUNDRED FORTY THOUSAND DOLLARS ($240,000) on January 1 in the years and installments as follows: Years Principal Installments 1982 $ 3,000 1983 4,000 1984 4,000 1985 4,000 1986 4,500 1987 4,500 1988 5,000 1989 5,000 1990 5,500 1991 5,500 1992 6,000 1993 6,000 1994 6,500 1995 .7,000 1996 7,000 1997 7,500. 1998 8,000 1999 8,500 2000 8,500 2001 9,000 200' 9,500 2003 10,000 2004 10,500 2005 11,000 2006 11,500 2007 12,000 2008 13,000 2009 13,500 2010 14,000 2016 16,000 - 14 - with interest from the date on which this Bond is issued and delivered at the rate of five per centum (5%) per annum, payable on the 1st day of January next following the date of the issuance and delivery of this Bond, and annually thereafter on the 1st day of January each year, until said sum is paid. Both the principal hereof and interest hereon are payable in lawful money of the United States of America, to the registered holder hereof at the address shown on the registration books of the Town. The final installment of principal and interest due on this Bond shall be made only upon presentation and surrender of this Bond to the Town. Installments of principal of this Bond becoming due on and before January 1, 1991, are not payable prior to their stated due dates, unless the Farmers Home Administration is the registered owner hereof. Installments becoming due on and after January 1, 1992, are subject to prepayment prior to their stated due dates in the amount of $500 or any multiple thereof, at the option of the Town, in inverse order of due dates, on January 1, 1991, and on any interest payment date thereafter, by the payment of such principal amount and accrued interest, without prepayment premium. If the Farmers Home Administration is the registered owner, all installments are subject to prepayment at any time prior to their stated due date, in the amount of $500 or any multiple thereof, in inverse order of their due date, by the payment of such principal amount and accrued interest to the date of prepayment, without prepayment premium. Notice of prepayment shall be given as provided by the Ordinance authorizing this Bond. This Bond is issued by the Board of Trustees of the Town of Firestone, Colorado, for the purpose of paying part of the cost of improving the municipal water system of the Town, by acquiring water rights, under the authority of and in full con- formity with the Constitution and Laws of the State of Colorado, particularly the provisions of Title 31, Article 35, Part 4, Colorado Revised Statutes 1973, as amended, and all other laws - 15 - thereunto enabling, and pursuant to Ordinance No. of said Town, adopt and approved by the Board of Trustees of the Town on the day of February, 1981. Pursuant to Section 31-35-413 of said Part 4, such recital shall conclusively impart full compliance with all of the provisions of said Part, and this Bond issued containing such recital is incontestable for any cause whatsoever after its delivery for value. Both the principal of and the interest on this Bond are payable solely out of a special fund created in full confor- mity with law and designated as the "Water Revenue Bond Fund", of the Town, which Fund shall contain the net income and revenue derived by the Town from the operation of the muncipal water system, after payment of the necessary and reasonable costs and expenses of the operation and maintenance of the water system, or if necessary from the Bond Reserve Account created for such purpose, all as is more particularly set forth in the Ordinance authorizing the issuance of this Bond. This Bond is equitably and ratably secured by a lien on the net income and revenue of said water system, and constitutes an irrevocable and first lien on said net revenues and Fund, although not necessarily an exclusive first lien. It is hereby recited, certified and warranted that for the payment of this Bond, the Town of Firestone has created and will maintain said Fund and will deposit therein out of the income and revenue of the water system, the amounts and revenue specified in said Ordinance, and out of said Fund, as an irrevocable charge thereon, will pay this Bond and the interest thereon, in the manner provided by said Ordinance. For a de- scription of said Fund and the nature and extent of the security afforded thereby for the payment of this Bond, reference is made to that Ordinance. This Bond does not constitute a debt of the Town of Firestone within the meaning of any constitutional or statutory limitation, and shall not be considered or held to be a general obligation of the Town. - 16 - It is hereby certified and recited that all the require- ments of law have been fully complied with by the proper officers of the Town in the issuance of this Bond. For the payment of this Bond and the interest thereon, the Town of Firestone pledges the exercise of all its lawful powers. This Bond is transferable only upon the books kept by the Treasurer of the Town as Registrar, by the registered owner hereof in person or by his or her duly authorized attorney, and