10-04-1984 Special Called MeetingOctober 4. 1984
A special called meeting of Mayor and Council was held on October 4, 1984 at Smyrna
City Hall. The meeting was called to order at 5:00 p.m. by presiding officer Mayor �
Arthur T. Bacon. All Council members were present except Hugh Ragan and Jim Tolleson,'
who had previous engagements. Also present was City Attorney Charles Camp, City `
Clerk Willouise Spivey, Gordon Morton and Ed Wall, representing Lex Jolley & Assoc-
iates and Tom Sharpe from the Marietta Daily Journal.
The purpose of the special called meeting was to finalize the $4,375,000 Water and
Sewerage Revenue Bond issue. Mr. Morton stated we received a real good insurance
rate and the City's.bond rating is AAA.
A Resolution was read appointing a successor custodian of the City of Smyrna Water
and Sewerage System Sinking Fund. Jim Hawkins made a motion the Resolution be ap-
proved and the Water and Sewerage System Sinking Fund be moved to an escrow account
with the Trust Company Bank of Cobb County. James Williams seconded the motion which
carried 5-0.
After discussion, James Williams made a motion the Ordinance, as attached hereto,
be approved as presented. Jim Hawkins seconded the motion which carried 5-0.
James Williams made a motion the Mayor be given authority to sign the Bond Purchase
Agreement. Jack Shinall seconded the motion which carried 5-0.
With no further business, meeting adjourned at 5:25 p.m.
I
A RESOLUTION APPOINTING A SUCCESSOR CUSTODIAN OF THE CITY
OF SMYRNA WATER AND SEWERAGE SYSTEM.SINKING FUND, AND FOR OTHER
PURPOSES:
WHEREAS, pursuant to that certain ordinance adopted on
November 1, 1954, the City of Smyrna has heretofore authorized
the issuance of $900,000 principal amount of "City of Smyrna
Water and Sewerage Revenue Anticipation Certificates, Series
1954" (hereinafter sometimes referred to as "Series 1954
Certificates"); and
WHEREAS, pursuant to said ordinance of November 1, 1954,
the Cobb Exchange Bank, Marietta, Georgia was designated as
Custodian of the"Water and Sewerage System Sinking Fund"
(hereinafter sometimes referred to as "Sinking Fund") which said
fund was created pursuant to provisions of said ordinance of
November 1, 1954 and secures the payment of the City's Series
1956 Certificates, Series 1957 Bonds and Series 1960 Bonds now
outstanding; and
WHEREAS, it was provided in Section 2 of Article V of said
ordinance of November 1, 1954, that the City could, from time to
time, designate a successor Sinking Fund Custodian; and
WHEREAS, it has now been determined that the Trust Company
Bank, Atlanta, Georgia, should be designated as the successor
Sinking Fund Custodian.
NOW, THEREFORE, BE IT RESOLVED by the Mayor and Council of
the City of Smyrna and it is hereby resolved by authority of the
same, that pursuant to the provisions of Section 2 of Article V
of said ordinance of November 1, 1954, the Trust Company Bank,
Atlanta, Georgia be and the same is hereby designated as
successor Custodian of the "Water and Sewerage System Sinking
Fund" effectlive as of the date of the adoption of this
land
BE IT FURTHER RESOLVED by the authority aforesaid, and it
is hereby resolved by authority of the same, that any and all
ordinances and resolutions, or parts of ordinances and
resolutions, in conflict with this resolution this day adopted
re
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AN ORDINANCE TO PROVIDE FOR ADDING TO, IMPROVING, EXTENDING
AND EQUIPPING THE EXISTING WATER AND SEWERAGE SYSTEM OF THE CITY
OF SMYRNA AND TO ACQUIRE THE NECESSARY PROPERTY THEREFOR; TO
PROVIDE FOR THE ISSUANCE OF WATER AND SEWERAGE REVENUE BONDS,
SERIES 1984, TO FINANCE IN WHOLE OR IN PART THE COST OF SUCH
ADDITIONS, EXTENSIONS AND IMPROVEMENTS AND TO FUND IN PART A
REASONABLY REQUIRED RESERVE FOR THE CITY'S REVENUE BONDS, PAYABLE
SOLELY FROM THE EARNINGS OF SAID WATER AND SEWERAGE SYSTEM, AS
NOW EXISTENT AND AS HEREAFTER ADDED TO, EXTENDED AND IMPROVED; TO
PROVIDE FOR THE ADOPTION OF RATES AND THE COLLECTION OF FEES AND
CHARGES FOR THE SERVICES AND FACILITIES OF SAID SYSTEM; TO
PROVIDE FOR THE ISSUANCE UNDER CERTAIN CIRCUMSTANCES OF
ADDITIONAL PARITY BONDS; TO PROVIDE FOR THE CREATION AND
MAINTENANCE OF CERTAIN FUNDS; TO PROVIDE FOR THE REMEDIES OF THE
OWNERS OF SAID BONDS, AND FOR OTHER PURPOSES:
WHEREAS, under and by virtue of the authority of the
"Revenue Bond Law" (Title 36, Chapter 82, Article 3 of the
Otticial Code of Georgia Annotated, as amended) the City of
Smyrna, a "governmental body" as defined in said Revenue Bond Law
(hereinafter sometimes referred to as "City") is authorized to
acquire additional water and sewerage facilities by the addition
thereto of improvements to its present water and sewerage system,
and to acquire and construct such additions and to operate and
maintain said system, as added to and extended for its own use,
and for the use of the public, and to prescribe and revise rates
and collect fees and charges for the services, facilities and
commodities furnished by said water and sewerage system, as now
existent and as hereafter added to, extended and improved, and in
anticipation of the collection of revenues from such water and
sewerage system, to issue revenue bonds to finance, in whole or
in part, the cost of such additions, extensions and improvements
to the existing system, to establish a debt service reserve and
to pay expenses incident to accomplishing the foregoing; and
WHEREAS, the City of Smyrna in order to tinance a water and
sewerage system for the City has heretofore pursuant to an
ordinance adopted November 1, 1954, authorized the issuance of
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be and the same are hereby repealed, and this resolution shall
be in full force and effect from and after its adoption.
