627' RESOLUTION NO. %Z %
A RESOLUTION PROVIDING FOR THE ACQUISITION, CONSTRUCTION
AND ERECTION OF EXTENSIONS AND IMPROVEMENTS TO THE MUNI-
CIPAL WATER AND SEWER SYSTEM OF THE CITY OF EDGEWATER,
FLORIDA; AUTHORIZING THE ISSUANCE BY THE CITY OF NOT
EXCEEDING $700,000 WATER AND SEWER REVENUE BONDS TO
FINANCE A PART OF THE COST THEREOF; PLEDGING THE NET
REVENUES OF SAID SYSTEM, CERTAIN MUNICIPAL EXCISE
TAXES, AND ALL MONEYS OF THE CITY DERIVED FROM SOURCES
OTHER THAN AD VALOREM TAXATION AND LEGALLY AVAILABLE
FOR SUCH PURPOSE, TO SECURE PAYMENT OF THE PRINCIPAL
OF AND INTEREST ON THE BONDS; AND PROVIDING FOR THE of
D
p
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RIGHTS OF THE HOLDERS OF THE BONDS, REPEALING ALL
RESOLUTIONS OR PARTS OF RESOLUTIONS IN CONFLICT HERE-
4
WITH, SPECIFICALLY REPEALING RESOLUTION NO. 607, AND
PROVIDING AN EFFECTIVE DATE THEREFORE.
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF EDGEWATER, FLORIDA:
ARTICLE I
GENERAL
1.01 Authority for this Resolution. This Resolution, hereinafter
called the "instrument," is adopted pursuant to the provisions of Chapter
159, Part I, Florida Statutes, and other applicable provisions of law.
1.02 Findings. It is hereby found and determined that:
(A) For the benefit of its inhabitants, the City of Edgewater,
Florida (the Issuer) presently owns a water and a sewer system (the System);
and it is necessary for the continued preservation of the health, welfare,
convenience and safety of the Issuer and its inhabitants to construct ex-
tensions and improvements to the System (the Project), in accordance with
certain plans and specifications now on file with the City Clerk of the
Issuer (the Clerk).
(B) The Issuer has been advised by its consulting engineers that
the cost of constructing the Project in accordance with said plans and
specifications is estimated at $700,000, which shall be paid with the pro-
ceeds of the sale of the bonds herein authorized (the Bonds), and shall
be deemed to include all expenses necessary, appurtenant or incidental thereto,
1
including the cost of any land or interest iherein or of any fixtures or equipment, or
6.77
property necessary or convenient therefor, the cost of labor and
materials to complete such construction, engineering and legal
expenses, fiscal expenses, expenses for estimates of costs and
revenues, expenses for plans, specifications and surveys, interest
during construction, if any, administrative expenses and all other
necessary miscellaneous expenses.
(C) (i) Pursuant to Section 167.431, Florida Statutes,
the Issuer did, on January 23, 1952, enact non-emeroencv Ordinance
No. 13 levying and imposing a utilities services tax on every
purchase of electricity, metered or bottled gas (natural liquefied
petroleum gas or manufactured), telephone service and telegraph
service within the corporate limits of the Issuer.
The proceeds to be derived by the Issuer from the
utilities services tax are hereinafter'referred to as the "Excise
Taxes."
(ii) The revenues to be derived annually from the
rates, rentals, fees and other charges made and collected for the
services and facilities of the System are estimated to be $ 209,900.00
and, together with the Excise Taxes will be sufficient to pay, as
the same shall become due and payable, the principal of and interest
on the prior lien obligations, hereinafter defined, the principal
of and interest on the Bonds and the annual cost of operating,
repairing and maintaining the System, the aggregate annual amount
of which is estimated to be $ 277,800.00 It is estimated
that the period of usefulness of the System will exceed forty-
one years.
(D) It is deemed necessary and desirable to pledge the
net revenues of the System, and the Excise Taxes to the payment of
the principal of and interest on the Bonds. No part of such
revenues or Excise Taxes will be pledged or hypothecated except
with respect to the Bonds, and except that such revenues and Excise
Taxes have been pledged first to the payment of the principal of
and interest on the Issuer's outstanding Water Works and Sewer System
Refunding and Improvement Revenue Bonds, dated February 1, 1964,
originally authorized in the aggregate
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.principal amount of $1,692,000, hereinafter sometimes referred to
as the "prior lien obligations". It is deemed necessary and desirable
to pledge as additional security for the payment of the principal
of and interest on the Bonds all moneys of the Issuer derived from
sources other than ad valorem taxation which shall be legally
available for such purpose.
(E) This instrument is declared to be and shall con-
stitute a contract between the Issuer and all of the holders
of the Bonds; and the covenants and agreements herein set forth
to be performed by the Issuer are and shall be for the equal
benefit, protection and security of all of the legal holders
of any and all of the Bonds, all of which shall be of equal
rank and without preference, priority or distinction of any
of the Bonds over any other, except asphereinafter provided.
(F) The Issuer is not, under this instrument, obliga-
ted to levy any ad valorem taxes on any real or personal property
situated within its corporate territorial limits to pay the
principal of or interest on the Bonds or to pay the cost of
maintaining, repairing and.operating the system. The Bonds shall
not constitute a lien upon the System or any other property of
the Issuer or situated within its corporate territorial limits.
. 1.D3 Definitions. The following terms in this instru-
ment shall have the following meanings unless the text otherwise
expressly requires:
(A) "Gross Revenues" shall mean all moneys received
from rates, fees, rentals or other charges or income received
by the Issuer or accruing to it in the management and oper-
ation of the System, all calculated in accordance with sound
accountinq practice.
(B) "Operatinq Expenses" of the System shall mean
all current expenses, paid or accrued, for the operation, main-
tenance and repair of the System and its facilities, as calcu-
lated in accordance with sound accountinq practice, and shall
include, without limitinq the qenerality of the foreqoinq,
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insurance premiums, administrative expenses of the Issuer re-
lated solely to the System, labor, cost of materials and
supplies used for current operation, and charges for the
accumulation of appropriate reserves for current expenses not
annually recurrent but which are such as may reasonably be
expected tobeincurred in accordance with sound accounting
practice. "Operating Expenses" shall not includeanyallowance
for depreciation or for renewals or replacements of capital
assets of the System.
(C) "Net Revenues" of the System shall mean the
gross revenues thereof, as defined in subsection (A), after
deducting therefrom only the operating expenses of the same,
as defined in subsection (B).
(D) "Fiscal Year" shall mean the period commencing
on October 1 of each year and continuing to and
including the succeeding September 30.
1.04 Project Authorized. The Issuer is hereby
authorized to construct the Project as defined in Section 1.02 (A)
above.