similarly noted hereon, or it may be surrendered in exchange for new bonds of the same aggregate principal amount, in coupon form or in serial registered form, in the denomination of $500 each, and subject to the conditions provided in said Ordinance. IN TESTIMONY WHEREOF, The Board of Trustees of the Town of Firestone, Colorado, has caused this Bond to be signed by the manual signature of the Mayor, sealed with an impres- sion of the seal of the Town, and attested and countersigned by the manual signature of the Town Clerk and Treasurer, as of the o?3 day of 7Z�E���M,(, T*a. 1981. ( S E A L ) ATTESTED AND COUNTERSIGNED: i (Manual Signature) Town Clerk -Treasurer TOWN OF FIRESTONE, COLORADO By (Manual Signature) Mayor i 17 - (Form of Registration Panel) This Bond is registered in the office of the Treasurer of the Town of Firestone, Colorado, as Registrar, in the name of the owner listed below, and the principal amount of this Bond and interest thereon shall be payable only to such owner, all in accordance with the Ordinance authorizing the issuance of this Bond. Date of Name of Signature of Registration Registered Owner Registrar United States of America, Farmers Home Administration i 18 - Section 9. Disposition of Bond Proceeds. The Series 1981 Bonds shall be sold and delivered to the purchaser, solely to provide the Town with money for the purpose hereinbefore stated. Neither the purchaser of said bonds, nor the subsequent holders of any of them shall be responsible for the application or disposal by the Town or any of its officers of the funds derived from the sale thereof. In the event that all of the proceeds of the Series 1981 Bonds are not needed for the acquisition of the water rights, any remaining proceeds shall be deposited to the Bond Reserve Account described in Section 14. All or any appropriate portion of the bond proceeds may be temporarily invested or reinvested pending such use in securit- ies or obligations which are lawful investments for such towns in the State of Colorado. It is hereby covenanted and agreed by the Town that the temporary investments or reinvestment of the bond proceeds, or any portion thereof, shall be of such nature and extent, and for such period, that the bonds shall not be or become arbitrage bonds within the meaning of Section 103(c) of the Internal Revenue Code of 1954 as amended, and pertinent reg- ulations, and such proceeds, if so invested or reinvested, shall be subject to the limitations and restrictions of said Section 103(c), and pertinent regulations as the same now exist or may later be amended. The issue of said bonds by the Town shall constitute a warranty by and on behalf of the Town for the benefit of each and every holder of any of said bonds, that said bonds have been issued for a valuable consideration in full conformity with law. Section 10. Incontestable Recital in Bonds. Each bond shall recite that it is issued under the authority of Title 31, Article 35, Part 4, Colorado Revised Statutes 1973, as amended, and such recital shall conclusively impart full compliance with all of the provisions of said Part 4, and all bonds issued containing such recital shall be incontestable for any cause whatsoever after their delivery for value. - 19 - Section 11. Payment of Interest Durin2 Acquisition. If necessary, the interest due on said bonds during the ac- quisition of the water rights shall be advanced from any fund of the Town available therefor, said amount to be later reimbursed from the revenues of the water system. The term "water system" as herein used, shall include not only the property comprising the existing water system and the improvements acquired with the proceeds of this issue of bonds, but all additions, improvements and extensions hereafter constructed or acquired by the Town. Section 12. Rates and Charges For Service by the Water System. The Board of Trustees of the Town covenants that it will establish, maintain and enforce rates and charges for services 'rendered by the water system to create income and revenue each year sufficient to pay maintenance and operation expenses of the system and to cover 1.20 times the annual interest and prin- cipal requirements of the Series 1981 Bonds. It shall be the duty of the Town to establish, maintain and enforce such rates continuously until all of said bonds and the interest thereon have been fully paid and discharged. Section 13. Payment of Principal and Interest. There is hereby established and created a special fund to be known as the "Water Revenue Bond Fund", (the "Bond Fund") and the Town hereby covenants and agrees to maintain the Bond Fund so long as any of the bonds herein authorized remain outstanding and unpaid. The Bond Fund shall be kept separate and apart from all other funds of the Town, and shall contain all of the income and revenue derived by the Town from the operation of the water system, after the payment of all necessary and reasonable costs and expenses of operating and maintaining the water system. The owners and holders of