HomeMy WebLinkAboutOrdinances Book 15, Page 638, No Ordinance Number638 /
AN ORDINANCE OF THE CITY OF PADUCAH, KENTUCKY, REPEALING AND
RESCINDING AS A MATTER OF RECORD A PREVIOUSLY ADOPTED ORDINANCE
WHICH WAS DEFEATED AT A REFERENDUM ELECTION HELD ON NOVEMBER 3,
1964; OTHERWISE REAFFIRMING DETERMINATIONS PREVIOUSLY MADE THAT
A PUBLIC PROJECT SHOULD BE UNDERTAKEN IN GENERAL WELFARE, CON-
SISTING OF THE CONSTRUCTION AND INSTALLATION, WITH NECESSARY AP=
PURTENANCES, OF EXTENSIONS, IMPROVEMENTS AND ADDITIONS TO THE
MUNICIPAL SANITARY SEWER SYSTEM FACILITIES IN AND FOR SAID
CITY AND ITS ENVIRONS; AUTHORIZING THE FINANCING THEREOF
(TO THE EXTENT FUNDS ARE NOT PROVIDED FROM OTHER SOURCES)
THROUGH THE ISSUANCE BY SAID CITY OF ITS $6600,000 ,SEWER
SYSTEM REVENUE BONDS OF 1965" PAYABLE AS TO PRINCIPAL AND
INTEREST SOLELY FROM THE REVENUES OF SUCH SYSTEM; PROVID-
ING FOR THE COLLECTION AND SEGREGATION OF THE INCOME AND
REVENUES OF SAID SYSTEM, AND THE ALLOCATION AND DISTRIBU-
TION T1AEREOF TO VARIOUS SPECIAL FUNDS HEREIN CREATED, IN
ORDER TO PROVIDE FOR THE ORDERLY PAYMENT OF SUCH PRINCIPAL
AND INTEREST, THE COSTS OF OPERATION AND Y,AINTENANCE, AND
THE ACCUMULATION AND 14AINTEMANCE OF PROPER RESERVES,;eRE-
SCRIBING CONDITIONS AND RESTRICTIONS PURSUANT TO WHICH AD-
DITIONAL BONDS PAYABLE FROM SUCH REVENUES MAY BE ISSUED
IN THE FUTURE FOR EXTENSIONS, IMPROVEMENTS AND ADDITIONS
TO SUCH SYSTEM; AND PROVIDING FOR AN ADVERTISED, PUBLIC,
COMPETITIVE SALE OF THE BONDS HEREIN AUTHORIZED.
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WHEREAS, the City of Paducah (for convenience hereinafter sometimes
referred to as the "City"), situated in McCracken County, Kentucky, has
for many years owned and operated, and from time to time added to, extended
and improved, a system of sewer facilities, and it is the considered opinion
and judgment of the Mayor and Board of Commissioners of said City that it
is imperative at this time to provide for further extensions, enlargements,
additions and improvements thereto; and
WHEREAS, said City has heretofore employed Messrs. Burns & McDonnell,
Consulting Engineers of Kansas City, Missouri, and has caused said Consulting
Engineers to make extensive studies and surveys, and to prepare and submit
plans, recommendations, and cost estimates relative to such sanitary sewer
extensions, enlargements, additions and improvements as are necessary to be
undertaken at this time for the provision of adequate and effective sanitary
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sewer service in additional areas where such service has not heretofore been
provided; and the findings, reports and recommendations of said Consulting Engi-
neers have been submitted to and thoughtfully considered by the Mayor and Board
of Commissioners of said City, the City -County Health Officer, and representatives
of the State Board of Health and the Kentucky Water Pollution Control Commission;
and
WHEREAS, said City has heretofore employed as its Fiscal Agents Stein
Bros. & Bovee and the Kentucky Company, Municipal Bond Dealers, having offices
in Paducah, Kentucky, and having wide experience over a period of years in the
financing of public projects and undertakings throughout the Commonwealth; and the
recommendations of said Fiscal Agents relative to the financing of the proposed
and recommended sewer facilities have been thoughtfully considered and discussed
by the Mayor and Board of Commissioners; and
WIEREAS, by a certain Ordinance of said City which was duly adopted
on August 19th, 1964, thereupon duly signed as provided by law and published in
full in the Sun-Nmocrat, Paducah, Kentucky, in its issue of August 27, 1964,
it was proposed that said City issue and offer at public sale its $3,0001000
"Sewer System Revenue Bonds of 1964,11 to accomplish the purposes herein stated and
also other purposes which were the subject of controversy; and thereafter, as
authorized and permitted by law, the requisite number of qualified voters of
said City made and filed their Petition that said Ordinance be submitted to a
referendum -at the occasion of -the General or Regular Elections to be held on
November 3, 1964; and by proper action such submission was duly made and done;
and upon canvass and report of such referendum election according to law, it
was made'to appear that such proposed ordinance was defeated; and asa consequence
thereof said Ordinance has never become effective; and
'VIHEREAS,the Cityls Fiscal Agents have caused such ordinances and other
proceedings to be prepared and submitted, and the same have been duly and
thoughtfully examined and considered•by the Mayor and Board of Commissioners;
and said Consulting Engineers have reported that the preparation of working
drawings and specifications is in progress; and it is the opinion and judgment of
the Mayor and Board of Commissioners that action should be taken at this time;
NOW, THEREFORE. THE BOARD OF COMtISSIONERS OF THE CITY OF PADUCAH_,
KE14TUCK13 DOES HEREBY ORBAIN AS FOLLOWS:
Section 1. The May and Board of Commissioners acknowledge as a matter
of record that that certain Ordinance of said City which was adopted as a meeting
held on August 18, 1964, and published in The Sun-Damocrat, Paducah, Kentucky,
in its issue of August 27, 196h, was (a) the subject of a Petition for Referendum,
duly made and filed in timely fashion by the requisite number of qualified
voters of said City according to law, (b) duly submitted to the qualified
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voters of said City upon the occasion of the "eneral or Regular Elections on
November 3, 1964, and (c) upon such occasion defeated by vote of a majority
of the voters who voted on such issue.
Accordingly, it is acknowledged that said identified Ordinance did
not become effective as an Ordinance of the City of Paducah, Kentucky. In
order that it may always be clear that such is the fact, the City Clerk is
hereby ordered and instructed to make a notation in the Official Ordinance
Book, adjacent to the title or caption of said Ordinance as therein recorded
(or if the same was not officially therein recorded by reason of the filing
of such Petition for Referendum, then in the Minutes of the meeting of the
City's Board of Commissioners held on August 18, 1964, wherein it is shown
that said identified Ordinance was finally adopted and ordered to be published),
substantially, as follows:
"This Ordinance was defeated at a Referendum Election
held on November 3, 1964, and by reason thereof did
not becomes_ effective according to law."
Section 2'. The City shall forthwith undertake construction and
installation of essential public works and facilities consisting of extensions,
additions and improvements to sanitary sewers in and for the City of Paducah
and its environs, substantially in accordance with the must recent].;/ revised
reports and recommendations of the Consulting Engineers, for the purpose of
providing adequate sanitary sewer service in the interests of the public health,
safety and general welfare; and it is declared that the same shall be under-
taken and financed according to authority of KRS 94.160, and of KRS 16.350
to 96.510, inclusive, which are incorporated herein by reference. More
specifically, said public project as referred to herein and to be undertaken
at this time, shall be substantially as summarized in "Schedule A,"attached
to and transmitted with a letter which was addressed by the City Manager to
the Mayor and Board of Commissioners under date of May 27, 1965, -copies of
which letter and Schedule are on file in the office of the City Manager and
the City Clerk, subject to public inspection. Said sanitary sewer installa-
tions and facilities, with all necessary appurtenances, are determined to be
urgently required in the public interests, shall constitute a public and muni-
cipal undertaking of said City, and for convenience are sometimes hereinafter
referred to collectively as the "Project."' Said sewer system and facilities
as presently to be added to, improved, and extended, together with all future
additions, improvements and extensions thereof, are sometimes hereinafter
referred to as the "System."