ARTICLE II
AUTHORIZATION, TERMS,EXECUTION AND
REGISTRATION OF REVENUE BONDS
2.01 Authorization of Revenue Bonds. Subject and pursuant
to the provisions of this instrument, obligations of the Issuer to
be known as "City of Edgewater Water and Sewer Revenue Bonds" (the
"Bonds") are hereby authorized to be issued in an aggregate principal
amount not exceeding Seven Hundred Thousand Dollars ($700,000)
for the purpose of providing funds to pay a part of the cost of the
Project provided for in Section 1.02 hereof.
2.02 Description of Bonds. The Bonds shall be dated as
of.the date of their delivery; shall bear interest at not exceeding
the legal rate per annum, payable on September 1, 1975 and annually
thereafter on September 1 of each year; shall be numbered consecutively
from one upward in order of maturity; and shall be in the denomina-
tions, be numbered and mature on September 1 of each year as follows:
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BOND
BOND
YEAR
DENOMINATION
NUMBER
YEAR DENOMINATION NUMBER
1978
$ 6,000
1
2000 $10,000
35
1979
7,000
2
- 9,000
36
1980
7,000
3-
2001 101000
37-38
1981
7,000
4
2002 10,000
39-40
1982
8,000
5
1,000
41
1983
8,000
6
2003 10,000
42-43
1984
9,000
7
2,000
44
1985
9,000
8
2004 10,000
45-46
1986
10,000
9
3,000
47
1987
10,000
10
2005 10,000
48-49
1988
10,000
11
5,000
50
1,000
12
2006 10,000
51-52
1989
10,000
13
5,000
53
1,000
14
2007 10,000
54-55
1990
10,000
15
7,000
56'
2,000
16
2008 10,000
57-58
1991
10,000
17
8,000
59
2,000
18
2009 10,000
60-61
1992
10,000
19
9,000
62
3,000
20
2010 10,000
63,64,65
1993
10,000
21
1,000
66
4,000
22
2011 10,000
67,68,69
1994
10,000
23
2,000
70
4,000
24
2012 10,000
71,72,73
1995
10,000
25
4,000
74
5,000
26
2013 10,000
75,76,77
1996
10,000
27
6,000
78
6,000
28
2014 10.,000
79,80,81
1997
10,000
29
8,000
82
7,000
30
2015 10,000
83,84,85
1998
10,000
31
9,000
86
7,000
32
1999
10,000
33
8,000
34
2.03 Places of Payment.
The Bonds shall be issued
in coupon form; shall
be payable as
to both principal
and interest
at such
place or places
as the Issuer shall hereafter
by resolution
designate,
in lawful
money of the
United States of America; and
shall bear interest
from the date
of issue, in accordance
with and
upon surrender
of the
appurtenant
interest coupons as
they severally
mature,
unless registered;
provided, however, that Bonds held by
the United
States of
America, acting
through the Farmers Home
Administration,
U.S.
Department of Agriculture (the "Government"),
shall be payable at
"Finance Office, U.S. Department
of Agriculture,
Farmers
Home Administration, 1520
Market Street, St.
Louis, Missouri
63103,"
or at such other places as the Government shall
from time
to time
in writing designate to the Issuer.
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2.04- Provisions -for Redemption. Bonds maturing on
or before September 1, 1985 are not subject to redemption
prior to their respective stated dates of maturity. Bonds maturing
September 1, 1986 and thereafter shall, at the option of the
Issuer, be redeemable in whole or in part, in inverse numerical and
maturity order, on September 1, 1985 or on any interest payment
date thereafter at par and accrued interest, plus the following
premiums, expressed as percentages of the par value of the Bonds so
redeemed, if redeemed in the following years:
5%, if redeemed on September 1, 1985 or thereafter,
to and including September 1, 1987;
4%, if redeemed on September 1, 1988 or thereafter,
to and including September 1, 1991;
3%, if redeemed on September 1, 1992 or thereafter,
to and including September 1, 1995;
2%, if redeemed on September 1, 1996 or thereafter,
to and including September 1, 1999;
1%, if redeemed on September 1, 2000 or thereafter,
to and including September 1, 2003;
Without premium, if redeemed September 1, 2004 or
thereafter, but prior to maturity;
provided, however, that at least thirty (30) days prior to the
redemption date written notice of such redemption shall be given to
the paying agents for the Bonds and to each of the registered
owners at their respective addresses as they appear upon the registration
books of the Clerk of the Issuer and shall be published at least
once in a financial newspaper published in the City of New York,
New York. Bonds held by the Government may be redeemed by the
Issuer on any interest payment date prior to maturity at the price
of par and accrued interest, without premium.
2.05 Execution of Bonds. The Bonds shall be executed in
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the name of the Issuer with the manual or facsimile signature of
its Mayor and the corporate seal of the Issuer shall be impressed
thereon, attested and countersigned with the manual or facsimile
signature of its City Clerk, provided that the signature of one of
such officers shall be manually executed thereon. In case any one
or more of the officers who shall have signed or sealed any of the
Bonds or whose facsimile signature shall appear thereon shall cease
to be such officer of the Issuer before the Bonds so signed and
sealed have been actually sold and delivered, such Bonds may nevertheless
be sold and delivered as herein provided and may be issued as if
the person who signed or sealed such Bonds had not ceased to hold
such office. The validation certificate endorsed on the Bonds
shall be executed with the manual or facsimile signature of the
Mayor. Any Bond may be signed and sealed on behalf of the Issuer
by such person who at the actual time of the execution of such Bond
shall hold the proper office of the Issuer, although at the date of
such Bonds such person may not have held such office or may not
have been so authorized. The coupons attached to the Bonds shall be
authenticated with the facsimile signatures of any present or
future Mayor and City Clerk of the Issuer. The Issuer may adopt
and use for such purposes the facsimile signatures of any such
persons who shall have held such offices at any time after the date
of the adoption of this instrument, notwithstanding that either or
both shall have ceased to hold such office at the time the Bonds
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shall be actually sold and delivered.
2.06 Negotiability and Registration. The Bonds shall be
and shall have all the qualities and incidents of negotiable instru-
ments under the law merchant and the Laws of the State of Florida,
and each successive holder, in accepting any of the Bonds or the
coupons appertaining thereto, shall be conclusively deemed to have
agreed that the Bonds shall be and have all of said qualities and
incidents of negotiable instruments.
The Bonds may be registered, at the option of the holder,
as to both principal and interest upon the books kept for the
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registration and transfer of Bonds by the City Clerk, as Bond
Registrar, and endorsed upon the Bonds by the Bond Registrar in the
space provided thereon. After such registration, no transfer of
the Bonds shall be valid unless made at the office of the Bond
Registrar by the registered owner or by his duly authorized agent
or representative and similarly noted on the Bonds, but at the
expense of the holders the Bonds may be discharged from registration
by being in like manner transferred to bearer, and thereupon trans-
ferability by delivery shall be restored. At the option and expense
of the holder, the Bonds may thereafter again from time to time be
registered or transferred to bearer as before.. The Bond Registrar
shall not be required to make any such transfer of Bonds during
fifteen (15) days next preceding an interest payment date on the
Bonds, or in the case of any proposed redemption of Bonds, after
such Bonds have been selected for redemption. The person in whose
name any Bond shall be registered shall be deemed and regarded as
the absolute owner thereof for all purposes, and payment of or on
account of the principal of any Bond and the interest on any Bond
shall be made only to or upon the order of the registered owner
thereof or his legal representative. All such payments shall be
valid and effectual to satisfy and discharge the liability upon
such Bond including the interest thereon to the extent of the sum
or sums so paid.