the Series 1981 Bonds, shall have a first and prior lien, but not necessarily an exclusive first lien, on such net revenues, the Bond Fund and the Reserve Account hereinafter referred to in Section 14. The bonds and the obligations ev- idenced thereby shall not constitute a lien upon the physical - 20 - properties of the municipal water system, or any part thereof, or on any other property of the Town, but shall constitute a lien only on the net revenues derived from the operation of the water system in the manner provided in this ordinance. Such net rev- enues and Bond Fund are hereby irrevocably pledged for the fol- lowing purposes and shall be disbursed in the following manner and order: (a) For the prompt payment of the interest on and the principal of the Series 1981 Bonds, when and as the same shall become due and payable respectively, and any additional bonds payable from the income and revenue of the water system and having a lien thereon on a parity with the lien of the Series 1981 Bonds. (b) For payments to the Reserve Account in order to maintain the account in the amount required by Section 14 or for the required payments to a reserve fund created as additional security for the payment of principal and interest on any addi- tional bonds hereafter issued and having a lien on a parity with the lien of the Series 1981 Bonds. The amounts on deposit in the Reserve Account shall be used for the payment of principal of or interest on the Series 1981 Bonds when the other monies in the Bond Fund are insufficient to make such payments, to pay for emergency maintenance and for extensions to the water facilities. (c) After the payments and accumulations hereinabove referred to have been made, any remaining revenues of the water system may be used to pay the principal of and interest on additional revenue bonds having a lien on the net income and revenue which is subordinate to the lien of the Series 1981 Bonds; for the payment of principal and interest on general obligation water bonds, or for any lawful purpose of the Town. Section 14. Bond Reserve Account. There is hereby established a separate account to be designated as the "Bond Reserve Account". Such Reserve Account shall be used to prevent defaults in the payment of the bonds authorized herein and the interest thereon, to pay for emergency maintenance and for ex- tensions to the water facilities, but if used for such purpose it shall be restored to the account as soon as possible. - 21 - The Reserve Account shall be established and funded in the total amount of $15,659. Annual payments shall be made to the Reserve Account in the amount equal to 10% of the principal and interest installment each year beginning on January 1, 1982 and continue each year until the Reserve Account is fully funded in the amount of $15,659. No additional payments need be made into the Reserve Account as long as the deposit therein shall equal or exceed such amount. In addition, there shall be de- posited to the .Reserve Account any proceeds of the bonds not needed for the completion of the project, and in such event, the required payments to the Reserve Account shall be adjusted or decreased accordingly. The Reserve Account shall be maintained until such time as the amount therein will be sufficient to pay all of the outstanding bonds and the interest thereon. Moneys in the Reserve Account may be invested in direct obligations of the United States Government or in any other obligations or securities which are lawful investments for such towns in the State of Colorado and the interest from such investments shall be con- sidered as revenues of the water system; such investments, how- ever, are subject to the covenants and provisions of Section 9 of this Ordinance. Section 15. Covenants of the Town. The Town hereby further irrevocably covenants and agrees with every holder of the Series 1981 Bonds issued under the provisions of this Ordinance, that so long as any of said bonds remain outstanding: (a) It will continue to operate and manage the water system in an efficient and economical manner and keep and maintain separate accounts of the receipts and expenses thereof in such manner that the revenue thereof, payable into the Bond Fund created by this Ordinance, may at all times be readily and accurately determined. (b) The Town will not furnish any free service for the water system, except_ for water service for municipally owned facilities. 