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and actually issued and delivered $900,000 principal amount of
Water and Sewerage Revenue Anticipation Certificates, Series
1954, dated December 1, 1954 (hereinafter referred to as "Series
1954 Certificates") and the principal maturing on the 1st day of
January, in the years and amounts, as follows:
Year
Amount
Year
Amount
Year
Amount
1956
$
12,000
1966
$
27,000
1976
$
37,000
1957
$
16,000
1967
$
28,000
1977
$
38,000
1958
$
21,000
1968
$
28,000
1978
$
39,000
1959
$
22,000
1969
$
29,000
1979
$
40,000
1960
$
22,000
1970
$
30,000
1980
$
42,000
1961
$
23,000
1971
$
31,000
1981
$
43,000
1962
$
24,000
1972
$
32,000
1982
$
45,000
1963
$
24,000
1973
$
33,000
1983
$
46,000
1964
$
25,000
1974
$
34,000
1984
$
48,000
1965
$
26,000
1975
$
35,000
; and
WHEREAS, the City pledged as security for the payment of
said Series 1954 Certificates and any parity obligations there-
with issued pursuant to said ordinance of November 1, 1954, all
or so much as may be necessary of the net revenues of the water
and sewerage system; and
WHEREAS, the City of Smyrna has heretofore pursuant to an
ordinance adopted March 26, 1956, ratifying and reaffirming said
ordinance of November 1, 1954, authorized the issuance of and
actually issued and delivered $150,000 principal amount of Water
and Sewerage Revenue Anticipation Certificates, Series 1956,
dated May 1, 1956 (hereinafter referred to as "Series 1956
Certificates") and the principal maturing on the 1st day of
January, in the years and amounts, as follows:
$ 2,000 in each of the years 1960 to 1964, inclusive
$ 3,000 in each of the years 1965 to 1969, inclusive
$ 4,000 in each of the years 1970 to 1974, inclusive
$ 5,000 in each of the years 1975 to 1979, inclusive
$ 6,000 in each of the years 1980 to 1984, inclusive
$25,000 in the years 1985 and 1986,
and said Series 1956 Certificates rank on a parity as to lien on
the net revenues of the water and sewerage system with said
Series 1954 Certificates; and
WHEREAS, the City of Smyrna has heretofore pursuant to an
ordinance adopted July 9, 1957, ratitying and reaffirming said
ordinances of November 1, 1954 and March 26, 1956, authorized the
issuance of and actually issued and delivered $275,000 principal
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amount of Water and Sewerage Revenue Bonds, Series 1957, dated
September 1, 1957 (hereinafter referred to as "Series 1957
Bonds") and the principal maturing on the 1st day of January, in
the years and amounts, as follows:
$ 5,000 in the year 1965,
$ 6,000 in the year 1966,
$ 8,000 in the year 1967,
$10,000 in each of the years 1968 to 1971, inclusive,
$11,000 in the year 1972,
$12,000 in each of the years 1973 to 1976, inclusive,
$13,000 in the year 1977,
$14,000 in the year 1978,
*15,000 in the years 1979 and 1980,
$16,000 in the year 1981,
�17,000 in the year 1982,
$18,000 in the year 1983,
$19,000 in the year 1984,
$30,000 in the year 1985,
and said Series 1957 Bonds rank on a parity as to lien on the net
revenues of the water and sewerage system with said Series 1954
and Series 1956 Certificates; and
WHEREAS, the City of Smyrna has heretofore by an ordinance
adopted May 23, 1960, ratifying and reaffirming said ordinances
of November 1, 1954, March 26, 1956 and July 9, 1957, authorized
the issuance of and actually issued and delivered $250,000 prin-
cipal amount of Water and Sewerage Revenue Bonds, Series 1960,
dated June 1, 1960 (hereinafter referred to as "Series 1960
Bonds") and the principal maturing on the 1st day of January, in
the years and amounts, as follows:
$ 5,000 in each of the years 1963 and 1964,
$ 6,000 in each of the years 1965 to 1967, inclusive,
$ 7,000 in the year 1968,
$ 9,000 in each of the years 1969 to 1972, inclusive,
$10,000 in each of the years 1973 to 1975, inclusive,
$11,000 in each of the years 1976 and 1977,
$12,000 in each of the years 1978 to 1980, inclusive,
$13,000 in each of the years 1982 and 1982,
$14,000 in the year 1983,
$15,000 in the year 1984,
$36,000 in the year 1985,
and said Series 1960 Bonds rank on a parity as to lien on the net
revenues of the water and sewerage system with said Series 1954
and Series 1956 Certificates and said Series 1957 Bonds; and
WHEREAS, said Series 1954 Certiticates have heretofore
matured and same have been paid in full as to both principal and
interest and same are no longer outstanding and provision having
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been duly made with the Trust Company Bank, Atlanta, Georgia the
Sinking Fund Custodian for said Series 1956 Certificates, Series
1957 Bonds and Series 1960 Bonds, for the payment of said Series
1956 Certificates, Series 1957 Bonds and Series 1960 Bonds in
accordance with their terms, said Series 1956 Certificates,
Series 1957 Bonds and Series 1960 Bonds are no longer outstanding
and said ordinances of November 1, 1954, March 26, 1956, July 9,
1957 and May 23, 1960 are null and void and of no force and
effect and the lien on the revenues of the water and sewerage
system created under said ordinances has been fully and
completely discharged; and
WHEREAS, it appears that it is now necessary and essential
to make further additions, extensions and improvements to the
City's water and sewerage system, and after due consideration by
the Mayor and Council of the City of Smyrna, it has been deter-
mined that by the expenditure of approximately $4,375,000,
together with other funds of the City legally available for such
purpose, the City's water and sewerage system can be added to,
extended, improved and equipped in accordance with, or substan-
tially in accordance with, the Engineering Report, dated August,
1984, prepared by the City's Consulting Engineers, Welker &
Associates, Inc., Marietta, Georgia, said Engineering Report of
said Consulting Engineers being hereinafter sometimes referred to
as "engineering report"; and
WHEREAS, it appears that the most feasible method of
raising the funds required to finance the overall undertaking now
