Resolution No. 641WJM&L: H: s
RESOLUTION NO. 641
A RESOLUTION PROVIDING FOR TH~ ISSUANCE OF SEWER
REVENUE BONDS~ FIXING THE FORM OF BONDS AND
PROVIDING COVENANTS FOR THEIR PROTECTION
SOUTH TAHOE PUBLIC UTILITY DISTRICT
~1~00~000 SEWER REVENUE BONDS OF 1966
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~ ~erein 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
California~
WHEREAS~ at an election in said Entity~ duly held on the 21st day of
September~ 1965~ t~e 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 a~d im-
provements~ including the acquisition of lands and easements necessary
therefor~ and all costs incidental thereto~ to an Enterpr~se~ as herein
defined~
WHEREAS~ the Entity proposes herein to issue revenue bonds to finance
the cost of the acquisition~ construction~ improving and financing 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 appurtenances
thereto~ 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. other obligations which
are 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 ORDERED~ as follows:
1. Bond Law~ These proceedings have been had and said bonds are
being issued pursuant to the provisions of the Revenue Bond Law of 1941~
as amended.
2o Conditions Precedent° All acts~ conditions and things required
by law to"exist~ ~appen an~ oe 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 tlae 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 t~e registered owner of a registered bond;
(c) Bonds or Bonds of This Issue
authorized to be issued~
(d)
(e) Bond Year means fiscal year.
mean the bonds herein
Bond Law means the Revenue Bond Law of 1941, as amended;
(f) Charges mean fees~ tolls~ rates and rentals prescribed
by th~--LegY~-l~-6'~'e Body for the services and facilities of the
Enterprise;
(g) Clerk or Secretar~ means the person elected or appointed
as the Secretary or Clerk of 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) ~j~5~i~_~y_ means the South Tahoe Public Utility District;
(j) ~.i.~..~q~!~.~ means Bank of America N~ To & S. A.~
Main 0ffice~ San Francisco~ California, unless otherwise provided~
(k) Fiscal Year means July 1 to June 30~
(t) 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 Resolutionj
(p) ~.e_g~s___~ti~w_e_~,~B_o_~ means the Board of Directors of the
Entity;
(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;
Body~
Presidin~.~[~.~. means the President of the Legislative
(s) ~_T~.~e_j~ 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~
(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 designated
by law to handle the funds of the Entity.
2
4. Public Interest. The public interest~ economy and general wel-
fare wilt be served by the acquisition~ construction~ improving and
financing of the Project~ including any or all expenses incidental
thereto or connected therewith.
5. ~__9_position~ 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 ($1~00,000)~ 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~nsisting of sewage
treatment plant and facilities, trunk sewers~ pumping
station and disposal facilities of the entire district, to-
gether with all additions and improvements to said system
hereafter made~ pursuant to the Revenue Bond Law of 19~17~'
6. Issue of Bonds° Revenue bonds of the Entity shall be issued to
pay the cost of the acquisition~ construction~ improvil~g and financing
of the Project.
7. ~r~9.~q.q~. C__0.s_t_... 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 thereto~ including bond discount~ if any~ and bond reserve
funds~ is the sum of $!~400~000~
8. ~p~p~_~_e_~o~e~ct~. It is hereby found and determined that the
Entity has made all necessary arrangements for the financing of the
Project. Accordingly~ it is hereby found and determined that:
(a) ~uate Funds~ The Project can be accomplished as
part of the Enterprise as a complete system from the funds to
be available from the proceeds of the sale of bonds.
(b) Adequate Rates. Charges have been and will be fixed~
levied and collected for the services and facilities to be
furnished by the Enterprise~ and
(c) Bond Pa~mento The charges and all other income and
receipts included in the definition of "Revenues" shall constitute
the revenues of the Enterprise pledged to service the bonds as
provided herein~
9. ~n~_~le Transaction~ The Project is one transaction~ complete
in and of itself, and the proceeds of bonds of this issue will be
applied to the cost thereof as ~erein provided°
10. ~e_parate Fund. The Entity~ during the term of the bonds to
be issued hereunder~ will operate the Enterprise as a separate and dis-
tinct agency~ and will create and maintain a separate and distinct
special fund and account for the Enterprise in which all revenues to be
received are to be deposited~ and from which all disbursements ~erein
provided, relating to the Enterprise~ are to be made during the term
of the bonds.