22 - (c) It will not sell or alienate any of the property constituting any part or all of the water system in any manner or to any extent as might reduce the security provided for the payment of the bonds out of the Bond Fund, but the Town may sell any portion of such property which shall have been replaced by other similar property of at least equal value, or which shall cease to be necessary for the efficient operation of the water system; provided, however, that in the event of any sale or sales, as aforesaid, where the aggregate consideration exceeds the sum of $10,000, such consideration shall be paid into the Bond Fund and shall be used for the purposes of said Bond Fund. (d) It will promptly render bills for water service furnished, use all legal means to assure prompt payment thereof and shall discontinue all water service to any user who shall become delinquent in the payment of such charges until the delinquency and all interest, costs and expenses incident thereto have been paid in full. (e) At least once each year it will furnish the original purchaser of the bonds a statement of the receipts of and the disbursements for the water system for the fiscal year immediately preceding each statement. (f) It will carry workmen's compensation, public liability and such other forms of insurance on insurable water- works property as would ordinarily be carried by utilities having similar properties of equal value, such insurance being in such amounts as will protect the water system and its opera- tion. Section 16. Additional Bonds. No additional bonds shall be issued payable from the income and revenue of the water system and having a lien upon such net income and revenue which is superior to the lien of the Series 1981 Bonds. However, nothing contained in this Ordinance shall be construed in such manner as to prevent the issuance by the Town of additional bonds payable from the net income and revenue derived from the operation of the water system and constituting - 23 - a lien upon said revenues equal to or on a parity with the lien of the Series 1981 Bonds, provided the net income of the water system, (net revenue is defined as the gross revenue of the water system less the amount necessary for the operation and maintenance of the water system) for the fiscal year preceding the year in which such parity bonds are to be issued was 120 per cent of the average annual debt service requirements on all the Series 1981 Bonds which are then outstanding and the additional bonds to be issued. If new fees or rates have been effected at any time prior to the date of issuance of the additional parity lien bonds, net revenues for the last fiscal year may be adjusted by applying the new rates to the connections being serviced. Also, for purposes of this test, the net revenues of the water system may be adjusted by including the additional revenues to be realized from the area to be served by the facilities to be constructed, pro- vided that the debt service of the proposed parity lien bonds is funded until the date of completion of the project to be con- structed with the parity lien bond proceeds. In addition, the Town shall be in compliance with all of the provisions of this Ordinance relating to the maintenance of the Bond Reserve Account. However, the limitations relating to the issuance of additional parity lien bonds, may be waived or modified by the written consent of bondholders representing 75 per cent of the then outstanding principal amount. Such restriction concerning the issuance of parity bonds shall not apply to the issuance by the Town of additional bonds or other obligations necessary for the completion of the project, in accordance with the present plans and specifications heretofore approved by the Board of Trustees. Nothing herein shall prevent the Town from issuing bonds having a junior or subordinate lien on the net income and revenue of the water system. Section 17. Defeasance. When all principal, interest and prior redemption premiums, if any, in connection with the bonds hereby authorized have been duly paid, the pledge and lien - 24 - and all obligations hereunder shall thereby be discharged and the bonds shall no longer be deemed to be outstanding within the meaning of this ordinance. There shall be deemed to be such due payment when the Town has placed in escrow and in trust with a commercial bank located within or without the State of Colorado, and exercising trust powers, an amount sufficient (including the known minimum yield from Federal Securities in which such amount may be initially invested) to meet all requirements of principal, interest and prior redemption premium, if any, as the same become due to their final maturities or upon designated prior redemption dates. The Federal Securities shall become due at or prior to the respective times on which the proceeds thereof shall be needed, in accordance with a schedule established and agreed upon between the Town and such bank at the time of the creation of the escrow, or the Federal Securities shall be subject to redemption at the option of the holders thereof to assure such availability as so needed to meet such schedule. The term "Federal Securities" within the meaning of this section shall include only direct obligations of, or obligations the principal and interest of which are unconditionally guaranteed by, the United States of America. Section 18. Payment of Costs of Issuing Bonds. All costs and expenses incurred in connection with the issuance and payment of the Series 1981 Bonds shall be paid exclusively from the proceeds of said bonds or from the net income and revenue of the water