HomeMy WebLinkAbout82-1-2192231
ORDINANCE NO. 82-1- 2192
AN ORDINANCE OF THE CITY OF PADUCAH, KENTUCKY, AUTHORIZING AND PROVIDING FOR THE ISSUANCE
AND SALE OF FOURTEEN MILLION FIVE HUNDRED THIRTY THOUSAND DOLLARS ($14,530,000) PRINCIPAL AMOUNT OF
CITY OF PADUCAH WATER WORKS REVENUE BONDS, SERIES 1982, DATED DECEMBER 15, 1982, UNDER THE
PROVISIONS OF SECTIONS 58.010 THROUGH 58.140 OF THE KENTUCKY REVISED: STATUTES; FOR THE PURPOSE OF
DEFRAYING THE'COST OF THE CONSTRUCTION OF EXTENSIONS, -ADDITIONS, AND IMPROVEMENTS TO THE EXISTING
MUNICIPAL WATER WORKS SYSTEM; PROVIDING FOR SAID BONDS TO RANK ON A PARITY WITH THE OUTSTANDING
$1,280,000 OF CITY OF PADUCAH WATER WORKS REFUNDING REVENUE BONDS, SERIES OF 1978; SETTING FORTH THI
TERMS AND CONDITIONS UPON WHICH SAID $14,530,000 OF BONDS (SERIES 1982) ARE TO BE AND MAY BE ISSUED
AND OUTSTANDING; PROVIDING FOR THE COLLECTION, SEGREGATION, AND DISTRIBUTION OF THE REVENUES OF SAII
WATER WORKS SYSTEM; AND PROVIDING FOR AN ADVERTISED PUBLIC COMPETITIVE SALE OF SAID SERIES 1982
BONDS; AND PROVIDING FOR THE IMMEDIATE ADVERTISING, PUBLIC SALE, AND ISSUANCE OF FIFTEEN MILLION
EIGHT HUNDRED SIXTY THOUSAND DOLLARS ($15,860,000) PRINCIPAL AMOUNT OF CITY -OF PADUCAH WATER WORKS
REVENUE BOND ANTICIPATION NOTES, SERIES 1982, DATED JANUARY 25, 1982, TO PROVIDE INTERIM FINANCING.
WHEREAS, the City of Paducah, a second class city, of McCracken County, Kentucky, owns an(
operates the existing municipal water works system (the "System") serving the City, pursuant to,
Sections 58.110 through 58.140 of the Kentucky Revised Statutes, and in that connection the City
presently has outstanding $1,280,.000 of Bonds designated as City of Paducah Water Works Refunding
Revenue .Bonds, Series of 1978,.dated April 1, 1978 (the "Bonds of 1978° or the "Prior Bonds")
scheduled to mature serially on July 1 in each of the respective years, 1989 through 2002,
inclusive, and in 2008, and
WHEREAS, said Prior Bonds, by their terms are payable from and secured by a first pledge
of the revenues derived from the operation of the System, and
WHEREAS, in order to finance the cost (not otherwise provided) of a construction project
consisting of the construction of extensions, additions, and improvements (the "Construction
Project" or the "Project") to the System, and pursuant to rights reserved in the 1978 Bond
Ordinance, it is deemed advisable and for the best interest of the City that the Board of
Commissioners now authorize the issuance by the City of $14;530,000 of Bonds, Series 1982 (the
'°Current Bonds"), ranking on a parity with said Prior Bonds, in compliance with the conditions
prescribed in the 1978 Bond Ordinance for the issuance of bonds ranking on a parity with the Bonds
of 1978, which conditions are found herein to currently exist, and
WHEREAS, the proceeds of said Current Bonds will be supplemented by (a) a Federal (EDA)
grant in the amount of -approximately $1,000,000 (of which approximately $600,000 has been received),
(b -)"the sum of $500,000, furnished directly by the City, and (c) anticipated income from the
investment of the proceeds of Current Bonds and/or -Notes pending disbursement of such proceeds, to
provide the total cost of such construction,. and
WHEREAS, it is deemed necessary and advisable that the City issue $15,860,000 of its Water
Works Revenue Bond Anticipation Notes to provide interim financing of such Construction Project in
anticipation of the issuance of the Current Bonds.
NOW, THEREFORE, THE BOARD OF COMMISSIONERS OF THE CITY OF-PADUCAH, KENTUCKY, DOES ORDAIN
AS FOLLOWS:
SECTION 1. DEFINITIONS.
As used in this Ordinance, unless the context requires otherwise:
"BOARD -OF COMMISSIONERS" means the Board of Commissioners of the -City of Paducah,
Kentucky, or such other body as shall be the governing body of said City under the laws of Kentucky
at any given time.
"BOND. COUNSEL",refers to the -firm of Rubin $ Hays, Municipal Bond Attorneys, Suite 300,
Fireside Building, 209 South Fifth Street, Louisville, Kentucky 40202, which firm has prepared the
legal proceedings for the issuance of the Current Bonds, -has furnished all of the customary services
of Bond Counsel in this financing and will continue to furnish such services until the Current Bonds
are delivered and paid for, including the rendering of,the final. approving Legal Opinions with
regard to the legality of the Current Bonds, the Notes, ifissued, and the'tax exemption of the
interest thereon.
"BONDS OF 1978" or "PRIOR BONDS" refers to the outstanding $1,280,000 of Bonds of the
original authorized $1,280,000 of City of Paducah Water Works Refunding Revenue Bonds, Series 1978,
dated April 1, 1978.
232
"BOND ORDINANCE OF 197811, 111978 BOND ORDINANCE" or "PRIOR BOND ORDINANCE" refers to the
rdinance authorizing the Bonds of 1978, which Ordinance was enacted by the Board of Commissioners
of the City of Paducah on April 5, 1978.
"CERTIFIED PUBLIC ACCOUNTANTS" refers to an independent Certified Public Accountant or
firm of Certified Public -Accountants, duly licensed in Kentucky, and may include Accountant(s)
regularly employed to audit the financial affairs of the System and/or of other City financial
matters. Until otherwise directed by the governing body of the City, such term shall be deemed to
refer to the firm of Schuette & Taylor, 626 Kentucky Avenue, Paducah, Kentucky 42001.
"CITY" refers to the City of Paducah, Kentucky.
"CODE" or "INTERNAL REVENUE CODE" refers to the United States Internal Revenue Code of
1954, as' -amended.
"CONSTRUCTION PROJECT" or "CURRENT CONSTRUCTION PROJECT" or "PROJECT" refers to the
proposed extensions, additions, and improvements to the municipal water works System of the City,
the cost (not otherwise provided) of which Construction. Project is being financed by the Current
Bonds
"CURRENT BONDS" refers to the $14,530,000 of City of Paducah Water Works Revenue Bonds,
Series 1982, dated December 15'.. 1.982, authorized herein. -
"CURRENT BOND ORDINANCE" refers to this Ordinance authorizing the Current Bonds.
"DEBT SERVICE RESERVE FOR NOTES" or "NOTE RESERVE*FUND" refers to the "Debt Service
Reserve For Notes" created as part of the Note and Coupon Redemption Fund in Section 22 of (PART
TWO) of this Ordinance.
"DEPOSITORY BANK" or "CONSTRUCTION ACCOUNT DEPOSITORY" refers to The -Peoples First
National Bank 4 Trust Co., Paducah, Kentucky, which is the Bank in which the Construction Account
created herein will be deposited and maintained.
"ENGINEER" or "INDEPENDENT CONSULTING ENGINEER" refers to an Independent Consulting
Engineer or firm of Engineers of excellent national reputation or of recognized excellent reputation
in Kentucky in the field of water works engineering. Until otherwise directed by the Governing Body
of the City, such term shall be deemed to refer to -the firm of G. Reynolds Watkins Consulting
Engineers, Inc., 3399 Tates Creek Road, Lexington, Kentucky 40502, or a member of said firm, or its
successor or successors.
"ELIGIBLE 15% OF OUTSTANDING BONDS" refers to an amount equal to 15% of the lesser of (a)
the'face amounts (par) of the original authorized issues or Series, or (b) the net proceeds thereof
if originally sold at less than 98%'o -f par, of whatever bonds are outstanding against and payable
from the revenues of the System to the extent that such percentage of such bonds is, in the opinion
of Bond Counsel, exempt from restriction as to investment yield under Section -103 of the Internal
Revenue Code as amended, and the applicable arbitrage regulations thereunder—
"FISCAL AGENT" refers to the firm of J.J.B.- Hilliard, W.L. Lyons, Inc.', 545 South Third
Street, -Louisville, Kentucky 40202.
"GOVERNING BODY" refers to the following.:
-(a) To the -Board of Commissioners of -the City of Paducah, Kentucky, or such other body as
shall be the governing body of the City under the laws of Kentucky at any given time,
with reference to:
(1) the issuance of parity bonds or other bonds;
(2) the establishment and adjustment- or revision of rates and charges for water
service; -
(3) the reserved right of the City to amend ordinances previously adopted insofar as
same may relate to the terms of office .of members of the Commissioners of Water
Works, the manner of electing or appointing the same, and the number thereof.-
(4)
hereof;
(4) the determination that the amounts to. be paid into the respective funds are
proper and sufficient for the respective purposes thereof, as set out in Section
14 of the Prior Bond Ordinance; and
(5) the responsibility of having each municipal officer having custody of any moneys
administered under the provisions of this Ordinance to be bonded in accordance
with Section 15 of the Prior Bond Ordinance.
(b) To the "Commissioners of -Water Works", established in the Ordinance dated August 6,
1946, with reference to:
(1) general management, control, and operation of the Water Works (other than as
specifically reserved to the City's Board of Commissioners);
233
(2) the adoption of a budget for current expenses, as set out in Section 16 of the
Prior Bond Ordinance;
(3) the responsibility of filing the reports as to "coverage" required by Section 17
of the Prior Bond Ordinance;
(4) -having jurisdiction to place and purchase insurance on the System,, as set_out in
Section 21 of the Prior Bond Ordinance;
(5) the furnishing of the records, audits, reports-, and arrangements -for engineering
inspection, referred to in Section 22 of the prior Bond Ordinance.
"INVESTMENTS" refers to investments of funds on deposit in the various funds created
herein, and includes' (a)' -direct obligations of or obligations guaranteed by the United States of
America, or any of its agencies, including bookkeeping entries; and (b) interest-bearing time
deposits or Certificates of Deposit issued by FDIC Banks, fully secured, to the extent of the amount
in excess of -the amount insured by the Federal Deposit Insurance Corporation, by a pledge of direct
obligations or obligations guaranteed by the United States .of America, having a fair market value,
exclusive of accrued interest, equal to not less than 100% of such excess amount.
"NET ANNUAL DEBT SERVICE REQUIREMENTS" refers to gross annual principal and interest
requirements of all Outstanding Bond's, adjusted for projected net annual cash flow (positive or
negative) of the Invested Sinking Fund created in Section 13B of the 1978 Bond Ordinance.
14NOTE AND COUPON REDEMPTION FUND" refers to the 1°City of Paducah Water Works Bond
Anticipation Note and Coupon Redemption Fund" created in Section 21 of (PART TWO) of this Ordinance.
1°NOTES" refers to the $15,860,000 of City of Paducah Water Works Revenue Bond Anticipation
Notes, Series 1982, dated January 25, 1982, authorized'in'PART TWO of this Ordinance.
"OUTSTANDING BONDS1° refers to the outstanding Current Bonds and the Outstanding Prior
Bonds and does not refer to any bonds '°defeased" as provided in Section 15 hereof.
"OUTSTANDING NOTES" refers to the outstanding Notes authorized in PART TWO of this
Ordinance, and does not refer to any Notes "defeasedt° as provided in Section 15 hereof.
"PARITY BONDS" means bonds issued in the future, which bonds issued in the future will,
pursuant to the provisions of the Prior Bond Ordinance, and this Current Bond Ordinance, rank on a
basis of parity with the Current Bonds, and shall not be deemed to include, nor to prohibit the
issuance of, bonds ranking inferior in security to the Current Bonds.
