Resolution No. 588INDEX TO
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Be
Ce
RESOLUTION NO. 588
A RESOLUTION PROVIDING FOR THE ISSUANCE OF THE
FIRST DIVISION OF SEWER REVENUE BONDS, FIXING
THE FORM OF BONDS AND PROVIDING COVENANTS
FOR THEIR PROTECTION
SOUTH TAHOE PUBLIC UTILITY DISTRICT
SEWER REVENUE BONDS OF 1.966 - FIRST DIVISION
GENERAL PROVISIONS
1. Bond Law ......................
2. Conditions Precedent
3. Definitions
4. Public Interest
5. Proposition
6. Issue of Bonds
7. Project Cost
8. Complete Project
Adequate Funds
Adequate Rates
Bond Payment .................
9. Single Transaction
10. Separate Fund
DIVISION INTO SERIES AND PROVISIONS GOVERNING
THE ISSUANCE OF THE FIRST DIVISION
11. Multiple Series
12. Callable Bonds
13. Purchase of Bonds
14. Interest Coupons
15. Interest After Maturity
16. Where Bonds Payable
17. Negotiable Instruments
18. Execution of Bonds
19. Record of Bonds
20. Registration of Bonds
Principal and Interest
Id - Principal Only-
De--registration
Re.-registration
21. Delivery of Bonds-
22. Transcript
ISSUANCE OF SUBSEQUENT SERIES
PROVISIONS APPLICABLE TO ALL BONDS OF THE ISSUE
23. Proceeds of Bonds
tReserve Fund
Acquisition Costs
Construction Costs
Incidental Expenses
24. Pledge of Revenues
~5. First Li~n on Revenues
26. Equal Parity
27. Ratio of Net Revenue Coverage
28. Bonds Not a Debt
29. Entity Credit Not Encumbered
30. Bonds a Special Obligation
31. Revenues a Trust Fund
32. Sewer Revenue Fu~_.~
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33.
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50.
Bond Fund
Revenue Bond Reserve Fund
Maintenance and Operation Funds
Sewer'Surplus Fund
Feeding Higher Priority
Investment of Surplus Funds
Inactive Deposits
Notice of Redemption
Form of Notice
Receipt of Notice Unnecessary
Certificate of Notice Conclusive
Redemption Fund
il U
se of Funds
Coupons Due
Coupons Not Due
Retransfers
Effect of Notice of Redemption
~/ Interest Terminates
Matured Coupons Payable
Covenants ...........
a Acquire Project
b Operate Enterprise
c Good Repair
d Preserve Security
e Collect Revenues
f Service Bonds
g Pay Claims
h Encumbrances
i No Free Service
No Competition
k Insurance
i Fidelity Bonds
m Engineers
n Audit and Report
i Balance Sheet
ii Revenue and Payments
iii Insurance
iv Customers
v Billing
vi Rate Schedules
vii Recapitulation
viii Comments
Additional Bonds
a)
b)
C
f
Modifications
Refunding
Default
a) Event of
ii
Net income
i! Ratio to Bond Service
Estimated Additional Net Income A. Earnings
B~ Rate Increase
Bond Terms
Use of Proceeds
Additional Reserve
Subordinate Lien Bonds
Principal
Interest
Covenants
Bankruptcy
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ii
l Acceleration
Application of Funds
i) Costs and Expenses
ii/ Interest on Undue Bonds
iii Principal and Interest on Due Bonds
iv~ Insufficient Funds
d) Refunding Defaulted Bonds
51. Bondholder Remedies
/ Accounting
Injunction
Mandamus
52. Connections Mandatory
3. Regulations for Collecting Charges
Billing Period
Delinquency
Collection With Taxes
Collection by Suit
Collecting Charges With Other Utility Charges-
i) With Utility Charges of Entity
A) Discontinuance of Service
Upon Delinquency
B) Id - Time
ii) Collection by Suit
54. Unconditional Obligation
55. Performance of Essence
56. Recourse to Bond Law
57. Indenture is Covenant
58. Period of Agreement
59. Fiscal Agent
g
h
i
Acceptance
Resignation
Removal
Continued Service
Funds
Bond Redemption
Records
Compensation
Responsibilities
FORM OF BONDS OF FIRST DIVISION
60. Bond Form
61. Interest Coupon Form
62. Registration Form
63. Legality
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iii
WJM&L:H:s
A RESOLUTION PROVIDING FOR THE ISSUANCE OF THE FIRST
DIVISION OF SEWER REVENUE BONDS~ FIXING THE FORM OF
BONDS AND PROVIDING COVENANTS FOR THEIR PROTECTION
SOUTH TAHOE PUBLIC UTILITY DISTRICT
SEWER REVENUE BONDS OF 1966 -- FIRST DIVISION
RESOLVED~ by the Board of Directors of the South Tahoe Public
Utility District~ E1 Dorado County~ California:
WHEREAS~ the South Tahoe Public Utility District, in the County of
E1Dorado~ State of California, herein called "Entity~, is a public
utility district duly organized and now existing under and pursuant to
the provisions of the Public Utility District Act of the State of
Californial
WHEREAS~ at an election in said Entity~ duly held on the 21st day
of September, 1965~ the qualified electors of the Entity authorized
the issuance of $1~00~000 of revenue bonds for the purpose of acquiring~
constructing~ improving and financing of additions~ extensions and im-
provements, including the acquisition of lands and easements necessary
therefor~ and all costs incidental thereto~ to an Enterprise~ as herein
defined~
WHEREAS~ the Entity proposes herein to issue revenue bonds to
finance the cost of the acquisition, construction~ improving and financ-
ing of additions~ extensions and improvements~ including the acquisition
of lands and easements necessary therefor, and all costs incidental
thereto~ to the Enterprise~ including all parts of the Enterprise, all
appurtenan6es tbereto~ and to provide that the principal of and interest
on said bonds shall be paid from a Bond Fund and that their payment
be further secured by a Reserve Fund~ both of which funds are herein
created and will be maintained from the gross revenues, and the revenues
will be such that the Entity can and does herein determine that the
principal of and interest on said bonds, together with the payment of
all othe~ obligations which a~e a charge against the revenues~ and the
costs of the maintenance and operation of said Enterprise can be
financed solely from the revenues and to which its tax fund need not
make any contribution at all;
NOW, THEREFORE, IT IS DETERMINED and 0RDERED~ as follows:
A. GENERAL PROVISIONS
1o Bond Law.. These proceedings have been had and said bonds are
being issued pursuant to the provisions of the Revenue Bond Law of 19~1~
as amended°
2. Conditions Precedent° All acts~ conditions and things required
by law to exist~ happen and be performed precedent to and in the issuance
of said bonds have existed~ have happened and have been performed in due
time, form and manner as required by law~ and the Entity is now authorized,
pursuant to each and every requirement of law~ to issue sewer revenue
bonds in the manner and form as provided herein~
3. Definitions.
following meaning:
As used herein the following terms have the
(a) Annual means the fiscal year of the Entity~ which is
from July 1 to June 30~ both inclusive~
(b) Bondholder or Holder of Bonds means the holder of a
bearer bond~ or the-"regi'~'~ered owner of a registered bond~
(c) Bonds or Bonds of This Issue mean the bonds herein
authorized to be issued~
(d) Bond Law means the Revenue Bond Law of 1941~ as amended~
(e) Bond Year m~an, s the period from the date of the bonds
to the end of each succeeding twelve (12) months thereafter~
(f) Charges mean fees~ tolls~ rates and rentals prescribed
by the Legislative Body for the services and facilities of the
Enterprise;
(g) Clerk or Secretary means the persons elected or appointed
as the Secr--~y or Clerk o~ the Entity and of its Legislative Body~
(h) Enterprise means the system~ plant~ works and facilities
used or useful for the collection~ treatment and disposal of
sewage of the Entity~ together with all additions and improvements
to said system hereafter made~ including the Project~
(i) Entity means the South Tahoe Public Utility District~
(j) First Division or Bonds of This Division mean the series
of $700~000 principal amount herein described and authorized
to be issued~
(k) Fiscal Agen~ means that agent as specified in Section
59 of this Resolution~ unless otherwise provided~
(1) Finance Officer - see ':Treasurer hereunder~
(m) Gross Revenues mean annual revenues of the Enterprise~
(n) Improve means reconstruct~ replace~ extend~ repair~
better~ equip~ develop~ embellish or otherwise improve~
(o) Indenture means this Resolution~
Entity~
Legislative Body means the Board of Directors of the
(q) Net Revenues and Net Revenue of the Enterprise mean annual
gross revenues of the Enterprise after deducting all sums expended
therefrom for the annual management~ operation~ maintenance and re-
pair of the Enterprise~ including all incidental costs~ fees and
expenses properly chargeable thereto~
(r)
Body:
Presiding Officer means the President of the Legislative
(s) Project means the acquisition and construction of the
improvements described herein~ the cost of which is to be paid
from the proceeds of the bonds of this issue~
2
(t) Revenues mean all charges received for~ and all other
income and receipts derived from the operation of the Enterprise~
or arising from the Enterprise, including revenues deposited in
the Bond Fund to provide the payment of the bonds and interest
thereon~ and Reserve Fund to secure the payment of the bonds
and interest thereon~ and interest received on any invested
moneys of the Enterprise;
(u) Treasurer or Finance Officer means the officer desig-
nated by law to handle ~ funds of th~ Entity.