contemplated is by the issuance and sale of its water and
sewerage revenue bonds for that purpose; and
WHEREAS, the City has made an application to the Municipal
Bond Insurance Association for the issuance of a Municipal Bond
Guaranty Insurance Policy on the Series 1984 Bonds hereinafter
authorized to be issued and provision should be made to print a
statement of insurance, if a policy is so issued, on the back of
the Series 1984 Bonds; and
QC
WHEREAS, upon the recommendation of the City's revenue bond
underwriter, the Mayor and Council of the City has determined
that a debt service reserve for the Series 1984 Bonds hereinafter
authorized to be issued should be partially funded, simultane-
ously with the issuance and delivery of said Series 1984 Bonds,
with moneys to be derived from the sale of said Series 1984
Bonds; and
WHEREAS, the City has received and accepted the offer of
Lex Jolley & Co., Inc., Atlanta, Georgia, to purchase the
$4,375,000 principal amount of Series 1984 Bonds hereinafter
authorized to be issued at a price of $4,259,937.50, plus accrued
interest to date of delivery, and the sale of said Series 1984
Bonds at that price will provide the City with moneys sufficient
to finance the cost of the overall undertaking now contemplated;
and
WHEREAS, prior to the actual issuance and delivery of the
bonds hereinafter authorized to be issued, the City of Smyrna
will enter into a contract with the Trust Company Bank, Atlanta,
Georgia pursuant to which the Bank will agree to act as Paying
Agent Bank and as Bond Registrar for the bonds hereinafter
authorized to be issued and to perform various functions with
respect to the bonds, including, but not limited to, the authen-
tication of the bonds of this issue by the manual signature of a
duly authorized officer of the Bank, as Bond Registrar, the
registration, transfer, exchange and related mechanical and
clerical functions, as well as the preparation, signing and
issuance of checks and drafts in payment of the principal of and
interest on the bonds as same become due and payable; and
WHEREAS, the City of Smyrna has entered into a contract,
dated April 2, 1952, with the Cobb County -Marietta Water
Authority (hereinafter referred to as "Authority") and said
contract was subsequently amended on February 23, 1957, pursuant
to which the Authority has agreed to sell and deliver potable
water to the City and the City has agreed to purchase such
potable water for the price and under the terms and conditions
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set forth in said contract, as amended, and the cost of the water
so purchased by the City of Smyrna constitutes an operating
charge ranking equally with the other costs of operating and
maintaining the City's water and sewerage system, a duplicate
original of said contract, dated April 2, 1952, and a duplicate
original of said amendment, dated February 23, 1957, being on
file and of record in the permanent records of the Mayor and
Council of the City of Smyrna kept in the office of the Clerk of
said City and said contract and amendment thereto, by this
reference thereto, are incorporated herein and made a part
hereof; and
WHEREAS, the City of Smyrna has entered into an Agreement,
dated April 13, 1971, with Cobb County (hereinafter referred to
as "County") pursuant to which the County has agreed to provide
sewage treatment and disposal services for the City's wastewater
in accordance with and under the terms and conditions provided
therein, and the cost of such sewage services constitutes an
operating charge ranking equally with the other costs of
operating and maintaining the City's water and sewerage system, a
duplicate original of said Agreement, dated April 13, 1971, being
on file and of record in the permanent records of the Mayor and
Council of the City of Smyrna kept in the office of the Clerk of
said City and said Agreement, by this reference thereto, is
incorporated herein and made a part hereof; and
WHEREAS, as additions, extensions and improvements are
completed, additional demands are made for further additions,
extensions and improvements and that in order to meet this
situation, provision should be made for the issuance of addi-
tional revenue bonds or obligations for such purpose, said bonds
to stand on a parity with and be of equal dignity as to lien on
the net revenues of said water and sewerage system with the bonds
hereinafter authorized to be issued or such bonds or obligations
may be junior and subordinate to such lien on said net revenues
securing the payment of the bonds hereinafter authorized to be
issued.
NOW, THEREFORE, BE IT ORDAINED by the Mayor and Council of
the City of Smyrna, and it is hereby ordained by authority of the
same, as follows:
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ARTICLE I
AUTHORIZATION, FORM AND REGISTRATION OF BONDS
Section 1. Under the authority of the Revenue Bond Law
(Title 36, Chapter 82, Article 3 of the Official Code of Georgia
Annotated, as amended), and the Charter of the City for the
purpose of providing funds to be applied toward the cost of
adding to, extending, improving and equipping the City's water
and sewerage system, acquiring the necessary property therefor,
both real and personal, to fund in part a reasonably required
debt service reserve for the City's revenue bonds, and to pay
expenses necessary to accomplishing the foregoing, there be and
there is hereby authorized to be issued water and sewerage
revenue bonds of the City of Smyrna in the principal amount of
$4,375,000 payable solely from the special fund hereinafter
created and designated as "City of Smyrna Water and Sewerage
System Sinking Fund" (hereinafter sometimes referred to as "Water
and Sewerage System Sinking Fund" or "Sinking Fund") and all of
the covenants, agreements and provisions of this ordinance shall
be for the equal and proportionate benefit and security of all
owners of the bonds issued hereunder, including any parity bonds
hereafter issued.