"PAYEE BANK" refers to the Bank at which the Notes are payable and at which the Current
Bonds will be payable, which Bank is The Paducah Bank $ Trust Co., Paducah, Kentucky.
"PRIOR BOND ORDINANCE" refers to the 1978 Bond Ordinance.
"PRIOR DEPOSITORY" refers to the bank in which all of the Funds created in the Prior Bond
Ordinance are and will be deposited and maintained and at which the principal of and interest on the
Prior Bonds are and will be payable, which bank is the Citizens Bank & Trust Company, Paducah,
Kentucky.
"REQUIRED RESERVE" refers to an amount equal to not less than the maximum amount of
principal and interest requirements falling due in any twelve month period on all of the outstanding
Prior Bonds, Current Bonds, and any parity bonds, which Required Reserve is required to be
accumulated in the Sinking Fund Reserve of 1978, as set out in Section 13B of the Prior Bond
Ordinance, and in Section 9A hereof.
"REVENUE FUND" refers to the City of Paducah Water Works Revenue Fund, created in the
Prior Bond Ordinance for the benefit of the Prior Bonds, and which will continue to be maintained
for the benefit of all of the Prior Bonds, Current Bonds, and any future parity bonds.
"SINKING FUND" refers to the t9City of Paducah Water Works Bond and Interest Redemption
Fund", created in the Prior Bond Ordinance for the benefit of the Prior Bonds, and which will
continue to be maintained for the benefit of all of the Prior Bonds, Current Bonds, and any future
parity bonds.
"SINKING FUND RESERVE" refers to the Sinking Fund Reserve created as a part of the Sinki
Fund in the Prior Bond Ordinance, as adjusted in Section 9A hereof.
"SYSTEM" and "WATER WORKS SYSTEM" shall be used synonymously in this Ordinance and shall
be deemed to refer to the City of Paducah water works system, together with all future extensions,
additions, and improvements to said System.
PART ONE - AUTHORIZATION OF CURRENT BONDS
SECTION 2. CONSTRUCTION AWARD APPROVED; RATIFICATION OF PREVIOUS ACTION IN
COMMENCING CONSTRUCTION.
234
The Board of Commissioners hereby authorizes, approves, ratifies, and confirms its
previous action in (a) awarding the contracts for the construction of the Current Construction
Project to the lowest and best bidders, (b) entering into formal contracts with said bidders, and
(c) undertaking the construction of the Construction Project according to the plans and
specifications heretofore prepared for the City, all subject to the issuance of the Notes and the
Current Bonds authorized herein.
SECTION 3.. AUTHORIZATION OF BONDS.
For the purpose of defraying the costs (not otherwise provided) of the Current
Construction Project'there'are'hereby authorized to bepresentlyissued. and sold Fourteen Million
Five Hundred Thirty Thousand Dollars ($14,530,000) principal amount -of City of Paducah Water Works
Revenue Bonds, Series 1982,'dated and bearing interest from December. 15, 1982_, -payable semi-annually
on the first days of January and July in each year, except that the first interest coupon on'each
Bond shall represent interest from December 15, 1982; to July -1, 1983; all of said dates being
subject to change by future amended -ordinance depending on the decision of the Governing Body of the
City as to the time of issuance of the Current Bonds, as more particularly provided in Section 16
hereof. Said $14,530;000 of -Bonds -shall consist. -of two thousand, nine hundred six (2,906) Bonds of
the denomination of $5;_000 -each, numbered from l to 2,906, inclusive, shall bear interest at a
coupon rate of rates to be'fixed by supplemental Resolution as a result of the advertised sale of
the Current Bonds, -and shall mature -serially and in numerical order on July first of the respective
years as set out below.
The numbering and maturities of said $14,530,000 of Current Bonds shall be as follows:
SECTION 4. PLACE OF PAYMENT; MANNER OF EXECUTION; AND PROVISION AS TO
PRIOR REDEMPTION.
Both principal of and interest on the Current Bonds shall be payable at the main office of
the Payee Bank, The Paducah Bank & Trust Co., Paducah, Kentucky, in such funds as are at that time
lawful moneys of the United States of America.
The Current Bonds shall be executed on behalf of the City with the duly authorized
reproduced facsimile signature of the Mayor of the City and the reproduced facsimile of its
corporate seal shall be imprinted thereon, and attested by the reproduced facsimile signature of the
City Clerk; each Bond shall be signed manually by one of said officials (part of the Bonds may be
signed manually by one of such officials and the remainder of the Bonds by the other); and the
interest coupons attached to said Bonds shall be executed with the -duly authorized reproduced
facsimile signatures of said Mayor and said City Clerk; and said officials, by the execution of
Principal
Maturities
of
Maturity -
Current
July 1
Bonds,
Numbering
1984
90,000
1-18
1985
105,00.0
19-39
1986
120,000
40-63
1987
140,000
64-91
1988
150,000
92-121
1989
-175,000
122-156
1990
190,000
157-194
1991
215,000
195-237
1992
240,000
238-285
1993
320,000
286-349
1994
355,000
350-420
1995
400,000
421-500
1996
450,000
501-590
1997
505,000
591-691
1998
555,000
692-802
1999
620,000
803-926
2000
695,000
927-1065
2001
785,000
1066-1222
2002
880,000
1223-1398
2003
1,005,000
1399-1599
2004
1,125,000
1600-1824
2005
1,260,000
1825-2076
2006
1,410,000
2077-2358
2007
1,580-,000
235'9-2674
2008
1,160,000
2675-2906
SECTION 4. PLACE OF PAYMENT; MANNER OF EXECUTION; AND PROVISION AS TO
PRIOR REDEMPTION.
Both principal of and interest on the Current Bonds shall be payable at the main office of
the Payee Bank, The Paducah Bank & Trust Co., Paducah, Kentucky, in such funds as are at that time
lawful moneys of the United States of America.
The Current Bonds shall be executed on behalf of the City with the duly authorized
reproduced facsimile signature of the Mayor of the City and the reproduced facsimile of its
corporate seal shall be imprinted thereon, and attested by the reproduced facsimile signature of the
City Clerk; each Bond shall be signed manually by one of said officials (part of the Bonds may be
signed manually by one of such officials and the remainder of the Bonds by the other); and the
interest coupons attached to said Bonds shall be executed with the -duly authorized reproduced
facsimile signatures of said Mayor and said City Clerk; and said officials, by the execution of
235
appropriate certifications, shall adopt as and for their own proper signatures, their respective
facsimile signatures on said Bonds and Coupons.
The Current Bonds and interest coupons shall be fully negotiable and shall pass merely by
delivery.
Current Bonds maturing on and after July 1, 1993, shall be subject to redemption by the
City prior to maturity, in whole or in part, in the inverse order of their maturities (less than all
of a single maturity to be selected by lot), on any interest payment date falling on or after
January 1, 1993, upon payment of face amount plus all accrued interest evidenced by interest coupons
maturing on and prior to the redemption date plus a redemption premium expressed in terms of a
percentage of the face amount of the Bonds -called for redemption as follows:
3% from January 1, 1993, through January 1, 1998;
2% if thereafter and on -o± before January 1, 2003; and
1% if thereafter and prior to final maturity.
In the event that any of said Bonds are called for redemption as aforesaid, notice thereof
identifying the Bonds to be redeemed shall be given by publication at least once not less than
thirty days prior to the redemption date in a newspaper of general circulation throughout Kentucky,
and in a periodical of general circulation among purchasers of bond issues published in New York,
New York.
All of said Bonds as to which the City reserves and exercises the right of redemption and
as to which notice as foresaid shall have been given, and for the retirement of which, upon the
terms aforesaid, funds are duly provided, will cease to bear interest on the redemption date.
Notice of such redemption may be waived with the written consent of the holder(s) of the bond(s) so
called for redemption.
SECTION S. REAFFIRMATION OF DECLARATION OF WATER WORKS SYSTEM
TO CONSTITUTE REVENUE PRODUCING PUBLIC PROJECT.
The previous action of the City (declared in the Prior Bond Ordinance) in declaring the
existing water works System of the City to constitute a revenue-producingpublic project or System
within the meaning of Sections 58.010 through 58.140 of the Kentucky Revised Statutes, is hereby
authorized, approved, ratified, and confirmed; and so long as any of the Prior Bonds, Current Bonds,
or any parity bonds shall remain outstanding, said System shall be owned, controlled, operated, and
maintained.on a revenue-producing basis, for the security and source of payment of the Prior Bonds,
Current Bonds, and any parity bonds, under the authority hereinbefore stated.
SECTION 6.. CURRENT BONDS PAYABLE OUT OF REVENUES ON A PARITY WITH PRIOR
BONDS.
All of the Current Bonds, with interest thereon, and any additional parity bonds that may
be issued and outstanding under the conditions and restrictions of the Prior Bond Ordinance and of
this Current Bond Ordinance, are to be issued in anticipation of the revenues to be derived from the
operation of said water works System, all as hereinafter more specifically provided, shall be
payable out of the Sinking Fund created in the Prior Bond Ordinance, on a parity basis with the
Prior Bonds, and shall be a valid claim of the holders thereof against said Sinking Fund and against
a sufficient portion of the gross revenues of the System pledged to said Fund.
SECTION 7. FORM OF BONDS.
The Current Bonds in the amount of $14,530,000, and coupons, shall be in substantially the
following form:
NO.
(FORM OF BONDS)
UNITED STATES OF AMERICA
COMMONWEALTH OF KENTUCKY
COUNTY OF..McCRACKEN
CITY OF PADUCAH
WATER WORKS REVENUE BOND
SERIES, 1982.
$5,000
KNOW ALL MEN BY THESE PRESENTS:
That the City of Paducah, in the County of McCracken, in the Commonwealth of Kentucky, for
value received, hereby promises to pay to the bearer hereof, solely from the special fund
hereinafter identified, the sum of
FIVE THOUSAND DOLLARS
on the first day of July, 19
and to pay interest on said sum from the date hereof at the rate of percent ( %) per
annum payable semi-annually on the first days of January and July in each year until paid, except
236
as the provisions hereinafter set forth with respect to prior redemption may be and become
applicable hereto, such interest as may accrue on and prior to maturity of this Bond to be paid upon
presentation and surrender of -the annexed interest coupons as the same severally mature, both
principal and interest being payable in lawful money of the United States of America at The Paducah
Bank & Trust Co., Paducah; Kentucky.
This Bond is one of a duly authorized series of bonds (said Bonds and -the appertaining
coupons being hereinafter collectively referred to as "the Current Bonds") in the principal amount
of Fourteen Million Five Hundred -Thirty Thousand Dollars ($14,.530,000), issued by said City pursuant
to an Ordinance duly enacted (the "Current Bond,Ordinance") under and in full compliance with Ahe
Constitution and Statutes of -the Commonwealth of Kentucky, and more specifically, Sections 58.010
through 58.140 of the Kentucky Revised Statutes, for the purpose of defraying the cost (not
otherwise provided) of constructing a construction project, consisting of extensions, additions, and
improvements to the municipal water works system (the tPSystem") of the City, as is more fully
identified in the Current Bond Ordinance..
This Bond. and all of the $14,530,000 of Current Bonds rank on a parity as to security and
source of payment with $1,280,000 of outstanding Water Works Refunding Revenue Bonds; Series of
1978, dated April 1, 1978 (the "Prior Bonds"), authorized by an Ordinance enacted by the Board of
Commissioners of said City on April 5, 1978 (the "Prior Bond Ordinance"). The Prior Bond Ordinance
provided and the Current BondOrdinancereaffirms that so long as any of the Prior Bonds, the
Current Bonds, and/or any additional bonds ranking on a parity therewith., are outstanding, -said
municipal water works System -shall be owned and operated as a revenue-producing public project or
System within the meaning of Sections 58..010 through 58.140 of the Kentucky Revised Statutes, for
the security of source of payment of any and all of such outstanding bonds.