3
11. Term of Bonds° The bonds shall be in the aggregate principal
amount of"-$i?J-~-d,O00~ shall be dated February 1~ 1965~ shall be desig-
nated "(Name of Entity) Sewer Revenue Bonds of 1966~'~ shall be negoti-
able in form and of the character known as ~serial"~ and at the option
of the bond bidders shall be either 1,400 in number~ numbered consecu-
tively from 1 to 1~400, both inclusive~ and of the denomination of
$1,000 each~ or shall be 280 in number, numbered consecutively from 1
to 280~ both inclusive, and of the denomination of $5~000 each~ Bidders
for said bonds must indicate in the bid proposal whether the denomina-
tions of bonds will be $1~000 or ~5~000 as provided above. A bid which
is silent as to number and denomination shall be conclusively presumed
to be for bonds in the denomination of $5~000~00 each°
Said bonds shall mature serially in the order of serial numbers and
have maturity dates of July 1 in each of the years and in the amounts,
as follows:
Bond Nos. Inclusive)
~1000 De- (B%~h$5000 De-
nominations nominations
Principal Year of
Amount .MAt..u~_i~t X _c ~.!~1 ,%b_!.~
I - 15 I - 3
16 - 45 4 - 9
46 - 75 lO - 15
76 - 11o 16 - 22
111 - 145 23 - 29
146 - 18o 30 - 36
181 - 220 37 - 24
221 - 260 ~5 - 52
261 - 305 ~3 - 61
306 - 350 62 - 70
351 - 395 71 - 79
396 - ~45 80 - 89
446 - 495 90 - 99
496 - 550 lO0 - 11o
551 - 61o 111 - 122
611 - 670 123- 134
671 - 735 135- 147
736- 8Q5 1~8- 161
806 - 875 162 - 175
876 950 176 - 19o
951 - 1030 191 - 206
1031 - 1115 207 - 223
1116 - 1205 224 - 241
1206 - 1300 242 - 260
1301 - 1400 261 - 28O
$15,000 1967 Not Callable
30~000 1968
30~000 1969 "
35~000 1970
35~000 1971
35~000 1972
~0~000 1973
40~ 000 1974
45~000 1975
45,000 1976
~5~000 1977 "
50~000 1978
50~000 1979
55~ooo 198o "
6o,ooo 1981
6o~ooo 1982
65~ooo 1983
70~000 1984
70,000 1985
75~000 1986 On or after 7./1/76
80~000 1987
85~000 1988
90~000 1989
95~000 1990
100~000 1991
12. Callable Bonds. Bonds maturing by their terms on or before
~uly 1, 198~ shall not be subject to call prior to their fixed maturity
date. Bonds maturing on or after July 1, 198'6 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 July 1~ 1976 (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 principal amount for each whole
~welve (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 interest rate applicable to each bond
redeemed.
13. Purchaser of Bonds, Entity may also, from time to time, pur-
chase any or all 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 Co~~ The bonds shall bear interest at the rate
of not to exceed five per cent (5~) per annum from their date until
paid. Said interest shall be payable semiannually on the 1st day
of January and the 1st day of July of each year to the date of matur-
ity, except the first coupon which shall be for interest from February
1~ 1966 to July' 1~ 1966. Attached to each bond shall be interest
coupons payable at the time 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 must specify the rate or rates of interest which the bonds shall
bear. Bidders may bid different rates of interest irrespective of
the maturities of the bonds~ provided, that the spread from the lowest
to the highest rate shall not e:aceed 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 called 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
continue 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~ Ao~ 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. ~otiable Instruments~ The bonds are negotiable instruments
and title thereto, unless registered~ shall pass by p~ysical 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. ~?hen the bonds have been prepared in
accordance with this Indenture~ t~ey 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 counter-~
signed 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 0fficer~ who by such
signatures shall ratify the e:~ecution of the same. The seal of the
Entity may be affixed to the bonds by printed~ lithographed or other
reproduction thereof.
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.
5
20. Registration of Bonds. The bonds shall be subject to regis-
tration as to principal and interest upon written request of the owner
and presentation of any such bond to the Fiscal Agent for registration.
(a) Principal and Interest. Upon presentation and re-
quest, 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 bonds 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 regis-
tration 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 cancelied 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 reprinted
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 re-
questing de-registration.
(d) Re-registration. De-registered bonds are subject to
re-registration in the same manner as previously unregistered
bonds.
21. Delivery of Bonds. The bonds to be issued hereunder shall
be 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.
23. Proceeds of Bonds. There is hereby created a special fund
to be designat'Sd (Name'"'of ~ntity) Sewer Construction Fund, herein called
'~Construction Fund", which shall 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, shall 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 cont'r'acts for construction work, on certificates
of the Engineer as to the work completed substantially in accord-
ance 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 in.cidental 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
reimbursed therefor.'
Interest accrued on said bonds from their date to date of
delivery shall be deposited in the Bond Fund.
24. Pledge of Revenues. Ail of the revenues are hereby pledged
to pay the prin'¥ipat of' an'd"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.
25. First Lien on Revenues. The sums required to meet the pay-
ment 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 im-
provements~ 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,
or of execution or of delivery of th~ bonds~ by said lien upon
the revenues of the Enterprise in accordance with the law and this
Indenture. Said lien shall be prior and paramount to any and all other
claims and obligations that have arisen or may arise or be incurred
against said revenues.
27. Ratio of Net Revenue Coverage. The Entity covenants that it
will at all times es~'abli'~h~ 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 said 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
7
the payment of the bonds~ or the interest thereon, or any part thereof
against the General Fund of the Entity, nor shall its credit or taxing
power be deemed to be pledged thereto~ and the holders of the bonds~ or
the coupons thereof~ shall never have the right to compel the exercise
of the taxing power of the Entity or the forfeiture of any of its prop-
erty for the payment of the bonds or the interest thereon.