system, and in no event shall any of such costs or expenses or the principal of or interest on said bonds be paid out of or charged to the general fund or tax levies of the Town. Section 19. Temporary Borrowing. The Board of Trustees is hereby authorized to borrow such amount as may be necessary to pay the cost of such extensions and improvements until such time as the bonds authorized by this ordinance are issued and sold to the purchaser. The amount of such borrowing shall not, how- ever, exceed the amount of $400,000, and the temporary borrowing shall be repaid immediately from the proceeds of this issue of bonds. The interest rate on such borrowing shall be determined by the Board of Trustees. - 25 - Section 20. Repealer. All ordinances, or parts thereof, in conflict with this Ordinance are hereby repealed. Section 21. Ordinance Irrepealable. After the Series 1981 Bonds, have been issued, this Ordinance shall be irrepealable until said bonds and the interest thereon shall be fully paid, satisfied and discharged in the manner herein provided. Section 22. Severability. That if any one or more sections or provisions of this Ordinance be judicially determined invalid or unenforceable, such determination shall not affect, impair or invalidate the remaining provisions hereof, the in- tention being that the various provisions hereof are severable. Section 23. Emergency Provision. By reason of the fact that the Town is not supplied with adequate water facilities, and it is necessary to issue revenue bonds to pay part of the cost of the acquisition of water rights, which costs have become due and will hereafter become due and payable, it is hereby declared that an emergency exists, that this Ordinance is necessary for the preservation of the public peace, health and safety, and that it shall take effect upon adoption and compliance with the provisions of Section 31-16-104, Colorado Revised Statutes 1973, as amended. Section 24. Recording and Authentication. This Ordi- nance shall be recorded in a book kept for that purpose, shall be authenticated by the signatures of the Mayor and Town Clerk, and shall be published in accordance with law. ADOPTED AND APPROVED This aq 3 day of Ci , 19 81 . ( S E A L) �. � iX i f KU.'1.C,& G Mayor ATTEST: Town Clerk -Treasurer - 26 - It was then mov c$ by Trustee iwt ✓ and seconded by Trustee Lts rti that all rules of this Board which, unless suspended, might prevent the final passage and adoption of this Ordinance at this meeting be and the same are hereby suspended. The question being upon the adoption of said motion and the suspension of the rules, the roll was called with the following result: Those v(.ting AYE: Tz itees: Jim Christensen Frank Cimino Roger Trujillo Jeff Kincade Sherman Lyon Those voting NAY: Trustees having voted in favor of said motion, the presiding officer declared the motion carried and the rules suspended. Trustee 2�t C �,ti,/ticp then moved that said Ordi- nance be finally passed and adopted as read. Trustee seconded the motion. The question being upon the final passage and adoption of said Ordinance, the roll was called with the following result: Those voting AYE: Trustees: Jim Christensen Frank Cimino Roger Trujillo Jeff Kincade Sherman Lyon Those voting NAY: & The presiding officer thereupon declared that at least three -fourths of all the members of the Board of Trustees having voted in favor thereof, the motion was carried and the Ordinance is finally passed and adopted as an emergency ordinance. - 27 - On motion duly adopted, it was ordered that said Or- dinance, after its approval by the Mayor and attestation by the Town Clerk -Treasurer, be published in thece,2 t a newspaper of general circulation in the Town, and be recorded in a book kept for that purpose. After consideration of other business to come before the Board, the meeting was. adjourned. ( S E A L Mayor ATTEST: Town Clerk -Treasurer - 28 - r I STATE OF COLORADO ) COUNTY OF WELD ) ss. ) TOWN OF FIRESTONE ) I, Trudence L. Peterson, Town Clerk -Treasurer of the Town of Firestone, Colorado, do hereby certify that the foregoing pages numbered 2 to 27, inclusive, constitute a full and correct copy of the record of the proceedings of the Board of Trustees of the Tpwn, taken at a regular meeting thereof, held on Tuesday, the day of February, 1981, at the Town Hall, in Firestone, Colorado, so far as said minutes relate to an Ordinance concerning the issuance of Water Revenue Bonds, Series 1981, of the Town; that said Ordinance has been duly authenticated. by the signatures of the presiding officer of the Board of Trustees and myself, as Town Clerk of the Town, sealed with the corporate seal of the Town and the Ordinance recorded in the Book of Ordinances kept for that purpose in my office; that said Ordinance was, on the `� day of �2 , 1981, published in full in , a newspaper of general circulation in the Town of Firestone. IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed the seal of the Town, this /�i � day of 1981. Town Clerk -Treasurer - 29 -