2.07 Bonds Mutilated, Destroyed, Stolen or Lost. In
case any Bond shall become mutilated, or be destroyed, stolen or
lost, the Issuer may in its discretion issue and deliver a new Bond
of like tenor as the Bond so mutilated, destroyed, stolen or lost,
in exchange and substitution for such mutilated Bond, upon sur-
render and cancellation of such mutilated Bond, or in lieu of and
substitution for the Bond destroyed, stolen or lost, and upon the
owner furnishing the Issuer satisfactory indemnity and complying
with such other reasonable regulations and conditions as the Issuer
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may prescribe and paying such expenses as the Issuer may incur.
All Bonds so surrendered shall be cancelled by the City Clerk. If
any such Bonds shall have matured or be about to mature,. instead of
issuing a substitute. Bond the Issuer may pay the same, upon being
indemnified as aforesaid, and if such Bond be lost, stolen or
destroyed, without surrender thereof.
Any such duplicate Bonds issued pursuant to this section
shall constitute original, additional contractual obligations on
the part of the Issuer whether or not the lost, stolen or destroyed
Bonds be at any time found by anyone, and such duplicate Bonds
shall be entitled to equal and proportionate benefits and rights as
to lien on and source and security for payment from the funds, as
hereinafter pledged, to the same extent as all other Bonds issued
hereunder.
2.08 Form of Bonds. The text of the Bonds shall be in
substantially the following form, with only such omissions, insertions
and variations as may be necessary and/or desirable and approved by
the Mayor prior to the issuance thereof (which necessity and/or
desirability and approval shall be presumed by his execution of the
Bonds and the Issuer's delivery of the Bonds to the purchaser
thereof):
No.
S
UNITED STATES OF AMERICA
STATE OF FLORIDA
COUNTY OF VOLUSIA
CITY OF EDGEWATER
WATER AND SEWER REVENUE BOND
KNOW ALL MEN BY THESE PRESENTS, that the City of Edgewater,
Florida, a public body created and existing under and by virtue of the
Laws of the State of Florida (hereinafter sometimes referred to as
the "Issuer"), for value received, hereby promises to pay to the
bearer, or if this Bond be registered to the registered holder as
herein provided, on the first day of September, 19_, from the
special funds hereinafter mentioned, the principal sum of
THOUSAND
DOLLARS.
and to pay interest thereon, from
the date
of
the delivery of this
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Bond to the purchaser thereof, solely from said special funds, at
the rate of per centum ( %)
per annum, payable on September-1, 1975 and annually thereafter
on the first day of September of each year upon the presentation
and surrender of the annexed coupons as they severally fall due.
Both principal of and interest on this Bond are payable at
in lawful money of the United States of America.
This Bond is one of an authorized issue of Bonds in
the aggregate principal amount of $700,000 of like date, tenor and
effect, except as to number, denomination, interest rate (if all
Bonds do not bear the same rate of interest) and date of maturity,
issued to finance a part of the cost of acquiring, erecting and
constructing extensions and improvements to the combined municipal
water and sewer system of the Issuer (the "System"), under the
authority of and in full compliance with the Constitution and
Statutes of the State of Florida, particularly Chapter 159, Part I,
Florida Statutes, and a resolution duly adopted by the Issuer on
19 (the "Resolution"), and is subject to all the
terms and conditions of the Resolution.
This Bond and the interest thereon are payable solely
from and secured by a lien upon and a pledge of the net revenues to
be derived from the operation of the System, the proceeds of certain
municipal Excise Taxes, and all moneys of the Issuer derived from
sources other than ad valorem taxation and legally available for
such purpose, in the manner described in the Resolution. It is
expressly agreed by the holder of this Bond that the full faith and
credit of the Issuer are not pledged to the payment of the principal
of and interest on this Bond and that such holder shall never have
the right to require or compel the exercise of any taxing power of
the Issuer to the payment of such principal and interest or the
cost of maintaining, repairing and operating the System. This Bond
and the obligation evidenced hereby shall not consitute a lien upon
the System or any part thereof or upon any other property of the
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Issuer. or situated within its corporate limits, but shall constitute
a lien only on the net revenues derived from the operation of the
System and said Excise Taxes. -
The lien of the holders of the Bonds of .the issue of
which this Bond is one on the revenues of the System is junior,
subordinate and inferior in every respect to the lien on such
revenues in favor of the Issuer's outstanding Water Works and Sewer
'System Refunding and Improvement Revenue BondsdatedFebruary 1,
1964 (the "prior lien obligations"). TheIssuerin the Resolution
has covenanted and agreed with the holders of the Bonds of the
issue of which this Bond is one that it will not hereafter issue
any additional obligations payable from the revenues of the System
on a parity with the prior lien obligations.
In and by the Resolution, the Issuer has covenanted and
agreed with the holders of the Bonds of this issue that it will
fix, establish, revise from time to time whenever necessary, maintain
and collect always such fees, rates, rentals and other charges for
the use of the product, services and facilities of the System
which, together with the proceeds of the Excise Taxes will always
produce cash revenues sufficient to pay, and out of such funds pay,
as the same shall become due, the principal of and interest on the
prior lien obligations and the Bonds, the necessary expenses of
operating and maintaining the System and all reserve, Sinking Fund
or other payments required by the Resolution, and that such rates,
rentals, fees and other charges will not be reduced so as to be
insufficient to provide funds for such purposes, and that it will
levy and collect the Excise Taxes at such rates, not exceeding the
maximum rates permitted by law, as shall be necessary to provide
funds which, together with the revenues of the System, will be
sufficient to pay, and out of such funds pay, as the same shall
become due, the principal of and interest on the Bonds, the necessary
expenses of operating and maintaining the System and all reserve,
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Sinking Fund or other payments required by the Resolution, and that
the rates of such Excise Taxes will not be reduced so as to be
insufficient to provide funds for such purposes.
The Bonds of this issue maturing on or before September
i, 1985 are not subject to redemption prior to their respective
stated dates of maturity. Bonds maturing September 1, 1986, and
thereafter shall, at the option of the Issuer, be redeemable in
whole or in part, in inverse numerical and maturity order, on
September 1, 1985 or on any interest payment date thereafter at par
and accrued interest, plus the following premiums, expressed as
percentages of the par value of the Bonds so redeemed, if redeemed
in the following years;
58, if redeemed on September 1, 1985 or thereafter,
to and including September 1, 1987;
4%, if redeemed on September 1, 1988 or thereafter,
to and including September 1, 1991;
3%, if redeemed on September 1, 1992 or thereafter,
to and including September 1, 1995;
2%, if redeemed on September 1, 1996 or thereafter,
to and including September 1, 1999;
1%, if redeemed on September 1, 2000 or thereafter,
to and including September 1, 2003;-
Without premium, if redeemed on September 1, 2004 or
thereafter, but prior to maturity;
provided, however, that notice of such redemption shall be given
in the manner required by the Resolution.