Section 2. Said water and sewerage revenue bonds shall be
designated as "City of Smyrna Water and Sewerage Revenue Bonds,
Series 1984" (hereinafter sometimes referred to as "Series 1984
Bonds"), shall be dated October 1, 1984, shall be in the torm of
fully registered bonds without coupons, shall be in the denomi-
nation of $5,000 or any integral multiple thereof, shall be
numbered R-1 upward, shall be transferable to subsequent owners
as hereinafter provided, shall bear interest trom date at the
rate per annum set forth below opposite each principal maturity,
all interest shall be payable January 1, 1985 and semi-annually
thereafter on the 1st days of January and July in each year and
the principal shall mature on the 1st day of July, in the years
and amounts, as follows:
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Year
Amount
Rate
Year
Amount
Rate
1985
$
90,000
7.00%
1993
$
165,000
9.00%
1986
$
95,000
7.25
1994
$
180,000
9.20
1987
$
100,000
7.50
1995
$
195,000
9.40
1988
$
110,000
7.75
1996
$
215,000
9.60
1989
$
120,000
8.00
1997
$
235,000
9.75
1990
$
130,000
8.25
1998
$
255,000
9.90
1991
$
140,000
8.50
1999
$
285,000
10.00
1992
$
150,000
8.75
2000
$
310,000
10.10
2004
$1,600,uu0
10.375
The principal amount of said bonds shall be payable at maturity,
unless redeemed prior thereto as hereinafter provided, upon
presentation and surrender thereof at the principal corporate
trust office of the Trust Company Bank, Atlanta, Georgia, Paying
Agent and Bond Registrar, and payments of interest on the bonds
shall be made by check or draft payable to the registered owner
as shown on the bond registration book of the City of Smyrna kept
by the Bond Registrar at the close of business on the fifteenth
day of the calendar month next preceding the January 1 and July 1
interest payment dates and such payments shall be mailed to the
registered owner at the address shown on said bond registration
book. Both the principal of and interest on the bonds of this
issue shall be payable in lawful money of the United States of
America.
Section 3. The bonds of this issue shall be executed on
behalf of the City of Smyrna by use of the facsimile signature of
the Mayor and attested by the facsimile signature of the Clerk of
the City of Smyrna and a facsimile of the official seal of the
City shall be imprinted thereon and the bonds shall be authenti-
cated by the manual signature of a duly authorized otticer of the
Trust Company Bank, Atlanta, Georgia, as Bond Registrar. Said
Clerk of the City is hereby authorized to certity by the use of
said Clerk's facsimile signature as to the authenticity of a true
and correct copy of the text of the legal opinion to be rendered
by Messrs. Sutherland, Asbill & Brennan (John H. Mobley &
Associates), Bond Counsel, which opinion will be printed on the
bonds of this issue. The validation certificate to be printed on
the bonds of this issue shall be executed by use of the tacsimile
signature of the Clerk of the Superior Court of Cobb County and a
facsimile of the official seal of said court shall be imprinted
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thereon. There shall be printed on the back of the Series 1984
Bonds a Statement of Insurance prepared by the Municipal Bond
Insurance Association. In case any otticer whose signature shall
appear on the bonds shall cease to be such officer before
delivery of such -bongs, such signature shall nevertheless be
valid and sufficient for all purposes the same as if such officer
had remained in office until such delivery. The bonds of this
issue, the certificate of authentication and registration, form
of assignment and the certificate of validation to be endorsed
upon the bonds, shall be in substantially the following forms,
with such variations, omissions and insertions as may be required
or permitted by this ordinance, to -wit:
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No. R- UNITED STATES OF AMERICA $
STATE OF GEORGIA
CITY OF SMYRNA
WATER AND SEWERAGE REVENUE BOND
SERIES 1984
BOND DATE: INTEREST RATE: MATURITY DATE: CUSIP:
October 1, 1984
FOR VALUE RECEIVED, the City of Smyrna, a municipal
corporation of the County of Cobb, State of Georgia, hereby
promises to pay solely from the special fund provided therefor,
as hereinafter set forth, to
, or registered assigns, the principal sum of
DOLLARS
in lawful money of the United States of America, on the date
specified above, unless redeemed prior thereto as hereinafter
provided, upon presentation and surrender hereof at the principal
corporate trust office of the Trust Company Bank, Atlanta,
Georgia, Paying Agent and Bond Registrar, and to pay to the
registered owner hereof solely from the said special fund
interest on said principal amount from the date hereof or from
the most recent interest payment date to which interest has been
paid, at the rate per annum specified above, on January 1, 1985
and semi-annually thereafter on the 1st days of January and July
in each year (each an "Interest Payment Date"), until payment of
the principal amount hereof. Payments of interest on this bond
shall be made by check or draft payable to the registered owner
as shown on the bond registration book of the City of Smyrna kept
by the Bond Registrar at the close of business on the fifteenth
day of the calendar month next preceding each Interest Payment
Date and such interest payments shall be mailed to the registered
owner at the address shown on the bond registration book.