30. Bonds a Special Obligation. The bonds shall be special obliga-
tions of the Entity and shall be payable from and secured by a lien
upon the gross revenues of the Enterprise~ as herein provided.
31. Revenues a Trust Fund. The Revenues shall constitute a trust
fund for the security ~nd payment of the bonds. After the payment of
the principal and interest on the bonds, there shall be paid from the
Revenues~ such sums as may be required to pay the costs of necessary and
reasonable maintenance and operation of the Enterprise~ which costs
shall include the reasonable expenses of management~ operation~ repair
and other expenses necessary to maintain and preserve the Enterprise
in good repair and working order.
32. Revenue Fund. There is hereby created a special fund to be
designated '(Name of Entity) Sewer Revenue Fund~ herein called ~lRevenue
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.
So long as any bonds of this issue or any additional bonds
authorized hereunder are outstanding or any interest thereon is unpaid,
said fund shall be administered and disbursements shall be made there-
from in the manner and in the order progressively set forth in Sections
33~ 34~ 35 and 36 hereof.
33. Bond Fund. There is hereby created a special fund designated
(Name of En~ity) 1966 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 received
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 Officer shall pay out of
the Revenue Fund to the Fiscal Agent for 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.
8
Any amount required to be set aside, transferred to smd 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. Reserve Fund. There is hereby created a (Name of Entity)
1966 Sewer Revenue Bond Reserve Fund~ herein called "Reserve 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 pay-
ment 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 bonds, the Finance 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
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 dur-
ing 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.
9
35. Maintenance and Operation Funds° From the moneys remaining
in the Revenue Fund'] the Finance Officer shall pay the reasonable ex-
pense of operation and maintenance of the Enterprise.
36. Surplus Fund. There is hereby created a special fund desig-
nated (Name of Entity) 1966 Sewer Revenue Bond Surplus Fund~ herein
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. To this Fund there shall be transferred monthly all
moneys remaining in the Revenue Fund over and above the amounts trans-
ferred or disbursed under Sections 33~ 34 and 35 hereof excepting the
sum of $10~000 which shall be retained to cover unforeseen expenditures
for the remainder of the month° The moneys in this Fund may be used
for any of the following purposes~
(a) To pay the cost of unusual or e~traordinary mainte-
nance of or repairs to the Enterprise~
(b) To improve the Enterprise~
(c) To pay the principal and interest of the bonds~
(d) To pay the principal~ interest and premiums of bonds
called prior to maturity~
(e) To pay for the bonds purchased in the open market at
prices offered at or below the sum required to be paid in the
event of redemption by call~
(f) To pay the principal and interest of general obligation
notes or bonds or other revenue bonds which have been or may be
hereafter issued for sewer purposes~ and the premium on such
bonds called or purchased prior to maturity~ and
(g) For any other lawful purpose.
No moneys shall be otherwise paid or transferred therefrom unless
all of the requirements of this resolution then required to be per-
formed have been accomplished~
37. Feeding Higher Priority. In the event that the balance in
any fund is below its requirements~ moneys from a fund of lower priority
shall be transferred up to fill such deficiency in said fund~ and said
higher fund shall have a first claim on the moneys of said lower fund
for said purpose.
38. Investment of Surplus Funds. Ail moneys that are not required
to be used withiH such time may be invested in authorized negotiable
direct obligations of the United States of America~ maturing not more
than the following period with moneys of the following funds:
a) Construction Fund - six months~
b) Bond Fund - 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 Deposits. Any moneys not then needed may be de-
posited as inactive funds of the Entity.
10
40. Notice of Redemption. The Finance Officer shall cause thirty
(30) days prior notice of r~'~e~ption to be given by mail~ and in addi-
tion shall 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
a 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.
41. 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 in-
cludes 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 (ex-
cept that no coupons need be surrendered on bonds registered as
to both principal and interest) at the office of the Fiscal Agent~
(e) Require that bonds which at the time of call are
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 further 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 condi-
tion 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.
43. Certificate of Notice Conclusive. A certificate by the
Finance Officer that not'~ce of call and redemption has been given to
the 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-
l,ermines to call and redeem any of said bonds~ the Finance Officer
shall establish in the Fiscal Agenc_ y a redemption fund to be described
and known as (Name of Entity) 1966 Sewer Revenue Bond Redemption Fund,
hereinafter called "Redemption Fund'I. 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.