It is hereby certified and recited that all acts, conditions
and things required to exist, to happen and to be performed precedent
to and in the issuance of this Bond, exist, have happened and have
been performed, in regular and due form and time as required by the
Laws and Constitution of the State of Florida applicable thereto,
and that the issuance of this Bond, and of the issue of Bonds of
which this Bond is one, does not violate any consititutional,
statutory or charter limitations or provisions.
This Bond and the coupons appertaining thereto are and
have all the qualities and incidents of negotiable instruments
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under the law merchant and the Laws of the State of Florida.
This Bond may be registered as to both principal and
interest in accordance with the provisions endorsed hereon.
IN WITNESS WHEREOF, the City of Edgewater, Florida, has - -
issued this Bond and has caused the same to be executed in its name
and on its behalf by its Mayor and its corporate seal to be impressed
hereon, attested and countersigned by its City Clerk, all as of
, 19
(SEAL)
ATTESTED AND COUNTERSIGNED:
City ca er
CITY OF EDGEWATER, FLORIDA
By
FORM OF COUPON
0
No. $
On the lst day of September, 19_, unless the Bond to
which this coupon is attached is callable and shall have been
previously duly called for prior redemption and payment thereof
duly made or provided for, the City of Edgewater, Florida, will
pay the the bearer at , Florida, from the
special funds described in the Bond to which this coupon is attached,
the amount shown hereon in lawful money of the United States of
America, upon presentation and surrender of this coupon, being one
year's interest then due on its Water and Sewer Revenue Bond, dated
, 19 , No.
(SEAL)
ATTESTED AND COUNTERSIGNED:
City Clerk
CITY OF EDGEWATER, FLORIDA
By
Mayor
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FORM OF VALIDATION CERTIFICATE
This Bond is one of a series of Bonds which were validated by
judqment of the Circuit Court for Volusia. County, Florida rendered
on 19
PROVISIONS FOR REGISTRATION .
This Bond may be registered as to both principal and
interest on the books kept by said City Clerk, as Bond Registrar,
such registration being noted hereon by the Bond Registrar in the
registration blank below, the coupons being surrendered and the
interest being payable only to the registered holder, remitted by
mail, after which registration no transfer shall be valid unless
made on said books by the registered holder or his legal representative
and similarly noted in the registration blank below, but it may be
discharged from registration by being transferred to bearer, after
which it shall be transferable by delivery, or it may again be
registered as before. Upon reconversion of this Bond into a coupon
Bond, coupons representing the interest to accrue upon the Bond to
date of maturity shall be attached hereto.
Date of Name and Address of Signature of
Registration Registered Owner Bond Registrar
ARTICLE III
COVENANTS, SPECIAL FUNDS
AND APPLICATION THEREOF
3.01 Bonds Not to Be Indebtedness of Issuer. Neither
the Bonds nor the coupons attached thereto shall be or constitute
general obligations or indebtedness of the Issuer as "bonds"
within the meaning of Article VII, Section 12 of the Constitution
of Florida, but shall be payable solely from and secured by a
lien upon and pledge of said net revenues, Excise Taxes and a
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pledge of all moneys of the Issuer derived from sources other than
ad valorem taxation and legally available for such purpose, as
herein provided. No owner or holder of any Bond or coupon issued
hereunder shall ever have the right to compel the exercise of any
ad valorem taxing power to pay such Bond or coupon or the cost of
operating and maintaining the System, or be entitled to payment of
such Bond or coupon from any funds of the Issuer except from the
net revenues derived from the operation of the System, the Excise
Taxes and all moneys of the Issuer derived from sources other than
ad valorem taxation and legally available for such purpose, in the
manner provided herein.
3.02 Security for Bonds. The payment of the debt
service of all of the Bonds issued hereunder shall be secured
forthwith equally and ratably by a pledge of and a lien upon the
net revenues derived from the operation of the System, as now or
hereafter constituted, and the Excise Taxes, and by a pledge of all
moneys of the Issuer derived from sources other than ad valorem
taxation and legally available for such purpose. TheIssuerdoes
hereby irrevocably pledge such funds to the payment of the principal
of and interest on the Bonds issued pursuant to this instrument and
to the payment into the Sinking Fund at the times provided of the
sums required to secure to the holders of the Bonds issued hereunder
the payment of the principal of and interest thereon at the respective
maturities of the Bonds and coupons so held by them.
The lien on and pledge of the revenues of the System in
favor of the Bonds is junior, subordinate and inferior in every
respect to the pledge of and lien on such revenues in favor of the
outstanding prior lien obligations.
3.03 Application of Bond Proceeds. The Issuer hereby
covenants that it will establish with the
Bank,Florida, aseparate account or
accounts (herein collectively called the "Construction Account")
into which shall be deposited the proceeds from the sale of the
-is-
Bonds herein authorized (except such portion thereof as shall be
necessary to pay interest on the Bonds during the construction of
the Project, which shall be deposited in the Sinking Fund) required
to assure payment in full of the cost of the Project. Withdrawals
from the Construction Account shall be made only for such purposes
as shall have been previously specified in the Project cost esti-
mates and as shall be approved by the Issuer's consulting engineers
for the Project.
The Issuer's share of any liquidated damages or other
moneys paid by defaulting contractors or their sureties, and all
proceeds of insurance compensating for damages to the Project
during the period of construction, shall be deposited in the
Construction Account to assure completion of the Project.
Moneys in the Construction Account shall be secured by
the depository bank in accordance with U. S. Treasury Department
Circular 176 and in the manner prescribed by the Laws of the State
of Florida relating to the securing of public funds. when the
moneys on deposit in the Construction Account exceed the estimated
disbursements on account of the Project for the next 90 days, the
Issuer may direct the depository bank to invest such excess funds
in direct obligations of or obligations the principal of and interest
on which are guaranteed by the United States of America, which
shall be subject to redemption at any time at face value by the
holder thereof.- The earnings from any such investment shall be
deposited in the Construction Account.
When the Construction of the Project has been completed
and all construction costs have been paid in full, all funds
remaining in the Construction Account shall be deposited in the
Sinking Fund hereinafter established, and the Construction Account
shall be closed.
All moneys deposited in said Construction Account shall
be and constitute a trust fund created for the purposes stated, and
there is hereby created -a lien upon such fund infavorof the
holders of the Bonds until the moneys thereof shall have been
applied in accordance with this instrument.