Section 3. For the purpose of providing funds (to the extent not
otherwise provided) to defray the costs of the said Project, together with
all necessary and proper appurtenances, and expenses incident thereto, and
expenses incident to the issuance of the Bonds hereinafter referred to,
there are hereby authorized to be issued the said City's "Sewer System Revenue
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Bonds of 19651"in the principal amount of Six Hundred Thousand Dollars ($600,000),
hereinafter sometimes referred to as the "Bonds"), consisting of 600 negotiable
coupon revenue Bonds, registrable as to principal only, each in the denomination
of One Thousand Dollars ($1,000); with reservation of right on the part of
said City to issue additional bonds in the future, payable from the income and
revenues of said System, subject to the conditions and restrictions hereinafter
prescribed and set forth.
In the event the City shall hereafter issue parity Bonds in conformity
with the conditions and restrictions hereinafter prescribed in that connection,
the City reserves the right to provide in the Ordinance or Ordinances from time
to time authorizing the issuance of such parity Bonds, that the same shall be,
or may be, issued in any denomination which is a multiple of One Thousand
Dollars ($1,000.00), and/or that the same shall be issued, or may be issued,
as "Bonds in Fully Registered Form," with or without appurtenant coupons
representing the accrual of interest, and with or without privilege on the part
of the owners or registered holders thereof to exchange Bonds authorized to
be issued in Coupon Form upon surrender of Bonds issued in Fully Registered
Form, and with or without privilege on the part of the owners or registered
holders to surrender Bonds issued in Fully Registered Form upon surrender of
Bonds issued in Coupon Form, upon such terms and conditions as the City may
prescribe in the Ordinance authorizing the issuance of any series of such parity
Bonds.
Section 4. That said Bonds, hereby authorized, shall be numbered
consecutively 1 to 6003 inclusive; shall be dated August 1, 1965; shall mature
as to principal in various amounts on January 1, in each of the years 1967 to
19861•inelusive,-asset forth in the schedule appearing below; shall bear interest
from their date until payment of principal, such interest to the respective maturi-
ty dates to be represented by interest coupons attached to the Bonds maturing
on January 1 and July 1 of each year, beginning January 1, 1977; such interest
to be at such rate or rates (not in excess of 6% per annum), as may be established
by a supplemental Ordinance or Resolution upon the basis of competition among
bidders upon theoccasionof the advertised, public, competitive sale of the
.Bonds
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as hereinafter provided; the numbers and principal maturities of said
Bonds to be as set forth in the following schedule:
BONDS NUMBERED PRINCIPAL AMOUNT DATE OF 14ATURITY
Inclusive
1-20 $ 20,000 January 1, 1967
21-41 21,000 January 1, 1968
42-63 22,000 January 1, 1969
64-86 23,000 January 13 1970
87-110 24,000 January 1, 1971
111-134 24,000 January 1, 1972
135-159 25,000 January 1, 1973
160-185 26,000 January 1, 1974
186-213 28,000 January 1, 1975
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BONDS NUMBERED
PRINCIPAL AMOUNT
DATE OF MATURITY
Inclusive
214-242
29,000
January 1, 1976
243-272
30,000
January 11 1977
273-303
31,000
January 1, 1978
304-335
32,000
January 1, 1979
336-369
34,000
January 1, 1980
370-404
35,000
January 1, 1981
405-440
36,000
January 1, 1982
441,478
38,000
January 1, 1983
479-517
39,000
January 1, 1984
518-558
41,000
January 1, 1985
559=600
42,000,
January 11 1986
provided, however, that said Bonds numbered 111 to 600, inclusive, (all bonds
maturing on and after January 1, 1972), shall be
subject to redemption at the
option of said City prior tomaturity in whole, or
from time to time 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 on
or after January 1, 1971,
and in the event any
of said Bonds are called for
redemption as aforesaid,
notice thereof identifying the Bonds to be redeemed shall be given by jub.lication
at least once not less than thirty (30) days prior to the redemption date in a
II daily newspaper of general circulation throughout Kentucky, and in a financial
newspaper or journal of general circulation among bond buyers published in New
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York, New York (and by registered mail to the holders of any then registered
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Bonds to be redeemed), and it is further agreed that should any of said Bonds
be called for redemption prior to maturity as aforesaid, the City will pay to the
respective holders, upon surrender of the Bonds, interest in addition to that
evidenced by interest coupons maturing on and prior to the redemption date,
expressed in percentages of the principal amount, as set forth in the following
schedule:
On and after January 1, 1971, and on or prior to January 1, 1976 ............103%
�! On and after July 1, 1976, and on or prior to January 1, 1981 ...............102%
On and after July 1, 1981, but prior to final maturity— .................... 101%
Both principal of and interest on the Bonds shall be payable in lawful money of
the United States of America at the principal office of The Paducah Bank, Incor-
porated, in the City of Paducah, McCracken County, Kentucky, or, at the option of
the holders, at the principal office of ,
in the City of , State of Said Bonds
shall be executed by a reproduced facsimile of the signature of the Mayor of
said City, sealed with a reproduced facsimile of its corporate seal, and attested
by the manual signature of the City Clerk, and the interest coupons attached
to said Bonds shall be executed with the facsimile signatures of said Mayor and
said City Clerk. If any officer whose signature or a facsimile of whose signature
appears on any Bond or coupon shall cease to be such officer prior to delivery,
every such signature, or facsimile signature, shall nevertheless be valid and
binding for all purposes, the same as if such officer had continued in office
until the time of delivery of such Bond or coupon. Signatures, or facsimile
reproductions of signatures, of any officer or officers holding office at the
time when such signatures or facsimile reproductions are caused to appear on
643
any Bond or coupon shall be valid and e£fectivo for all purposes, whether or
not such officers, or any of them, were in office at the date of the Bonds. All
of said Bonds, together with the interest thereon, and any Bonds which may here-
after be issued on a basis of parity therewith subject to the conditions and
restrictions hereinafter set forth, shall be payable only out of the "Paducah
Sewer System Bond and Interest Redemption Fund," hereinafter created and estab-
lished, and shall be a valid claim of the holders thereof only against said
fund and the fixed portion or amount of the revenues of the said System of said
City pledged to said fund.
Section 5. Said Bonds and appurtenant interest coupons shall be fully
negotiable, but upon presentation of any of said Bonds at the office of the City
Treasurer of -the City of Paducah; McCracken County, Kentucky, said Bonds may
be registered as to principal in the name of the owner on the books in said Treas-
urer's office, such registration to be noted on the reverse side of the Bonds
by the City Treasurer, and thereafter the principal of such Bonds shall be payable
only to the registered holder, his legal representatives or assigns. Such
registered Bonds shall be transferable to another registered holder, or back to
bearer, only upon presentation to the City Treasurer with a legal assignment
duly acknowledged or proved. Registration of any of such Bonds shall not affect
the negotiability of the interest coupons thereto attached, but such coupons
shall always be transferable by delivery merely.
Section 6. Said Bonds and appurtenant interest coupons, and provision
for registration of the Bonds, shall be in substantially the following forms,
(subject to the reservation of right as set forth in Section 3 hereof), to -wit:
(FORM OF BOND)
UNITED STATES OF AMERICA
COMMON1WEALTH OF KENTUCKY
COUNTY OF McCRACKEN .