11
(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) Coupons 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 unregistered
or register'ed as to principal only) must have attached thereto
or presented therewith all interest coupons maturing after
the redemption date~
(d) Retransfers. If after all of the bonds have been re-
deemed 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 ~1~ 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
price 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;
(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 covenan'ted and agreed to and with the holders of the bonds from
time to time~ that the Entity will:
(a) Acquire Project. Commence the acquisition~ construc-
tion and completion of the Project and continue the s~e with
all practical dispatch and in a sound and economical manner~
12
(b) ~_erate Enter~K~_~.~ 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
managementl
(c) Goo~d R~.~i~_. 0perate, maintain~ preserve and keep
the Enterprise and every part thereof in good repair~ working
order and condition;
(d) Preserve Sec~,~¥.~ Preserve and protect the security
of the bonds and the ~igbts of the holders thereof~ and warrant
and defend such rights against the claims and demands of all
persons whomsoever~
(e) Collect Reven~.~ Collect and llold 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 Indenturel
(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;
(g) ~a_~.~laimSo 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 Enter-
prise~ 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 protectedl
(b) 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~which otherwise would
impair or impede the ~ights of the holders of the bonds with
respect to such revenues o~ ti~e operation of the Enterprise
without provision for the retirement of the bonds of this
issue then outstanding from the proceeds thereofl provided,
however~ that material and equipment worn out or not needed for
t~e efficient and proper operation of the Enterprise may be
sold without the conse~t of the bondholders if the proceeds
thereof are apglied to the improvement or extension of the
Enterprise or to the retirement of the bonds~
(i) No Free Service. Not permit any part of the Enterprise
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~ in-
cluding this Entityl
(j) No Competition. Not acquire~ construct~ operate or
maintain~ and not permit any other public or private corporation
or agency or any persons w~atsoever to acquire~ construct, op-
erate or maintain within its boundaries or within any part thereof~
any system or utility competitive with the Enterprise;
13
14
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 lien 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 of lien on the Rev-
enues with the bonds of this issue~ for the purpose of improving the
Enterprise or for acquiring~ constructing or improving additions~ ex-
tensions or betterments to the Enterprise or for the purpose of refund-
ing any outstanding bonds issued for the Enterprise or for any combina-
tion of such purposes and subject to the following conditions:
(a) Default. The Entity shall not at the time of the issu-
ance of such'additional bonds be in default hereunder unless the
bonds are for refunding such defaulted obligations~
(b) Terms. Such additional bonds shall mature on January
1 or July 1 in each year~ the final maturity date of the addition-
al bonds shall be not earlier than the final maturity date of any
bonds then outstanding~ fixed serial maturities or minimum annual
sinking fund payments or any combination thereof shall be estab-
lished in amounts sufficient to provide for the payment and retire-
ment of all such additional bonds on or before their respective
maturity dates~ and
(c) Net Revenues. The annual net revenues of the Enterprise
for the latest fis'~a~'year or bond year prior to the issuance of
such additional bonds~ as shown by an audit~ certificate or
opinion of an independent certified public accountant employed by
the Entity~ plus the additional net revenues~ estimated as pro-
vided in subdivision (d) of this section~ shall have produced the
following sums:
i) One and thirty-hundredths (1.30) times the average
annual amount of the principal of and interest on the then
outstanding bonds of this issue and plus the average annual
amount of the minimum annual sinking funds required to be
paid under the provisions of a resolution providing for the
issuance of such additional bonds~ estimated to accrue during
the term of the then outstanding bonds of this issue~ plus
the average annual amount of the interest on the bonds of
the additional issue to accrue subsequent to the term of the
then outstanding bonds~
ii) Provided~ however~ that if the total of the average
annual amount of principal of and interest on the additional
bonds plus the average annual amount of the minimum sink-
ing funds required to be paid in the resolution providing
for their issuance~ to accrue subsequent to the term of the
bonds of this issue~ shall exceed the total average annual
amount computed under subdivision (i) of this subdivision
(c)~ then the net revenues shall amount to one and thirty-
hundredths (1.30) times the total average annual amount
computed under this subdivision (ii)~
15
(d) Estimated Additional Net Income. The net revenue
estimated as provided in subdivision ~C-)' of this section may
be revised and enlarged in a written report of an independent
engineer or the Entity engineer, as approved by a certificate
or opinion of an independent certified public accountant~ to
include any or all of the following:
i) Additional Connections. The net revenues of
the additional number of users connected to the Enterprise
at the time of the issuance of said report~ had such
users been connected to the Enterprise for the entire
fiscal or bond year used for the audit~ certificate or
opinion referred to in said subdivision (c)~
ii) ~p_9_U_~sitionso The net revenues to be derived
from the users connected to a sewer system or sewer facil-
ities to be acquired by the Entity from the proceeds of
the additional bonds~
iii) Construction. Seventy-five per cent (75~) of the
additional net revenues estimated to be produced from the
construction of the project for which additional bonds are
to be issued~ or from construction from other revenues~
in any twelve' (12) months' p~riod out of'the twehty-fpu.r
(24) months next succeeding~ and
iv) Rate Increase. Seventy-five per cent (75~) of
the addi¥~-~-[ revenues estimated to be derived from any
increase in charges made by the Entity which have not been
reflected in the audit~ certificate or opinion for the
full fiscal or bond year covered therein;
(e) Refund~n_~ Bonds~ In the event and to the extent that
additional bonds are to be issued for the purpose of refunding
and retiring any bonds of this issue~ for the purpose of the
calculation required under t~is section~ the amounts of annual
principal~ interest~ and minimum sinking funds required to have
been paid on the bonds to be refunded need not be taken into
consideration in computing the coverage for such additional bonds~
(f) For the purposes of this section:
i) Independent Certified Public Accountant means any
registered or licensed certified public accountant or firm
of such certified public accountants duly licensed or
registered or entitled to practice and practicing as such
under t~e laws of the State of California~ appointed and
paid by the Entity~ and who~ or each of whom~
(1) is in fact independent~ and not under
domination of the Entity~
(2) does not ~ave any substantial interest~
direct or indirect~ with the Entity~
(3) is not connected with tl~e Entity as an
officer or employee of the Entity~ but who may
be regularly retained to make annual or other
similar audits of the books of the Entity; and
16
ii) Independent ~ineer means any individual or
firm of engineers having special knowledge and experience
in the utility field~ appointed and paid for by the Entity
and who, or each of whom~
(1) is in fact independent and not under
domination of the Entity~
(2) does not have any substantial interest,
direct or indirect~ with the Entity~
(3) is not connected with the Entity as an
officer or employee of the Entity~ but who may
be regularly retained to make annual or other
periodic reports to the Entity~
(g) Subordinate Lien Bonds~ Nothing in this Indenture shall
be deeme~--l~-~-6-'~'~¥~¥i~'t~'~he power of the Entity to issue
such additional bonds payable from but inferior as to the lien
of any of the then outstanding bonds on the Revenues without
compliance witi~ the provisions of this section or of any other
provision of this Indenture.