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3.04 Covenants of the Issuer. So long as any of the
principal of or interest on any of the Bondsshall be outstanding
and unpaid, or until there shall have been set apart in the Sinking
Fund herein established, including the Reserve Account therein, a
sum sufficient to pay, when due, the entire principal of the Bonds
remaining unpaid, together with interest accrued and to accrue
thereon, the Issuer covenants with the holders of any and all of
the Bonds issued pursuant to this instrument as follows:
(A) Annual Budget of Current Expenses. The Issuer
covenants and agrees that on or before the date of delivery of the
Bonds to the purchaser thereof, it will adopt a budget of Current
Expenses for the System for the remainder of the then current
fiscal year and thereafter, on or before the first day of each
fiscal year during which any of the Bonds are outstanding, it will
adopt an Annual Budget of Current Expenses for the ensuing fiscal
year, and will mail a copy of such budget or amendments thereto to
any requesting bondholder. Current Expenses shall include all
reasonable and necessary costs'of operating, repairing, maintaining
and insuring the System, but shall exclude depreciation, payments
into the Sinking Fund and payments into the Reserve Account. The
Issuer covenants that the Current Expenses incurred in any year
will not exceed the reasonable and necessary amounts required
therefor, and that it will not expend any amount or incur any
obligations for the operation, maintenance and repair of the System
in excess of the amount provided for Current Expenses in the Annual
Budget, except upon resolution of the City Council that such expenses
are necessary to operate and maintain the System.
(B) Revenue Fund. The Issuer covenants and agrees that
on or before the date of delivery of the Bonds to the purchaser
thereof, it will establish with a depository in the State of Florida,
which is a member of the Federal Deposit Insurance Corporation and
which is eligible under the Laws of the State of Florida to receive
municipal funds, and maintain so long as any of the Bonds are
outstanding, a special fund to be known as the "City of Edgewater
Water and Sewer System Revenue Fund", hereinafter called the "Revenue
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o 0
Fund".
The Issuer further covenants and agrees that whenever,
from time to time, at any time deposits from the revenues of the
System and from the proceeds of the Excise Taxes shall have been
made sufficiently for minimum compliance with the covenants, require-
ments and provisions of the ordinance enacted by the Issuer authoriz-
ing issuance of the prior lien obligations, and such required deposits
shall be made monthly,, the balance of any and all revenues of the
System and the Excise Tax and/or any balance of moneys on deposit
in the "Revenue Fund" heretofore created and established for the
benefit oftheprior lien obligations. which shall be in excess of
the minimum requirements for compliance with such covenants, require-
ments and provisions of said ordinance shall forthwith, and not
less frequently than monthly, be deposited into said Revenue Fund
hereby created. Whenever the said covenants, requirements and
provisions of such ordinance shall no longer require deposits of
revenues of the System and of the Excise Tax for the debt service
of the prior lien obligations, the Issuer shall deposit into the
Revenue Fund, promptly as received, all cash income received from
the ownership and operation of the System and all of the proceeds
of the Excise Tax.
(C) Bond and Interest Sinking Fund. The Issuer covenants
and agrees to establish with a depository in the State of Florida,
which is a member of the Federal Deposit Insurance Corporation, and
which is eligible under the Laws of the State of Florida to receive
municipal funds a special fund or funds, collectively called "City
of Edgewater Water and Sewer System Bond and Interest Sinking
Fund", hereinafter called the "Sinking Fund", to be used exclusively
for the purposes hereinafter mentioned. After delivery of the
bonds to the purchaser thereof, and after first making any deposits
into the Operation and Maintenance Fund required by Paragraph 3.04(D)
hereof, the Issuer shall transfer on or before the 15th day of each
month from the Revenue Fund and deposit to the credit of the Sinking
Fund the following amounts:
(1) A sum equal to 1/12 of the amount of one year's
interest on all the Bonds then outstanding, together with the
amount of any deficiency in prior deposits for interest; and
(2) Beginning on September 1, 1977, a sum equal to
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.1/12 of the principal of the Bonds maturing on the next succeeding
anniversary date, together with the amount of any deficiency in
prior deposits for principal.
-
(3) After fulfillment of the requirements of paragraphs
(c)(1) and (2), the Issuer shall transfer on or before the 15th day
of each month from the Revenue Fund and deposit to the credit of a
special. account in the Sinking Fund, herein called the "Reserve
Account", the sum of Three Hundred Forty -Five Dollars and Eighty -
Three Cents ($345.83) until such time as the funds and investments
therein shall equal Forty-One.Thousand Five Hundred Dollars ($41,500),
and monthly thereafter such amount as may be necessary to maintain
in the Reserve Account the sum of Forty -One Thousand Five Hundred
Dollars ($41,500). but not exceeding Three Hundred Forty -Five Dollars
and Eighty -Three Cents ($345.83) monthly. Moneys in the Reserve
Account shall be used only for (1) paying the cost of repairing or
replacing any damage to the System which shall be caused by an
unforeseen catastrophe, (2) constructing improvements or exten-
sions to the System which shall increase its net revenues and which
shall be approved by said consulting engineers, if the Issuer shall
not then be in default under any of the provisions of this instrument,
and (3) paying the principal of and interest on the Bonds in the
event that the moneys in the Sinking Fund shall ever be insuffi-
cient to meet such payments.
(D) -Operation and Maintenance Fund. Whenever provision
for the payment of the reasonable current expenses of the oper-
ating, maintaining and repairing of the System pursuant to the
provisions of said ordinance authorizing issuance of the prior lien
obligations shall expire or cease by reason of the terms of such
ordinance, or for any other reason, the Issuer covenants and agrees
to establish with a depository in the State of Florida, which is a
member of the Federal Deposit Insurance Corporation, and which is
eligible under the Laws of the State of Florida to receive municipal
funds, a special fund to be known as the "City of Edgewater Water
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V �J
and Sewer System Operation and Maintenance Fund", herein called the
"Operation and Maintenance Fund," which shall be used exclusively
for the purpose of receiving funds to be transferred monthly by the
Issuer from the Revenue Fuhd, and for paying, as they accrue, the
Current Expenses of the System pursuant to the Annual Budget.- Before
making the deposits to the Sinking Fund as provided in paragraph
(C) above, the Issuer shall transfer on or before the fifteenth day
of each month from the Revenue Fund and deposit to the credit of
the Operating and Maintenance Fund a sum sufficient to pay the
Current Expenses of the system for the current month, all in accord-
ance with the Annual Budget. Any balance remaining in the Operation
and Maintenance Fund at the end of the fiscal year and not required
to pay costs incurred during said fiscal year shall be deposited
promptly into the Revenue Fund. "
(E) Deficiency or Excess Funds. Whenever by reason
of the insufficiency of moneys on deposit in the Revenue Fund
the Issuer is not able to make promptly the current monthly
payments required to be made pursuant to the provisions of
paragraph (C) above, the Issuer covenants and agrees that it
will pay into the Revenue Fund from any moneys of the Issuer derived
from sources other than ad valorem taxation and legally available
for such purpose whatever sums are necessary to cure such existing
deficit. Subject to the provisions for the disposition of revenues
in paragraphs (C) and (D), which are cumulative, the Issuer shall,
on or before the 15th day of each month, transfer to the Reserve
Account in the Sinking Fund the balance of moneys remaining in the
Revenue Fund until the funds and investments in the Reserve Account
equal the amount of Forty -One Thousand Five Hundred Dollars ($41,500),
and thereafter whenever funds and investments in the Reserve Account
equal $41,500 the Issuer may use the surplus funds in the Revenue
Fund for the purchase or redemption of Bonds or for any other
lawful municipal purpose.