It is provided in and by the Prior Bond Ordinance and in and by the Current Bond Ordinance
that additional bonds ranking on a parity with the Prior Bonds and with the Current Bonds, may be
issued and outstanding upon the conditions and restrictions (including the possible combination of
the Paducah water works system and the Paducah sewer system and the future issuance of parity bonds
to finance extensions, additions, and/or improvements to the then combined and consolidated system)
provided in the Prior Bond Ordinance and in the Current Bond Ordinance; and these Current Bonds,
together with such additional bonds ranking on a parity therewith as have been heretofore issued and
are now outstanding, viz., the $1,280,000 of outstanding Prior -Bonds, and as may be hereafter issued
and outstanding from time to time under the parity conditions and restrictions of the Prior Bond
Ordinance and the Current Bond Ordinance, are and will continue to be payable from and secured by a
first pledge of a,fixed portion of the gross income and revenues to be derived from the operation of
the System, which fixed portion of said gross income and revenues shall be sufficient to pay the
principal of and interest on all of said outstanding bonds as and when the same become due and
payable, and which shall be set aside as a special fund for that purpose and identified as the
"Paducah Water Works Revenue Bond and.Interest Redemption Fund" (the "Sinking Fund").
The City covenants that so long as any of the Prior Bonds, these Current Bonds, and/or any
additional parity bonds are outstanding, the System will be continuously owned and operated as a
revenue-producing undertaking, and that the City will fix, charge, and adjust from -time to time as
needed, such rates for the services and facilities of the System so- that the income and revenues
therefrom will be sufficient to pay all of the Prior Bonds, these Current Bonds, and any. additional
parity bonds, and the interest thereon, as the same become due, to pay the cost of operation and
maintenance of the System, and to provide for the depreciation thereof.
In and by the proceedings authorizing the Prior Bonds, the City has covenanted and agreed
that so long as any bonds are outstanding against the System, the management, control, and operation
of the System will continue to be vested in an independent commission known as the Commissioners of
Water Works, which shall not be abolished so long as any of such bonds are outstanding and unpaid.
These Current Bonds do not constitute an indebtedness of the City of Paducah, Kentucky,
within the meaning of any constitutional or statutory provisions or limitations, but are payable as
to both principal and interest solely out of the revenues of the System, as aforesaid.
Current Bonds falling due on and after July 1,, 1993, are subject to redemption by the City
prior to maturity, in whole or in part, in the inverse order of their maturities (less than all of a
single maturity to be selected by lot), on any interest payment date falling on or after January 1,
1993, on notice published at least one time not less than thirty days prior to the redemption date,
in (a) a newspaper of general circulation throughout Kentucky, and in (b) a periodical of general
circulation among purchasers of bond issues published in New York, New York, upon payment of face
237
amount plus all accrued interest evidenced by interest coupons maturing on and prior to the
redemption date, plus a redemption premium expressed in terms of a percentage of the face amount of
the Bonds called for redemption, as follows:
3% from January 1, 1993,'through January 1, 1998;
2% from July 1, 1998, through January 1, 2003; and
1% on July 1, 2003, or thereafter and prior to final maturity.
This Bond and the coupons appertaining hereto are fully negotiable and shall pass merely
by delivery.
This Bond is exempt from taxation in the Commonwealth of Kentucky.
It is hereby certified, 'recited, and -,declared that all -acts, conditions, and things
required to exist, happen, and be performed precedent to and in the issuance of the Current Bonds,
have existed, have happened,. and have been.pe.rformed, in due time, form and manner as required by
law, that the amount of this Bond, together with all other obligations of said City, does not exceed
any limit prescribed by the Constitution or Statutes of the Commonwealth of Kentucky, and that a
sufficient portion of the gross income and revenues of the.System has been pledged to and will be
set aside into the Sinking Fund by the City for the prompt payment of the principal of and interest
on this Bond, all of the Current Bonds and all other bonds ranking on a parity therewith, including
those issued heretofore (the Prior Bonds) and those which may be issued hereafter.
IN WITNESS WHEREOF, the City of Paducah, in the Commonwealth of Kentucky, has caused this
Bond to be executed with the.duiy authorized reproduced facsimile signature'of its Mayor, and the
reproduced facsimile of its corporate seal to be imprinted hereon, attested by the reproduced
facsimile signature of its. City Clerk, and signed manually by one of said officials, and the coupons
hereto attached to be executed with the duly authorized reproduced facsimile signatures of said
Mayor and said City Clerk, and this Bond to be dated the 15th day of December, 1982.
CITY OF PADUCAH, KENTUCKY
By (Facsimile Signature)
Mayor
ATTEST:
(Facsimile Signature)
City Clerk
Manual Signature of Mayor or City Clerk
(Facsimile Seal of City)
(FORM OF COUPON)
COUPON NO.
Unless the Bond to which this coupon appertains is redeemable and accordingly shall have
been theretofore called for prior redemption and payment of the redemption price shall have been
duly made or provided for.
On the first day of , 19
The City of Paducah, Kentucky, will pay to the bearer the amount shown hereon out of its
"Paducah Water Works Revenue Bond and Interest Redemption Fund", at The Paducah Bank & Trust Co.,
Paducah, Kentucky, as provided in and.being interest then due on its $5,000 Water Works Revenue
Bond, Series 1982, dated December 15, 1982, numbered
CITY OF PADUCAH, KENTUCKY
By
Mayor
ATTEST:
City Clerk
SECTION 8. COMPLIANCE WITH PARITY REQUIREMENTS OF PRIOR BOND ORDINANCE.
In accordance with the requirements of Section 18 of the Prior'Bond Ordinance; it is
hereby certified, covenanted, and declared:
(a) That the Construction Project shall upon completion constitute a part of the System,
and the -revenues of the System, including the new facilities resulting from the completion'of the
238
Construction Project, are pledged as security for the Current Bonds, as well as for the Prior Bonds,
ranking on a parity.
(b) That prior to the issuance of the Current Bonds, there will have been procured and
filed with the City Clerk a statement, based on necessary investigation, by an independent, state
licensed Certified Public Accountant, to the'effect-that-the net revenues (defined in Subsection (1)
below) of the System for twelve (12) consecutive months out of the preceding eighteen (18) months
(subj'ecf to adjustments permitted under the Prior Bond -Ordinance, as specified in subsection (c) (2)
below) were equal to at least one and thirty hundredths (1.30) times the average Net Annual Debt
Service Requirements (as defined in Section 1 of the Prior Bond Ordinance and reaffirmed in Section
1 hereof) with respect to the Prior Bonds then outstanding and with respect to the Current Bonds.
(c) That the foregoing is subject to the following:
(1) For the purpose of the foregoing calculation, the term
"net revenues" was defined in the-Trior Bond Ordinance, as
"gross income and revenues of the System less operating
expenses, which shall include salaries, wages-.,. cost of
maintenance and„operation,_ cost of water purchased, if any,
materials and supplies, pumping costs, insurance, and all
other items that are=normally and regularly so included
undex recognized -accounting practices, exclusive of
allowances for depreciation".
(2)- As provided in Section 18(2,) of the Prior -Bond Ordinance,
the "net revenues" referred to above may be adjusted (as
evidenced by a certification -of an Independent Consulting
Engineer): to reflect: -
(i) Any revisions in the schedule of rates and charges
being imposed at the time of_the.issuance-of such proposed
parity bonds;
(ii) Any increase in such -net revenues projected by reason
of the revenues anticipated to be derived from the then
proposed construction project, the cost of which project is
to be -paid (in whole or in part) through the issuance of the
then proposed parity bonds;
(3) An appropriate Certification will be duly filed with the
City Clerk prior to the issuance of the Current Bonds,
certifying that contracts, secured by 100% performance
bonds, for the Construction Project, have been entered into
or will have been entered into prior to the issuance of the
Current Bonds.
Accordingly, based on the foregoing compliance with the requirements of the Prior Bond
Ordinance, it is hereby found and declared that the Current Bonds shall rank and be payable on a
parity with the outstanding Prior Bonds from the gross income and revenues of the water works
System.
SECTION -9. PROVISIONS OF PRIOR BOND ORDINANCE'INCORPORATED
HEREIN; ADJUSTMENTS IN REQUIRED DEPOSITS.
All proceedings preliminary to and in connection with the issuance of the Prior Bonds,
whereby provision was made for the receipt, custody, and application of the proceeds of the Prior
Bonds; for the operation of said System on a revenue-producing basis; for the segregation,
allocation, and custody of the revenues derived from the operation of the System; and for the
enforcement and payment of the Prior Bonds; and all other covenants for the benefit of bond -holders
set out in the Prior Bond Ordinance, except as amended in the succeeding paragraph of this Section
9, are hereby ratified, confirmed, and readopted, and shall continue in force and inure to the
security and benefit of the Current Bonds, as well as of the Prior Bonds, the same as if such
provisions and proceedings were set out here -in in full; provided that the amount of income and
revenues of the System to be transferred from the Revenue Fund and paid into the Sinking Fund during
each of the respective fiscal years, so long as any of the Prior Bonds and/or Current Bonds are
outstanding, shall be sufficient to pay when due, the interest upon and principal of all of the
Prior Bonds and all of the Current Bonds, to provide for the operation, maintenance, and
depreciation of the System, and to -increase the reserves of certain funds, as hereinafter specified.
In accordance with the requirements of Section 13B -of the Prior Bond Ordinance, it is
hereby recognized that the City is obligated, upon the issuance of the Current Bonds, ranking on a
parity with the Prior Bonds; to provide for additional payments into the Sinking Fund to provide for
the additional principal; interest, and reserve requirements. It is further hereby recognized that
239
in and by such Section of the Prior Bond Ordinance, provision was included for the accumulation in
the Reserve Fund within the Sinking Fund, of a reserve in an amount equal to not less than the
maximum Net Annual Debt Service Requirements (as defined in the Prior Bond Ordinance and repeated in
Section 1 hereof) required in any ensuing year for principal and interest requirements with respect
to the Prior Bonds (the "Required Reserve")--. It was further provided in the aforementioned Section
and is hereby reaffirmed that as and when additional -parity bonds are issued-, provision shall be
made for increasing the Required Reserve of the Reserve Fund to an,_aggregate amount -equal to the
maximum Net Annual Debt Service Requirements thereafter becoming due with respect to all Outstanding
Bonds-, including the Prior Bonds:,_ --_the Current Bonds, and any additional parity bonds,. in any
twelve-month period thereafter, which Reserve Fund shall be similarly maintained and restored when
necessary.
A. Deposits into Sinking.Fund.
Accordingly -,-based on -the -additional principal and :interest requirements of the Current
Bonds, it is hereby determined that -the amounts to be so set aside into the Sinking Fund, maintained
at the Prior Depository, on or before the -15th day of each month, shall be not less than amounts
constituting the total of the foll-owing:
(1) A sum equal to one-sixth (1/6) of the next -succeeding interest installment
to become due on all of the outstanding Prior Bonds, Current Bonds, and any
additional parity bonds.
(2) A, -sum equal to one -twelfth (1/12) of the principal amount of any Prior
Bonds, Current Bonds, and any additional parity bonds, maturing on the next
succeeding July first; plus
(3) An amount -equal to 1/120 of the additional amount necessary to accumulate
the then Required,Res-erve, in order to assure accumulation of the full
amount of the Required Reserve within a period of ten years from the date
of issuance of the Current Bonds.
In compliance with the requirements of the Prior Bond Ordinance, the City covenants that
monthly transfers shall continue until there.shall have been accumulated in the Sinking Fund an
amount sufficient to pay the interest on and principal of the Prior Bonds and Current Bonds as same
shall become due during the ensuing one-year period, and to accumulate in the Sinking Fund Reserve
an amount equal to the Required Reserve, i.e., the maximum Net Annual Debt'Service Requirements
thereafter become due with respect to said Prior Bonds and Current Bonds. Whenever the amount of
the Required Reserve shall have been accumulated and is being -maintained -in the Sinking Fund
Reserve, the monthly transfers into the Sinking Fund shall be reduced to the total of the following:
(a) A sum equal to one-sixth (.1/6)- of the next succeeding interest installment
to become due on all of the outstanding Prior Bonds, Current Bonds,. and any
additional parity bonds; plus
(b) A sum equal to one -twelfth (1/12) of the principal amount of any Prior
Bonds, Current Bonds, and any additional parity bonds, maturing on the next
succeeding July first,
but subject to resumption of the -additional amounts required by Section 9(a)(3) above, if, to the
extent of, and so long as necessary to restore the Required Reserve. -
As and when additional parity bonds are issued, provision shall be made for additional
payments into the Sinking Fund so as to pay the interest on and the principal of such additional
parity bonds as and when the same become due, and for increasing the Sinking Fund Reserve by similar
monthly amounts to an aggregate amount -equal to the adjusted Required -Reserve, viz., the maximum Net
Annual Debt Service Requirements with respect to all Outstanding Bonds, including the Prior Bonds,
the Current Bonds, and any additional parity bonds, in any period of twelve (12) months ending on
July 1 of any year, which -Sinking Fund Reserve shall be similarly maintained and restored when
necessary.