4. Public Interest. The public interest~ economy and general wel-
fare will be served by the acquisition~ construction, improving and
financing of the Project~ including any or all expenses incidental
thereto or connected therewith.
5. P~r~positiono Revenue bonds of the Entity shall be issued to
pay the cost of the acquisition~ construction~ improvement and financing
of the Project as set forth in the following Proposition submitted to
and approved by a majority vote of the voters of the Entity voting at
an election duly called and held therein:
PROPOSITION: Shall the South Tahoe Public Utility
District issue revenue bonds in the
principal amount of One Million Four
Hundred Thousand Dollars (~1~400,000)~ for the acquisition~
construction~ improving and financing of additions~ ex-
tensions and improvements~ including the acquisition of
lands and easements necessary therefor~ and all costs
incidental thereto~ to an enterprise consisting of sewage
treatment plant and facilities, trunk sewers, pumping
station and disposal facilities of the entire district, to-
gether wit~ all additions and improvements to said system
hereafter made~ pursuant to the Revenue Bond Law of 19417
6. Issue of Bonds° Revenue bonds of the Entity shall be issued
to pay the cost of the acquisition~ construction~ improving and
financing of the Project.
7. P~__~.~ect Cost. The total estimated cost of the Project~ in-
cluding the engineering and other fees, acquisition of lands and
easements~ construction of improvements~ and all other expenses inci-
dental the~eto~ including 'bond discount, if any~ and bond reserve
funds~ is the sum of $t~00~000.
8. C~m~lete Pro~ect. It is ~ereby found and determined that
the Entity has made all necessary arrangements for the financing of
the Project. Accordingly~ it is hereby found and determined that:
(a) ~_de.q.uate Funds. The Project can be accomplished as
part of the Enterprise as a complete system from the funds to
be available from the proceeds of the sale of bonds.
(b) Adequate Rates. Charges have been and will be
fixed~ levied and collected for the services and facilities
to be furnished by the Enterprise~ and
(c) Bond Payment. The charges and all other income and
receipts included in the definition of "Revenues~' shall
constitute the revenues of the Enterprise pledged to service
the bonds as provided herein°
3
9. Single Transaction. The Project is one transaction~ complete
in and of itself~ and th~ proceeds of bonds of this issue will be
applied to the cost thereof as herein provided.
10. Separate Fund. The Entity~ during the term of the bonds to
be issued hereunder~ will operate the Enterprise as a separate and dis-
tinct agency~ and will create and maintain a separate and distinct
special fund and account for the Enterprise in which all revenues to be
received are to be deposited~ and from which all disbursements herein
provided~ relating to the Enterprise~ are to be made during the term
of the bonds.
Be
DIVISION INT0 SERIES AND PROVISIONS GOVERNING
THE ISSUANCE OF THE FIRST DIVISION
11. Multiple Series. The bonds are hereby divided into two or
more series. The first series~ herein called the First Division~ shall
be in the aggregate amount of $700~000~ shall be dated January ~5~ 1966,
shall be called "South Tahoe Public Utility District Sewer Revenue Bonds
of 1966 - First Division ~ shall be negotiable in form and of the
character known as serial~ and at the option of the bond bidders shall
be either 700 in number~ numbered consecutively from 1 to 700~ both
inclusive, and of the denomination of $1~000 each, or shall be 140 in
number, numbered consecutively from 1 to 140, both inclusive~ and of
the denomination of $5~000 each. Bidders for said bonds must indicate
in the bid proposal whether the denomination of bonds will be $1~000
or $5~000 as provided herein. A bid which is silent as to number and
denomination shall be conclusively presumed to be for bonds in the
denomination of $5~000 each.
Said bonds shall be numbered and shall mature serially in the
order of serial numbers on January 15 in each of the years and amounts,
as follows:
$1~000 Denom-inations
~Both Inclusive)
$5~000 Denom-inations
[Both Inclusive)
Aggregate
Principal Year of
Amount Maturity
1 - 15
16 - 3O
31 - 45
46 - 6o
61 - 75
76 - 95
96 - 115
116 - 135
136 - 155
156 -- 175
176 - 200
201 - 225
226 - 250
251 - 280
281 - 310
311 - 340
341 - 370
371 - 405
406 - 440
441 - 480
481 - 520
521 - 560
561 - 605
606 - 650
651 - 700
l- 3
4- 6
7- 9
10 - 12
13 - 15
16 - 19
20 - 23
24 - 27
28 - 31
32 - 35
36 - 40
41 - 45
46 - 50
51 - 56
57 - 62
63 - 68
69 - 74
75 - 81
82 - 88
89 - 96
97 - 104
105 - 112
113 - 121
122 - 13o
131 - 140
$15~000 1967
15~000 1968
15~000 1969
15~000 1970
15~000 1971
20,000 1972
20~000 1973
20~000 1974
20~000 1975
20~000 1976
25,000 1977
25,000 1978
25~000 1979
30~000 1980
30~000 1981
30~000 1982
30~000 1983
35~000 1984
35~O00 1985
40,000 1986
407000 1987
4o~ooo 1988
45~ooo 1989
45~ooo 199o
5o~ooo 1991
Not Callable
Callable on and
after January
15~ 1977
4
12. Callable Bonds. Bonds maturing by their terms on or before
January 15, 1976 shall not be subject to call prior to their fixed ma-
turity date. Bonds~.maturing on or after January 15, 1977, shall, by
their terms, be subject to call and redemption, at the option of the
Entity, as a whole or in part, in inverse numerical order, on January
15, 1977 (but not prior thereto) or on any interest date thereafter and
prior to their maturity date or dates at the principal amount thereof
and accrued interest thereon to the date of redemption, plus a redemption
premium equal to one-quarter of one per cent (1/4 of 1%) of such princi-
pal amount for each whole twelve (12) months, and for any remaining
fraction of a twelve (12) month period from the date fixed for redemption
to the maturity date of the bonds~ provided, however, that in no event
shall the total of such premiums so paid exceed the stated annual in-
terest rate applicable to each bond redeemed.
13. Purchase of Bonds. Entity may also, from time to time, pur-
chase any or ~11 outstanding bonds at prices offered, at or below the
sum required to be paid in the event of redemption by call. Ail bonds
purchased or called shall be cancelled and shall not again be reinstated.
14. Interest Coupons. The bonds of the First Division shall bear
interest at the rEte of not to exceed five per cent (5%) per annum from
their date until paid. Said interest shall be payable semiannually on
the 15th day of January and the 15th day of July of each year to the date
of maturity. Attached to each bond shall be interest coupons payable at
the times the respective interest payments thereon become due and for
the amount thereof, as determined from the accepted bid for the purchase
of the bonds. Bidders for the purchase of the bonds of this Division
must specify the rate or rates of interest which the bonds shall bear.
Bidders may bid different rates of interest irrespective of the maturi-
ties of the bonds; provided, that the spread from the lowest to the
highest rate shall not exceed two and one-half per cent (2-1/2%) per
annum. The interest rates stated in the bid may be in multiples of any
fraction of one per cent. Bidders shall not be permitted to cause the
interest for a given period to be split and represented by more than
one coupon.
15. Interest After Maturity. If, upon presentation at maturity,
or if redeemable and duly calle~ for redemption, payment of said bonds
or of any interest coupons thereon is not made in full accordance with
the terms of this Indenture, said bonds or coupons~ or both, shall con-
tinue to bear interest at the rate stated in the bond until paid in full.
16. Where Bonds Payable. The bonds and interest thereon shall be
payable in lawful money of the United States of America at the Main
Office of the Bank of America, N. T. & S. A., 300 Montgomery Street,
San Francisco, California, which is hereby designated as the Fiscal
Agent, or, at the option of the holder, at any fiscal agency of the
Entity in Los Angeles, California, Chicago, Illinois, or New York,
New York.
17. Negotiabl.e Instruments. The bonds of this Division are negoti-
able instruments and title thereto, unless registered, shall pass by
physical delivery thereof. The holders of these bonds shall have all
of the rights possessed by holders of negotiable instruments payable
to bearer.