CITY OF PADUCAH
SEWER SYSTEM REVENUE BOND OF 1965
No. $1,000.00
KNOW ALL MEN BY THESE PRESENTS:
That the City of Paducah, in the County of McCracken, and Commornaealth
of Kentucky, for value received, hereby promises to pay to bearer, or if this
Bond be registered to the registered holder hereof, as hereinafter provided,
solely from the special fund hereinafter identified, the sum of One Thousand
Dollars ($1,000.00) on the first day of January, 19_, and likewise from said
special fund to pay interest on said sum from the date hereof until payment of
principal at the rate of per cent ( p) per annum, payable on the
first days of January and July in each year, beginning on the first day of
January, 1966, except as the provisions hereinafter set forth with respect to
redemption may be and become applicable hereto, such interest as may accrue on
and prior to the maturity of this Bond to be paid only upon presentation and
surrender•of -the annexed interest coupons as the same severally mature, both
644
principal and interest being payable in lawful money of the United States of
America at the principal office of The Paducah Bank, Incorporated ,
in the City of Paducah, McCracken County, Kentucky, or, at the option of the
holder, at the principal office of
in the City of _, State of
This Bond is one of a duly authorized issue of Bonds, aggregating $600,000,
authorized by an Ordinance duly adopted and published according to law, issued
for the purpose of defraying the costs of constructing and installing extensions,
additions and improvements to the municipal sewer system of said City, and necessary
appurtenant facilities, and incidental expenses, and this Bond,has been issued
under and in full compliance with the Constitution and Statutes of the Commonwealth
of Kentucky, including among others, Section 94.160 and Sections 9.6.350 to
96.510, inclusive, of the Kentucky Revised Statutes.
A statutory mortgage lien which said City has recognized as being effec-
tive upon issuance and delivery of any of the Bonds of the issue of which this
Bond is a part, is created and granted by Section 96.L00 of the Kentucky Revised
Statutes for the benefit and protection of the holders of said Bonds, and the
same shall continue as a first lien upon the aforesaid municipal sewer system,
and appurtenant facilities, together with all future, additions and improvements
thereto, and extensions thereof, and the revenues derived from the operation
thereof, until payment in full of all Bonds authorized and permitted to be issued
under the provisions of said Ordinance, including parity Bonds,if any be issued
subject to the conditions and restrictions prescribed in that connection in
and by said Ordinance.
The Bonds numbered 111 to 600, inclusive (all Bonds maturing on and after
January 1, 1972), of the series of which this Bond is one and as may be outstanding
from time to time, are subject to redemption at the option of said City prior
to maturity, in whole or from time to time 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 on or after January 1, 1971, and in the event any of said
Bonds are called for redemption as aforesaid, notice thereof identifying the
Bonds to be redeemed will be given by publication at least once not less than
thirty (30) days prior to the redemption date in a newspaper of general circu-
lation among bond buyers published in New York, New York, (and by registered mail
to the holders of any then registered Bonds to be redeemed), and it is further
agreed that should any or all of said Bonds be called for redemption as aforesaid,
said City will pay to the holders of the respective Bonds so called for redemp-
tion, upon surrender thereof, interest in addition to that evidenced by interest
coupons maturing on and prior to the redemption date, expressed in percentages
of the principal amount as set forth in the following schedule:
If Redeemed
On and after January 1, 1971, and on or prior to January 1, 1976...........103;
On and after July 1, 1976, and on or prior to January 13 1981 ..............102%
On and after July 1, 1981, but prior to final maturity .....................101%
645
All of said Bonds as to which said City reserves and exercises the right of
redemption and as to which notice as aforesaid shall have been given and for
the redemption of which, upon the terms aforesaid, funds are duly proveded,
will cease to bear interest on the redemption date.
This Bond and the issue of which it forms a part, together with such
additional Bonds ranking on a parity therewith as may be issued and outstanding
from time to time under the conditions and restrictions set forth in the Ordi-
nance authorizing the issuance of this Bond, are payable only from and secured
by a pledge of and first lien upon a fixed portion of the gross income and
revenues to be derived from the operation of said municipal sewer system which
fixed portion shall be sufficient to pay the principal of and interest on this
Bond and the issue of which it forms a part 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 Sewer System Bond and Interest Redemption Fund."
This Bond and the issue of which it forms a part do not constitute an
indebtedness of the said City of Paducah within the meaning of any constitutional
or statutory provisions or limitations. Said City covenants that it will fix,
and if necessary adjust from time to time, such rates for use of the services
and facilities of said municipal sewer system, and will collect and account for
income and revenues therefrom, sufficient to pay promptly the interest on and
principal of this issue of Bonds, and all other Bonds ranking on a parity there-
with as may be issued and outstanding from time to time in accordance with the
conditions and restrictions arescr.)ac _. -;,,1t connection, and also to pay the
costs of operation and maintenance of said system.
This Bond is fully negotiable but may be registered as to principal only
in the name of the holder on the books of said City in the office of the City
Treasurer of the City of Paducah, Kentucky, such registration being noted hereon
by snid City Treasurer, after which no transfer shall be valid unless such regis-
tered Bond be presented to said City Treasurer with a legal assignment duly
acknowledged or proved , and such transfer is made on said books and similarly
noted on the Bond, but it may.be discharged from such registration by being
similarly transferred and registered to bearer, after which it Shall be trans-
ferable by delivery, but it may be again registered as before. The registration
of this Bond as to principal shall not restrain the negotiability of the coupons
by delivery merely.
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 this Bond and the issue of Bonds of which it is one, have existed,
have happened, and have been performed in due time, form and Mnner 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
646
of the Commonwealth of Kentucky; and that a sufficient portion of the income
and revenue] of said municipal sewer system has been pledged to and will be
set aside into said special fund by said City .for the prompt payment of the
principal of and interest on all Bonds which by their -terms and by the
provisions of said Ordinance are payable therefrom, in addition to proper
provision for the costs of operation and maintenance thereof.
IN WITNESS 1%1HEREOF, said City of Paducah, Kentucky, has caused this
Bond to be executed by a reproduced facsimile of the signature of the Mayor
of said City, and a reproduced facsimile of its corporate seal to be
hereunto affixed, attested by the manual signature of the City Clerk, and the
coupons hereto attached to be executed with the facsimile signatures of said
Mayor and said City Clerk, and this Bond to be dated the first day of August,
1965.
(FACSIMILE OF SEAL)
ATTEST:
No.
(Manual Signature)
ity Jerk
CITY OF PADUCAH, KENTUCKY
By, (Facsimile Signature)
Mayor
(FORM OF COUPON)
*Unless the Bond to which this coupon is attached shall
have been called for prior redemption
On the first day of 19_, the City of
Paducah, Kentucky, will pay to bearer Dollars ( )
out of its "Paducah Sewer System Bond and Interest Redemption Fund," at the
principal office of
in the City of Paducah, McCracken County, Kentucky, or, at the option of the
holder, at the principal office of
, in the City of State of
as provided in and being interest then due on its Sewer System Revenue Bond
of 1965, dated August 1, 1965, Number
CITY OF PADUCAH, KENTUCKY
By. (Facsimile Signature)
ATTEST: Mayor
(Facsimile Signature)
'ity Ulerk
*(This redemption legend to appear only on coupons
maturing on and after July 1, 1971.)