Whenever the amount in -the Sinking Fund Reserve is equal to or greater than the amount
required to prepay or redeem all outstanding Bonds, including the Prior Bonds, the Current Bonds,
and any parity bonds, such -Sinking Fund Reserve shall -be -used to retire all of such outstanding
Bonds in the following manner: (a) through call for redemption on the next permissible redemption
date; (b) to purchase such outstanding Bonds in the open market; or (c) to purchase such Bonds
through advertisement for and receipt of tenders of Bonds, at not exeeding the next applicable call
price, as may be determined by the Governing Body of the City; provided further, however., that said
Sinking Fund Reserve shall not be used to prepay bonds in advance of maturity unless -sufficient
amounts are on deposit in the Sinking Fund and"the Sinking -Fund Reserve to prepay and retire all of
such outstanding Bonds.
240
B. Current Bond Payment Account.
On or before the 20th days of June and December in each year, the Prior Depository shall
transfer from the Sinking Fund and from the Sinking -Fund Reserve (if necessary) a sum equal to the
interest or a sum equal to the principal and interest, as the case may be, becoming due and payable
on the Current Bonds at the Payee Bank, The Paducah Bank & Trust Co.,"Paducah, Kentucky, on the
ensuing July 1 or January "l, and deposit s-ame in an -account at the Payee Bank entitled, "City of
Paducah Water Works Bond and Interest Payment Account", hereby created, to be maintained at the
Payee Bank and held as a trust fund to b -e drawn upon to pay maturing coupons, or maturing Bonds and
coupons,, as the case may be, of the Current Bonds, upon presentation thereof on or after maturity
and upon surrender of maturing Bonds and/or Coupons.
C. Deposits into Depreciation Fund.
In Section 13C of the Prior Bond Ordinance, a fund was created which 'is known as the
"Paducah Water Works System Depreciation Fund" "(the "Dep"reciation Fund"), which iso required to be
deposited in the Prior Depository, and -into which Fund there was required to be deposited in each
month, an amount equal to ten percent (100) of the balance of the income and revenues in the Revenue
Fund, which deposits were to continue until there shall have been -'accumulated and is being
maintained in the Depreciation Fund the sum of at least $250,000-, which amount shall continue to be
maintained, and when necessary, restored to said amount. It was.further provided -in said Section
13C that as and when additional parity bonds are issued, provision shall be made for additional
payments.into the Depreciation Fund, until there shall have been accumulated in said Fund in
approximately equal monthly installments over a period of 120 months, an additional amount equal to
four percent (4%) of the Current Bonds and any additional outstanding -parity bonds. In accordance
therewith, it is hereby determined"that 41-o of the -Current Bonds authorized herein is the sum of
$581,200, which, when added to the sum of $250,000, currently required to be accumulated in the
Depreciation Fund, equals the total amount of $831,200.
Accordingly, it is determined that the additional amount to be deposited in the
Depreciation Fund in equal monthly installments over a period of 120 months, from the funds
remaining after making the deposits required to- be. made by Section 9A above, shall be $4,843 (in
addition to the aforesaid 10% monthly amounts), until such total amount of $831,200 shall have been
accumulated; provided, further that, in accordance with the Prior Bond Ordinance, as hereby
adjusted, based upon the recommendation of the Independent Consulting Engineers, if and whenever the
amount accumulated in the Depreciation Fund shall equal either
(a) an amount equivalent to 10% of the total amount of bonds outstanding
against and payable from the revenues - of the System; or
(b) thesum of $831,200, whichever is greater_,
deposits into the_ Depreciation Fund may, thereafter, at the option of the Governing Body of the
City, be discontinued; provided, however, that if at the time of ,.the issuance of such bonds, the
Independent Consulting Engineers then employed by the City shall recommend in writing to the
Governing Body, the accumulation of a larger amount in the Depreciation Fund than the amount -
specified in either (a) or (b) above, then such deposits shall continue until such larger amount has
been so accumulated.
All other provisions contained in the Prior Bond Ordinance with reference tothe
application of the proceeds of the Depreciation Fund, the deposit,- security, and investment thereof,
and all other related provisions, are hereby readopted,'ratified,--and confirmed, except to the
extent amended herein.-
-
D. Deposits into Operation and Maintenance Fund. =
Itis"further recognized that in and by Section 13D of the Prior Bond Ordinance a fund was
created which is known as the "Paducah Water Works System Operation and Maintenance Fund" (the
"Operation and Maintenance Fund").0 into'whith therewasrequired to be deposited -in-each month,
after the transfers of the amounts required to be transferred by Sections 9A and 9B above, such
amounts as are required to pay, as they accrue, the proper and necessary costs of -operating,
maintaining, and insuring the System, as set out in the "'Current Expensest4 contained in the Annual
Budget; and all of the provisions of said Section 131 of the Prior Bond Ordinance"are hereby
readopted, ratified, and confirmed.
E. Surplus Funds.
It is hereby .further recognized that it was provided -.in -Section 13E of the Prior Bond
Ordinance that if, at the end of any fiscal year, after making the 'payments required by the
foregoing, there shall remain a balance in said Revenue Fund in excess of the amount required to be
241
transferred during the ensuing year, such balance within sixty (60) days after the end of such
fiscal year, may, at the direction of the Governing Body of the City, be used as follows, in the
order specified:
(1) To retire or redeem outstanding Prior Bonds and/or Current Bonds in inverse
order of maturities,. to purchase Bonds in..the open market, or_to purchase
Bonds through advertisement for and -receipt of tenders of Bonds, at not
_exceeding the next applicable call price, as may be determined by the
governing body of the City;
(2) To transfer additional amounts to the Sinking Fund Reserve;
(3) To transfer additional amounts to the Depreciation Fund;
(4) To transfer additional amounts to the Operation and Maintenance Fund;
(5) To pay principal and interest.requirements of any outstanding junior and
subordinate obligations against the System.
(6), Provided further that after the following shall have been accumulated and
are being maintained_:
(a) the Required Reserve (Sinking Fund Reserve);
(b) the amount required to be accumulated in the Depreciation Fund, as
specified in Section 13(.1) and (2) of the Prior Bond Ordinance, and as
reaffirmed in Section 9B above;
(c) an amount equal to one month's average requirements of the Operation
and Maintenance Fund; and
(d) an amount in the Sinking Fund (e.xclusive.of the Required.Reserve)
equal to the Net Annual Debt Service Reserve Requirements for.the
ensuing year,
any surplus in the Revenue Fund then remaining, may, at the direction of the Governing Body, be
transferred and used for -any lawful purpose of the City.
SECTION 10. PROVISION PERMITTING ADDITIONAL PARITY BONDS.
The Current Bonds shall not be entitled to priority one over the other in the application
of the income and revenues -of the System, regardless of the time or times of their issuance, it
being the intention that there shall be no priority -among the Current Bonds, regardless of the fact
that they may be actually issued and.delivered.at different times, and provided further that the
lien and security of and for any bonds or obligations hereafter issued that are payable from the
income and revenues of the System shall, except as set out herein, be subject to the priority of the
Prior Bonds and the Current Bonds as may from time to time be outstanding; provided the City has in
said Prior Bond Ordinance reserved the right and privilege, and does hereby reserve the right and
privilege, of issuing additional -Bonds from time to time payable from the income -and revenues of the
System ranking on a parity with the Prior Bonds and with the Current Bonds, but only under the
conditions specified in Section 18 of the Prior Bond Ordinance, which conditions are hereinafter
repeated, taking into account the issuance of the.Current Bonds, as follows:
The City reserves the right to add new water works facilities, and/or related auxiliary
facilities, and/or to finance future extension, additions, and/or improvements to the System by the
issuance of one or more additional series of bonds to be secured by a parity lien on and ratably
payable from, the revenues of.the System, provided in each instance that:
(a) The facility or facilities to be constructed from the proceeds of the
additional parity bonds is or are made a part of the System and its or
their revenues are pledged as additional security for the additional parity
bonds and the outstanding Prior Bonds and Current Bonds_.
(b) There shall have been procured and filed with the City_Clerk a statement by
a Certified Public Accountant, as defined herein, reciting the opinion
based upon necessary investigation that the net revenues of the System for
12 consecutive months of the preceding 18 months (with adjustments as
hereinafter provided) were equal to at least one and thirty hundredths
(1.30) times the average Net Annual Debt Service Requirements (as defined
in Section 1 of the Prior Bond Ordinance and reaffirmed in -Section 1
hereof) of the Prior Bonds, the Current Bonds, and any additional parity
bonds including the bonds then proposed to be issued.
"Net revenues" as herein used are defined as gross income and revenues less
operating expenses, which shall include salaries, wages, cost of
maintenance and -operation, cost of water" purchased, if any, materials and
supplies, pumping costs, insurance, and all other items that are normally
and regularly so included under recognized accounting practices, exclusive
of allowances for depreciation.
242
1°Gross income and revenues' shall include investment income, connection
fees, disconnection fees, and all other items of income which have been
established as 'treasonably anticipated annual income of the System", based
upon a certification of Independent Consulting Engineers and/or Certified
Public Accountants, as defined herein.
"Operating expenses" shall include only _those items of costs of maintenance
and operation which are "reasonably -anticipated annual operation and
maintenance expense of the System", and shall exclude any unusual items of
operation and maintenance expense which are of a generally non-recurring
nature, according to the certification of Independent..Consulting Engineers
and/or of Certified Public Accountants, as defined herein.
Such "net revenues" may be adjusted for'the purpose of the foregoing
computations to reflect (i): any revisions -in the schedule of rates or -
charges being imposed at the time of the issuance of any such additional
parity-bonds,,and also to reflect (ii) any increase in such.net revenues
projected by reason of the revenues anticipated -to be derived from the
extensions, additions, and/or improvements to the System or any separately
acquired -.(or to be acquired) water works system or.facilities being
financed (in whole or in part) by such additional parity,_bonds; provided
such latter adjustment shall be made only if contracts (secured by 100%
performance bond) for -the immediate acquisition.. and/or construction of such
extensions, additions, and/or improvements or contracts for the acquisition
of an existing waterworks system or existing water works facilitieshave
been or wi11_have--been entered into priorto the issuance.of such
additional parity bonds. All of such adjustments shall be,_based upon the
written certification of an Independent Consulting Engineer, as defined
--herein....,
(c) The interest payment dates for all such additional parity bonds shall be
semi-annually on January 1 and July l.of each -year, and the principal
maturities thereof shall.be oh -July 1 of the year in which any such
principal is scheduled to become due. -
(d) The City hereby.readopts,-ratifies, and confirms the provisions of Section.
18(3) of the Prior Bond Ordinance, in which the City reserved the right to
issue parity bonds to refund.or-refinance outstanding bonds, provided such
right shall henceforth -apply to the .refunding or refinancing of any part or
all of the Prior Bonds and of the Current Bonds.
(e) The._City readopts, ratifies,:and confirms the provisions of Section 18(4)
of the Prior Bond Ordinance, in which the City (i) reserved the right to
combine and consolidate the Water Works System of the City with the Sewer
System of the City into a single.combined_and consolidated
revenue-producing project or system (the "Consolidated System"), (ii) to
issue parity bonds payable from the revenues of the Consolidated System to
refund or refinance any of,the.bonds outstanding against the sewer system
of the City, and thereafter, (iii) to issue parity bonds to finance
additional water and/or sewer facilities to the Consolidated System.