This bond is one of a duly authorized issue in the aggre-
gate principal amount of $4,375,000 (hereinafter sometimes
referred to as "Series 1984 Bonds") issued for the purpose of
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providing funds to be applied toward the cost of adding to,
extending, improving and equipping the City's water and sewerage
system, acquiring the necessary property therefor, both real and
personal, to fund in part a reasonably required debt service
reserve for the City's revenue bonds, and to pay expenses
necessary to accomplishing the foregoing, and is issued under
authority of the Revenue Bond Law (Title 36, Chapter 82, Article
3 of the Official Code of Georgia Annotated, as amended) and the
Charter of the City of Smyrna, and was duly authorized by an
ordinance of the Mayor and Council of the City of Smyrna adopted
on the day of October, 1984. In addition to the bonds of
this issue, the City may issue under certain terms and conditions
as provided in said ordinance, additional revenue bonds or
obligations which, if issued, will rank on a parity as to lien on
the net revenues of the City's water and sewerage system with the
bonds of this issue. Reference to said ordinance is hereby made
for a complete description of the fund charged with, and pledged
to, the payment of the principal of and the interest on the bonds
of this issue, the nature and extent of the security for the
payment thereof and for a statement of the rights, duties and
obligations of the City, the rights of the owners of the bonds of
this issue and the terms and conditions under which additional
pari passu bonds may be issued, to all the provisions of which
the owner hereof, by the acceptance of this bond, assents.
The terms and provisions of this bond and definitions of
certain terms used herein are continued on the reverse side
hereof and all such continued terms and provisions and defini-
tions shall for all purposes have the same effect as though fully
set forth at this place.
This bond shall not be valid or become obligatory for any
purpose or be entitled to any security or benefit under said
ordinance until this bond shall have been authenticated and
registered upon the bond registration book kept by the Bond
Registrar for that purpose, which authentication and registration
shall be evidenced by the execution by the manual signature of a
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auly authorized officer of the Bond Registrar of the certificate
hereon.
IN WITNESS WHEREOF, the City of Smyrna has caused this bond
to be executed by use of the facsimile signature of its Mayor and
a facsimile of its official seal to be imprinted hereon and
attested by the use of the facsimile signature of its Clerk, as
of the 1st day of October, 1984.
Attest:
CITY OF SMYRNA
By:
Mayor
Clerk
(S E A L)
Date of Authentication and Registration:
CERTIFICATE OF AUTHENTICATION AND REGISTRATION
This bond is one of the Series 1984 Bonds described in the
ordinance of October , 1984.
Trust Company Bank, as Bond Registrar
By:
Authorized Officer
VALIDATION CERTIFICATE
STATE OF GEORGIA )
COUNTY OF COBB )
The undersigned Clerk of the Superior Court of Cobb County,
State of Georgia, DOES HEREBY CERTIFY that this bond was
validated and confirmed by judgment of the Superior Court of Cobb
County, Georgia, on the day of , 1984, and that no
intervention or objection was filed in the proceedings validating
same and that no appeal from said judgment of valuation has been
taken.
WITNESS my facsimile signature and seal of the Superior
Court of Cobb County, Georgia.
Clerk, Superior Court, Co
County, Georgia
(S E A L)
***********
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[THE FOLLOWING SHALL BE PRINTED ON THE BACK OF THE BONDS]
This bond is transferable only upon the bond registration
book kept for that purpose at the principal corporate trust
office of the Bond Registrar by the registered owner hereof in
person, or by attorney duly authorized in writing, upon the
surrender and presentation to the Bond Registrar of this bond
duly endorsed for transfer or accompanied by an assignment duly
executed by the registered owner or attorney duly authorized in
writing, and thereupon a new registered bond, in the same
aggregate principal amount and of the same maturity shall be
issued to the transferee in exchange therefor.
The Series 1984 Bonds are issuable in' the form of regis-
tered bonds in the denomination of $5,000 or any integral
multiple thereof and are exchangeable at the principal corporate
trust office of the Bond Registrar in the manner, sub3ect to the
conditions and upon payment of charges, if any, provided in said
ordinance.
Said ordinance provides, among other things, for pre-
scribing and revising rates and collecting fees and charges for
the services, facilities and commodities furnished by the water
and sewerage system, as now existent and as hereafter added to,
extended, improved and equipped, to the extent necessary to
produce revenues sutticient to pay the reasonable and necessary
costs of operating and maintaining said system, including the
payment of any contractual obligations incurred pertaining
thereto, and to pay into a special fund designated "City of
Smyrna Water and Sewerage System Sinking Fund" the amounts
required to pay the principal of and the interest on the bonds
of this issue and any other bonds hereafter issued on a parity
therewith as the same become due and payable, either at maturity
or by proceedings for mandatory redemption, and to create and
maintain a reserve therein for that purpose, as well as to
create and maintain a reserve for extensions and improvements to
the system.
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This bond shall not be deemed to constitute a debt of the
City of Smyrna nor a pledge of the faith and credit of said
City, nor shall the City be subject to any pecuniary liability
hereon. This bond shall not be payable from, nor a charge upon,
any funds other than the revenues pledged to the payment hereof,
and is payable solely from the special fund provided therefor
from the revenues of said system, including all future additions
thereto and any other moneys deposited therein. No owner of
this bond shall ever have the right to compel the exercise of
the taxing power of the City to pay the same, or the interest
hereon, or to enforce payment hereof against any other property
of the City, nor shall this bond constitute a charge, lien or
encumbrance, legal or equitable, upon any other property of the
City other than the revenues pledged to the payment hereof.
The bonds of this issue may be redeemed prior to their
respective maturities, either in whole or in part, at the option
of the City, on any interest payment date in any year not
earlier than July 1, 1995 from any moneys available for such
purpose as provided in said ordinance by payment of the princi-
pal amount thereof and accrued interest thereon to date of
redemption, together with a premium of 2% of such principal
amount if redeemed on or prior to January 1, 1996; 1 1/2% of
such principal amount if redeemed thereafter and on or prior to
January 1, 1997; 1% of such principal amount if redeemed
thereafter and on or prior to January 1, 1998; 1/2 of 1% of such
principal amount if redeemed thereafter and on or prior to
January 1, 1999 and at par without a premium if redeemed
thereafter and before maturity. If the bonds are called in
part, then any bonds so called for redemption shall be called in
the inverse order of their maturities and if less than a full
maturity by lot in such manner as may be designated by the Bond
Registrar.