647
(FORM OF REGISTRATION TO BE PRINTED ON THE BACK OF
EACH BOND
Date of In 4'hose Name Signature
Registration Registered City Treasurer
Section 7. The Bonds authorized by this Ordinance shall be publicly
offered for sale according to a "Notice of Sale of Bonds" conforming to the
requirements of KRS Chapter 424 (and particularly KRS 424.140(3) and KRS 424.360),
which shall be published one time, not less than seven (7) days nor more than
twenty-one (21) days prior to the date therein specified for the opening and
consideration of purchase bids, in each of the following: (a) The Paducah Sun -
Democrat, a legal newspaper published in Paducah, Kentucky, and having the largest
circulation therein, (b) The Courier*Journal, Louisville, Kentucky, a legal
newspaper having statewide circulation, and (c) The Daily Bond Buyer, New York,
New York, a financial newspaper or journal of general circulation among bond
buyers. In said published notice, bidders shall be notified that bids must be
for the entire amount of Bonds offered for sale, and shall be for cash at not
less than the face amount thereof, with accrued interest to date of delivery;
that they may specify an interest rate or rates in multiples of 1/8 or 1/10 of
1%, provided none may exceed 6% per annum, only one rate may be specified for
Bonds of a single maturity, and the City will not entertain any proposal that
interest authorized by this Ordinance to be issued, all sums representing accrued
interest received from the purchaser or purchasers shall forthwith be deposited
in the "Paducah Sewer System Bond and Interest Redemption Fund," hereinafter
created and established, and the same shall be used and applied to the payment of
interest coupons becoming due on said date. There shall next be set aside and
paid from the proceeds of the Bonds all expenses incident to the authorization,
sale, and delivery thereof, and the fees and expenses which the City may have
agreed to pay to the Fiscal Agents in connection therewith.
The entire remaining balance of the proceeds of Bonds issued hereunder
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shall constitute the "Sewer Conbtruction Fund," hereby created, and shall
be deposited in a bank o: barks which are members of Federal Deposit Insurance
Corporation (hereinafter sometimes referred to collectively as the "Depository
Bank"), and shall be applied to the extent necessary and not otherwise pro-
vided, in paying the costs of the Project. Balances_in excess of the amount
insured by FDIC shall be secured at all times as hereinafter provided.
There shall be deposited in said Sewer Construction Fund (for convenience
sometimes hereinafter referred to simply as the "Construction Fund"), by
the City Treasurer from time to time all moneys received from any and all
sources which are obtained for the purposes of the aforesaid Project (except
amounts received from the purchaser or purchasers of said Bonds.as representing
accrued interest to delivery, and interest to be set aside from Bond proceeds,
as provided above). A true and accurate separate accounting shall be made of
all deposits in and disbursements from said Construdtion Fund, and at no tine
shall there be any conmingling with other moneys of the City of Paducah,
Pentucky.
Moneys from time to time on deposit inssaid Construction_ Fund shall
be secured by a valid pledge to -the City of Paducah, Kentuelcy of direct
obligations of, or obligations the principal. of and interest on which are
guaranteed by, the United States of America, having at all times a market
value (exclusive of accrued interest), at least equal to the balance maintained
on deposit therein. If at any tire there shall be on deposit in said
Construction Fund moneys in excess of the estimated disbursz)ments on account
of the Project for the next ninety (90) days, the City reserves the right to
direct that the Depository Bank invest such excess funds in direct obligations
of, or obligations the principal of and interest on which are guaranteed by,
the United States Government, which shall mature not later than eighteen (10)
month after the date of such investment and which shall be subject to re-
demption at any time by the holder thereof. Earnings received from any such
investments shall be deposited by the City in the Construction Fund. Any
moneys remaining in the Construction Fund after all costs of the Project have
been paid, as certified by the Consulting Engineers, shall be transferred from
the Construction -Fund and deposited in the "Sewer Depreciation and Extension
Fund," hereinafter created; provided, however, that if the amount so available
shall exceed N200,000.00, the excess -over *200,000.00 shall be deposited in
the "Bond and Interest Redemption Fund," hereinafter created, and shall be
credited to the "Debt Service Reserve" therein, for which provision is here-
inafter made; but if -the amount so available for deposit in said Debi. Service
Reserve shall be more than sufficient to fill such Debt Service Reserve to the
amount prescribed to be accumulated and maintained therein, any excess of Bond
649
proceeds still remaining shall be deposited in the aforesaid "Sewer Depreciation
and Extension Fund" as in the case of the first w200,000.00 of excess Bond proceeds.
Disbursements from said Construction Fund shall be made by checks signed
by the City Treasurer and countersigned by the City Manager but only if accom-
panied and supported by one or more vouchers signed by or on behalf of the
Engineer or firm of Engineers having supervision of construction of said Project
affirming that the payee of the check is entitled to payment of the amount thereof
for labor, materials, or services earned and due under the terms of an authorized
contract relating to said Project.
Pending disbursements for the authorized purposes3 the proceeds of all
Bonds at any tine issued pursuant to this Ordinance shall be subject to a first
and paramount lien and charge in favor of the holders of Bonds issued and out-
standing hereunder, and for their further security.
�n the event that the amount hereinabove provided to be set aside from
Bond proceeds for.payment of interest, together with revenues of -the System
available for such purpose, shall prove to be insufficient for payment of interest
on the Bonds during the period anticipated to be required for the construction
and development of the System, additional moneys may be transferred from the said
Construction Fund to the "Paducah Sewer System Bond and Interest Redemption Fund311
hereinafter created, and so applied, inasmuch as interest during such period is
a proper part of the cost of the Project; provided, however, the aggregate
amount of Bond proceeds set aside for such purpose from Bond Droceeds shall
not exceed interest accruing on the Bonds for the first three (3) years from
the date of the Bonds, as provided in KRS 96.400.
Section 9. From and after issuance and delivery of any Bonds herein
authorized or permitted to be issued and so long as any thereof remain out-
standing and unpaid, the said System shall be operated on a fiscal year basis
beginning each January 1, and ending on the nest December 31, and on that basis
the income and revenues shall be collected, segregated, accounted for and dis-
tributed, as follows:
(A) A separate and special fund or account of said City, distince and
apart from all other funds and accounts, is hereby created, and is designated
and identified as the "Paducah Sewer System Revenue',Fund" (hereinafter sometimes
referred to as the "Revenue Fund"), whish shall be maintained with a bank in
Paducah, Kentubky, which is a member of Federal Deposit Insurance Corporation
(hereinbefore and hereinafter sometimes referred to as "FDIC"), and said City
covenants and agrees that it will deposit therein, promptly as received from
time to time, all cash revenues of the System as defined in Section 9(D) of
this Ordinance. The moneys in the Revenue Fund from time to time shall be used
and disbursed and applied by said City only for the purposes, and in the manner
and order of priorities, specified in the succeeding subsections of this Section 9,
all as permitted by applicable statutes, as follows:
650
(B) A separate and special fund or account of said City is hereby
created, distinct and apart from all other funds and accounts, and the same is
hereby designated and identified as the "Paducah Sewer System Bond and Interest
Redemption Fund," (hereinafter for convenience sometimes referred to as the
"Bond Fund"'), which shall continuously be maintained so long as any of the
Bonds herein authorized or permitted to be issued are outstanding, in a bank
which is a member of FDIC; and all moneys deposited therein from time to time
shall be used and disbursed and applied, and are hereby irrevocable pledged,
solely for the purpose of paying the principal of and interest on such Bonds as
may be issued and outstanding from time to time pursuant to the provisions
of this Ordinance, including parity Bonds, if any are issued.