(f) The City hereby readopts, ratifies, and confirms the provisions of Section
18(5) of the Prior Bond Ordinance, entitled, "Priority of Lien, Permissible
Disposition of Surplus or Obsolete Facilities.; Conditions".
SECTION 11. SALE OF -BONDS.
The Current Bonds shall be offered publicly for sale upon the basis of sealed, competitive
bids at such time as the Governing body shall designate by resolution or ordinance. The Mayor
and/or the City Clerk, in cooperation with the Fiscal Agent, may, as part of the arrangement for the
public sale of the Current Bonds, prepare and/or publish and distribute such Notice of Bond Sale,
Official Terms and Conditions of Sale of Bonds, Bid Form, and an Official Statement, in the
customary forms as may be necessary or desirable, without further action being taken by the
Governing Body,.
-SECTION 12. ACCEPTANCE OF BID FOR PURCHASE OF BONDS.
Upon the date and 'at the hour set forth for the opening and consideration of purchase
bids, as provided in the instruments hereinabove approved, the sealed bids received by the City
Clerk shall be publicly opened and publicly read by the presiding officer. If there shall be one ox
more bids that conform in all respects to the prescribed terms and conditions, the same shall be
compared and the Board of Commissioners agrees that if it accepts any bid, it will, on the same day
that such bids are received, accept the best of such bids, as measured in terms of the lowest
interest cost to the City, as calculated in the manner prescribed in the "Official Terms and
Conditions of Sale of Bonds".
If upon the basis of the foregoing, the Board of Commissioners shall accept a purchase big
for the Current Bonds, the Board of Commissioners shall adopt'a Resolution to that effect, supply
proper evidence.of such acceptance to the bidder,submitting the accepted purchase bid, and thereupon
arrangements shall be made for the Bonds to be printed in accordance therewith.
243
SECTION 13. DISPOSITION OF PROCEEDS OF BONDS;
INTERIM FINANCING IF NEEDED; REIMBURSEMENT
TO CITY FOR AMOUNTS ADVANCED.
A special account or fund of the City shall be and is hereby created and designated as the
"City of Paducah 1982 Water Works Project Construction Account" (the "Construction Account"). The
City covenants that it will promptly deposit into the Construction Account from time to time, when
and as when received-, the following amount:
(a) IF BOND ANTICIPATION NOTES ARE NOT ISSUED.
In the event that Bond Anticipation Notes, as contemplated and provided for in PART TWO of
this Ordinance, are not issued for any reason, then upon the sale and delivery of the Current Bonds,
such proceeds shall first be applied
'(1) to deposit the amount received from the purchaser representing accrued
interest from November 15, 1982, to the date of delivery, into the Sinking
Fund;
(2) topay any and.all expenses incident to the issuance, sale, and delivery of
the Current Bonds, including the fee of the Fiscal Agent, J. J. B.
Hilliard W..L. Lyons, Inc., 545 South Third Street, Louisville, Kentucky
40202, and the fee of W. David Denton, Special Counsel for the City -,and
Counsel for Paducah Water Works, according to the terms of the respective
Contracts of said Fiscal Agent and said City Attorney, plus the fee of the
rating agency and such other expenses as may be approved by the Governing
Body;
(3) to reimburse the City tothe extent that the City shall have found it
necessary to expend funds for various items of construction costs relating
to the.Current Construction Project prior to the_issuance, sale, and
delivery_of_the Bonds upon order(s)_of the Governing Body with the written
approval of the Engineers for the City. If and to the extent not
reimbursed at th-e time of delivery of the Bonds, such amounts may
subsequently be reimbursed, with the same written approvals, out of the
Construction Account created above; and
(4) to deposit the entire remaining proceeds of the Current Bonds into the
Construction Account.
(b) IF BOND ANTICIPATION NOTES ARE ISSUED.
In the event that Bond Anticipation Notes are issued for interim financing purposes, as
contemplated and as authorized in PART TWO of this Ordinance, then upon the subsequent issuance of
the Current Bonds,.the first proceeds.of the Current Bonds, to the extent necessary (together with
any other available funds) to pay the full amount of principal of all outstanding Bond Anticipation
Notes, all interest due thereon, plus any applicable redemption premium, shall be deposited into the
Note and Coupon Redemption Fund created in PART TWO of this Ordinance; and the,proceeds of the
Current Bonds are hereby specifically pledged, and a first lien is hereby created on such proceeds,
for that purpose. The remaining proceeds (if any) of the Current Bonds shall then be applied as
specified in the foregoing subsections .(a) (1), (2), (3), and (4) of this Section 13.
The amount deposited in said Construction Account, to the extent that same may cause the
aggregate deposits of the City in the Depository Bank to be in excess of the amount insured by the
FDIC, shall be collaterally secured by direct obligations of the United States of America, or any of
its agencies, having a market value equivalent to such deposit, or such Depository may invest for
the benefit of such account whatever portion of such Account is designated by the Mayor or Governing
Body, in such obligations, maturing_at such time or -times as to make such funds available when need
for construction purposes, or in Certificates of Deposit,. secured (to the extent of the amount in
excess of the amount insured by the FDIC) by_direct obligations of the United States Government, or
any of its agencies,.in accordance with KRS 66.4.80.
Investment income derived from investment of the Construction Account shall, as received,
be deposited in the Construction Account.
Said Depository shall be obligated to send written notice to the City of the need for
investment directions if and whenever funds in excess of $10,000 shall remain uninvested for a
period of more than ten days.
Payment from the Construction Account for costs in connection with the Current
Construction Project shall be made only upon vouchers approved by the Engineers having charge of
supervising such construction and countersigned by the Mayor, said Engineers to certify in each
instance that the voucher represents a sum actually earned by and due to the proposed payee under a
contract with said City for work performed and/or materials furnished in connection with the
Project, or represents a sum necessary to be expended for land and/or rights of way necessary to be
acquired by the City in connection with said Project, provided (a) all checks drawn against said
244
Construction Account shall be signed by at least two of the following officials: the Chairman, the
Vice Chairman, and the General Manager of the Commissioners of Water Works, and (b) each check shall)
be accompanied by such voucher before being honored by said Depository of the Construction Account.
The aforementioned officials are hereby -authorized to execute such checks from time to time, in the
necessary amounts, upon the -aforesaid -vouchers being executed by -the Engineers, countersigned as set
out above, and presented to them, or to their duly authorized agents or representatives, without -the
necessity of any further meetings, authorizations, ordinances, or motions by the Governing Body of
the City.
Each of such -checks shall be fully negotiable, and the aforesaid Bank shall be authorized
to honor and pay the same, if said voucher of the Engineers is attached thereto, provided said Bank
assumes the responsibility for the -propriety of all endorsements, or if all endorsements to it are
guaranteed by another responsible FDIC bank.
No expenditure shall be made from the Construction Account except for proper and
authorized expenses relating to the. construction of the Current.Construction Project in accordance
with the plans and specifications approved by the City, for which construction contracts have been
awarded by the City to insure the completion.of.the Project._
Pending disbursement for the authorized purposes,'the proceeds of the Current Bonds shall
be subject to a first and paramount lien and charge in favor of the holder or holders of the Current
Bonds, and for their future security.
After completion of the Current Construction Project, as certified by the Engineers, any
balance then remaining on deposit"in the Construction -Account shall, subject to any and all
applicable legal provisions and applicable arbitrage regulations necessary to.assure the exemption
of interest on the Current Bonds from Federal income taxation, upon orders of the Governing Body, be
used:
(i) to pay the principal on the Notes,
(ii) be transferred to the Sinking Fund Reserve in the
Sinking Fund, or
(iii) be t-ransferred to the.Depreciation Reserve,
but for no other purpose.
If the Engineers shall certify to the City that funds. are needed prior to delivery of the
Current Bonds to pay costs of the Project, the Mayor of the City shall be authorized on behalf of
the City to borrow sums from the Depository Bank and/or from other FDIC banks, and to execute notes
in evidence thereof, such notes to be secured (a) if no Bond Anticipation Notes are issued pursuant
to the provisions of PART TWO of this Current Bond Ordinance, by a pledge of the first proceeds of
the Current Bonds when delivered, or (b) if Bond Anticipation Notes are issued, by a pledge of the
proceeds of the Current Bonds remaining after the payment in full of the Bond Anticipation Notes.
The proceeds of any such notes authorized by this paragraph shall be deposited in the Construction
Account and disbursed in the manner set out in this Section.
SECTION 14. INVESTMENTS: LIMITATION ON INVESTMENT OF FUNDS.
The City covenants and certifies, in compliance with Federal arbitrage regulations, as
follows:
(a) The City certifies, on the basis of known facts and circumstances in existence on the
date of adoption of this Bond and Note Ordinance, that it is not expected that the proceeds of the
Current Bonds, the Notes, or the revenues of the System will be used in a manner which would cause
such Bonds or Notes to be arbitrage bonds. The City covenants to the purchasers and/or holders of
the Current Bonds and to the purchasers of the Notes that (1) the City will make no use of the
proceeds of said Bonds or Notes, or the revenues of the System, which, if such use had been
reasonably expected on the date of issue of such Bonds or Notes, would have caused such Bonds or
Notes to be "arbitrage bonds", and (2) that the City will comply with (i) all of the requirements of
Section 103(c) of the Internal Revenue Code, and (ii) all of the requirements of applicable Income
Tax Regulations thereunder, to whatever extent is necessary to assure that neither the Current Bonds
nor the Notes shall not be treated as arbitrage bonds.
(b) The City certifies, based on information furnished by the Engineers, on known facts
and reasonable expectations at this time, as follows:
245
(1) that the City has entered into contracts with the Engineers in connection with the
construction of the Project financed by the Current Bonds, and the fees to be paid to such Engineer
will exceed the lesser of either (i) the sum of $100,000, or (ii) an amount equal to 220 of the
total cost of the Project;
(2) that work on the Project has commenced or will commence within six months from the
date of issuance of the Current Bonds;
(3) that the construction of the Project will proceed thereafter to completion with due
diligence on the part of the City;
(4) that at least 95% of the spendable proceeds of the Current Bonds will be expended on
the costs of the Project within less than three years from the date of issuance of the Bonds;
(5) that it is anticipated that amounts on deposit in the Sinking Fund will be used
within thirteen (13) months from the date of deposit for the payment of debt service on the
Outstanding Bonds; and the Sinking Fund will annually be depleted through such application, for
current debt service requirements of the Bonds, except for an amount equal to not more than the
greater of (a) one -twelfth (1/12) of debt service requirements -of the Current Bonds for the then
ensuing year, or (b) one year's earnings on the Sinking Fund,
(6) that it is not anticipated that amounts will be accumulated in any reserve fund(s)
anticipated to be used for debt service on the Outstanding Bonds or Notes in excess of the Eligible
15% of Outstanding Bonds, as defined -herein..
(7) that it is not reasonably anticipated that amounts accumulated in the Depreciation
Fund will be used for payment of debt service on any Outstanding Bonds, .even though such Fund will
be so available if necessary to prevent a default in the payment of principal and -interest on such
Bonds; and
(8) that the City*has not been advised of any listing or contemplated listing by the
Internal Revenue Service determining that such certification with respect to its obligations may not
be relied on;
Accordingly it is anticipated that there will be no limitation on the permissible yield or
investments made from the proceeds of the Current Bonds or the Notes or from the revenues of the
System.
Prior to or at the time of delivery of the Current Bonds and the Notes, respectively, the
Mayor and the City Treasurer, who are jointly and severally charged with the responsibility for the
issuance of the Current Bonds and the Notes, are jointly and severally authorized to execute the
appropriate certification with reference to the matters referred to above, setting out all known an(
contemplated facts (apart from legal conclusions) concerning such anticipated construction,
expenditures, and investments, including the execution of necessary and/or desirable certifications
of the type contemplated by the "Proposed Arbitrage Regulations", as amended, in order to assure
that interest on the Current Bonds and on the Notes will be exempt from all Federal income taxes an(
that neither such Bonds nor Notes will be treated as "arbitrage bonds".
SECTION 15. DEFEASANCE OF BONDS AND/OR NOTES.