In addition, the Series 1984 Bonds maturing July 1, 2004
are subject to mandatory redemption prior to maturity in
accordance with the provisions of said ordinance, in part, by
RM
lot in such manner as may be
designated by
the Bond
Registrar at
par plus accrued interest to
the redemption
date, in
the
following principal amounts
on July 1, in the
years,
as follows:
Year Amount Year
Amount
Year
Amount
2001 $ 345,000 2002
$ 380,000
2003
$ 415,000
Notice designating the
bonds (or the
portion of the prin-
cipal amount of the bonds) to be acquired by redemption, as
aforesaid, snail be mailed, postage prepaid, to ail registered
owners of bonds to be redeemed in whole or in part at the
addresses which appear in the bond registration book at least
thirty days prior to the redemption date, but failure so to mail
any such notice shall not affect the validity of the proceedings
for such redemption or cause the interest to accrue on the
principal amount of the bonds so designated for redemption after
the redemption date.
To the extent and in the manner permitted by said ordi-
nance, modifications, alterations, amendments, additions and
recisions of the provisions of the ordinance, or of any ordi-
nance supplemental thereto or of the bonds, may be made by the
City with the consent of the owners of at least sixty-five per
centum (65%) in aggregate principal amount of the bonds then
outstanding, including any parity obligations therewith then
outstanding, and without the necessity for notation hereon of
reference thereto.
This bond is issued with the intent that the laws of the
State of Georgia shall govern its construction.
In case of default, the owner of this bond shall be
entitled to the remedies provided in said ordinance authorizing
its issuance and in said Revenue Bond Law and any amendments
thereto.
It is hereby recited and certified that all acts, condi-
tions and things required to be done precedent to and in the
issuance of this Water and Sewerage Revenue Bond have been done,
have happened and have been performed in due and legal form as
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required by law, and that provision has been made for the allo-
cation from the anticipated revenues of the water and sewerage
system, as now existent and as hereafter added to, extended,
improved and equipped, of amounts sufficient to pay the princi-
pal of and the interest on all of said bonds as same mature, or
are acquired by mandatory redemption, and to create and maintain
a reserve for that purpose, and that said revenues are
irrevocably allocated and pledged to the payment of said bonds
and the interest thereon.
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns
and transfers unto [please print or typewrite name and address
including postal zip code of assignee] the within bond and all
rights thereunder, hereby constituting and appointing
attorney to transfer this bond on the bond registration book
kept for such purpose by the Bond Registrar, with full power of
substitution in the premises.
DATED
Signature Guarantee
Notice: The signature to
this assignment must corres-
pond with the name as it
appears upon the face of the
within bond in every parti-
cular, without alteration or
enlargement or any change
whatever
I-10
Section 4. only those bonds which shall have endorsed
thereon a certificate of authentication and registration substan-
tially in the form hereinbefore set forth, duly executed by the
manual signature of an authorized officer of the Trust Company
Bank, as Bond Registrar, shall be entitled to any benefit or
security under this ordinance and such certificate upon any of
said bonds when duly executed shall be conclusive evidence that
such bond has been duly authenticated, registered and delivered.
It shall not be necessary that the same officer of the Bond
Registrar sign the certificate of authentication and registration
on all of the bonds that may be issued hereunder at any one time.
The person in whose name any bond shall be registered shall be
deemed and regarded as the absolute owner thereof for all
purposes and the payment of the principal amount, interest and
premium, if any, shall be made only to or upon the order of the
registered owner thereof. All such payments shall be valid and
effectual to satisfy and discharge the liability upon such bond,
including redemption premium, if any, and the interest thereon to
the extent of the sums so paid.
Section 5. The Bond Registrar shall keep the bond regis-
tration book for the registration of the bonds of this issue and
for the registration of transfers of the bonds as herein
provided. The transfer of any bond shall be registered upon the
bond registration book upon the surrender and presentation of the
bond to the Bond Registrar duly endorsed for transter or accom-
panied by an assignment duly executed by the registered owner or
attorney authorized in writing in such form as shall be satisfac-
tory to the Bond Registrar. Upon any such registration of
transfer, the Bond Registrar shall authenticate and deliver in
exchange for such bond or bonds so surrendered, a new bond or
bonds registered in name of the transferee, of any denomination
or denominations authorized by this ordinance, and in an aggre-
gate principal amount equal to the aggregate principal amount of
the bonds so surrendered and of the same maturity.
1
Section 6. Any bond of this issue, upon presentation and
surrender thereof to the Bond Registrar, together with an assign-
ment duly executed by the registered owner or duly authorized
attorney, in such form as may be satisfactory to the Bond
Registrar, may be exchanged, at the option of the registered
owner, for an aggregate principal amount of bonds of the same
maturity equal to the principal amount of the bond so surrendered
and of any authorized denomination or denominations. The Bond
Registrar may make a charge for every exchange or registration of
transfer of the bonds sufficient to reimburse it for any tax or
other governmental charge required to be paid with respect to
such exchange or registration of transfer, but no other charge
shall be made to the owner of bonds under this ordinance.
Section 7. If any bond shall become mutilated, the Bond
Registrar in its discretion and at the expense of the owner of
such bond shall authenticate and deliver a new bond of like tenor
registered in the name of the owner in exchange and substitution
for such mutilated bond. If any bond shall become lost, des-
troyed or wrongfully taken, evidence of such loss, destruction or
wrongful taking within a reasonable time thereafter may be sub-
mitted to the City and if such evidence shall be satisfactory and
indemnity of a character and in an amount satisfactory shall be
given, then the City at the expense of the owner shall cause a
new bond of like tenor registered in the name of the owner to be
authenticated by the Bond Registrar and delivered to the
registered owner.