18. Execution of Bonds. When the bonds of this Division have been
prepared in accordance with this Indenture, they shall be executed on
behalf of the Entity and under its official seal, by the Presiding
Officer by his printed, engraved or lithographed facsimile signature
and countersigned by the manual signature of the Clerk, and the interest
coupons shall be executed and authenticated by the printed, engraved
or lithographed facsimile signature of the Finance Officer, who by such
signatures shall ratify the execution of the same. The seal of the
Entity may be affixed to the bonds by printed, lithographed or other
reproduction thereof.
5
19. Record of Bonds. The Fiscal Agent shall keep a record of
the names of the purchasers of the bonds and of all successive holders
of the bonds issued hereunder so far as such information is furnished
to him.
20. Registration of Bonds. The bonds of this Division shall be
subject to registration as to principal and interest upon written re-
quest of the owner and presentation of any such bond to the Fiscal
Agent for registration°
(a) Principal and Interest. Upon presentation and request~
the Fiscal Agent shall cut off the coupons and destroy them. It
shall maintain a book in which it shall enter the numbers of
all registered bol~ds and the names and addresses of the owners of
registered bonds. Until such registration is cancelled as
herein provided~ the interest and principal thereof shall be
payable only to the registered owner. There shall be provided on
the back of each bond a suitable blank showing the name and
address of the registered owner, the date of registration or
transfer~ the type of registration and the signature of the
Fiscal Agent.
(b) Id. - Principal 0nly. The bonds may be registered as
to principal only. When bonds are registered as to principal
only, a notation shall be made to that effect in the registra-
tion book and on the bond. The coupons shall not be detached
and the interest on such bonds shall be paid upon presentation
of such coupons in the same manner as unregistered bonds.
Principal~ however, shall be paid only to the registered owner
upon presentation of such bond.
(c) De-registration. The registration of any unmatured
bond may be cancelled upon written request of the registered
owner. Upon receipt of such request, the Fiscal Agent shall
cancel the registration in the bond register book and on the
back of the bond~ cause all unmatured coupons to be re-print%d~
and re-attached to the bond~ and deliver the bond and attached
coupons to the owner. Until such bond is re-registered, the
principal thereof shall be payable to bearer~ and the interest
shall again be paid upon surrender of proper coupons. The cost
of reprinting the coupons shall be paid by the person requesting
de-registration.
(d) Re-registrat~.on. De-registered bonds are subject to
re-registration in the same manner as previously unregistered
bonds.
21. Delivery of Bonds. The bonds to be issued hereunder shall be
delivered to the purchasers thereof. The Entity shall deliver the
bonds upon receipt of the purchase price and shall credit the proceeds
to the special fund and account for the payment of the cost of the
Project~ as provided herein~ but the purchasers shall not be required
to see to the proper application thereof.
22. Transcript. The Clerk is hereby authorized to prepare and
furnish to the purchasers of the bonds issued hereunder and attorneys
examining the same a complete set of certified copies of all ordinances,
resolutions and documents of the Entity relating to the Project and
the Enterprise and to the issuance of bonds and of all other proceed-
ings and records of the Legislative Body showing the right, power and
authority to issue the bonds and to provide the security therefor, and
such certified copies and certificates shall be deemed representations
of the Legislative Body as to all facts stated therein.
C. ISSUANCE OF SUBSEQUENT SERIES
~ub.se.q.~ent Series. The right is reserved by the Entity, to be ex-
ercised by supplementary resolution or resolutions adopted from time to
time by its Legislative Body, to issue and sell the $700,000 principal
amount of the subsequent series of bonds. The provisions for date~
dates of maturity, prior redemption~ and all other provisions relating
to said bonds~ not contained in this Indenture~ shall be provided in
said supplementary resolution or resolutions. The first maturity of the
bonds of any subsequent division shall not be prior to January 1~ 1968~
and the last maturity of said bonds shall not be prior to January 1~
1992. None of the bonds of any subsequent division shall be callable
at premiums greater than those herein provided for the First Division
nor other than in inverse numerical order.
D. PROVISIONS APPLICABLE TO ALL BONDS OF THE ISSUE
23. Proceeds of Bonds. There is hereby created a special fund to
be designa~-~-(Name of ~-~-~ty) Sewer Construction Fund, herein called
"Construction Fund"~ which s[~all be maintained by the Finance 0fficer~
as a separate account~ distinct from all other funds of the Entity. The
proceeds of the bonds~ or any part thereof~ including the premium, if
any, sold by the Entity~ s~all be deposited in said Fund and shall be
expended as follows:
(a) Reserve Fund. The amount of five per cent (5~) of the
principal amount of the bonds issued shall be deposited in the
Reserve Fund;
(b) Acquisition Costs. The cost of acquiring any facilities,
lands and easements for the Project for which contracts have been
or shall be made, or any interlocutory decree in eminent domain
had and taken~ shall be paid to the persons entitled thereto;
(c) Construction Costs. The costs of constructing the Pro-
ject due under contracts for construction work~ on certificates
of the Engineer as to the work completed substantially in
accordance with the plans and specifications to be adopted by the
Legislative Body therefor and as said certificates are approved
by it~ shall be paid to the persons entitled thereto;
(d) Incidental Expenses. The incidental expenses of said
proceedings, consisting of all engineering~ inspection~ legal
and fiscal fees and the costs of authorizing and issuing the
bonds as approved by the Legislative Body shall be paid to those
persons entitled thereto or the appropriate Entity fund reim-
bursed therefor.
Interest accrued on said bonds from their date to date of delivery
shall be deposited in the Bond Fund.
24. ~!edge of Revenues~ Ail of the revenues are hereby pledged
to pay the principal of and interest on the bonds, and to provide:
a) a Bond Fund~
b) A Bond Reserve Fund~
c) Operation and maintenance funds, and
d) a Surplus Fund.
7
25. First Lien on Revenues. The sums required to meet the payment
of interest on and principal of the bonds of this issue shall be secured
by a direct and exclusive first charge and lien upon all of the gross
revenues of the Enterprise~ including the gross revenues of improvements~
extensions and additions thereto~ together with any interest earned
thereon.
26. Equal Parity° Ail of the bonds shall be equally and ratably
secured without preference or priority by reason of number~ date~ date
of sale or of execution or of delivery of the bonds, by said lien upon
the revenues of the Enterprise in accordance with the law and this
Indenture. Said lien shall be prior and paramount to any and all other
claims and obligations that have arisen or may arise or be incurred
against said revenues.
27. Ratio of Net Revenue Coverage. The Entity covenants that it
will at ale times establish~ maintain and collect charges sufficient~
with other revenues received~ to provide net revenues equal to not less
than 1.30 times the aggregate amount of the principal of and interest on
the bonds of this issue which shall become due and payable within the
next succeeding twelve (12) months.
28. Bonds Not a Debt. The bonds and interest thereon shall not
be a debt of sai~ Entity~ nor a charge, lien or encumbrance, legal or
equitable~ upon any of its property or upon any of its income or re-
ceipts or revenues~ other than the revenues of the Enterprise which
have been pledged to the payment thereof as herein provided.
29. Entity Credit Not Encumbered. No recourse shall be had for
the payment of the ~onds~ or the"'i~terest thereon~ or any part thereof~
against the General Fund of the Entity~ nor shall its credit or taxing
power be deemed to be pledged thereto~ and the holders of the bonds~ or
the coupons thereof~ shall never have the right to compel the exercise
of the taxing power of the Entity or the forfeiture of any of its prop-
erty for the payment of the bonds or the interest thereon.
30. Bonds a Special Obligation. The bonds shall be special ob-
ligations of ~he Entity' and shall be payable from and secured by a lien
upon the gross revenues of the Enterprise~as herein provided.
31. Revenues a Trust Fund. The revenues here pledged and any other
funds that may hereafter be created from said revenues~ for the payment
of the principal of or interest on the bonds of this issue~ or the better
securing of the payment thereof~ shall constitute a trust fund for the
security and payment thereof~ and except as otherwise specifically
authorized by this Indenture~ shall not be used for any other purpose
so long as any of the bonds or any interest thereon are outstanding and
unpaid~ except that out of such revenues there may be apportioned~ so
long as all of the principal of and interest on the bonds are paid as
the same become due and payable~ together with all other charges re-
quired for the protection or better security of such bonds~ such sums
as may be required therefrom to pay the costs of proper and reasonable
maintenance and operation of the said Enterprise~ and all such principal
of and interest on the bonds and all sums required for said security
funds and any other funds that may hereafter be created for the better
secur£rgof the bonds shall be paid from said revenues prior to the
application of any of said moneys to the payment of the cost of opera-
tion or maintenance of said Enterprise.
32. Sewer Revenue Fm~d. There is hereby created a special fund
to be designated (Name of Entity) Sewer Revenue Fund~ herein called
~Revenue Fund':~ which shall be maintained and operated by the Finance
Officer as a separate account~ distinct from all other funds of the
Entity~ into which shall be paid on or before the first day of each
month following the receipt thereof~ the revenues.