The City shall deposit in said Bond Fund all sums received from any
purchaser or purchasers of Bonds issued hereunder as representing accrued
interest on such Bonds to date of delivery, and the amount so deposited shall
be applied to payment of interest coupons maturing on said date. Thereafter,
the City shall transfer from the Revenue Fund to the Bond Fund on or before the
15th day of each month, sums not less than:
(1) beginning on the 15th day of the first month, after issuance of
the Bonds, and continuing until December 15, 1965, such propor-
tionate monthly sums as, together with accrued interest to deliv-
ery as above provided to be set aside at the time of delivery, will
be sufficient to accumulate in the Bond Fund by December 15, 19653
a sum equal to the amount of the interest coupons which will become
due and payable on January 1, 1966;
(ii) beginning on the 15th day of the first month after issuance of the
Bonds, and continuing until December 15, 19663 such proportionate
monthly sums as will be sufficient to accumulate in the Bond Fund
not later than December 15, 1966, a sum equal to the principal
amount of all outstanding Bonds which will become due and payable
on January 1, 1967;
(iii) beginning January 15, 1966, a sum equal to one-sixth (1/6) of the
next succeeding interest installment to become due on all Bonds
then outstanding;
(iv) beginning January 15, 1967, a sum equal to one -twelfth (1/12) of
the principal of all Bonds maturing on the next succeeding January 1;
(v) beginning July 15, 1966, an additional sum equal to one one -hundred -
twentieth (1/120) of the aggregate amount of the principal of and
interest on all outstanding Bonds maturing on the ensuing January
1 and July 1, computed as of July 1 in each year;
PROVIDED, HOIAEVER, that all sums deposited in the Bond Fund in excess
of semiannual interest payments and annual principal payments of the Bonds,
shall constitute and accumulate within the Bond Fund as a Debt Service Reserve,
hereby created, until such time as there shall be accumulated in such Reserve
a sum equal to not less than the average of the amounts necessary to provide
for payment, when due, of both principal of and interest on all outstanding
Bonds during all subsequent fiscal years to final maturity; and thereafter the
aforesaid monthly deposits referred to in (v) above may be suspended, but shall
be resumed whenever authorized disbursements from the Debt Service Reserve
shall reduce the balance therein below the amount hereinabove prescribed, and
y
shall be continued for such period of tine as may be required to restore and
maintain the balance therein at such prescribed level.
In the event parity Bonds are issued pursuant to the conditions and
restrictions hereinafter prescribed in that connection, the monthly deposits
shall be adjusted as provided in Section 11 of this Ordinance.
Moneys from time to time in the Debt Service Reserve may be held in
cash, in which event the same shall be secured by a valid pledge of direct
obligations of, or obligations the principal of and interest on which are guaran-
teed by, the .United States Government, having at all times an equal market
value; or the same, or any part thereof, may be invested and reinvested by the
City Treasurer upon written direction of the City Manager, in interest-bearing
obligations of, or obligations the principal of and interest on which are guaran-
(teed by, the United States Government, maturing or subject to redemption at the
option of the holder not later than five (5) years from date of investment or
the final maturity date of Bonds outstanding pursuant to this Ordinance, which-
ever date is the earlier. Income from any such investments shall be accumu-
lated in said Debt Service Reserve, and may be invested in the same manner.
Withdrawals shall be made from the said Debt Service Reserve, and transferred
to the Bond Fund, if and to any extent required at any time to prevent default
in the payment of principal of or interest on any Bonds which by their terms
are payable from said Bond Fund; and if necessary, securities held as investments
in said Debt Service Roserve shall be converted into cash for such purposes, but
no vithdrawals therefrom shall be made for any other purposes, and the City
hereby irrevocable pledges all moneys and securities in the Debt Service Reserve
for such purposes only. In the event any such permitted withdrawals are made,
the deficiency in said fund shall.,be required to be made into or for the account
of said Debt Service Reserve; and in such event the Debt Service Reserve may
be applied to the payment and retirement of all such outstanding Bonds, whether
by redemption or purchase, notwithstanding any other provision hereinabove
made concerning the use and application of said Debt Service Reserve.
(C) A separate and special fund or account of said City is hereby
created, and the same is hereby designated and identified as the "Sewer Operation
and Maintenance Fund," which shall be maintained in a bank which is a member of
FDIC.
After observing the priority of deposits set forth in (B) above there
shall be deposited in,this fund monthly from the Revenue Fund, a sum equal to
the anticipated costs of operatind and maintaining the System for the next
ensuing month, according to the Budget for which provision is hereinafter
made, together with an amount sufficient to meet any unforeseen deficit in
payment of the costs of operating and maintaining the System during the previous
651
652
month; and moneys deposited from time to time in the said "Sewer Operation and
Maintenance Fund" shall be used and applied for such purposes.
(D) A separate and special fund or account of said City is hereby
created, and is hereby designated and identified as the "Sewer Depreciation and
Extension Fund" (hereinafter sometimes referred to simply as the "Depreciation
Fund"), which shall be maintained in a bank which is a member of FDIC.
After observing the priority of deposits set forth in (B) and (C)
above, which are cumulative, there shall be transferred from the Revenue Fund
each month and deposited in the Depreciation Yund the sum of u2,000.00, (or
so much thereof as may be available), and any excess Bond proceeds remaining
after payment in full of all costs of the Project, to the extent particularly
set forth in Section 8 of this Ordinance.
In addition to the above deposits from the Revenue Fund (and from
surplus Bond proceeds, if any), there scall also be deposited in the Depreciation
Fund, as received, such connection fees or charges as may be exacted from users
of the System, the proceeds of P71 property damage insurance (except public
liability) maintained in connection with the System, and the cash proceeds of
any surplus, worn out or obsolescent properties of the System, if the same be
sold upon order of the Board of Commissioners according to the conditions herein-
after prescribed in that connection. The term "cash revenues" of the System,
as used in Section 9 hereof, means all proceeds of service charges, and does
not include the cash items enumerated in this paragraph.
The Depreciation Fund shall be available and may be withdrawn and used
by the City, upon appropriate certification of need, for the purpose of paying
the cost of unusual or extraordinary repairs, renewals or.replacements, not
included in the Annual Budget of Operating Expenses, and the cost of construct-
ing extensions, additions and improvements to the System which will either
enhance its revenue-producing capacity or provide a higher degree of existing or
prospective service.
If .and when the balance in the Depreciation Fund, including the market
value of investments helf for the account thereof, shall equal the sum of 5200;000.00,
and so long as such balance shall remain at said sum, constituting a reserve for
application to any of the enumerated purposes of the Depreciation Fund, said
required monthly payments into said Fund may (but need not) cease, subject to
immediate resumption in the event disbursements from said Fund for authorized
Purposes shall reduce said Fund below the prescribed level.
Any sums remaining in the Revenue Fund after observing the priority
Of deposits set forth in paragraphs (B), (C) and (D) of this Section 9,(including
any sums over and above the b2,000.00 deposit required in paragraph (D), if
available), may, upon order of the Board of Commissioners be used and applied
(a) for application to the Debt Service Reserve, as provided in Section 9 (B),
653
(b) to provision of a reserve in the Sower Operation and Maintenance Fund equal
to the anticipated costs of operating and maintaining the System for a period of
three (3) months, and (c) to the redemption of Bonds outs tanding. pursuant to
this Ordinance in accordance :with their terms, or for the purchase and retirement
thereof upon terms no less advantageous to the City than the then current terms
of redemption.
At any time when the accumulations in the Depreciation Fund shall exceed
anticipated r,:d foreseeable needs far authorized purposes, all or any portion
of such excass may be invested and reinvested by the City Treasurer upon written
direction of the City 111a.nager in interest-bearing obligations of, or obligations
the principal of and interest on which are guaranteed by, the United States
Government, maturing or subject to redemption at the option of the holder not
later than three (3) years after the d-te of investment; but as and when funds
may be required for authorized purposes a sufficient portion thereof shall be
converted into cash and so applied. All investments for the account of the
Depreciation rind shall be carried to the credit of said Fund; all income from
investments and any profit from the sale thereof shall be credited thereto; and
any expenses incident to investment or reinvestment, together with any loss .from
forced conversion of investments into cash, shall be charged thereto.