The City reserves the right, at any time, to cause the pledge of the revenues securing the
Prior Bonds, the Current Bonds, and all Parity Bonds, to be defeased and released by paying an
amount into an escrow fund sufficient, when invested (.or sufficient without such investment, as the
case may be) in cash and/or direct or fully guaranteed obligations of the United States Government,
to assure the availability in such escrow fund of anadequate amount (a) to call for -redemption and
to redeem and retire all of such outstanding bonds, both as to principal and as to interest, on the
next optional redemption date, including all costs and expenses in connection therewith, and to pay
all principal and interest falling due on such outstanding bonds to and on said date, or (b) to pay
all principal and interest requirements on such outstanding bonds as same mature, without redemptioi
in advance of maturity, the determination of whether to defease under (a) or (b) or both to be made
by the,Governing Body of the -City. Such investments shall have such maturities as to assure that
there will be sufficient funds for such purpose. If such defeasance is to be accomplished pursuant
to (a), the City shall take all steps necessary to publish notice of the redemption of such
outstanding bonds on the next applicable redemption date. Upon the proper amount of such
investments being placed in escrow and so secured, such revenue pledge shall -be automatically fully
defeased and released without any further action being necessary. Provided no such defeasement
shall be accomplished through the use of amounts on deposit in the Sinking Fund Reserve or through
246
any other funds if such defeasement would, in the opinion of recognized Bond Counsel, adversely
affect the exemption of interest on any of the outstanding bonds from Federal income taxation.
The City reserves the right to cause all security for the Notes to be similarly defeased
and released.
SECTION '16. 'REAFFIRMATION OF COVENANTS OF PRIOR;ORDINANCE;
COVENANT THAT CURRENT BONDS WILL BE ISSUED TO
RANK ON A PARITY WITH PRIOR BONDS.
In addition to the covenants heretofore made for the benefit of the holders of the Current
Bonds, the City hereby specifically reaffirms those provisions of the 1975 Bond Ordinance included
in Sections 17,.21, 22, 23_ and 26 thereof, entitled as follows:
"SECTION 17. RATES AND CHARGES FOR SERVICES OF THE SYSTEM."
"SECTION 21. INSURANCE."
°°SECTION 22. RECORDS, AUDITS AND REPORTS; MONTHLY REPORTS;
ENGINEERING INSPECTION." -
"SECTION 23. GENERAL COVENANTS."
except that said Section 17 of the Prior Bond Ordinance is hereby expanded to provide._
(a) that the City will maintain, and adjust if necessary, rates and charges for the use
of and services rendered by the System, sufficient to meet all of the requirements of
Sections 9 and 21 hereof, and to provide excess revenues in an amount sufficient to
prevent a default in the payment of the interest on the Bond Anticipation Notes; and
(b) that the City will enact whatever ordinance, if any, shall be required
to assure that the Current Bonds can be issued and sold in compliance with the parity
provisions of Section 18 of the Prior Bond Ordinance, thus assuring that the Current Bonds
will rank on a parity (as first lien bonds) with the Prior Bonds.
The City further acknowledges,that.under Section 17 of the Prior Bond Ordinance, the City
has covenanted (1) not to reduce water rates without establishing that the proposed reduction will
not reduce the required coverage below the amount of coverage (revenues,, as adjusted, equal to at
least 1.30 times average "Net Annual Debt Service Requirements", as defined herein) which would be
required in order to enable the City to issue additional parity bonds, and (2) to cause a report to
be filed with the Governing Body within four months after the end of each fiscal year by Certified
Public Accountants and/or Independent Consulting Engineers, setting forth what was the precise
percentage ("coverage1°) of the average Net Annual Debt Service Requirements falling due in any
fiscal year thereafter for principal of and interest on all of the then outstanding bonds payable
from the revenues of the System, produced or provided by the net revenues of the System in that
fiscal year, calculated in the manner specified in Section 18 of the Prior Bond Ordinance; and that
if and whenever such report so filed shall establish that such coverage of net revenues for such
year was less than 115% of the average Net Annual Debt Service Requirements thereafter, the City
shall increase the rates by an amount sufficient, in the opinion of such Engineers and/or
Accountants, to establish the existence of or immediate projection of, such minimum 115% coverage.
Such covenants are hereby specifically readopted and reaffirmed.
SECTION 17. DATE, AMOUNT, AND OTHER TERMS OF CURRENT BONDS
MAY BE REVISED BEFORE ISSUANCE.
The City reserves the right, prior to the issuance of the Current Bonds, to amend this
Ordinance as to the date, amount, maturities, redemption premiums, and other provisions of such
Current Bonds, consistent with market conditions and other pertinent factors at the time of such
issuance, provided no such changes shall be made if and to the extent that such changes, in the
opinion of the City's recognized Bond Counsel, would adversely affect the security for the issuance
of the outstanding Bond Anticipation Notes hereinafter authorized in PART II hereof.
PART TWO - AUTHORIZATION OF BOND ANTICIPATION NOTES
SECTION 18. AUTHORIZATION OF NOTES.
For the purpose of defraying the costs (not otherwise'provided) of the Construction
Project, in anticipation of the issuance, at a later date, of the Current Bonds, there are hereby
authorized to be presently issued and sold, pursuant to Sections 58.010 through 58.150 of the
Kentucky Revised Statutes, Fifteen Million Eight Hundred Sixty Thousand Dollars ($15,860,000)
principal amount of City of Paducah Water Works Revenue Bond Anticipation Notes, Series 1981, dated
and bearing interest from January 25, 1982 (the "Notes"), payable semi-annually on January 25 and
July 25 in each year. Said $15,860.000 of Notes shall be in the denomination of $5,000, shall be
-numbered from 1 to 3,172, inclusive, shall bear interest at a single coupon rate to be fixed by
247
Supplemental Resolution of the Board of Commissioners as a result of the public sale of the Notes,
and shall mature on July 25, 1984.
-SECTION 19. -PLACE OF PAYMENT, MANNER OF EXECUTION; AND
PROVISION AS TO PRIOR REDEMPTION OF NOTES.
Both principal of and interest on the Notes shall be payable at the main office of the -
Payee -Bank, the Paducah BankF Trust Co., Paducah, Kentucky, in such funds as are at that time
lawful moneys of the United States of America.
,The --Notes shall be executed on behalf of the City with the duly authorized reproduced
facsimile signature of.the Mayor and the reproduced facsimile of its corporate seal shall be
imprinted thereon, and attested by the reproduced facsimile signature of the City Clerk. Each Note
shall be signed manually by one of such officials (part of the Notes may be signed by one of such
officials and the remainder of the Notes by the other), and the interest coupons attached to said
Notes shall be- executed -with the duly authorized reproduced facsimile signatures of said Mayor and
said City Clerk; and said officials, by the execution of appropriate certifications, shall adopt as
and for their -own proper signatures, their respective facsimile signatures on said Notes and
Coupons.
The Notes and interest coupons shall be fully negotiable and shall pass merely by
delivery.
The Notes shall be subject to redemption by the City prior to maturity, in whole or in
part (to -be selected by lot), on January 25, 1983, and on any date thereafter '(not necessarily an
interest payment date), upon -payment of the face amount plus all accrued interest to date plus a
redemption premium in an amount equal to one-half of one percent (1/20) of the face amount of the
Notes called for redemption.
In the event that any of said Notes are called for redemption as aforesaid, notice thereof
identifying the Notes to be redeemed shall be given by publication at least once not less than
thirty days prior to the redemption date in a newspaper of general circulation throughout Kentucky
and in a periodical -of general circulation among purchasers of bond issues published in New York,
New York.
All of said Notes as_to which the City reserves and exercises the right of redemption and
as to which notice as aforesaid shall have been given; and for the retirement of which, upon the
terms aforesaid, funds are duly provided, will cease to bear interest on the redemption date.
Notice of such redemption -may be waived with the written consent of the holder(s) of the Note(s) so
called for redemption.
SECTION 20. FORM OF NOTES.
The Notes, in the total amount of $15,860,000, and coupons, shall be in substantially the
following form:
R"
UNITED STATES OF AMERICA
COMMONWEALTH OF KENTUCKY
COUNTY OF McCRACKEN
CITY -OF PADUCAH
WATER WORKS REVENUE BOND ANTICIPATION NOTE
SERIES 1982
KNOW ALL MEN BY THESE PRESENTS:
$5,000
That the City of Paducah, of McCracken County, Kentucky (the "City"), acting under the
authority of Sections 58.010 through 58.150, inclusive, and 56.513 of the Kentucky Revised Statutes,
for value received, hereby promises to pay to the bearer hereof, the principal sum of
FIVE THOUSAND DOLLARS ($5,000),
on July 25, 1984,
and to pay interest on said principal sum from the date hereof at the rate of percent ( %)
per annum, payable semi-annually, on January 25 and July 25 in each year until paid, except as the
provisions hereinafter set forth with respect to prior redemption may become applicable hereto, such
interest as may accrue on and prior to maturity of this Note to be paid upon presentation and
surrender of the annexed interest coupons as the same severally mature, both principal and interest
being payable in lawful money of the United States of America at The Paducah Bank & Trust Co.,
Paducah, Kentucky.
This Note is one of a series of notes in the aggregate principal amount.of $15,860,000
(collectively the "Notes"), duly authorized by the City and issued in anticipation of the issuance
of City of Paducah Water Works Revenue Bonds, Series 1982, dated December 15, 1982 (the "Bonds"),
248
and this Note is issued pursuant to a duly adopted Ordinance of the City authorizing both the Bonds
and the Notes (the 91Bond Ordinance"), to which Ordinance reference is hereby made for a more
complete description of the nature and extent of the security thereby created, the rights and
limitations of rights of the Holder of this Note, and the rights, obligations, and duties of the
City, for the purpose of financing the costs (not otherwise provided) of a project (the
1°Constru.ction Project" or the 11Project"), consisting of the construction of extensions, additions,
and improvements to the existing water works system (the "Systemi0) of the City.
-The City represents to the bearer of this Note that it has taken all proper steps to
initiate the Project and has in the Bond Ordinance appropriately recorded evidence -of the City's
determination that same shall `initially be financed (to the extent funds are not otherwise provided)
by the proceeds of the Notes, and ultimately by the proceeds of the Bonds.
The City covenants with the bearer of this Note that at a proper time or times during the
construction of the Project, or upon completion thereof (such time or times to be determined in the
discretion of the City), and in any event in ample time prior to the maturity and/or applicable
redemption date(s) of the Notes, that'the City will take"all proper and necessary action under
existing statutory authority and in accordance with law, to offer at public sale, issue, and
deliver, the Bonds and/or Renewal Notes, in the amount of approximately $14,530',000, which is an
amount estimated to be the aggregate of all costs of said Project (to the extent funds are not
otherwise provided)-, including provision for payment from the proceeds of said Bonds, and/or Renewal
Notes, of the principal of and interest on the Notes as herein provided, unless and except to the
extent that such principal and interest shall previously have been paid, or provisions for payment
thereof shall have been duly made from other sources, as provided in the Bond Ordinance.
The City covenants with the bearer of this Note that when the proceeds of the Bonds are
received, a sufficient amount of the first proceeds thereof, shall be deposited in the "City of
Paducah Water Works Bond Anticipation Note and Coupon Redemption Fund,°' at the payee bank, for the
prompt payment of the principal amount of the Notes, together with interest thereon (except to the
extent that such interest shall previously have been paid as hereinabove provided), and said Notes
shall constitute a first charge upon said proceeds; and any balance then remaining shall be
deposited in the Construction Account created in the Bond Ordinance.
The City covenants that the proceeds of the Notes, less (a) proper expenses of issuance ofl
the Notes, (b) reimbursement to the City of any funds advanced by the City to initiate the
construction of the Project, (c) accrued interest, if any, to be set aside into the aforesaid Note
and Coupon Redemption Fund., and (d) the capitalized Debt Service Reserve For Notes, will be
deposited in said Construction Account, from which disbursements will be made solely for proper
costs of the Project.