8
So long as any bonds of this issue or any additional bonds autho-
rized hereunder are outstanding or any interest thereon is unpsid~ said
fund shall be administered and disbursements shall be made therefrom in
the manner and in the order progressively set forth in Sections 33~ 34~
35 and 36 hereof.
=33. Bond Fund There is hereby created a special fund designated
(Nam~ of Entity) 19~6 Sewer Revenue Bond Fund~ herein called "Bond Fund"~
which shall be maintained by the Fiscal Agent~ as a separate account~
distinct from all other funds of the Entity~ to cover the payment of
the principal of and interest on all of the bonds.
(a) Forthwith~ upon receipt of the proceeds of the bonds
of this issue~ the Finance Officer shall pay therefrom to the
Fiscal Agent for deposit in the Bond Fund any funds ~eceived
on account of interest accrued on said bonds from their date
to the date of their delivery.
(b) On the first day of each calendar month beginning with
the date of the bonds~ the Finance 0ffice~ shall pay out of the
Revenue Funds to the Fiscal Agent fo~ deposit in the Bond Fund~
an equal aliquot part of the amount necessary to pay the next
maturing installment of interest on said bonds.
(c] On the first day of each calendar month commencing
twelve (12) months prior to the first maturity of the bonds~
the Finance Officer shall pay out of the Revenue Fund to the
Fiscal Agent for deposit in the Bond Fund~ an equal aliquot part
of the aggregate yearly amount necessary to pay the next maturing
installment of principal of the bonds of this issue.
Any amount required to be set aside~ transferred to and placed in
the Bond Fund may be prepaid in whole or in part by being earlier
set aside~ transferred to and placed in the Bond Fund~ and in that
event the monthly transfer which has been so prepaid need not be made
at the time appointed therefor. In any event at least one month prior
to the due date of any maturity or installment of principal of or
interest on the bonds all sums required for the payment thereof must
be in such Bond Fund in cash.
Ail moneys in this Fund shall be used and withdrawn solely for the
purpose of paying the principal of and interest on the bonds as the same
shall become due and payable. After full payment of the bonds and
interest any balance in the Fund shall be returned to the Revenue Fund.
34. Revenue Bond Reserve Fund. There is hereby created a (Name
of Entity) 1965 Sewer Revenue Bond Reserve Fund~ herein called "Revenue
Fund"~ which shall be maintained by the Fiscal Agent~ as a separate
account~ distinct from all other funds of the Entity~ to further secure
the payment of the principal of and interest on the bonds.
(a) Forthwith upon receipt of the proceeds of the bonds of
this issue the Finance Officer shall pay from the Construction
Fund to the Fiscal Agent for deposit in the Reserve Fund an
amount equal to five per cent (5~) of the principal amount of
bonds sold and delivered.
(b) On the first day of each calendar month following the
date of the bo~ds~ the Finande Officer shall pay from the Revenue
Fund to the Fiscal Agent for deposit in the Reserve Fund an amount
equal to one one-twentieth of the amount of principal and interest
due during the next succeeding twelve months, until there shall
have been accumulated therein an amount equal to the average
9
annual aggregate amount of principal and interest to accrue
during the term of the bonds°
(c) Whenever any moneys are withdrawn from the Reserve
Fund to pay the principal and interest of bonds, the amount
so withdrawn shall be restored from available funds in the
Surplus Fund~ and~ if none, then by monthly transfers from
the Revenue Fund on the first day of each calendar month there-
after in the sum of not less than $300 or an amount equal to
one-half the net surplus for the prior monthly service collec-
tion period~ whichever shall be greater~ until there has been
restored therein the gross amount provided therefor in
subdivision (a) of this Section.
Money in the Reserve Fund shall be used solely for the purpose of
paying the principal of and interest on the bonds in the event that the
moneys in the Bond Fund are insufficient therefor and for that purpose
may be withdrawn and transferred to the Bond Fund. After reaching the
year of maximum debt service of the bonds~ moneys in said fund in
excess of an amount equal to the principal and interest to accrue during
the current fiscal year may be transferred from the Reserve Fund to
the Bond Fund°
The moneys in the Reserve Fund shall be transferred to the Bond
Fund at the times and for the purposes necessary to pay the last re-
maining installments of principal and interest of the bonds. Any bal-
ance thereafter shall be transferred to the Revenue Fund°
35. Maintenance and Operation Funds. From the moneys remaining in
the Revenue Fund, the Finance Officer shall pay the reasonable expense
of operation and maintenance of the Enterprise.
36. Sewer Surplus Fund° There is hereby created a special fund
designated-(Name of Entity--~-'1966 Sewer Revenue Bond Surplus Fund~ here-
in called "Surplus Fund"~ which shall be maintained and operated by the
Finance Officer as a separate account, distinct from all other funds
of the Entity.
(a) To this Fund there shall be transferred monthly all
moneys remaining in the Revenue Fund over and above the amounts
transferred or disbursed under Sections 33~ 34 and 35 hereof;
(b) The moneys in this Fund may be used for any of the
following purposes:
i) To pay the cost of unusual or extraordinary
maintenance of or repairs to the Enterprise~
ii) To improve the Enterprise~
iii) To pay the principal and interest of the bonds
of this issue~
iv) To pay the principal~ interest and premiums of
bonds called prior to maturity~
v) To pay for the bonds of this issue purchased in
the open market at prices offered at or below the sum
required to be paid in the event of redemption by call~
vi) To pay the principal and interest of general ob-
ligation notes or bonds or other revenue bonds which have
been or may be hereafter issued for sewer purposes.
vii) For any other lawful purpose.
10
37. Feeding Higher Priority. In the event that the balance in any
~und is below its requirements~ moneys from a fund of lower priority
~.~hall be transferred up to fill such deficiency in said fund, and said
higher fund shall have a first claim on the moneys of said lower fund
for said purpose.
38. Investment of Surplus Funds. Ail moneys that are not required
to be used within such time may be invested in authorized negotiable
direct obligations of the United States of America~ maturing not more
than the following period with moneys of the following funds:
a) Constructio~ Fund - six months~
b) Bond Fund - one hundred days
c) Reserve Fund - twelve years for 75~ of the money
and one year for 25~ thereof~
d) Surplus Fund - five years~
39. Inactive De~o_s.[~_~, Any moneys not then needed may be deposited
as inactive funds of the Entity°
40° Notice of Redemption. The Finance Officer shall cause thirty
(30) days prior notice of redemption to be given by mail~ and in addi-
tion s~all publish such notice once at least thirty (30) days prior to
the day of call in a financial paper published in San Francisco and in
~ financial paper published in New York. The Finance Officer shall mail
such notice by registered mail thirty (30) days prior thereto to the
last known holder or holders of any bearer bonds so called~ as shown by
the records in his office. Notice of redemption of any registered bonds
shall be given to the registered owners by registered mail at least
thirty (30) days prior to the date of call. No interest shall accrue
on said bonds called for redemption or on any interest coupons thereof
after the redemption date specified in said notice.
21. Form of Notice, The notice of redemption shall:
(a) State the redemption date;
(b) State the redemption price;
(c) State the numbers and dates of maturity of the
bonds to be redeemed; provided~ however~ that whenever any call
includes all of the bonds of a maturity the numbers of the bonds
of such maturity need not be stated~
(d) Require that such bonds be surrendered with all in-
terest coupons maturing subsequent to the redemption date (except
that no coupons need be surrendered on bonds registered as to
both principal and interest) at the office of t~e Fiscal Agent;
(e) Require that bonds which at the time of call a~e
registered so as to be payable otherwise than to bearer shall
be accompanied by appropriate instruments of assignment to the
Entity duly executed~ and
(f) Give notice that furthe~ interest on such bonds
will not accrue after the designated redemption date.
42° Receipt of Notice Unnecessary. The actual receipt by the
holder of any bond of notice of such redemption shall not be a con-
dition precedent to redemption~ and failure to receive such notice
shall not affect the validity of the proceedings for the redemption
of such bonds or the cessation of interest on the date fixed for
redemption.
11
43. Certificate of Notice Conclusive° A certificate by the
Finance Officer that notice of call and redemption has been given to
holders of registered bonds as herein provided shall be conclusive as
against all parties~ and no bondholder whose registered bond is called ~
for redemption may object thereto or object to the cessation of interest
on the redemption date fixed by any claim or showing that he failed to
actually receive such notice of call and redemption°
44° Redemption Fund° Prior to the time the Legislative Body de-
termines to call and redeem any of said bonds~ the Finance Officer
shall establish in the Fiscal Agency a redemption fund to be described
and known as (Name of Entity) 1966 Sewer Revenue Bond Redemption Fund~
hereinafter called "Redemption Fund". Prior to the publication of
the notice of a redemption there must be set aside in said Redemption
Fund moneys available for the purpose and sufficient to redeem~ at the
premiums payable as herein provided~ the bonds designated in such
notice of redemption.