Section 8. The City shall make all necessary and proper
provisions for the transfer and exchange of the Series 1984 Bonds
by the Bond Registrar and the City shall deliver or cause to be
delivered to the Bond Registrar a sufficient quantity of blank
bonds duly executed on behalf of the City, together with the
certificate of validation pertaining thereto duly executed by the
Clerk of the Superior Court of Cobb County, as herein provided in
order that the Bond Registrar shall at all times be able to
register and authenticate the bonds of this issue at the earliest
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practicable time in accordance with the provisions of this
ordinance. All bonds surrendered in any such exchange or regis-
tration of transfer shall be forthwith cancelled by the Bond
Registrar and a record thereof duly entered in the permanent
records pertaining to the Series 1984 Bonds maintained by the
Bond Registrar.
Section 9. The Mayor and Clerk of the City of Smyrna are
hereby authorized and directed to execute, for and on behalf of
the City of Smyrna, a certification, based upon facts, estimates
and circumstances, as to the reasonable expectations regarding
the amount, expenditure and use of the proceeds derived from the
sale of the Series 1984 Bonds, as well as such other documents as
may be necessary or desirable in connection with the issuance and
delivery of said Series 1984 Bonds.
I-13
ARTICLE II
REDEMPTION OF BONDS BEFORE MATURITY
Section 1. The bonds issued hereunder may be redeemed at
the option of the City in part on any interest payment date in
any year not earlier than July 1, 1995, from moneys in the "City
of Smyrna Water and Sewerage System Sinking Fund" not required
for paying the principal of and interest on the bonds coming
due, whether at maturity or by proceedings for mandatory redemp-
tion, in the then current sinking fund year and the maintenance
therein of a reserve in an amount equal to the maximum debt
service requirement coming due in any succeeding sinking fund
year on the Series 1984 Bonds, or in whole on any interest
payment date in any year not earlier than July 1, 1995, from any
moneys which may be available for such purpose and deposited
with the Paying Agent Bank on or before the date taxed for
redemption. The optional redemption of the bonds shall be made
by the payment of the principal amount of the bonds to be
redeemed and accrued interest thereon to date of redemption,
together with a premium of two per centum (2%) of such principal
amount if redeemed on or prior to January 1, 1996; and one and
one-half per centum (1 1/2t) of such principal amount if
redeemed thereafter and on or prior to January 1, 1997; one per
centum (1%) of such principal'amount if redeemed thereafter and
on or prior to January 1, 1998; one-half of one per centum
(1/2%) of such principal amount if redeemed thereafter and on or
prior to January 1, 1999 and at par without a premium if
redeemed thereafter and before maturity. If the bonds are
called for redemption in part, then any bonds so called for
redemption shall be called in inverse order of their maturities
and if less than a full maturity by lot in such manner as may be
designated by the Bond Registrar.
In addition, the Series 1984 Bonds maturing on July 1, 2004
are subject to mandatory redemption prior to maturity on July 1,
2001 and on each succeeding July 1 to and including July 1,
2003, in part, by lot in such manner as may be designated by the
Bond Registrar, at par plus accrued interest to the redemption
date, in the following principal amounts on July 1, in the
years, as follows:
Year Amount Year Amount Year Amount
2001 $ 345,000 2002 $ 380,000 2003 $ 415,000
If less than all of the bongs of a single maturity are to
be redeemed, the Bond Registrar shall treat any bond of such
maturity outstanding in a denomination of greater than $5,000 as
two or more separate bonds in the denomination of $5,000 each
and shall assign separate numbers to each for the purpose of
determining the bonds or the principal amount of such bonds in a
denomination greater than $5,000 to be redeemed by lot. With
respect to any bond called for partial redemption, the regis-
tered owner thereof shall surrender such bond to the Bond
Registrar in exchange for one or more bonds in any authorized
denomination in the aggregate principal amount equal to the
unredeemed principal amount of such bond so surrendered.
The Bond Registrar shall furnish the City on or before the
forty-fifth (45th) day next preceding each mandatory redemption
date (or optional redemption date if such option is exercised by
the City) with its certificate setting forth the bonds that have
been selected for mandatory redemption (or optional redemption)
either in whole or in part on such date.
At least thirty (30) days before any date upon which any
such optional redemption is to be made a notice of intention so
to redeem signed by the Mayor and attested by the Clerk of the
City of Smyrna designating the redemption date and the bonds to
be redeemed (in whole or in part) shall be filed at the place at
which the principal of and interest on the bonds shall be
payable and shall be mailed, postage prepaid, to all registered
owners of bonds to be redeemed (in whole or in part) at
addresses which appear upon the bond registration book.
At least thirty (30) days before the date upon which such
mandatory redemption is to be made a notice of such mandatory
II-2
r
redemption signed by a duly authorized officer of the Bond
Registrar designating the bonds to be redeemed (in whole or in
part) shall be filed at the place at which the principal of and
interest on the bonds shall be payable and shall be mailed,
postage prepaid, to all registered owners of bonds to be
redeemed (in whole or in part) at addresses which appear upon
the bond registration book.
It is expressly provided, however, that the failure so to
mail any such notice of optional redemption or mandatory redemp-
tion of the Series 1984 Bonds shall not affect the validity of
the proceedings for such redemption or cause the interest to
continue to accrue on the principal amount of such bonds so
designated for redemption after the redemption date.