(F) Trust Funds. The funds and accounts created and
established by this instrument shall constitute trust funds for the
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purpose provided herein for such funds. All of such funds, except
as hereinafter provided, shall be continuously secured in the same
manner as municipal deposits of funds are required to be secured by
the Laws of the State of Florida. Moneys on deposit to the credit
of the Reserve Account shall be invested by the depository bank,
upon request by -the Issuer, in direct obligations of, or obligations
the principal of and interest on which are guaranteed by the United
States of Americaand which shall be subject to redemption at face
value at any time by the holder thereof at the option of such
holder; and the moneys on deposit to the credit of the Sinking Fund
may be so invested in such obligations which shall mature not later
than fifteen (15) days prior to the date on which such moneys shall
be needed to pay the principal of and interest on the Bonds in the
manner herein provided, but moneys on deposit to the credit of the
Revenue Fund and the Operation and Maintenance Fund shall not be
invested at any time. The securities so purchased as an investment
of funds shall be deemed at all times to be a part of the account
from which the said investment was withdrawn, and the interest
accruing thereon and any profit realized therefrom shall be credited
to such account and any loss resulting from such investment shall
likewise be charged to said account.
(G) Rates and Charges. The Issuer covenants and agrees
to maintain and collect, so long as any of the Bonds are outstanding,
such schedule of rates and charges for the services and facilities
of the System which, together with the Excise Taxes, will produce
revenues which shall be sufficient to provide for current debt
service and reserve requirements for the outstanding prior lien
obligations and for the Bonds and pay the reasonable expenses of
operation and maintenance of the System; and the Issuer covenants
and agrees that so long as any of the Bonds are outstanding and
unpaid, at the same time and in like manner that the Issuer prepares
its Annual Budget of the Current Expenses, the Issuer shall annually
prepare an estimate of gross revenues to be derived from the operation
of the System for the ensuing fiscal year, and to the extent that
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said gross revenues, together with the Excise Taxes, are insufficient
to pay debt service requirements during such ensuing year on all
outstanding Bonds payable from the revenues of the System, build up
and maintain the required reserves for all such outstanding Bonds
and pay Current Expenses, the Issuer shall revise the fees and
rates charged for the use of the services and facilities of the
System sufficiently to provide the funds required.
(H) Levy of Excise Taxes. The Issuer covenants and
agrees that it will not repeal the ordinances now in effect levying
the Excise Taxes and will not amend or modify said ordinances in
any manner so as to impair or adversely affect the power and obliga-
tion of the Issuer to levy and collect the Excise Taxes or impair
or adversely affect in any manner the pledge of the Excise Taxes
made herein or the rights of the holders of the Bonds. The Issuer
shall be unconditionally and irrevocably obligated, so long as any
of the Bonds or the interest thereon are outstanding and unpaid, to
levy and collect the Excise Taxes at such rates, not exceeding the
maximum rates permitted by law, as shall be necessary to provide
funds which, together with the gross revenues of the System shall
be sufficient to pay, as the same shall become due, the principal
of and interest on the Bonds, the principal of and interest on the
prior lien obligations, the Current Expenses of operating and
maintaining the System and the other payments provided for herein.
This provision shall not be construed to prevent reasonable re-
visions of the rates of the Excise Taxes as long as the proceeds of
the Excise Taxes to be collected by the Issuer in each year there-
after, together with the gross revenues of the System, will be
sufficient to pay the principal of and interest on the Bonds and
the prior lien obligations as the same shall become due and pay the
Current Expenses of operating and maintaining the System and to
make the other payments herein required in such year.
(I) Issuance of Other Obligations.
(1) The Issuer covenants and agrees that in the event
the cost of construction or completion of the Project shall exceed
6'*'M
the dollar amount of Bonds herein authorized, it shall deposit into
the Construction Account the amount of such excess out of funds
available to it for such purpose, and the Issuer may provide such
excess, and onlysuch excess, through the issuance of parity Bonds
conforming to the requirements of paragraph (3) of this subsection;
but except to complete the Project, it will not issue any other
obligations payable from or secured by the revenues of the System,
the Excise Taxes or any other security pledged to secure payment of
the Bonds, unless the conditions hereinafter set forth shall be
met, or unless the lien of such obligations is junior and subord-
inate in all respects to the lien of the Bonds. The Issuer covenants
and agrees that it will not issue any additional obligations
payable from the revenues of the System on a parity with the out-
standing prior lien obligations. `
(2) The Issuer shall have the right to add new water or
sewer facilities and related auxiliary facilities, by the issuance
of one or more additional series of bonds to be secured by a parity
lien on and ratably payable from the gross revenues of the System
and any other security pledged to the Bonds, provided in each
instance that: -
(a) The facility or facilities to be built from the
proceeds of the additional parity bonds is or are made a part of
the System and its or their revenues are pledged as additional
security for the additional parity bonds and the outstanding Bonds.
(b) The Issuer is in compliance with all covenants and
undertakings in connection with all of its Bonds then outstanding
and payable from the revenues of the System or any part thereof and
has not been in default as to any payments required to be made
under this instrument for a period of at least the next preceding
24 months, or if at such time the Bonds shall not have been out-
standing for 24 months then for the period that the Bonds shall
have been outstanding.
(c) The annual net revenues (plus the Excise Taxes, if
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the Excise Taxes shall be pledged as security for the outstanding
Bonds and the additional parity bonds) for the fiscal year next
preceding the issuance of additional parity bonds are certified by
an independent certified public accountant not regularly employed
by the Issuer, to have been equal to at least one and twenty -
hundredths (1.20) times the average annual requirements for principal
and interest on all .the Bonds then outstanding and payable from
such pledged revenues.
(d). The estimated average annual net revenues of the
facility or facilities to be constructed and acquired with the
proceeds of such additional bonds (and any other funds pledged and
set aside for such purpose), when added to the estimated future
average annual net revenues of the then existing System (plus the
Excise Taxes, if the Excise Taxes shall be pledged as security for
the outstanding Bonds and the additional parity bonds) shall be at
least one and twenty -hundredths (1.20) times the average annual debt
service requirements for principal and interest on all outstanding
Bonds payable from the revenues of the System and on the additional
bonds proposed to be issued. Estimates of future revenues and
operating expenses shall be furnished byrecognized independent
consulting engineers and approved by the City Council of the
Issuer and by the Mayor thereof, and shall be forecast over a
period of not exceeding ten years from the date of the additional
bonds proposed to be issued., Provided, however, the conditions
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provided by this paragraph and by the next preceding paragraph (c)
may be waived or modified by the written consent of the holders of
seventy-five per centum (75%) of the Bonds then outstanding.