(a) Use of Funds° Said moneys must be set aside in said
fund solely for that purpose and shall be applied on or after
the redemption date to payment for the bonds to be redeemed
upon presentation and surrender of such bonds and (except as
to bonds registered as to both principal and interest) all
interest coupons maturing after the redemption date~ and shall
be used only for that purpose~
(b) Co__~ons Due. Any interest coupon due on or prior
to the redemption date shall be paid from the Bond Fund pro-
vided in Section 33 upon presentation and surrender thereof~
(c) Coupons Not Due. Each bond presented (if un-
registered or registered as to principal only) must have at-
tached thereto or presented therewith all interest coupons
maturing after the redemption date~
(d) Retransfers. If after all of the bonds have been
redeemed and cancelled or paid and cancelled~ there are moneys
remaining in said Redemption Fund~ said moneys shall be trans-
ferred to the Revenue Fund~ provided~ however~ that if said
moneys are part of the proceeds of refunding bonds said moneys
shall be transferred to the fund created for the payment of
principal of and interest on such refunding bonds.
45. Effect of Notice of Redemption. When notice of redemption
has been given substantially as provided in Section 41~ and when the
amount necessary for the redemption of the bonds called for redemption
is set aside for that purpose in the Redemption Fund~ as provided in
Section 44 hereof~ the bonds designated for redemption shall become
due and payable on the date fixed for redemption thereof~ and~ upon
presentation and surrender of said bonds and (except as to bonds
registered as to both principal and interest) all interest coupons
maturing after the redemption date~ to the Finance Officer, and~ if
any of said bonds be registered~ upon the appropriate assignment
thereof~ such bonds shall be redeemed and paid at said redemption pric~
out of the Redemption Fund.
(a) Interest Terminates. No interest will accrue on
such bonds called for redemption or on any interest coupons
thereof after the redemption date specified in such notice, and
the holders of said bonds so called for redemption after such
redemption date shall look for the payment of such bonds and
the premium thereon only to said Redemption Fund. Ail bonds re-
deemed and all interest coupons thereof shall be cancelled
forthwith by the Finance Officer and shall not be reissued.
12
(b) Matured Coupons Payable° Ail interest coupons, per-
taining to any redeemed bonds~ which coupons have matured on or
prior to the time fixed for redemption, shall continue to be
payable to the respective holders thereof but without interest
thereon. Ail unpaid interest payable at or prior to the date
fixed for redemption upon bonds registered in such manner that
the interest is payable only to the registered owners shall
continue to be payable to the respective registered owners of
such bonds, or their order~ but without interest thereon.
46. Covenants. For the protection and security of the bonds~ it
is covenanted and agreed to and with the holders of the bonds from time
to time, that the Entity will:
(a) A_p_c u~e Pro~_[~ct. Commence the acquisition, construc-
tion and completion of the Project and continue the same with
all practical dispatch and in a sound and economical manner~
(b) 9perate Enterp£~_$~. Operate the Enterprise in an
efficient and economical manner and prescribe~ revise and col-
lect such fees, tolls~ rates and other charges in connection
therewith that the services and facilities of the Enterprise
may be furnished to its inhabitants and other users at the
lowest possible cost consistent with sound economy and prudent
management;
(c) Good Repa.i~r. Operate, maintain~ preserve and keep
the Enterprise and every part thereof in good repair, working
order and condition;
(d) Preserve Secur. i~. Preserve and protect the security
of the bonds and the rights of the holders thereof, and warrant
and defend ~ch rights against the claims and demands of all
persons whomsoever;
(e) Collect Revenues. Collect and hold in trust the
revenues and other funds pledged to the payment of the bonds
and apply such revenues or other funds only as provided by
this Indenture;
(f) Service Bonds. Pay and cause to be paid punctually
the principal of the bonds and the interest thereon on the date
or dates and at the place or places and in the manner mentioned
in the bonds and in the coupons thereto appertaining and in
accordance with this Indenture, and the Indenture or Indentures
authorizing issuance of subsequent series;
(g) Pay ~laims. Pay and discharge any and all lawful
claims for labor, materials and supplies which~ if unpaid,
might by law become a lien or charge upon the revenue of the
Enterprise, or any part of said revenues~ or any funds in the
hands of the Finance Officer~ prior or superior to the lien of
the bonds or which might impair the security of the bonds, to
the end that the priority and security of the bonds shall be
fully preserved and protected~
(h) Encumbrances. Not mortgage or otherwise encumber~
sell~ lease, or dispose of the Enterprise or any part thereof,
nor enter into any lease or agreement which would impair or
impede the operation of the Enterprise or any part thereof
necessary to secure adequate revenues for the payment of the
principal and interest of the bonds, or which otherwise would
impair or impede the rights of the holders of the bonds with re-
spect to such revenues or the operation of the Enterprise without
13
provision for the retirement of the bonds of this issue then
outstanding from the proceeds thereof; provided~ however, that
material and equipment worn out or not needed for the efficient
and proper operation of the Enterprise may be sold without the
consent of the bondholders if the proceeds thereof are applied
to the improvement or extension of the Enterprise or to the
tirement of the bonds;
(i) No Free Service~ Not permit any part of the Enter-
prise to be used or taken advantage of free of charge by any
person~ firm or corporation or by the State of California or
the United States of America~ or by any public corporation~
political subdivision~ city~ county~ district or agency of
either~ including this Entity;
(j) No Competition. Not acquire, construct~ operate
or maintain, and not permit any other public or private corp-
oration or agency or any persons whatsoever to acquire, con-
struct~ operate or maintain within its boundaries or within
any part thereof~ any system or utility competitive with
the Enterprise;
(k) Insurance. Procure and keep in force insurance upon
all building-~-~-'structures of the Enterprise and the machinery
and equipment therein~ which are usually insured by Entities
operating like properties~ in good and responsible insurance
companies~ The amount of the insurance shall be such as may be
required to adequately protect it and the holders of the bonds
from loss due to any such casualty~ and in the event of any such
loss~ the proceeds shall be used to repair or restore the
Enterprise~ or for the payment of the bonds issued hereunder;
(1) Fidelity Bonds. Procure suitable fidelity bonds
covering all of its officers and other employees charged with
the operation of the Enterprise and the collection and dis-
bursing of revenues therefrom;
(m) ~rs. Employ consulting engineers of acknow-
ledged reputatio~-~-skill and experience in the construction
and operation of the Enterprise for any unusual or extra-
ordinary items of maintenance~ repair~ extensions or better-
ments as shall be required from time to time~ all reports, esti-
mates and recommendation of such consulting engineers to be
filed with the Clerk and furnished to the purchasers of the
bonds if requested; and
(n) Audit and Re_~.Orto Employ a certified public
accountant--who shall prep----~re and file with the purchaser of
the bonds, with the Finance Officer and with the California
Districts Securities Commission if the bonds shall at any
time be certified by it~ annually within one hundred twenty
(120) days after the close of each fiscal year on June 30th,
commencing in the year 1967~ an annual audit for the preceding
year which shall include:
i) Balance Sheet. A balance sheet including
balances ~-~~n~'~herein created;
ii) Revenue and P~ments. A statement in detail
of the cash receipts and disbursements of the income
and expenses of the Enterprise~
iii) Insurance. A statement as to the insurance
carried by it~ including a brief description of each
policy as to its coverage and name of company issuing it~
iv) Customers. The number of customers classified
by rate or charge for service groups~ the number of prop-
erties connected to the Enterprise and the number of
applications for service on hand but not connected3
v) Billing. The annual billings and the average
monthly billing per user~
vi) Rate Schedules. The schedules of the rates and
charges prescribed by the rate ordinance then in effect~
vii) Recapitulation. A recapitulation of funds and.
accounts created by this Indenture into which are put
moneys derived from the operation of the Enterprise and
from the sale of the securities herein authorized~ which
shall show balances at the beginning of the period, deposits
and withdrawals made during the period, and balances at the
end of the period~ and also monthly deposit requirements
for funds during the next succeeding fiscal period~
viii) Comments. Comments of the accountant relative
to the fulfillment of the provisions of this Indenture and
the manner in which the Enterprise has been operated~ and
his recommendations for improving the operation of the
Enterprise~
47. Additional Bonds. No additional bonds shall be issued or
other obligations incurred which shall be payable from the revenues and
constitute a lieu'thereon which shall have priority over the bonds of
this issue. The Entity may issue additional bonds payable as to prin-
cipal and interest from the revenues and on parity but not superior as
to lien on the revenues~ under the following conditions and not other-
wise:
(a) Net Income. The net revenues, before principal
and interest charge~ble to revenues, as shown by the books
of the Entity for the latest prior bond year with respect
to which such books have been examined, and reported, upon
by an independent certified public accountant employed, by
the Entity, plus, at the option of the Entity~ either or
both of the items hereinafter in this Section designated
(A) and (B) shall have amounted, to:
i) Ratio to Bond Service. At least 1.30
times the aggregate of the average annual amount of
interest to accrue and payments of principal required
to be made in the fiscal years to accrue thereafter
during the term of the bonds of this issue, on all in-
debtedness to be outstanding immediately subsequent to
the incurring of such additional indebtedness.