All payments into the abovo special funds shall be made on or before
the .fifteenth (15th) day of each month, except that :when the fifteenth day of any
month shat) be a Sunday or a legal holiday then such payment shall be made on the
next succeeding business day.
All moneys held in any of the above special funds shall be kept apart
from all other municipal funds and shall be deposited in a bank or banks which
are members of FDIC, and all such deposits which cause the aggregate of all
deposits of the City in any bank to be in excess of the amount secured by FDIC,
shall (unless invested as herein authorized) be secured by a surety bond or
bonds or by pledge of direct obligations or by guaranteed bonds or securities of
the United States Government having a market value equivalent to such deposit.
Section 10. The said City hereby irrevocably covenants and agrees with
the holder or holders of any and all Bonds at any time issued and -outstanding
pursuant to authority of this Ordinance, that so long as the same or any part
thereof or interest thereon remain outstanding and unpaid:
(A) It will faithfully and punctually perform all duties with reference
to said System and Project required by the Constitution and laws of the
Commonwealth of Kentucky, and by the terms and provisions of this Ordinance.
(B) It will at all times operate said System on a revenue-producing
basis, and will parmit no free services to be rendered or afforded thereby.
(C) It will maintain the said System in good condition through appli-
cation of revenues accumulated and set aside for operation and maintenance
as herein provided; and will make unusual or extraordinary repairs, re-
newals and replacements, as the same may be.required, through application of
moneys accumulated and set aside into the Depreciation and Extension Fund.
(D) The City covenants and agrees that, so long as any of the Bonds
are outstanding, it will not sell or otherwise dispose of any of the
System facilities or any part thereof, and, except as provided for in this
Ordinance, it will not create or permit to be created any charge or lien
654
on the revenues thereof ranking equal or prior to the charge or lien of
these bonds. Notwithstanding the foregoing, the.City may at any time
permanently abandon the use of, or sell at fair market value, any of its
System facilities, provided that:
(i) It is in compliance with all covenants and undertakings in
connection with all of its Bonds or other obligations then outstanding
and payable from the revenues of the System, and the Debt Service Reserve
for the Bonds has been fully established, or is being accumulated by monthly
deposits as in this Ordinance provided;
(ii) It will, in the event of sale, apply the proceeds to either
(1) redemption of outstanding Bonds in accordance with the provisions
governing redemption of Bonds in advance of maturity, or (2) replacement
of the facility so disposed of by another facility which shall be incor-
porated into the System as hereinbefore provided;
(iii) It certifies, prior to any abandonment of use, that the facili-
•ty. to be abandoned,is nqt -any longer economicaLg feasible of. producing net
revenues; and
(iv) It certified that the estimated net revenues of the remaining
System facilities for the then next succeeding fiscal year, plus the
estimated net revenues of the facility, if any, to be added to the
System, satisfy the earnings test hereinafter provided in governing
issuance of additional Bonds.
(E) It will establish, enforce, and collect rates and charges for
services rendered and facilities afforded by said System; and the same
shall be reasonable and just, taking into account and consideration the
cost..and.valu8�of:the System, the costs,,of operating the same.-amd main-
taining it in a good state of repair, proper and necessary allowances
for depreciation and for additions and extensions, the amounts necessary
for the.orderly retirement of all outstanding Bonds and the accruing
interest thereon, and the accumulation of reserves as herein provided,
and such rates and charges shall be adequate to meet all such require-
ments as provided in this Ordinance, and shall, if necessary, be adjusted
from time to time in order to comply herewith.
On or before the inception of initial operation of the Project
additions to the System, the City will adopt a budget of Operating
Expenses for the System for the remainder of the then current fiscal year
of the System, and thereafter, on or before the first day of each fiscal
year so long as any Bonds are outstanding, it will adopt an Annual
Budget of Operating Expenses for the ensuing fiscal year, and will file
a copy of each such Budget, and of any amendments thereto, in the office
of the City Clerk, and furnish copies thereof to the holder of any Bond
upon request. The term "Operating Expenses," as herein used, includes
all reasonable and necessary costs of operating, repairing maintaining,
and insuring the System, but shall exclude any allowance for depreciation,
payments into the Depreciation Fund for extensions, improvements, and
extraordinary repairs and maintenance, and payments into the Bond Fund
and the Debt Service Reserve. The City cevenants that the Operating
Expenses incurred in any year will not exceed the reasonable and neces-
sary amounts therefor, and that it will not expend any amount or incur
any obligations for operation, maintenance and repairs in excess of the
amounts provided for Operating Expenses in the Annual Budget, except upon
resolution or ordinance duly adopted by the Board of Commissioners deter-
mining that such expenses are necessary in order to operate and maintain
the System. At the same time, and in like manner, the City agrees that
it will prepare an estimate of gross revenues to be derived from opera-
tion of the System for each fiscal year, and to the extent that said gross
revenues are insufficient to provide for all payments required to be made
into the Bond Fund during such ensuing fiscal year, and to build up and
maintain the reserves specified and enumerated in Section 9 of this
Ordinance, and to pay Operating Expenses, the City covenants and agrees
that it will revise its rates and charges for services rendered by the
System, so that the same will be adequate to meet all of such require-
ments.
(F) It will not at any time make any reduction in any prevailing
schedule of rates and charges for use of the services and facilities of
the System, without first obtaining the written determination of a Con-
sulting Engineer of national reputation that the proposed reduction will
not adversely affect the ability of the City to meet all the requirements
set forth in this Ordinance.
655
(G) It will at all times segregate the revenues'o£ the System from
all other revenues, moneys, and funds of the City,.and will promptly and
regularly make application and distribution thereof into the special funds
provided in this Ordinance in the manner and with due regard for the
priorities herein attributed thereto.
(H) It will keep proper books of record and account, separate and
clearly distinguishable from all other municipal records and accounts,
showing complete and correct entries of all transactions relating to said
System, and the same shall be available and open to inspection by any
Bondholder, and any agent or representative of a Bondholder.
(I) It will, within ninety (90) days after the end of each fiscal
year, cause an audit to be made of the books of record and account perti-
nent to the System, by an independent state -licensed accountant not
in the employ of the City on a monthly salary basis, showing all receipts
and disbursements, with comments of the auditor concerning whether the
books and records are being kept in compliance with this Ordinance and in
accordance with recognized accounting practices, and will'promptly mail
a copy thereof to the original purchaser or purchasers of Bonds issued
hereunder. If requested to do so, the City will furnish to any Bondholder
a condensed form of the Balance Sheet, and a condensed form of the Oper-
ating Report, in reasonable detail. All expenses incurred in causing
such audits to be made, and copies distributed, shall constitute proper
expenses of operating and maintaining the System, and may be paid from
revenues allocated for such purposes, as herein provided.
(J) Any holder of said Bonds, or of any of the coupons, may either
at law or in equity, by suit, action, mandamus, or other proceedings,
enforce and compel performance by said City and its officers and agents
of all duties imposed or required by law or this Ordinance in connection
with the operation of said System, including the making and collecting
of sufficient rates and segregation of the revenues and application
thereof.