~8. Modifications. All of the provisions of this Indenture shall
constitute a contract between the Entity and the holder or holders of
the bonds° From and after the sale and delivery of any of the bonds~
no amendment~ alteration or modification of the bonds or of the cou-
pons 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 or~ alternatively~ the prior consent given at a
bondholders' meeting~ of the holders of at least sixty-six and two-
thirds percent (66-2/3~) of t~e aggregate principal amount of bonds
of said series then outstanding~ unless such amendment, alteration
or modification be herein authorized. Any such amendment, alteration
or modification which shall have received the 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.
If any alteration~ amendment or modification shall affect less than
all of the series outstanding hereunder, then the provisions of this
section shall apply only to the series affected by such amendment,
alteration or modification.
49. Calling.._ Bondholders' Meeting° If the Entity shall desire to
or shall be required to obtain the consent of the bondholders to a
proposed action, the Legislative Body may adopt a resolution calling a
meeting of bondholders affected by the proposed action for the purpose
of considering the action~ the consent to which is desired or required.
50. Notice of Meeting~ Notice specifying the purpose, place~ date
and hour'~6~--'~'~s~-6'~~¥~"~hall be given by mail thirty (30) days prior
thereto in a financial paper published in San Francisco or New York.
Such notice shall set forth the nature of the proposed action~ consent
to which is desired or required. The Finance Officer shall mail such
notice by registered mail to the last known holder or holders of bearer
bonds~ as shown by the records in his office~ and to the registered
owners of any registered bonds at their addresses shown on the bond
registry books~ The place~ date and hour of holding such meeting and
the date or dates of publishing and mailing such notice shall be
determined by the Legislative Body in its discretion.
17
51. Voting Qualifications. Any holder of a bearer bond may,
prior to any such meeting~ deliver such bond to any agency designated
by the Entity for the purpose, and shall thereupon be entitled to
receive a receipt for the bond so deposited~ calling for the redelivery
of such bond~ or of a certificate of deposit thereof~ satisfactory to
the Finance 0fficer~ executed by a bank or trust company~ at any time
after the meeting. The Finance Officer shall prepare and deliver to
the chairman of the meeting a list of the names and addresses of the
registered owners of the bonds as shown on the bond registry books,
together with a statement of the maturities~ series and numbers of the
bonds held by each of such registered bondholders~ and~ to the extent
known by him~ a list of the names and addresses of the owners of bearer
bonds deposited with the aforesaid agency~ together with a statement of
the maturities~ series and numbers of the bonds held and deposited by
each of such bondholders, and no bondholder shall be entitled to vote
at such meeting unless his name appears upon such lists or untess~ at
the meeting~ he shall present his bond or bonds or such certificate of
deposit thereof. No bondholder shall be permitted to vote with respect
to a larger aggregate principal amount of bonds than is set against
his name on such !ists~ unless he shall produce the bonds upon which
he desires to vote or such certificate of deposit.
52. Attendance and Voting by Proxy. Attendance and voting by bond-
holders at such meeting may be by proxy. Owners of registered bonds
may~ by an instrument in writing under their hands~ appoint any person
as their proxy to Vote at any meeting for them~ and such instrument
when presented at such meeting shall be sufficient to entitle such
son to vote as the proxy of said registered owner. Any person may
vote as the proxy of the owner of a bearer bond on presentation of such
bond, certificate of deposit thereof and an instrument in writing under
the hand of the bondholder appointing such person as his proxy to vote at
such meeting for him~ or if such instrument in writing has been deliver-
ed to such agency as provided for in Section 52 of this Indenture and
such person's name appears on the list delivered by the Finance Officer
to the chairman of the meeting as the proxy of the owner of such bearer
bond.