(3) The Issuer hereby covenants and agrees that in the
event additional series of parity bonds are issued, it will provide
that said parity bonds shall mature according to a schedule which
most closely approximates equal annual installments of combined
principal and interest payments for such parity bonds and all other
Bonds payable from the revenues of the System; it will adjust the
required deposits into and the maximum amount to be maintained in
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the Sinking Fund, including the Reserve Account therein, on the
same basis as hereinabove prescribed, to reflect the average annual
debt service on the additional bonds; and it will make such addi-
tional bonds payable as to principal on September 1 of each year in
which principal falls due and the coupons attached thereto payable
on September 1 of each year. If in any subsequently issued series
of bonds secured by a parity lien on the revenues of the System it
is provided that excess revenues shall be used to redeem bonds in
advance of scheduled maturity, or if the .Issuer at its option
undertakes to redeem outstanding bonds in advance of scheduled
maturity, the Issuer covenants that calls of bonds will be applied
to each series of bonds on an equal pro rata basis (reflecting the
proportion that the amount originally issued of each series bears to
the amount originally issued of each o� the other series) to the
extent that this may be accomplished in accordance with the call
provisions ofthe respective bond series,but the Issuer shall have
the right to call any or all outstanding bonds which may be called
at par prior to calling any bonds that are callable at a premium.
(J) - Disposal of Facilities. The -Issuer covenants and
agreesthat, so long as any of the Bonds are outstanding, it will
maintain its corporate identity and existance and will not sell or
otherwise dispose of any of the System facilities or any part
thereof, and, except as provided for above, it will not crbate or
permit to be created any charge or lien on the revenues thereof
ranking equal or prior to the charge or lien of the Bonds. Notwith-
standing the foregoing, the Issuer may at any time permanently
abandon the use of, or sell at fair market value, any of its System
facilities, provided that:
(a) It is in compliance with all covenants and under-
takings in connection with all of its Bonds then outstanding and
payable from the revenues of the System, and the debt service
reserve for such Bonds has been fully established;
(b) It will, in the event of sale, apply the proceeds to
either (1) redemption of outstanding Bonds in accordance with the
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provisions governing repayment of Bonds in advance of maturity, or
(2) replacement of the facility so disposed of by another facility
the revenues of which shall be incorporated into the System as
hereinbefore provided;
(c) It is certified, prior to any abandonment of use,
that the facility to be abandoned is no longer economically feasible
of producing net revenues; and
(d) It certified that the estimated net revenues of the
remaining System facilities for the next succeeding fiscal year,
plus the estimated net revenues of the facility, if any, to be
added to the System, satisfy the earnings test hereinbefore pro-
vided in this subsection governing issuance of additional parity
bonds.
(K) Insurance on System. While any of the Bonds shall
remain outstanding, the Issuer shall carry at least the following
insurance coverage:
(1) Fire and extended coverage on the insurable portions
of the System, in amounts sufficient to provide for not less than
full recovery whenever a loss from perils insured against does not
exceed eighty per centum (80%) of the full insurable value of the
damaged facility.
In the event of any damage to or destruction of any
facility or facilities of the System, the Issuer shall deposit the
insurance proceeds in the Reserve Account and promptly arrange for
the application thereof to the repair or reconstruction of the
damaged or destroyed portion thereof.
(2) Public liability insurance relating to the operation
of the System, with limits of not less than $100,000 for one person
and $300,000 for more than one person involved in one accident, to
protect the Issuer from claims for bodily injury and/or death and
not less than $10,000 for claims for damage to property of others
which may arise from the Issuer's operation of the System.
(3) If the Issuer owns or operates a vehicle in the
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operation of the System, vehicular public liability. insurance with
limits of not less than $100,000 for one person and $300,000 for
more than one person involved in one accident to protect the Issuer
from claims for bodily injury and death, and not less than $10,000
against claims for damage to property of others which may arise
from the Issuer's operation of vehicles. -
(9) All such insurance shall be carried for the benefit
of the holders of the Bonds. All moneys received for losses under
any of such insurance, except public liability, are hereby pledged
by the Issuer as security for the Bonds, until and unless such
proceeds are used to remedy the loss or damage for which such
proceeds are received, either by repairing the property damaged or.
replacing the property destroyed within ninety (90) days from the
receipt of such proceeds.
(L) Maintenance of System. The Issuer will complete the
construction of the Project in an economical and efficient manner
with all practicable dispatch, and thereafter will maintain the
System in good -condition 'and continuously operate the'same in an
efficient manner -and -at a reasonable -costs--
(M) No Free Services. The Issuer will not render or
cause to be rendered any free services of any nature by its System,
nor will any preferential rates be established for users of the
same class; and if the Issuer shall avail itself of the facilities
or services provided by the System, or any part thereof, then the
same rates, feesorcharges applicable to other customers receiving
like service under similar circumstances shall be charged to the
Issuer. Such charges shall be paid as they accrue, and the Issuer
shall transfer from its general funds sufficient sums to pay such
charges. The revenues so received shall be deemed to be revenues
derived from the operation of the System, and shall be deposited
and accounted for in the same manner as other revenues derived from
such operation of the System.
(N) Failure of User to Pay for Services. Upon failure
of any user of any product, services or facilities of the System to
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pay fox the same within sixty (60) days after the Issuer shall have
billed such user therefor, the Issuer shall shut off the connection
of such user and shall not furnish him or permit him to receive
from the System further service until all obligations owed by him
to the Issuer on account of services, including disconnection and
reconnection charges, shall have been paid in full. This covenant
shall not, however, prevent the Issuer from causing any System
connection to be shut off sooner.
(0) Enforcement of Collections. .The Issuer will dili-
gently enforce and collect the rates, fees and other charges for
the services and facilities of the System; and will take all steps,
actions and proceedings for the enforcement and collection of such
rates, charges and fees as shall become delinquent to the full
extent permitted or authorized by law;.`and will maintain accurate
records with respect thereof. All such fees, rates, charges and
revenues herein pledged shall, as collected, be held in trust to
be applied as provided in this instrument and not otherwise.
(P)^ Sufficiency of Rates. "The"'Issuer-covenants and
agrees that it will fix, establishi revise -from -time -to time -when
ever necessary and maintain always such fees, rates, rentals and
other charges for the use of the product, services and facilities
of the System which, together with the Excise. Taxes, will always
produce cash revenues sufficient to pay, and out of such funds pay,
as the same shall become due, the principal of and interest on the
prior lien obligations and the Bonds, the necessary expenses of
operating and maintaining the System and all reserve, Sinking Fund
or other payments required by this instrument, and that such rates,
fees, rentals or other charges will not be reduced so as to be
insufficient to provide funds for such purposes.