(b) Estimated Additional Net Income. The items either
or both of which may be added to such net revenues for the
purpose of applying the restriction contained in this Section
are the following~
15
(A) Earnin_g~ The revenues for the fiscal year
immediately preceding may be revised in a written report
of an independent engineer and certified as correct by
an independent certified public accountant~ adjusting
such earnings to reflect the net revenues of all of the
users connected to the system at the end of such fiscal
year, had such users been on the system for the entire
fiscal year.
(B) Rate Increase. An allowance for net revenues
in written form, computed and prepared by an independent
certified public accountant~ to reflect the increase in
charges which had become effective during any part of the
fiscal year prior to the issuance of the additional bonds.
Only 75~ of such estimated increase in annual net revenues
shall be recognized in the adjusted revenues for such pre-
ceding fiscal year to arrive at the total net revenues, which
shall be a part of the criteria for computing whether such
additional issue may be parity bonds.
(c) Bond Terms. The additional bonds~ irrespective of
priority of lien~ shall be payable serially with principal and
interest amortized over a period not shorter than the remaining
life of any of the then outstanding bonds of this issue, with
principal payments beginning not more than three (3) years from
the date of the additional bonds;
(d) Use of Proceeds. The proceeds of the sale of the
additional bonds must be used exclusively for the costs of
acquisition~ construction~ improving and financing of extensions
to and improvements of the Enterprise;
(e) Additional Reserve. A reserve fund shall be created
for such additional bonds which sh~ll be in the same proportion
and upon the same terms as provided for the reserve fund for
this issue;
(f) Subordinate Lien Bonds. Additional bonds payable from
but inferior as to lien on the revenues may be issued at any time.
48. Modifications. All of the provisions of this Indenture shall
constitute a contract between the Entity and the holder or holders of
the bonds, and from and after the sale and delivery of any of the bonds,
no amendment~ alteration or modification of the bonds or of the coupons
appertaining thereto or of this Indenture which shall impair~ impede or
lessen the rights of the holders of the bonds or the coupons appertaining
thereto then outstanding shall be made without the prior written consent
of the holders of at least seventy-five per cent (75~) of the aggregate
principal amount of bonds then outstanding. Any such amendment~ alt-
eration or modification which shall have received the written consent
of the holders of said percentage of said outstanding bonds as provided
in this Section shall be binding on the holders of all of the bonds and
coupons appertaining thereto, either attached to or detached from
said bonds.
49. Refundin.g. If, prior to the payment of the bonds, it shall
be found desirable to refund the bonds under the provisions of any law
then available, said bonds or any part thereof may be refunded with
the consent of the holders thereof and the refunding obligations shall
continue to enjoy whatever priority of lien over subsequent issues which
may have been enjoyed by the bonds refunded~ provided, however, that if
only a portion of the outstanding bonds is so refunded and if such bonds
are refunded in such manner that the interest rate thereof is increased
or that any of the refunding obligations mature at a date earlier than
the maturity date of any of the bonds not refunded~ then such ~onds may
not be refunded without the consent of the holders of the unrefunded
portion of said bonds.
16
50° Default°
(a) Event of. If one or more of the following events (her--
in called ~'events of default~') shall happen:
i) Princip3_l. If default shall be made in the due
and punctual payment of the principal of any bond when and
as the same shall become due and payable whether at maturity
as therein expressed, by proceedings for redemption, by
declaration or otherwise; or
ii) Interest. If default shall be made in the due and
and puncutual payment of any installment of interest of any
bond when and as such interest installment shall become
due and payable; or
iii) Covenants. If default shall be made in the ob-
servation of any of the covenants, agreements or conditions
on its part herein or in the bonds contained~ and any of
such defaults shall have continued for a period of thirty
(30) days~ or
iv) Bank~uPtc~. If the Entity shall file a petition
or answer seeking reorganization or arrangement under the
Federal Bankruptcy laws or other applicable laws or statutes
of the United States of America~ or if a court of competent
jurisdiction shall approve a petition, filed with or with-
out the consent of the Entity seeking reorganization unde~
the Federal Bankruptcy laws or any other applicable laws
or statutes of the United States of America, or if under
the provisions of any other law for the relief or aid of
debtors any court of competent jurisdiction shall assume
custody or control of the Entity or of the whole or any
substantial part of its property;
(b) Acceleration° Then and in each and every such case the
holders of not less ~-~an seventy-five per cent (75%) in aggre-
gate principal amount of the bonds at the time outstanding shall
be entitled~ upon notice in writing to the Entity, to declare
the principal of all of the bonds then outstanding and the in-
terest accrued thereon to be due and payable immediately~ and
upon any such declaration the same shall become and shall be
immediately due and payable~ anything in this Indenture or in
the bonds contained to the contrary notwithstanding;
(c) Appl.$~ation of Funds. All of the gross revenues of
the Enterprise, including all sums in all of the funds provided
for in any section hereof upon the date of the happening of
any event of default and all sums thereafter received by the
Entity hereunder shall be applied by it~ upon presentation of
the several bonds and coupons, and the stamping thereon of the
payment if only partially paid, or upon the surrender thereof
if fully paid, in the following order:
i) Costs and Expenses. To the payment of the costs
and expenses of the bondholders in declaring such event
of default, including reasonable compensation to their
agents~ attorneys and counsel~ and to the payment of the
costs and expenses of the Fiscal Agent in carrying out
the provisions of this Section~ including reasonable
compensation to its agents, attorneys and counsel;
17
ii) Interest on Undue Bonds. In case the principal
of the bonds shall not have become due and shall not then
be due and payable, to the payment of the interest in de-
fault in the order of the maturity of the installments of
such interest, with interest on the overdue installments
at the same rate~ such payments to be made ratably to the
persons entitled thereto without discrimination or
preference~
iii) Principal and Interest on Due Bonds. In case
the principal of the bonds shall have become and shall
be then due and payable~ to the payment of the whole amount
then owing and unpaid upon the bonds for the principal and
interest~ with interest on the overdue principal and in-
stallments of interest at the same rate;
iv) Insufficient Funds. In case such moneys shall
be insufficient to pay in full the whole amount so owing
and unpaid upon the bonds~ then to the payment of such
principal and interest without preference or priority of
principal over interest~ or of interest over principal,
or of any installment of interest over any other installmen'~
of interest~ ratably to the aggregate of such principal and
interest then due.
(d) Refundin~..~e~_f~t~ed Bonds. The Entity may, with the
consent of the holder thereof~ refund any defaulted bonds by
the issuance of a new bond maturing after the maturity of the
last bond of this issue~ but otherwise on a parity as to pay-
ment of interest with the bonds of this issue~ and exchange such
bond for such matured bond~ and in such event such action shall
not be deemed as a default hereunder.
51. Bondholder Remedies. Subject to any contractual limitations
binding upon the holders of any of the bonds (including but not limited
to~ any limitations upon the exercise of any remedy to the bondholders
holding a specific proportion or percentage of such bonds), any holder
of bonds shall have the right~ for the equal benefit and protection of
all holders of bonds of said authorized issue similarly situated, in
addition to those provided in the Bond Law:
(a) Accounting. By action or suit in equity to require
the Entity and its Legislative Body and other officers, agents
and employees to account as the trustee of an express trust~
(b) I~.~unction~ By action or suit in equity to enjoin
any acts or things which may be unlawful or in violation of the
rights of the bondholders~ or
(c) Mandamus. By mandamus or other suit~ action or
proceeding at law or in equity to enforce his rights against
the Entity and its and any of its officers~ agents and em-
ployees~ and to require and compel it or them to perform and
carry out its and their duties and obligations under the law
and its and their covenants and agreements with bondholders
as provided herein.
52. Connections Mandatory° The further maintenance or use of
cesspools or other local meah~bf sewage disposal shall constitute a
public nuisance. All buildings inhabited or used by human beings whic5
are not more than 200 feet from the sewerage system of the Entity or
any extension hereafter made thereto and in which any sewage is produced
shall be connected with the sewerage system of the Entity no more than
thirty (30) days from the time when such system lines are ready for use
ac that a connection can be made to the system or any extension thereof.