53. Issuer-Owned Bonds. The Legislative Body covenants that it
will present at the meeting a certificate~ signed and verified by one
member thereof and by the Finance Officer~ stating the maturities,
series and numbers of all bonds owned by~ or held for account of, the
Entity directly or indirectly. No person shall be permitted at the
meeting to vote or consent with respect to any bond appearing upon such
certificate~ or any bond which it shall be established at or prior to
the meeting is owned by the Entity directly or indirectly and no such
bond (in this Indenture referred to as "issuer-owned bond~) shall be
counted in determining whether a quorum is present at the meeting.
54. Quorum and Procedure. A representation of at least sixty-six
and two-thirds percent (~6-2/3~) in aggregate principal amount of the
bonds affected by the proposed action and then outstanding (exclusive
of issuer-owned bonds~ if any) shall be necessary to constitute a quo-
rum at any meeting of bondholders~ but less than a quorum may adjourn
the meeting~ from time to time~ and the meeting may be held as so
adjourned without further notice~ whether such adjournment shall have
been had by a quorum or by less than a quorum. The Legislative Body
shall~ by an instrument in writing~ appoint a temporary chairman of the
meeting, and the meeting shall be organized by the election of a perm-
anent chairman and a secretary. A~ any meeting~ each bondholder shall
be entitled to one vote for every $1~000 principal amount of bonds with
respect to which he shall be entitled to vote as aforesaid, smd such
vote may be given in person or by proxy~ as aforesaid. The Legislative
Body, by its duly authorized representative~ may attend any meeting of
the bondholders~ but shall not be required to do so.
55. Vote Require~. At any such meeting held as aforesaid~ there
shall be submitted for the consideration and action of the bondholders
a statement of proposed action~ consent to which is desired or required~
and if such action shall be consented to and approved by the bondholders
in person or by proxy holding at least sixty-six and two-thirds percent
(66-2/3~) in aggregate amount of the bonds affected by such proposed
action and then outstanding (exclusive of issuer-owned bonds)~ the
chairman and the secretary of the meeting shall so certify in writing
to the Legislative Body~ and such certificate shall constitute complete
evidence of the consent of such bondholders.
56. Certificate of Notice Conclusive. The actual receipt by any
bondholder of any notice required ~o be ~iven by Section 51 of this
Indenture shall not be a condition precedent to the undertaking~ notice
of which is required to be given~ and failure to receive such notice
shall not affect the validity of the proceedings thereat or prevent the
notice from having the effect intended by the giving of notice~ provided
that notice has been published and has also been mailed to bondholders
to the extent known to the Finance Officer. No irregularity in the form
of said notice shall affect its validity provided notice has been given.
A certificate signed by the chairman and secretary of any such meeting~
shall be conclusive evidence and the only competent evidence of the
matters stated in the certificate relating to the proceedings taken at
such meeting, as against all parties and it shall not be open to any
bondholder to show that he failed to receive notice.
57. Filing Certificate. The certificate shall be filed in the
office of the Finance Officer and shall be kept on file so long as any
of the bonds and the interest thereon are outstanding and unpaid. A
duplicate original~ if there is one and~ if not~ then a reproduced copy
thereof including the signatures thereon~ shall be filed with the Secre-
tary who shall likewise keep it filed with the papers of the proceedings
authorizing the issuance of the affected bonds.
58. Issuance of Refunding Bonds._ Refunding bonds may be issued~
sold or exchanged to r~'deem or retire outstanding bonds _
of this issue. The Legislative Body may provide for the issuance and
sale by supplemental resolution~ to take effect upon adoption~ which
shall provide the terms thereof~ and any conditions~ agreements and
covenants appertaining thereto. If the Legislative Body determines to
sell the refunding bonds or any part thereof~ they shall be offered for
sale in the manner provided in Section 54388 of the Bond Law. No elec-
tion shall be required to authorize the issuance of refunding bonds.
Ail of the provisions of the Bond Law~ excepting the provisions of
Article 3~ are applicable to refunding bonds and their issuance and
exchange.
59. Amount of Refunding Bonds. Funding or refunding bonds may be
issued in a principal amount sufficient to provide funds for the pay-
ment of all of the following:
(a) Ail bonds to be funded or refunded by them;
(b) Ail expenses incident to the calling~ retiring or
paying of the outstanding bonds and the issuance of the funding
or refunding bonds~ including the difference in amount between
the par value of the funding or refunding bonds and any amount
less than that for which the funding or refunding bonds may be
sold~
19
(c) Interest upon the funding or refunding bonds from the
date of sale to the date of payment of the bonds to be funded
or refunded out of the proceeds of the sale or the date upon
which the bonds to be funded or refunded will be paid pursuant to
the call or an agreement with the holders of such bonds~ and
(d) Any premium necessary in the calling or retiring
of the outstanding bonds and the interest accruing on them to
the date of the call or retirement.