(Q) Compliance with Laws and Regulations. The Issuer
covenants and agrees to perform and comply with, in every respect,
the Loan and Grant Agreements which it might have with the Govern-
ment or with any other governmental agency and all applicable
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Federal and State Laws. and regulations. _
(R) Remedies. Any holder of the Bonds or any coupons
appertaining thereto issued under the provisions of this instru-
ment, or any trustee acting for the holders of such Bonds and
coupons, may either at law or in equity, by suit, action, mandamus
or other proceedings in any court of competent jurisdiction,
protect and enforce any and all rights, including the right to the
appointment of a receiver, existing under the Laws of the State of
Florida, or granted and contained in this instrument, and may
enforce and compel the performance of all duties required by this
instrument or by any applicable State or Federal statutes to be
performed by the Issuer or by any officer thereof, including the
levy and collection of the Excise Taxes.
Nothing herein, however, shaft be construed to grant to
any holder of such Bonds or coupons any lien on any real property
of the Issuer.
(S) Records and Audits. The Issuer shall keep books and
records of the revenues of the System, the Excise Taxes, which such
books and records shall be kept separate and apart from all other
.books, records and accounts of the Issuer, and any holder of a Bond
or Bonds or the coupons applicable thereto issued pursuant to this
instrument shall have the right to, at all reasonable times, inspect
all records, accounts and data of the Issuer relating thereto.
So long as any of the Bonds shall be outstanding, the
Issuer will furnish on or before ninety (90) days after the close
of each fiscal year, to any bondholder who shall request the same
in writing, copies of any annual audit report prepared by an
independent certified public accountant or an auditing official of
the State of Florida, covering for the preceding fiscal year, in
reasonable detail, the financial condition and record of operation
of the System and any other facilities the revenues of which are
pledged to the payment of the Bonds and the collection of the
Excise Taxes.
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4
(T) Connection with System. The Issuer will, to the
full extent permitted by law, require all lands, buildings, resi-
dences and structures within its corporate limits which can use the
facilities and services of the System to connect therewith and use
the facilities and services thereof and to cease the use of all
other facilities. The Issuer will not grant a franchise for the .
operation of any competing water or sewer System until all Bonds
issued hereunder, together with interest thereon, shall have been
paid in full.
(U) Fidelitv Bond. The Issuer will require each employee
who may. have possession of the revenues of the System or the Excise
Taxes to be covered by a fidelity bond written by a responsible
indemnity company in an amount fully adequate to protect the Issuer
from loss.
(V) Government Approval of Extensions and Financing.
Anything herein to the contrary notwithstanding, -while -the Govern-
ment is the holder of any of the Bonds, the Issuer will not borrow
any money from any source or enter into any contract or agreement•
or incur any other liability in connection -with making extensions
or improvements other than normal maintenance of the System, or
make any extensions or enlargements of the System, or permit others
to do so, without obtaining the prior written consent of the Govern-
ment.
(W);,.Reimbursement. of Advances and Interest Thereon.
While the Government shall be the holder of any of the Bonds, the
Government shall have the right to make advances for the payment of
insurance premiums and/or other advances which, in the opinion of
the Government, may be required to protect the Government's security
interest. In the event of any such advances, the Issuer covenants
and agrees to repay the same, together with interest thereon at the
same rate per annum as specified in the Bonds, upon demand made at
any time after any such expenditure by the Government. Any such
amount due the Government shall take priority over any other pay-
ments -from the Reserve Account.
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Y
(.X) Release of Excise Taxes. At such time as the Issuer may
be able to obtain and file in the minutes of its. City Council a
certificate of a certified public accountant not reguarly employed
by the Issuer stating that for the immediately preceding fiscal
year the net revenues derived from the operation of the System
equaled at least one hundred forty percentum (140%) of the combined
maximum principal and interest maturing in any one ensuing fiscal
year on all outstanding obligations payable from the revenues of
the System, then upon a declaration by resolution of the City Council
the lien hereby impressed upon the Excise Taxes as security for
payment of the Bonds and the interest thereon shall be permanently
released, and thereafter the payment of the Bonds and the interest
thereon shall be solely secured by a lien upon and pledge of the
revenues to be derived from the operation of the System; provided,
however, the Excise Taxes shall not be so released unless all
payments required by this instrument to have been made to the
several accounts and Funds herein specified shall have been made in
full, and the Reserve Account shall have on deposit therein at
least the sum of Forty -One Thousand Five Hundred Dollars ($41,500).
ARTICLE IV
MISCELLANEOUS PROVISIONS
4.01 Modification or Amendment. No material modifi-
cation or amendment of this instrument or of any instrument amend-
atory hereof of supplemental hereto, may be made without the con-
sent in writing of the holders of two-thirds or more in principal
amount of the Bonds then outstanding; provided, however, that no
modification or amendment shall permit a change in the maturity of
such Bonds or a reduction in the rate of interest thereon, or in
the amount of the principal obligation, or affect the unconditional
promise of the Issuer to charge and collect such rates, fees and
charges for the use of the product, services and facilities of the
System and to levy and collect the Excise Taxes and apply the same
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as herein provided, or reduced the number of such Bonds the written consent
of the holders of which are required by this Section for such modifications
or amendments, without the consent of the holders of all such Bonds.
4.02 Creation of Superior Liens. The Issuer covenants that except
as herein provided it will not issue any other Bonds, certificates or ob-
ligations of any .kind or nature or create or cause or permit to be created
any debt, lien, pledge, assignment or encumbrance or charge payable from
or enjoying a lien upon the revenues of the System or the Excise Taxes
ranking prior and superior to the lien created by this instrument for the
benefit of the Bonds.
4.03 Severability of Invalid Provisions. If any one or more of the
covenants, agreements or provisions of this instrument or of the Bonds should
be held contrary to any express provision of law or contrary to the policy
of express law, though not expressly prohibited, or against public policy,
or shall for any reason whatsoever be invalid, then such covenants,
agreements or provisions shall be null and void and shall be deemed separate
from the remaining covenants, agreements or provisions of this instrument
and of the Bonds.
4.04 Validation Authorized. The Issuer's Attorney is hereby
authorized and directed to institute appropriate proceedings in the Circuit
Court of Volusia County, Florida, for the validation of the Bonds and the
proper officers of the Issuer are hereby authorized to verify on behalf of
the Issuer any pleadings in such proceedings.
4.05 Sale of Bonds. The Bonds are hereby sold and awarded to the
Government at the price of par and bearing interest at the rate of five
per centum (5%) per annum.
4.06 Conflicts Repealed. All Resolutions or parts of Resolutions
in conflict herewith are hereby repealed, Resolution No. 607 is specifically
repealed.
4.07 Effective Date. This instrument shall take effect immediately
upon its passage.
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The above and foregoing Resolution was presented by Councilman
who moved its adoption, said motion being seconded by Councilman '
and upon roll call vote said Resolution was duly declared adopted at a
special meeting of the City Council of the City of Edgewater, Florida,
held on the 31st day of December, 1975; the vote of said Council upon
roll call being as follows:
ATTEST:
r W I
Approved this .3/S'�day of
December, A.D. 1975.
Mayor
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�• II. 1
W
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