18
53. ~ulations for Collect~ar~. By ordinance duly adopted
the Entity has and shall establish~ maintain and diligently enforce
valid regulations for billing and collecting the charges for the set--
vices and facilities of the Enterprise which shall generally provide
as herein set forth. To the extent that such ordinance does not contain
any provisions included in this Section, it is supplemented by the pro-
visions hereof:
(a) Billln~_~riod. Statements of charges for service to
be rendered shall be mailed at the end of each billing period~
which shall be not to exceed bi-monthly~
(b) ~l~in u~q[~ If a statement is not paid on or before
the forty-Fifth--~6h) day after the post office cancellation
date of the billing~ the charge is delinquent;
(c) Collection With Taxes. Charges unpaid at the time
specified for the fixing of the rate of taxes may be added to
and become part of the annual assessment levied upon the land
upon which the service was used, if the property is owned~ con-
trolled~ or was in possession of the same person who owned,
controlled~ or was in possession of it during the time such
service charges were incurred or if the only transfers made
of the property since the date such charges were incurred have
been transferred by gift~ descent~ bequest~ or devise;
(d) C~011_~ec__tio~n~.~.,~i~. As an alternative remedy~ the
Entity may bring an action againSt the person or persons who
occupied the property when the service was rendered or the de-
posit became due or against the person guaranteeing such pay-
ment~ or against any or all of said persons for the collection
of the amount of the deposit or the delinquent charges and
penalties thereon. In such action a reasonable attorney's fee
shall be awarded to the Entity;
(e) ~.ollectins..~harMes With Other Utility Charges. The
Entity may provide for the collection of charges with other
utility charges as herein provided:
i) With Utility Charges of Entit._~. Where the person
charged is a user of another utility owned and operated by
the Entity, the charges shall be collected together with
and not separately from the charges for the other utility
service rendered by it~ They shall be billed upon the
same bill and collected as one item~
(A) Discontinuance of Service U~on Delin~u~n_~9_~o
Upon delinquency~ the other u~'i~£t~ s~ervice Shall ~e
discontinued until full payment of the dual charges
and penalties thereon and the charges for recontinu
ance of service~
(B) Ido- Time. The time for the discontinuance
of such other service shall not exceed forty-five (45)
days from the date the sewer service charges are
provided to become delinquent;
ii) Collection b_y~ Suito As an alternative remedy~
the Entity may bring an action against the person or
persons who occupied the property when the service was
rendered or t~e deposit became due or against the
person guaranteeing such p ayment~ or against any or all
of said persons for the collection of the amount of the
deposit or the delinquent charges and penalties thereon.
In such action a reasonable attorney's fee shall be
awarded to the Entity~
19
54. Unconditional. Oblisation. E~cept only as provided herei~
for altera~i'on of the bonds or this Indenture, nothing in this
Indenture or in the bonds or in the coupons contained shall affect
or impair the obligation of the Entity, which is absolute and un-
conditional, to pay the principal of and interest on the bonds to
the respective holders of the bonds and coupons at the respective
dates of maturity, or upon prior redemption, as herein provided,
and out of the revenues herein pledged for such payment, or affect
or impair the right of action, which is also absolute and uncon-
ditional, of such holders to institute suit to enforce such payment
by virtue of the contract embodied in the bonds and coupons.
55. P~rformance of Essence. The performance of the duties
prescribed in this Indenture and in the Bond Law by the Entity or
its proper officers, agents or employees, is of the essence of
Entity's contract with the bondholders.
56. Recourse to Bond Law. Each taker and subsequent holder
of the bonds and attached or detached coupons has recourse to all
of the provisions of this Indenture and of the Bond Law, and is
bound by their terms.
57. Indenture is Covenant. Each and all of the terms of
this Indenture shall be and constitute a covenant on the part of
the Entity to and with each and every bondholder from the time the
bonds are issued.
58. Period of Agreement. Whenever all of the bonds and all
interest then accrued thereon shall have been fully paid and dis-
charged, the agreements in this Indenture contained shall cease
and terminate, and the Entity shall be under no further obligation
to apply the revenues of the Enterprise as herein required, or
otherwise to do or perform any of the covenants, conditions or
agreements in this Indenture contained.
59. Fiscal Agent. The Entity hereby appoints the Main
Office of the ~ank of America N.T. & S.A., 300 Montgomery Street,
San Francisco, California, as the Fiscal Agent for this issue of
bonds for the purpose of paying the principal.of and interest
on any of the bonds presented for payment and for the purpose of
performing all other duties assigned to or imposed upon it as
herein provided:
(a) Acceptance...... The Entity and the Fiscal Agent
have entered into an agreement by the terms of which the
Fiscal Agent is obligated to perform the duties imposed
on it by the terms of this Indenture;
(b) Reuignation. Any Fiscal Agent appointed hereunder
may resig~ at any time. Upon the merger, consolidation~ or
other reorganization of any Fiscal Agent, the Legislative Body
shall appoint a new Fiscal Agent which may be the corporation
resulting from said reorganization;
(c) Removal. The Fiscal Agent initially appointed,
and any successor thereof, may be removed by the Entity and
a successor appointed~ provided, that each such successor
shall be a bank or trust company having trust powers doing
business in and having an office in the State of California~
(d) Continued Service. Any such Fiscal Agent desig-
nated by the Entity shall continue to be the Fiscal Agent
of the Entity for all of said purposes until the appointment
and qualification of a successor as such Fiscal Agent, and
the Entity agrees that it will maintain a Fiscal Agent within
the State so long as any of the bonds are outstanding and
unpaid;
2O
(e) Funds. The Fiscal Agent is hereby authorized and
directed to--~p the accounts and make the transfers of funds
in the manner herein provided, and disburse all sums required
for the payment of the principal of and interest on the bonds
presented for payment at maturity, or on redemption prior to
maturity;
(f) Bond Redemption. The Fiscal Agent is hereby auth-
orized to redeem said bonds and the interest coupons pertaining
thereto when duly presented to it for payment at maturity and
to cancel all bonds and coupons upon payment thereof and to
return them so cancelled to the Finance 0fficer~
(g) Records. The Fiscal Agent shall keep accurate records
of all funds administered by it and of all bonds and coupons
paid and discharged by it~
(h) ~ompeDsation. The Legislative Body is hereby auth-
orized to compensate the Fiscal Agent for the services rendered
.as such pursuant to the provisions of this Indenture;
(i) Responsibilities. The recitals of facts and all
promises~ covenants and agreements herein and in the bonds of
said authorized issue contained shall be taken as statements,
promises, covenants and agreements of the Entity, and the
Fiscal Agent assumes no responsibility for the correctness of
the same, and makes no representations as to the validity or
sufficiency of this Indenture or of the bonds or coupons, and
shall incur no responsibility in respect thereof, other than
in connection with the duties or obligations herein or in the
bonds assigned to or imposed upon the Fiscal Agent. The Fiscal
Agent shall be under no responsibility or duty with respect
to the issuance of the bonds for value. The Fiscal Agent shall
not be liable in connection with the performance of its duties
hereunder, except for its own negligence or default. The
Fiscal Agent shall not be required to bring any action to re-
quire the performance of any obligation hereunder.
E. FORM OF BONDS OF FIRST DIVISION
60. Bond Form. The bonds and coupons representing interest
thereon sh~il be ih substantially the following form, except that if
said bonds are sold in the denomination of $5,000, the bond form shall
be changed to reflect the denomination.as being $5,000, in all those
instances where it is shown to be $1,000:
UNITED STATES OF AMERICA
STATE. OF CALIFORNIA
COUNTY OF EL DORADO
SOUTH TAHOE PUBLIC UTILITY DISTRICT
SEWER REVENUE BOND OF 1966
NO.__ ....... $1,000
KNOW ALL MEN BY THESE PRESENTS, that the South Tahoe Public Utility
District, a public corporation, in the County of E1 Dorado, State of
California, hereinafter referred to as "District", rot value received
has obligated itself to pay to the bearer (or if this bond is registered,
to the registered owner hereof), from the 1966 Sewer Revenue Bond Fund
of the District, on the 15th day of January, 19,, , the sum of
21
ONE THOUSAND DOLLARS, with interest thereon from date at the rate
of ~ per annum, as evidenced by interest coupons attached
hereto at the time of issuance, said interest payable semiannually
on the 15th day of July and the 15th day of January in each year, all
as more particularly set forth in the Resolution providing for the
issuance of this bond.
Bonds maturing by their terms on or before January 15~ 1976,
shall not be subject to call prior to their fixed maturity date. Bonds
maturing on or after January 15, 1977, shall~ by their terms, be
subject to call and redemption~ at the option of the District, as a
whole or in part, in inverse numerical order on January 15, 1977
(but not prior thereto) or on any interest date thereafter and prior
to their maturity date or dates at the principal amount thereof and
accrued interest thereon to the date of redemption, plus a redemptioo
premium equal to one-quarter of one per cent (1/4 of 1%) of such
principal amount for each whole twelve (12) months, and for any re-
maining fraction of a twelve (12) month period from the date fixed for
redemption to the maturity date of the bonds; provided, however, that
in no event shall the total of such premiums so paid exceed the stated
annual interest rate applicable to each bond redeemed.