The obligation of the City for the payment of the principal of and interest on the Notes
shall be paid from the proceeds of the Bonds and/or Renewal Notes when said Bonds and/or Renewal
Notes are sold and delivered and the proceeds thereof shall have previously been received and are
available. The City has also pledged as additional sources of payment of the principal of and the
interest on the Notes (1) all interest income which may be realized from the investment of the
proceeds of the Notes pending disbursement of such proceeds, (2) to any extent which may be
necessary all of the proceeds of the Bonds and/or Renewal Notes, (3) to any extent which may be
necessary, the revenues derived by the City from the operation of the System, such pledge of
revenues being subordinate to the pledge of revenues securing (a) the City of Paducah Water Works
Refunding Revenue Bonds, Series 1978, dated April 1, 1978, currently outstanding in the face amount
of $1,280,000, and (4) if and to any extent which may be necessary, the Debt Service Reserve for
Notes created in the Bond Ordinance.
The Notes are subject to redemption by the City prior to maturity, in whole or in part (to
be selected by lot), on January 25, 1983, and on any date thereafter (not necessarily an interest
payment date), upon notice published at least one time not less than thirty days prior to the
redemption date in a newspaper of general circulation throughout Kentucky and in a periodical of
general circulation among purchasers of bond issues published in New York, New York, upon payment of
face amount plus all accrued interest to date plus a redemption premium equal to one-half of one
percent (1/2%) of the face amount of the Notes called for redemption.
The City hereby covenants and agrees that (a) if the Current Bonds (or any part thereof)
are sold and delivered so that the proceeds thereof become available more than ninety (90) days
prior to January 25, 1983, and (b) if market conditions indicate that same is then feasible, the
249
City will solicit tenders of the outstanding Notes for purchase and cancellation at a price or
prices not exceeding a price equivalent to the face amount thereof plus the redemption premium
one-half of one percent (1/2%) of face amount, together with accrued interest to the date of
surrender and payment; and that to the extent that tenders may be received upon such terms, the
proceeds of said Current Bonds which have been so received will be applied to the purchase and
cancellation of such Notes. Solicitation of tenders in this respect will be made by publication one
time of a notice in a financial newspaper published in New York, New York, at least thirty days
prior to the tender date. The balance of the Notes not tendered will be defeased to January 25,
1983, and redeemed on that date, through application of a sufficient portion of the proceeds of the
Bonds in the manner specified in the Bond Ordinance.
This Note and the coupons appertaining hereto are exempt from taxation in Kentucky, are
fully negotiable, and are transferable merely by delivery.
The Notes are limited and special obligations of the City, and do not and shall not
constitute an indebtedness of the City within the meaning of any constitutional or statutory
limitations or provisions, and the City shall not be.obligated to pay the Notes of which this Note
is one or the interest thereon except from the sources herein covenanted to be used for the payment
of the Notes or from the proceeds of Renewal Notes, if any.
IT IS HEREBY CERTIFIED, RECITED, AND DECLARED that all acts, conditions, and things
required to exist, to happen,.and to be performed precedent to and in the issuance and delivery of
this Note, do exist, have happened, and have been performed according to law, and that provisions
have been made, and will be made, for (a) the payment of the principal hereof from the proceeds of
the above -identified Bonds and/or other funds, and (b) for the,payment of interest hereon from
invested proceeds of the Notes and the interest thereon, and/or from other sources as hereinabove
recited.
IN TESTIMONY WHEREOF, the City of Paducah, in the Commonwealth of Kentucky, has caused
this Note to be executed in its name and on its behalf by the authorized reproduced facsimile
signature of its Mayor, and the reproduced facsimile of its corporate seal.to be imprinted hereon
and attested by the reproduced facsimile signature of its City Clerk,.and signed manually by one of
said officials, and the coupons hereto.attached to be executed with the duly authorized reproduced
facsimile signatures of said Mayor and said City Clerk, and this Note to be dated the 25th day of
January, 1982.
SEAL:
ATTEST:
City Clerk
CITY OF PADUCAH
By.
Mayor
(FORM OF COUPON)
COUPON NO. $
Unless the Note to which this Coupon appertains is -redeem able and accordingly shall have
been theretofore called for prior redemption and payment of the redemption price shall have been
duly made or provided for,
On the day of 198,
The City of Paducah, Kentucky, will pay to the bearer the amount shown hereon out of its
"City of Paducah Water Works Bond Anticipation Note and Coupon Redemption Fund,1° at the Paducah Bank
250
& Trust Co., Paducah, Kentucky, as provided in and being interest then due on its Water Works
Revenue Bond Anticipation Note, Series 1982, dated January 25, 1982, numbered
ATTEST:
City Clerk
CITY OF PADUCAH, KENTUCKY
By
Mayor
SECTION 21. SECURITY FOR NOTES..
As and for -,security for the payment of the principal of the Notes and all interest
thereon, .and.to provide for the payment of such principal..and interest, the City hereby pledges
(a) all interest in.come.whi.ch.may be realized from investments.made_from
the proceeds of the Notes pending disbursement of such proceeds;
(b) a pledge of and a lien on the first proceeds of the Current Bonds
and/or any necessary Renewal Notes;
(c) to any extent which may be necessary all. of the revenues of the
System, such pledge of revenues being subordinate to the pledge of revenues securing the
"
outstanding Prior Bonds, as set out in Section 9 hereof; and
(d) to any extent which may be necessary, all or any part of the Debt
Service Reserve for Notes.
SECTION 22. APPLICATION OF PROCEEDS OF NOTES;
PAYMENT OF THE NOTES.
Whenever the Bond Anticipation Notes shall have been sold and delivered, the proceeds
shall be applied as follows:
(a) Application of Proceeds of Notes.
(1) There shall first be paid from the proceeds of the Notes the fee of the City's Fiscal
Agent, J.J.B. Hilliard, W.L. Lyons, Inc., the fee of W. David Denton, Special Counsel for the City
and Counsel for Paducah Water Works, the rating agency fee, and all other expenses of the issuance
of the Notes.
(2) There shall next be paid whatever amount is necessary to reimburse the City for
amounts, if any, advanced by the City toward the costs of the Project in anticipation of the
issuance of the Current Bonds and/or Notes.
(3) There is hereby created a special fund or account of the City to be maintained at the
Payee Bank, separate and apart from all other funds and accounts of said City in said Bank, entitled
"City of Paducah Water Works Bond Anticipation Note and Coupon Redemption Fund" (the "Note and
Coupon Redemption Fund"), into which there shall first be deposited from the sale of the Notes an
amount equal to the accrued interest (if any) collected from the purchaser of the Notes for the
period from January 25, 1982, to the date of delivery thereof.
(4) There is hereby created a special fund or account of the City, to be maintained at
the Payee Bank, separate and apart from all other funds and accounts of the City in said Bank,
entitled "City of Paducah Debt Service Reserve for Notes" (the t°Debt Service Reserve For Notes", or
the "Note Reserve Fund"), which shall constitute a part of the Note and Coupon Redemption Fund, into
which there shall next be deposited from the proceeds of the Notes, an amount equal to one year's -
interest requirements on the Notes (initially estimated at approximately $1,744,600), which reserve
amount, based on the advice of the City's Fiscal Agent, is determined to be reasonably required for
the marketability of the Notes.
(5) 'The balance of the proceed -s, -then remaining shall be deposited into the Construction
Account -created in -Section 13 above, and shall -be available for the -payment of the costs -of the
Construction Project.
The City shall cause to be prepared by the Engineers having supervision of the
construction of the various elements of the Project, a schedule of projected expenditures required
to pay.the costs of the Construction Project (the "Schedule"), and the balances from time to time
existing in the Construction Account may be invested and reinvested in accordance with the
provisions of Section 13 hereof, and in accordance with such Schedule, subject to appropriate
revision based on acceleration or deceleration of such Schedule caused by weather and other factors.
251
(b)
(1)
Investment of Net Proceeds of Notes
Pending the issuance of the Current Bonds, funds on deposit in the Note and Coupon
Redemption Fund (Account), other than that portion of said Fund represented by the Note Reserve
Fund, shall, to the extent that same may cause the aggregate deposits of the City in the Payee Bank
to be in excess of the amount insured by the FDIC, be collaterally secured by direct obligations of
the United States, or -any of its agencies, having a market value equivalent to such deposit, or such
Depository may -invest for the benefit of .such Account whatever portion of such Account is designated
by the Governing Body, in marketable direct obligations of the United States or any of its
marketable Federal Agency Obligations, scheduled to mature -on or.before the next succeeding interest
payment date. Investment income derived from investment of the Note and Coupon Redemption Fund
(except for thatportion of said Fund represented by the Note Reserve Fund) shall, as received, be
deposited in said Note.and Coupon. -Redemption Fund.
(2) The amount deposited in the. Debt Service Reserve.. For Notes (Account) shall, to the
extent that same may cause the aggregate deposits of the City in the Payee Bank to be in excess of
the amount insured by the -FDIC, be collaterally secured by direct obligations of the United States,
or any of its agencies, having a market. value equivalent to such deposit, or such Depository may
invest for the benefit of such Account whatever portion of such Account is designated by the
Governing Body, in marketable direct obligations of the United States, or any of its marketable
Federal Agency Obligations, scheduled to mature on or before July 25, 1984. Investment income
derived from investment of the Note Reserve Fund shall, as received, be deposited in the Note
Reserve Fund; provided that if and whenever such income shall cause the total amount on deposit in
such Reserve to equal $2,331,000, which is an amount equal to less that 15% of the net proceeds of
the Notes, such deposits of investment income into such Reserve shall be discontinued, and such
investment income shall thereafter, at the direction of the Governing Body of the City, be
transferred to the Note and Coupon Redemption Fund, but deposits in such Reserve shall be promptly
resumed if and whenever such Reserve shall be reduced below such stipulated level of an amount equal
to one year's interest requirements on the Notes.
(c) Payment of Notes at Time of Issuance of Current Bonds.
Immediately upon the sale and delivery of the Current Bonds, the proceeds of the Current
Bonds shall be applied as specified in Section 13(b) hereof, which includes application of the first
proceeds thereof to the payment of the balance of principal and interest on the Outstanding Notes,
subject to possible application of other funds (involving reduction in the authorized amount of the
Current Bonds) as set out in subsection (d) below.
(d) Application of Surplus Funds after Payment of Notes.
After (or simultaneously with) the payment in full of all of the Notes and the Coupons
appertaining thereto, surplus amounts ("surplus amounts") remaining in the various Funds and derived
from the various sources, shall be applied as follows:
(1) All sums remaining in the Note and Coupon Redemption Fund, including the Debt Service
Reserve For Notes, may be used at. the direction of the Governing Body of the City:
(i) to pay the principal on the Notes,
(ii) to enable the City to issue a lesser amount of the Current
Bonds; or
(iii) be transferred to the Sinking.Fund Reserve in the Sinking
Fund,
but for no other purpose.
Provided that if Renewal Notes shall be issued and sold by the City for the purpose of
liquidating the original Notes, the aforesaid surplus amounts may be used at the direction of the
Governing Body of the City to reduce the amount of Renewal Notes needed to liquidate the outstanding
Notes, or earmarked by the City as a new Reserve Fund for the Renewal Notes, but for no other
purpose.
(e) The Note and Coupon Redemption Fund.
There shall be deposited into the i9City of Paducah Water Works Bond Anticipation Note and
Coupon Redemption Fund", (the "Note and Coupon Redemption Fund"), hereby created, in monthly
deposits in each month from the surplus revenues of the System, remaining after satisfying the
requirements of the Prior -Bonds and the requirements of the Prior Bond Ordinance, an amount in each
252
month equal to one -twelfth of the annual interest requirements falling due on the outstanding Notes
(subject to an initial credit for an amount equal to the collected accrued interest deposited into
said Fund).
If the City shall fail to make the required deposit into said Fund in any month, an amount
equal to such deficiency shall immediately be transferred from the Debt Service Reserve For Notes to
the Note and Coupon Redemption Fund, whereupon, as previously stated, any deficiency thereby created
in the Debt Service Reserve for Notes shall be restored by the City from the first available surplus
revenues of the System.`
(f) The Debt Service Reserve for Notes.