(K) If there be any default in the payment of the principal of or
interest on any of said Bonds, then upon the filing of suit by any holder
of said Bonds or any of the coupons, any court having jurisdiction of the
action may appoint a receiver to administer said System on behalf of the
City with power to charge and collect rates sufficient to provide for the
payment of any Bonds or obligations outstanding against said System, and
for the payment of Operating Expenses, and to apply the revenues in con-
formity with this Ordinance and the provisions of said statute laws of
Kentucky aforesaid.
(L) The City will cause each municipal officer or other phrson
(other than depository banks) having custody of any moneys administered
under the provisions of this Ordinance to be bonded at all times in an
amount at least equal to the maximum amount of such moneys in his custody
at any time; each such bond to have surety given by a surety corporation
qualified to do business in Kentucky and approved by the Board of Com-
missioners, and the premiums for such surety shall constitute a proper
expense of operating the System, and may be paid from moneys available
in the "Operation and Maintenance Fund.,'
(M) It will procure, and at all times maintain in force, insurance
of all insurable -properties constituting parts of, or being appurtenant
to, the System, to the full insurable value thereof, against damage or
destruction by fire, windstorm, and the hazards covered by the standard
"extended coverage" policy endorsements or provisions, the premiums
therefor to be paid from the Operation and Zaintenance Fund; and will
deposit all sums collected under the terms of .such policies in the De-
preciation and Extension Fund.
(N) The City covenants and agrees that according to authority of
KRS 96,930, at seq, it will provide that water service to Piny premises
(whethera such,water'serviceyby iurnished-by,a privately-ewaed utility
company or by a municipally-oomed water system) shall be discontinued
upon delinquency of payment to the City for sanitary sezrer service
charges to the same premises, according to such reasonable contracts or
regulations in that connection as may be effective from tine to time.
(0) It will regularly employ from time to time a Consulting Engineer
or firm of Consulting Engineers of national recognition in the field of
sanitation engineering to make a physical inspection of the System not
less often than once every five (5) years (and more often, if circum-
stances so require, in the judgment of the Board of Commissioners),
and to file in the office of the City Clerk a written report of the
physical condition thereof, sufficiency of renewals, additions, exten-
sions, enlargements, acquisitions or new installations, if any, together
with a preliminary estimate of the costs thereof and availability of funds
therefor, and such other comments as may in the opinion of the Engineer
or Engineers be deemed necessary or appropriate. Such written reports
656
shall be kept on file in the office of the City Clerk subject to in-
spection at all reasonable times by any holder of bonds or other obli-
gations of the City relating to the System, and a complete copy of each
such report shall be furnished without demand to the original purchasers
of Bonds at each public sale thereof.
Section U. The Bonds authorized to be issued hereunder and from
time to time outstanding shall not be entitled to priority one over the
other in the application of the revenues herein pledged for the payment
thereof, regardless of the time or times of their issuance, it being the in-
tention that there shall be no priority among the Bonds authorized to be is-
sued under the provisions of this Ordinance, regardless of the fact that they
may actually be issued and delivered at different times. No other bonds or
other obligations shall be issued by the City and made payable from the reve-
nues of the System unless the pledge of:revenues for the same -is expressly
made subordinate and inferior to the lien and pledge herein created; provided
however, said City hereby reserves the right and privilege of issuing additional
Bonds, from time to time, payable from the revenues of said System, equally
secured by the statutory mortgage lien upon the System, provision for which
is made in KRS 96.400 (said lien being hereby acknowledged to be effective
upon issuance of any Bonds under authority of this Ordinance), and secured
bf a parity lien upon and ratably payable from such revenues, for the purpose
of adding to, extending, or improving the System, provided in each instance
that:
(i) the facility or facilities to be built 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 Bonds;
(ii) the City is in compliance with all covenants and undertakings
in connection with all of its Bonds then outstanding and payable from
the revenues of the System or any part thereof;
(iii) the annual net revenues, defined as gross sewer service reve-
nues less Operating Expenses (as defined in Section 10(E) hereof), of
the System for a period of twelve months immediately preceding the is-
seance of additional parity Bonds, are certified by an independent
state -licensed accountant not employed by the City on a monthly salary
basis to have been equal to at least one and twenty-five hundredths
(1.255 times the average annual requirements for principal and interest
on all Bonds then outstanding and payable frcm the revenues of the
System, and the parity Bonds then proposed to be issued; provided,
however, that for the purposes of showing compliance with the require-
ments of this paragraph, such showings of the accountant may be adjusted
by an Engineer or firm of Consulting Engineers of national reputation
in the field of sanitation engineering (a) to reflect any increased
sewer service revenues which will be produced through the operation of
extensions, additions and improvements to be financed in whole.or in part
through application of the proceeds of the proposed parity Bonds, taking
into account any increase or decrease of the costs of operating and
maintaining the System incident thereto, but with respect to the ad-
justments permitted by this sub -paragraph (b) only in the event that
prior to the issuance of such parity Bonds the City shall have entered
into firm contracts establishing that the costs of the proposed exten-
sions, additions and improvements will not exceed the cost figures
used by the Engineers in making such computations.
The City hereby covenants and agrees that in the event additional
series of parity Bonds are issued, it shall: -
(i) adjust the monthly deposits into the Bond Fund on the same
basis as that prescribed in Section 9(B) hereof to provide for the
annual debt service on the additional Bonds;
(ii) adjust the amount of the Debt Service Reserve to a sum equal
657
to not less than the averae annual debt service on the bonds then out-
standing and such =',.diticnal p..rit,, Bonds, the additional Debt Service
Reserve to be accumulated monthly in the manner hereinbefore provided,
over a period of not nor:; than ten (10) years from the issuanc. of such
parity Bonds;
(iii) adjust the amount to be accumulated as a reserve in the Depre-
ciation ilmd in the manner prescribed in Section 9(D) hereof, by either
increasing, or reinstituting required monthly payments, to accrue a rea-
sonably increas«d Depreciation Reserve hind, the amount to be determined
by the City, upon competent, professional engineering advice and guidance,
taking into account the future replac.,ment cost of the facilites and equip-
ment to be constructed or acquired with the proceeds of such additional
Bonds; and
(iv) make such additional Bonds payable as to principal on January 1
of each year in ::hich principal falls due, and payable as to interest on
January- 1 and July l of each year; and schedule the principal maturities
of the parity Bonds in such manner as to cause the aggregate annual principal
and interest requirements of the outstanding Bonds and the parity Bonds to
be as nearly equal as may be feasible, except in the case of advance re-
funding according to the provisions hereinafter set forth in that connection.
The additional parity Bonds (sometimes herein referred to as "permitted"
to be issued), the issuance of which is restricted and conditioned by this Section,
shall be understood to mean Bonds payable from the revenues of said System on a
basis of equality and parity with the Bonds herein specifically authorised, and
shall not be deemed to include other bonds or obligations, the security and source
of payment of which are subordinate and subject to the priority of the Bonds and
parity Bonds herein authorized to be issued. The City expressly reserves the right
to issue its bonds or other obligations payable from the revenues herein pledged,
and not ranking on a basis of equality and parity with the Bonds and parity Bonds
herein otherwise referred to, without any proof of previous earnings or net reve-
nues, but only if such Bonds or other obligations are issued to provide for additions
of extensions or improvements of the System, and only if the same are issued in
express recognition of the priorities, liens and rights created and existing for
the security, source of paynrant, and protection of the said Bonds and parity Bonds
herein authorized and rermitted to be issued.