60. Default.
(a) Event of. If one or more of the following events (here-
in called ~'events of default") shall happen:
i) Principal. If default shall be made in the due
and punctual payment of the principal of any bond when and
as the same shall become due and payable whether at maturity
as therein expressed~ by proceedings for redemption, by
declaration or otherwise~ or
ii) Interest. if default shall be made in the due and
punctual payment of any installment of interest of any
bond when and as such interest installment shall become due
and payable~ or
iii) Covenants. If default shall be made in the observa-
tion.of any bf ~he 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) Bankruptcy. 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 without
the consent of the Entity seeking reorganization under the
Federal Bankruptcy laws or any other applicable laws or
statutes of the United States of America~ or if under the
provisions of any other law for the 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 than seventy-five per cent (75%) in aggregate
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 interest
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 con-
tained to the contrary notwithstanding~
(c) Application of Funds. Ail of the gross revenues of the
Enterprise, inclu~'ing 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 here-
under 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:
2O
i) Costs and Expenses. To the payment of the costs a2d
expenses of th8 bondholders in declaring such event of de--
fault~ 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~
ii) Interest on Undue Bonds. In case the principal of
the bond~ 'shall not have b~com~ due and shall not then be
due and payable~ to the payment of the interest in default 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 installments of in-
terest at the same rate~
iv) Insufficient Fm~ds. In case such moneys shall be
insufficient '~'o pay in f'uil 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 installment of interest~ ratably
to the aggregate of such principal and interest then due~
(d) Refunding Defaulted Bonds. The Entity may~ with the
consent of the holder'the~eof'~ 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 payment 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.
61. Bondholder Remedies. Subject to any contractual limitations
binding upon the ~older~ 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) Injunction. By action or suit in equity to enjoin any
acts or t~in~s which may be unlawful or in violation of the rights
of the bondholders~ or
(c) Mandamus. By mandamus or other suit~ action or proceed-
ing at law or in equity to enforce his rights against the Entity
and its and any of its officers~ agents and employees, 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.
21
62. Connections Mandatory. The further maintenance or use of
cesspools or other local means of sewage disposal shall constitute a
public nuisance. Ail buildings inhabited or used by human beings and
in which any sewage is produced, which are not more than 200 feet from
connection with the Enterprise or any extension hereafter made thereto
shall be connected with the Enterprise no more than thirty (30) days
from the time when system lines of the Enterprise are ready for use so
that a connection can be made thereto.
63. Regulations for Collecting Charges. By ordinance duly adopted
the Entity h~s and shall establish'~' ~g~nt'ain and diligently enforce valid
regulations for billing and collecting the charges for the services 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 provisions hereof:
(a) Billing Period. 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) Delinquency. If a statement is not paid on or before the
forty-fifth (452'h) day after the post office cancellation date of
the billing, the charge is delinquent~
(c) Collection With Taxes. Charges unpaid at the time speci-
fied 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~ controlled~ 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, be-
quest~ or devise~
(d) Collection As a Lien. The Entity may declare that any
of said charges are a lien and collect them as now or hereafter
provided therefor in the Bond Law~
(e) Collecting Charges With Other Utility Charges. The Entity
may provi~'e for th~ co~lectibh Of charges With 5ther utility charges
as herein provided:
i) With Utility Charges of Entity. Where the person
charged is a user of another utility owned and operated by
the Entity~ the charges shall be collected together with and
not 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 Upon Delinquency.
Upon delinquency~ tee Other u~ility service shall be
discontinued until full payment of the dual charges
and penalties thereon and the charges for recontinuance
of service~
(B) Id. - Time. The time for the discontinuance
of such other service shall not exceed forty-five (45)
days from the date the sewer service charges are pro-
vided to become delinquent~
22
(f) Collection bY Suit. As an alternative remedy~ and not-
withstanding any other procedure previously taken, the Entity may
bring an action against the person or persons who occupied the
property when the service was rendered or the deposit became due
or against the person guaranteeing such payment, or against any
or all of said persons for the collection of the amount of the de-
posit or the delinquent charges and penalties thereon. In such
action a reasonable attorney's fee shall be awarded to the Entity~
64. Unconditional Obligation. Except only as provided herein for
alteration of the bonds oS thus Indenture~ nothing in this Indenture or
in the bonds or in the coupons contained shall affect or impair the ob-
ligation of the Entity, which is absolute and unconditional, to pay the
principal of and interest on the bonds to the respective holders of the
bonds and coupons at the respective dates of maturity~ or upon prior re-
demption~ as herein provided, and out of the revenues herein pledged for
such payment~ or affect or impair the right of action, which is also
absolute and unconditional~ of such holders to institute suit to enforce
such payment by virtue of the contract embodied in the bonds and coupons.
65. Performance 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.
66. Recourse to Bond Law. Each taker and subsequent holder of the
bonds and attached' or 'd~tached coupons has recourse to all of the pro-
visions of this Indenture and of the Bond Law: and is bound by their terms.
67. Indenture is Covenant. Each and all of the terms of this In-
denture sha~l be aHd constitu{e a convenant on the part of the Entity to
and with each and every bondholder from the time the bonds are issued.
68. Period of Agreement. Whenever all of the bonds and all interest
then accrued thereon shall have been fully paid and discharged, the agree-
ments in this indenture contained shall cease and terminate, and the
Entity shall be ~der 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.