The District may also, from time to time, purchase any or all
of said outstanding bonds at prices offered at or below the sum re-
quired to be paid in the event of redemption by call. All bonds pur-
chased or called will be cancelled and will not again be reinstated.
The Treasurer shall cause thirty (30) days prior notice of re-
demption to be given by mail, and in addition shall publish such notico
once at least thirty (30) days prior to the day of call in a financial
papeE published in San Francisco and in a financial paper published i~
New ~ork. The Treasurer shall mail such notice by registered mail
thirty (30) days prior thereto to the last known holder or holders ol
any bearer bond so called, as shown by the records in his office.
Notice of redemption of any registered bond shall be given to the
registered owners by registered mail at least thirty (30) days prior
to the date of call. No interest shall accrue on said bonds called
for redemption or on any interest coupons thereon after the redemption
date specified in said notice.
If, upon presentation at maturity, or if redeemable and duly
called for redemption, payment of this bond or any interest coupon
thereon, or both, is not made in full accordance with the terms of the
resolution providing for the issuance hereof, said bond or coupon, or
both, shall continue to bear interest at the rate stated herein
until paid in full.
Both principal and interest are payable in lawful money of the
United States of America at the main office of the Bank of
~merica, N.T.& S.S., 300 Montgomery Street. San Francisco, California.
;he Fiscal Agent of the Distr~ct, or, at the option of the holder,
~any fiscal agency of the District in Los Angeles, California, Chicago~
Illinois, or New York, New York.
This bond is one of the First Division in the principal amount
of $700,000, part of an issue in the total principal amount of
$1,400,000, all of like date and tenor except as to number, maturity~
call provisions (and interest rate), all issued by the District for
the purpose of providing money to finance an Enterprise consisting
of the District Sewer System as set forth and described in Resolution
No. 588 entitled "A Resolution Providing for the Issuance of the
First Division of Sewer Revenue Bonds, Fixing the Form of Bonds and
Providing Covenants for Their Protection~ adopted on October 7, 19~5
22
to which reference is hereby made for the obligations, duties, rights
and privileges hereby created, and as authorized by law and in strict
accordance with the Revenue Bond Law of 1941, and in accordance with
an Ordinance of the Board of Directors of the District submitting the
question of its issuance to the qualified voters of the District at
an election held for that purpose, and as authorized by the vote of
more than the requisite majority of the voters of the District voting
on the proposition at said election.
The holder of this bond has all the rights of a holder of a
negotiable instrument payable to bearer. Both principal and interest
are payable solely from the revenues of the Enterprise hereinabove
referred to and the District is not obligated to pay the principal
hereof or interest hereon except from the revenues of said Enterprise.
The bonds of this issue constitute a first and prior lien upon the
said revenues except that additional bonds may be issued on a parity
of lien in accordance with the resolution hereinbefore referred to.
All of the revenues to be derived from the sewer service charges
imposed for the use of the Enterprise and the services and facilities
thereof, including revenues from improvements, additions and exten-
sions thereto which may hereafter be constructed or acquired, and
from other revenues of such Enterprise from sources not from sewer
service charges~ are pledged to pay the principal of and interest on
the bonds issued hereunder, and t9 ~rovide (1) a Revenue Bond Fund,
(2) a Revenue Bond Reserve Fund, (3) operation and maintenance funds~
and (4) a Surplus Fund.
The bonds and coupons appertaining thereto and the resolutiori
may be amended, altered or modified with the consent of the holders
of seventy-five per cent (75%) of the aggregate principal amount of
bonds then outstanding in the manner~ to the extent and upon the term~
provided in said resolution.
This bond is subject to registration as to principal and interest
upon written request of the owner and presentation of the bond to the
Fiscal Agent for registration. Thereafter, the principal hereof and
interest hereon shall be payable only to such registered owner. Bonds
may also be registered as to principal only, in which event the coupons
shall not be removed. Registered bonds may be de-registered and
again become payable to bearer.
IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions
and things required by the Constitution and laws of the State of
California to be done, to happen and to be performed precedent to and
in the issuance of this bond have been done, have happened and have
been performed in regular and due form, time and manner as required
by law~ that the District is authorized by law to operate the Enter-
prise herein referred to and the Board of Directors, by resolution
duly adopted, has established and has covenanted to maintain rates
and charges for services and facilities thereof sufficient with other
revenues received to provide net revenues equal to 1.30 times the
aggregate amount of the principal of and interest on the bonds oi'
this issue which shall become due and payable within the next succeed-
ing twelve (12) months, and the District has created a special 1966
Sewer Revenue Bond and Interest Fund for the payment of said principal
and interest and has agreed to set aside from the revenues of the
Enterprise in said fund, on the first day of each calendar month
beginning with the date of the bonds an equal aliquot part necessary
to pay interest which shall become due on the next succeeding in-
terest payment date, and, commencing twelve (12) months prior to the
first maturity of the bonds~ an equal aliquot part of the amount
necessary to pay the installment of principal which shall fall due at
the next ensuing principal payment date.
IT IS FURTHER CERTIFIED AND RECITED that for the further pro-
tection of the payment of the bonds of this issue and the interest
thereon when due~ the District has created a special 1966 Sewer
Revenue Bond Reserve Fund, in which it has agreed to pay from the
Construction Fund to the Fiscal Agent for deposit in the Reserve Fund
an amount equal to five per cent (5%) of the principal amount of bonds
sold and delivered, and commencing on the first day of each calendar
month following the date of the bonds, the Treasurer shall pay from
the Revenue Fund to the Fiscal Agent for deposit in the Reserve Fund
an amount equal to one one-twentieth of the amount of principal and
interest due during the next succeeding twelve months~ until there
shall have been accumulated therein an amount equal to the average
annual aggregate amount of principal and interest to accrue during
the term of the bonds, which fund shall be used solely as a guarantee
for the payment of the principal of and interest on said bonds.
IN WITNESS WHEREOF~ the South Tahoe Public Utility District,
by its Board of Directors, has caused this bond to be executed in its
behalf and under its official seal by the President by his printed,
lithographed or engraved facsimile signature hereon, and countersignei
by the manual signature of the Clerk, and has caused the interest
coupons to be executed and authenticated by the facsimile signature
of the Treasurer, all as of January 15~ 1966.
COUNTERS IGNED:
Presi-den~
61. Interest Coupon Form.
in the fol~0wing"form: .....
The coupons shall be substantially
South Tahoe Public Utility District
E1 Dorado County, California
Sewer Revenue Bond of 1966
Dated January 15, 1966
on _, 19~
The sum shown hereon is payable to bearer
(unless bond is registered as to principal
and interest) in lawful money as interest
(subject to prior redemption right
reserved) at the Main Office of the Bank of
America, N.T.& S.A. San Francisco, California,
or as otherwise provided in the bond.
Coupon No.
Bond No. __
Treasurer
62. Registration Form. The form of endorsement on said bond~
for registrat£6n''s'hai~ be~s follows:
This bond is registered in the name of the registered owner-
whose name and address appear last in the space below and
both the principal of and interest on this bond are payable
to such registered owner, unless it is registered as to
principal only, in which case only the principal is so
payable.
There must be no writing in the space below except by the
Fiscal Agent.
Date of "Type of 'Na~e of' Addr'esS of
Registry Registration* Registered Owner Re~is.~.e~ed Owner
Principal only
and Interest
P~incipal 0nly
and Interest
'~'rin~ipal Only
and Interest
Signature Of
Fiscal A~ent
In the event registration is as to principal only, strike the words
:and interest"; if as to principal and interest, strike the word
~only".
63. Legality. If any section, paragraph, subdivision, sen-
tence,clause or phrase of this Indenture shall for any reason be
adjudged by any court of competent jurisdiction to be unconstitutional,
unenforceable or invalid, such judgment shall not affect the validity
of the remaining portion of this Indenture. The Legislative Body
hereby declares that it would have adopted this Indenture and each
and every other section, paragraph, subdivision, sentence, clause or
phrase hereof and would have authorized the issuance of the bonds put.
suant hereto irrespective of the fact that any one or more sections~
paragraphs, subdivisions, sentences, clauses or phrases of this In-
denture may be held to be unconstitutional, unenforceable or invalid.
ATTEST:
* * * * * * * * * *
I hereby certify that the foregoing is a full, true and
correct copy of a resolution duly and regularly adopted by the Board
of Directors of the South Tahoe Public Utility District, E1 Dorado
County, California, at a meeting thereof duly held on the 7th day
of October, 1965, by the following vote:
AYES, and in favor thereof, Directors:
~; Wakeman, Kortes, Fesler and Stewart
NOES~ Directors: None
ABSENT, Directors:
Cl~e~ ~dd ex-officiO Secretary ~0~ the
South Tahoe Public Utility District
25