Nothing in this Section is intended or shall be construed to prevent or
restrict:
(A) the ordinary ref coding of the initially authorized Bonds, and/or
of any parity Bonds which may have been issued and are outstanding under the provisions
of this Ordinance, if such refunding does not operate to increase, in any year
until the final maturity of the outstanding Bonds which are not refunded, the
aggregate of the principal and interest requirements of the Bonds to remain out-
standing and the Bonds which are refunded; or
(B) any refunding of the initially authorized Bonds, and/or of any
parity Bonds which may have been issued and are outstanding under the provisions
of this Ordinance, more than six (6) months in advance of the earliest permissible
redemption date of the outstanding Bonds or parity Bonds which are to be refunded
(hereinafter referred to as "advance refunding"), if ,
658
(i) prior to the issuance of the refunding bonds the City shall
have elected to call the Bonds to be refunded, for redemption on the
earliest permissible redemption date in accordance with the terms thereof,
and shall have given notice of such action as in this Ordinance provided;
and
(ii) moneys sufficient for payment, when due, of the principal of
and interest on the Bonds to be refunded and any premium or additional
interest due upon the redemption date are simultaneously with the issuance
of the refunding bonds deposited in a "Special Escrow Account" in the
Bond Fund, are irrevocably pledged exclusively for the payment, redemption
and retirement of the Bonds to be refunded, and are invested for the
account of such Special Escrow Account either in United States Govern-
ment securities or in Certificates of Time Deposit issued by an incor-
porated state or national bank or trust company and fully and continuous-
ly secured to maturity by a valid pledge of United States Government
securities having an aggregate market value not less than the face
amount of such Certificates; and
(iii) the assured interest income from such investments is irrevo-
cably pledged to be paid as received from time to time into the Bond
Fund as in the case of revenues from sanitary sewer service charges
otherwise pledged to be set aside and deposited therein;
in which event the aggregate of the principal and interest requirements of
the Bonds to remain outstanding and the refunding bonds so issued may, in
any year or years until such redemption date, exceed the aggregate of the
annual principal and interest requirements prevailing in the absence of such
advance refunding, by the amount of the pledged interest income from such
investments to be received and paid into the Bond Yund during such year or
years.
Section 12. It is hereby covenanted and agreed by the City with each
and every holder of revenue Bonds issued and outstanding pursuant to this
Ordinance that the provisions of this Ordinance shall constitute a contract
between the said City of Paducah and the holder or holders of the revenue
Bonds herein authorized to be issued, and after the issuance of any of said
revenue Bonds no change or alteration of any kind in the provisions or opera-
tions under this Ordinance may be made, until all of the Bonds have been paid
in full, as to both principal and interest; provided, that modifications,
alterations and amendments of this Ordinance and of the rights and obligations
of the said City and of the holders of revenue Bonds issued and outstanding
hereunder may be made as in this section provided.
In the event that it shall appear desirable and to the advantage of
both the City and the holders of the revenue Bonds the City may propose such
modifications, alterations and amendments in the following manner: the Board
of Commissioners shall adopt an Ordinance proposing such modifications,
alterations or amendments, but providing therein that the same shall not become
effective unless and until it has had approval by the holders of the revenue
Bonds as hereinafter set out. Promptly upon adoption of said Ordinance the
City shall set a time and place for and call a meeting of the holders of the
revenue Bonds to be held ineither the City of Louisville, Kentucky, or the
City of Paducah, Kentucky. Notice of the time and place of the meeting and
in general terms the matters to be submitted thereat shall be given to the holders
of the revenue Bonds in the following manner:
(a) Not less than fifteen (15) days prior to the date set for the meeting
a copy of the Notice shall be mailed to each of the holders of revenue Bonds regis-
tered as to principal at the address appearing on the registration books and also
to the origianl purchaser or purchasers of the revenue Bonds;
(b) Notice of such meeting shall also be published in at least two issues
of (1) a financial journal published in the City of New York New York, or in the
City of Chicago, Illinois, and (2) a newspaper published and of statewide circu-
lation in the Commonwealth of Kentucky, and (3) a newspaper of general circulation
in the City of Paducah, Kentucky; the first of each of such publications to be made
not less than fifteen (15) days prior to the date set for the meeting and the
second of such publications to be made not less than seven (7) days nor more than
ten (10) days prior to the date set for such reeting.
At such meating there shall be submitted to the holders of the revenue
Bonds for their approval the Ordinance theretofore adopted proposing the modifi-
cations, alterations or amendments.
All holders of revenue Bonds hereby authorized and outstanding at the time
of such meeting and also of the parity revenue Bonds secured by the Bond Fund herein-
before created shall be entitled to vote thereat and attendance at such meeting
may be in person or by proxy. Each person seeking to attend or vote at any such
meeting must, if required, produce such proof of ownership of revenue Bonds or of
personal identify as shall be satisfactory to the inspectors of votes. Every
proxy shall be signed by the owner or by his duly authorized attorney and shall be
witnessed, and its genuineness, if questioned, shall be established to the satis-
faction of the inspectors of votes. The holders of revenue Bonds and the holders
of proxies present shall, by a majority vote, irrespective of the amount repre-
sented by them, select two persons from those present to act as inspectors of
votes, who shall count all votes cast at such meeting, and who shall make and file
with the secretary of the meeting their verified written report ini�dnplicate.of
all such votes so cast at said meeting.
The holders (or -persons entitled to vote the same) of not less than
seventy per cent (70%) in aggregate principal amount of all of such revenue Bonds
entitled to vote must be present at such meeting in person or by proxy in order
to constitute a quorum for the transaction of business, less than a quorum, however,
having power to adjourn.
Argy such modifications, alterations or amendments of this Ordinance, or
of any rights and obligations of the City, or of the holders o£ the revenue Bonds
in any particular, may be approved at such meeting or at a due adjournment thereof
held in accordance with the provisions of this section, but only by a resolution
duly adopted by the affirmative vote, iw parson or by proxy, of the holders (or
persons entitled to vote the same) Of sixty-six and two-thirds per cent (66-2/30)
or more in aggregate principal amount of such outstanding revenue Bonds; provided,
bsg
660
however, that no such modifications, alterations, or amendments shall be made
which will (a) permit an extension of the time of payment at maturity of the
principal of or payment of the interest on any revenue Bonds, or a reduction
in the amount of principal or the rate of interest thereon without written
consent of the holder thereof, or (b) reduce the percentage of holders of reve-
nue Bonds required by the provisions of this section for the taking of any
action under this section.
A record of the proceedings of each such meeting prepared and certified
by the secretary of the meeting and having attached thereto an original counter-
part of the report of the inspectors of votes and affidavits of mailing and
publication of the Notice of the meeting shall be filed with the City Clerk, of
the City, and thereupon the proposed modifications, alterations, and amendments,
as aforesaid, shall become effective, but otherwise shall be null and void.
Section 13. 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 remaining provisions of this
Ordinance.
Section lb. All ordinances, resolutions and orders, or parts thereof,
in conflict with the provisions of this Ordinance, are, to the extent of such
conflict, hereby repealed.
Section 15. This Ordinance shall be in ful-I force and effect from
end after its adoption, signature, attestation, and publication as provided
by law.
INTRODUCED AND GIVEN FIRST -READING APPROVAL by the Board of Commissioners
of the City of Paducah, Kentucky, at a meeting held on the 13th day of July, 1965
and ordered held over in the office of the City.Clerk, subject to public in-
spection, pending further consideration by the said Board of Commissioners.
FINALLY ADOPTED ON SECOND READING BY TIS BOARD OF CCI,-xISSIONERS OF THE
CITY OF PADUCAH, itA]TUCKY,AT A MEETING HELD ON THE 20th day of July, 1965,
on the same occasion signed in open session by the t,ayor, attested under seal
by the City Clerk, and ordered to be published in The Paducah Sun -Democrat,
Paducah, Kentucky, on the earliest possible date.
Mayor
(SEAL) City of Paducah, Kentucky
AT T :
'ity Ulerk