69. Fiscal Agent. The Entity hereby appoints the Main Office of
the Bank Of America N. To & 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 obli-
gated to perform the duties imposed on it by the terms of this
Indenture~
(b) Resignation. Any Fiscal Agent appointed hereunder may
resign at any time. Upon the merger~ consolidation~ or other re-
organization 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~
23
(d) Continued Service. Any such Fiscal Agent designated by
the Entity shall cSnti~ue 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~
(e) Funds. The Fiscal Agent is hereby authorized and directed
to keep 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 authorized
to redeem' said bond'~ ahd 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 Officer~
(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) Compensation. The Legislative Body is hereby authorized
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 re-
sponsibility for the correctness of the same, and makes no repre-
sentations as to the validity or sufficiency of this Indenture or
of the bonds or coupons~ and shall incur no responsibility in respc~'
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 require
the performance of any obligation hereunder.
70. Bond Form. The bonds and coupons representing interest thereon
shall be' in substantially the following form, except that if said
bonds are sold in the denomination of $5,000 each~ 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", for 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 1st day of July' , 19__, the sum of
ONE THOUSAND DOLLARS~ with interest thereon from date at the rate of
a__~%e per annum, as evidenced by interest coupons attached hereto
time of issuance, said interest payable semiannually on the
1st day of January and the 1st day of July of each year to the date
of maturity, except the first coupon which shall be for interest from
February 1, 1966 to July 1~ 1966. ~
Bonds maturing by their terms on or before July 1, 1985~ shall
not be subject to call prior to their fixed maturity date. Bonds
maturing on or after July 1, 1986, 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 July 1, 1976 (but not prior
theretoi 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 principal 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 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. Ail 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 notice
once at least thirty (30) days prior to the day of call in a financial
paper published in San Francisco and in a financial paper published
in New York. The Treasurer shall mail such notice by registered mail
thirty (30) days prior thereto to the last known holder or holders of
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 America
N. T. & S. A.~ 300 Montgomery Street, San Francisco~ California,
the Fiscal Agent of the District~ or, at the option of the holder, at
any fiscal agency of the District in Los Angeles, California, Chicago~
Illinois, or New York, New York.
This bond is one of an issue in the total principal amount of
$1,400,000, all of like date and tenor except as to number, maturity
and prior redemption (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. 641 entitled "A Resolution Providing for the Issuance of Sewer
Revenue Bonds, Fixing the Form of Bonds and Providing Covenants for
Their protection, adopted on December 17, 1965, 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 proposi-
tion 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 to provide (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 resolution
~y be s~uended, altered or modified with the consent of the holders
of sixty-six and two-thirds (66-2/3%) percent of the aggregate prin-
cipal amount of bonds then outstanding in the manner, to the extent
and upon the terms 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 per-
formed in regular and due form, time and manner as required by law~
that the District is authorized by law to operate the Enterprise 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 of this issue which shall
become due and payable within the next succeeding 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 be-
come due on the next succeeding interest 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 princi-
pal which shall fall due at the next ensuing principal payment date.
26
IT IS FURTHER CERTIFIED AND RECITED that for the further protec-
tion 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 de-
livered~ and commencing on the first day of each calendar month follow-
ing 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 countersigned
by the manual signature of the Clerk~ and has caused the interest cou-
pons to be executed and authenticated by the facsimile signature of
the Treasurer, all as of February l~ 1966.
COUNTERSIGNED:
Pr e s id e~t
clerk
71. Interest Coupon Form.
in the followYng 'fdrm: ..........
The coupons shall be substantially
South Tahoe Public Utility District
E1 Dorado County, California
Sewer Revenue Bond of 1966
Dated February l, 1966
The sum shown hereon is payable to bear-
er (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.
on , 19
Coupon No.
Bond No.
Treasurer
?2. Registration Form. The form of endorsement on said bonds
for registration shall be as follows:
This bond is registered in the name of the registered
owner whose name and address appear last in the space
27
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.
NOTE:
There must be no writing in the space below except
by the Fiscal Agent.
Dat~e o3 .... Type' of N'im~' of Address of Signature of
Reg~stry_Regi~trati0D* Registered Owner Registered Owner Fiscal Agent
Principal only
and Interest
Principal'only
and Interest
......... Principal only
and Interest
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 LegalSty. If any section, paragraph~ subdivision, sentence~
clause Ar phrase of this Indenture shall for any reason be adjudged
by any court of competent jurisdiction to be unconstitutional, unen-
forceable 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 pursuant hereto
irrespective of the fact that any one or more sections, paragraphs,
subdivisions, sentences, clauses or phrases of this Indenture may be
held to be unconstitutional, unenforceable or invalid.
ATTEST:
Cler~ ano ex-ofI~clo ~e y
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 an adjourned meeting thereof duly held on the l?th day
of December, 1965, by the following vote:
AYES, and in favor thereof, Directors:
Bickle, Wakeman, Kortes, Fesler and Stewart
NOES, Directors: None
ABSENT~ Directors: None
lC l~r~ an~ e x'-~3~ o f f ~ec~r~e t~~ the South
Tahoe Public Utility District
28