The Debt Service Reserve for Notes is earmarked and pledged for the purpose of preventing
a default in the payment of interest and/or principal on the Notes, and shall be used for that.
purpose, through transfer to the Note and Coupon Redemption Fund of sufficient -amounts, whenever
necessary, for the purpose of restoring any deficiency in such Note "and Coupon Redemption Fund, to,
prevent such default; provided that if and whenever such -Reserve shall be depleted or reduced for
any reason, such deficiency shall be restored at the earliest feasible date(s) through monthly
deposits from the first available surplus revenues of the System.
SECTION 23. COVENANT TO INCREASE WATER RATES BEFORE
DELIVERY -OF NOTES.
For the assurance of the purchasers of the Notes, the City _hereby covenants that prior to
the issuance and delivery of the.Notes, the City shall adopt an amended Water Rate Ordinance
increasing the rates charged for water service so as to increase total annual revenues from the
Water Works System to produce coverage of net revenues of the System of at least 1.3 times the
average Net Annual Debt Service Requirements (as defined herein) of the Prior Bonds and of the
interest requirements of the Notes, calculated in the manner set out, in Section -10 of PART ONE of
this Ordinance.
SECTION 24. SOLICITATION OF TENDERS OF NOTES.
The City hereby covenants and agrees that (a) if the Current Bonds (or any part thereof)
are sold and delivered so that the proceeds thereof become available more than ninety (90) days
prior to January 25, 1983, and (b) if market conditions indicate that same is then feasible, the
City will solicit tenders of the outstanding Notes in accordance with the provisions hereinabefore
set out in the form of such Notes. The balance of the Notes not tendered will be defeased to
January 25, 1983, and redeemed on that date through application of a sufficient portion of the
proceeds of the Current Bonds, in the manner specified in Section 15 hereof.
SECTION 25. SALE OF NOTES.
The notes shall be sold at public sale at a regular,.adjourned regular, or special, called
meeting of the Governing Body, after public advertisement as required by law, informing prospective
bidders that they may obtain from the City Clerk or from the Fiscal Agent, a copy of the Official
Terms and Conditions of Sale of Notes, setting out the following specific terms and conditions:
A. Bids must be made on forms, which, together with an Official
Statement, made be obtained at the office of the City Clerk or from the
Fiscal Agent, J.J.B. Hilliard, W.L. Lyons, Inc., 545 South Third Street,
Louisville, Kentucky 40202. Bids must be enclosed,_ in, sealed envelopes
marked "Proposal for City of Paducah Water Works Revenue Bond Anticipation
Notes," and bids must be received by the City Clerk prior to the date and
hour stated in the Notice of Note Sale.
B. Bids will be considered only for the entire $15,860,000 of Notes, at a
minimum price of $15, 542,800 (98% of par), plus accrued interest from the
date of the Notes (January 25, 1982) to the date of delivery.
C. Each proposal shall be accompanied by a good faith check in the amount of
$317,200, which shall be represented by a certified check or bank cashier's
check in that amount, payable to the order of the City of Paducah, Kentucky.
(If the amount of said check is to be credited -against the purchase price on
the date of delivery, said check must be in Federal funds).
D. Bidders must state a single interest coupon rate ina multiple of 1/8, .1/10,
or 1/20 of 1%, and there is no stated maximum interest rate.
E. Bids will be compared by ascertaining the dollar amounts of interest from
January 25, 1982, to July 25, 1984, at.the rate specified in each bid, using
39,650 total Note years, when adding the amount of the -discount, if any; the
best bid being the bid which results in the lowest net interest cost.
F. The right to reject bids for any reason deemed advisable by the Board of
Commissioners, and the right to waive any possible informalities or
irregularities in any bid which, in the judgment of the Board of
253
Commissioners, with the advice of the Fiscal Agent, shall be minor or
immaterial, shall be expressly reserved.
G. The purchaser must accept delivery of the Notes and make payment for same,
in Federal funds, at the accepted purchase price, when tendered for
delivery, at First National Bank of Louisville, Louisville, Kentucky, at no
-cost to the purchaser other than any charge made by -:such Bank for the cost
of the closing. It is .anticipated that the Notes will be tendered for
delivery on or about February 2, 1982.
H. Upon wrongful.refusal of said purchaser to take delivery of and pay for the
Notes when tendered for delivery, the amount of the good faith check shall
�be forfeited by such purchaser, and such amount shall be deemed liquidated
damages for.such default, provided, however, if said Notes are not ready for
delivery and payment within thirty (30) days from the date of sale herein
provided for, said purchaser shall be relieved of any liability to accept
.the Notes hereunder, whereupon, at the written request of such purchaser,
his good faith check will be returned, without interest.
I. At the time of delivery of the Notes, the purchaser may, at his option,
either pay the full purchase price in Federal funds, and have his good faith
check returned, or, if the good faith check is in Federal funds,, deduct the
good faith check from the purchase price and pay the net balance of such
purchase price.
In the event that there is no bid or that all bids are rejected, or that bids are receive(
for less than all of the Notes, the Issue -r may either re -advertise the salepursuant to this
Ordinance or negotiate the sale:of the Notes -pursuant to KRS 56.513, and the Fiscal Agent shall be
authorized to negotiate the-sal.e of part or. -all of the Notes based substantially on the terms set
out above, subject to -approval of any -such sale by the Governing Body
SECTION 26. COVENANT AS TO NOTES NOT BEING "ARBITRAGE BONDS."
The City reaffirms the provisions of Section 14 -of this Ordinance and again covenants to
the purchasers of the Notes that the City will make no use of the proceeds of the Notes or of the
revenues of the -System, which, if such use had been reasonably expected on the date of issuance of
the Notes, would have caused such Notes to be arbitrage bonds (notes).
SECTION 27. INTENTION TO SELL CURRENT BONDS
PRIOR TO MATURITY OF NOTES.
The City hereby declares its present intention to offer at public sale its Current Bonds,
as authorized in PART ONE of this Ordinance and to issue such Current Bonds prior to the date of
maturity of the Bond Anticipation Notes authorized in PART TWO hereof. However, as authorized by
KRS 58.150 and KRS 56.513, the City will have the right to issue Renewal Notes to retire the
Outstanding Notes, and.the City expressly reserves such right. Nevertheless, as provided in the
Notes, the City covenants that -at a proper time or times during the construction of the Construct
Project, or upon completion thereof, the City will take all proper and necessary action under
existing statutory authority and in accordance with the law, to offer at public sale, issue and
deliver the Current Bonds, and/or Renewal Notes, in the amount of approximately $14,530,000,
consistent with the amount needed to provide sufficient net proceeds to liquidate the unpaid
outstanding balance due on the Notes.
SECTION 28. SUPERVISION OF WATER WORKS SYSTEM CONTRACTUALLY
VESTED IN COMMISSIONERS OF 'WATER WORKS. -
Recognition is hereby taken of the fact that pursuant to an Ordinance heretofore enacted,
the supervision, management, and conduct of the water works system is vested in a municipal
commission, designated as the "Commissioners of Water Works", which Ordinance shall constitute a
contract between the City and the holders, of the.Prior Bonds, the Current Bonds (and/or the Notes),
and any additional parity bonds issued pursuant to the Prior Bond Ordinance and this Current Bond
Ordinance; and said Ordinance may not be amended.or.repealed so long.as any -of the Prior Bonds, the
Current Bonds (or. the Notes), and/or any parity bonds -are outstanding and unpaid'(and have not been
defeased), without the consent of at least 80% in amount of the holders of all of such outstanding
bonds (and/or Notes).
SECTION 29. CONTRACTUAL NATURE OF ORDINANCE.
The provisions of this Ordinance shall constitute a contract between the City and the
holders of the Current Bonds, and between the City and the holders of the Notes; and after the
issuance of any of the Current Bonds, no change, variation, or alteration of any kind, in the
provision of this Ordinance shall be made in any manner, except for the purpose of curing an
ambiguity or of curing, correcting or supplementing any defective or inconsistent provisions
contained herein or in any proceeding pertaining hereto, and except as herein provided, until such
254
time as all of the Current Bonds and the interest thereon have been paid in full; provided, however,
that the holders of eighty percent (80a) in principal amount of the Current Bonds and Notes at any
time outstanding shall have the right to consent to and approve the adoption of resolutions,
ordinances or other proceedings; modifying or amending any of.the terms or provisions contained in
this Current Bond Ordinance;' -provided, however, that no such modifications or amendments shall be
made which will permit: (a) an extension of the maturity of any of the Bonds,, or (b) a reduction in
the principal amount of any Bond or Note or the redemption premium or the rate of interest thereon,
or (c) the creation.of a -lien upon or a -pledge of revenues ranking prior to or on a parity with the
lien or pledge of the Prior Bonds, the'Current Bonds, or .the Notes, except as- expressly authorized
herein, or (d) a preference or_priority_of any Bond or Bonds over any other Bond.or Bonds, or of any
Note of Notes over any other Note or Notes, or (e) a reduction in .the percentage of the aggregate
principal amount of the Prior,Bonds, Current Bonds, and/or Notes required to consent to any such
modification or amendment, or (f) impair in any way the rights of the holders of the Current Bonds
or of the Notes.
SECTION 30. PROVISIONS IN CONFLICT REPEALED.
All ordinances, resolutions and orders, or parts thereof, in conflict herewith are, to the
extent of such conflict, -hereby repealed, and it is -hereby specifically ordered and provided that
except for the permissible issuance -of parity, bonds pursuant to Section 10 hereof, any proceedings
heretofore taken for the issuance -of other bonds payable or secured in any manner by all or any part
of the income and revenues of the System, or any part thereof, and which have'not heretofore been
issued and delivered, are hereby revoked and rescinded, and none of such other bonds shall be issue(
and delivered.
SECTION 31. SIGNATURES OF'OFFICERS.
-If any of the officers whose signatures or facsimile signatures appear on.the Current
Bonds, or coupons, cease to be such officers before delivery of the Bonds, such signatures shall
nevertheless be valid for all purposes the same as if said officers had remained in office until
delivery, as provided in KRS 58.040 and in KRS 61.390.
SECTION 32. SEVERABILITY CLAUSE.
If 'Any section, paragraph, clause or provision of this Ordinance shall be held invalid,
the invalidity of such section, paragraph, clause or provision shall not affect any of the
provisions of -this Ordinance.
SECTION 33. EFFECTIVE DATE OF ORDINANCE.
This Ordinance shall be introduced at a meeting of the Board of Commissioners and remain
on file for at least'one week for public inspection in the completed form in which it shall be put
on its final passage and if adopted shall be in full force and effect ten days thereafter.
Mayor
Introduced by the Board of Commissioners, December 29,--1981.
Passed by the Board of Commissioners, January -12,. 1982.
Recorded by Louise McKinney, City Clerk, Januarys 1982.
Published by The Paducah Sun., - Januaa..20, 1982 .
CERTIFICATE -OF THE CITY CLERK
I, Louise McKinney, hereby certify that I am -the duly qualified and acting City Clerk of
_the City of Paducah, Kentucky., that the foregoing Ordinance is a true and correct copy of an
Ordinance authorizing the issuance of (1) $14,530,000 of City of Paducah Water Works Revenue Bonds,
Series 1982, dated December 15, 1982;: and (2) $15;860,000 of City of Paducah Water Works Revenue
Bond Anticipation Notes, Series 1982, dated January 25, 1982, that said Ordinance was introduced ani
given its first reading by the Board of Commissioners of said City on December 29, 1981, that it w&
placed and remained on file in my office for public -inspection in that identical, completed form
until January 12, 1982,.on which date it was given its second reading.and final passage .and adoptioi
by said Board.
I further certify that said meetings were duly held in accordance with all applicable
requirements of Kentucky law, including KRS 61.810, 61.815, 61.820 and 61.825, that a quorum was
present at each of said meetings, that said Ordinance has not been modified; amended, revoked or
repealed, and that same is now in full force and effect.
IN TESTIMONY WHEREOF,_ witness my signature as City. Clerk and the Official Seal of said
City this J.)_ day of January, 1982.
SEAL:
City Clerk