However, it is expressly understood and agreed that should
the City hereafter elect to issue any parity bonds, as herein
authorized, it shall have the right to redeem the bonds of any
such future issue or issues before it redeems the bonds of this
issue or it may redeem the bonds of this issue before it redeems
the bonds of any such future issue or issues, or it may redeem
some of the bonds of this issue and some of the bonds of any
such future issue or issues at the same time, provided that
within each issue, if the bonds are redeemed in part, such
redemption as to said bonds shall be in the inverse order of
their maturities and if less than a full maturity by lot in such
manner as may be designated by the Bond Registrar.
Section 2. Nothing herein contained shall be construed to
limit the right of the City to purchase with any excess moneys,
as hereinabove defined, in the Sinking Fund and for sinking fund
purposes, the bonds of this issue in the open market at a price
not exceeding the callable price hereinabove set forth.
Section 3. Notice having been given in the manner and
under the conditions hereinabove provided, the bonds so desig-
nated for redemption or the portion of the bonds so designated
for partial redemption shall, on the redemption date designated
II-3
in such notice, become and be due and payable at the redemption
price hereinabove specified, and from and after the date of
redemption so designated, unless default shall be made in the
payment of the bonds so designated for redemption or the portion
of the bonds so designated for partial redemption, interest on
the principal amount of -said bonds so designated for redemption
shall cease to accrue on the redemption date.
II-4
ARTICLE III
CUSTODY AND APPLICATION OF PROCEEDS OF BONDS
The City covenants:
Section 1. From the proceeds derived from the sale of the
Series 1984 Bonds, including accrued interest, which are issued
under the provisions of this ordinance, the following payments
shall be made, simultaneously with the issuance and delivery of
said Bonds, to the extent and in the manner herein set forth:
(a) The aggregate sum of $81,300 representing the insur-
ance premium on the Municipal Bond Guaranty Insurance Policy and
the fee of Standard & Poor shall be paid to the respective
party.
(b) The accrued interest so received shall be deposited
into the "City of Smyrna Water and Sewerage System Sinking Fund"
hereinafter created in Article IV hereof and credited to the
special account designated as "Debt Service Account" to be used
and applied toward the payment of interest on the Series 1984
Bonds coming due on January 1, 1985.
(c) $375,000 shall be deposited into the "City of Smyrna
Water and Sewerage System Sinking Fund" hereinafter created in
Article IV hereof and credited to the special account designated
as "Debt Service Reserve Account" to fund in part a reasonably
required debt service reserve for the Series 1984 Bonds.
(d) The balance of the proceeds so received, and any other
funds acquired for such purpose by gift, donation, grant or
otherwise, shall be deposited into the special fund which is
hereby created and designated "City of Smyrna Water and Sewerage
System Construction Fund, 1984" (hereinafter sometimes referred
to as the "Construction Fund").
Section 2. The additions, extensions and improvements to
the water and sewerage system now contemplated shall be
accomplished in accordance, or substantially in accordance, with
the Engineering Report, dated August, 1984, prepared by the
City's Consulting Engineers, Welker & Associates, Inc.,
Marietta, Georgia. Said Engineering Report (herein sometimes
referred to as "engineering report") is hereby approved and
ratified and the Clerk be and is hereby authorized and directed
to forthwith duly record a copy of said engineering report in
the Minute Book of the Mayor and Council of the City of Smyrna,
said Minute Book being kept in the ottice of said Clerk and said
engineering report, by this reference thereto, is incorporated
herein and made a part hereof.
Section 3. The moneys in the Construction Fund shall be
held by the Depository and withdrawn and applied in accordance
with, or substantially in accordance with, said engineering
report and subject to the provisions and restrictions set forth
in this Article, and the City will not cause or permit to be
paid from the Construction Fund any sums except in accordance
with, or substantially in accordance with, said engineering
report and in accordance with such provisions and restrictions;
provided, however, that any moneys in said fund not presently
needed for the payment of current obligations during the course
of construction, as properly certified by the City's Consulting
Engineers, shall be invested in securities, maturing within
three (3) years from the date of purchase, as follows: (a) any
bonds or other obligations of the United States of America,
which as to principal and interest, constitute direct
obligations of the United States of America, or any obligations
of subsidiary corporations of the United States of America fully
guaranteed as to payment by the United States of America;
(b) obligations of the Federal Land Bank; (c) obligations of the
Federal Home Loan Bank; (d) obligations of the Federal
Intermediate Credit Bank; (e) obligations of the Central Bank
for Cooperatives; (f_) certificates of deposit of national or
state banks located within the State of Georgia which have
deposits insured by the Federal Deposit Insurance Corporation
("FDIC") (including the certificates of deposit of any bank
acting as depository, custodian or trustee for any proceeds of
the Series 1984 Bonds); provided, however, that the portion of
such certificates of deposit in excess of the amount insured by
the FDIC, if any, shall be secured by deposit with the Federal
III-2
Reserve Bank of Atlanta, Georgia, or with any national or state
bank located within the State of Georgia, of any of the
obligations included in (a) through (e) above, in a principal
amount and with a market value exclusive of accrued interest
always at least equal to such excess. Any such securities so
purchased shall be held by the Depository for the account of the
Construction Fund until maturity or until sold, and at maturity
or upon such sale, the proceeds received therefrom, including
interest income and premium, if any, shall be immediately
deposited by it in said Construction Fund and shall be disbursed
in the manner and for the purposes hereinafter set forth. All
moneys in and all securities held for the Construction Fund
shall be subject to a lien and charge in favor of the owners of
the Series 1984 Bonds issued hereunder and shall be held for the
security of such owners until paid out as hereinafter provided.
Section 4. Withdrawals from the Construction Fund may be
made for the purpose of paying the cost of the undertaking
herein contemplated, including the purchase of such property and
equipment as may be useful in connection therewith, and without
intending thereby to limit or restrict or to extend any
definition of such cost contained in the Revenue Bond Law, as
amended and as it may hereafter be amended, shall include: (a)
Interest accruing upon the Series 1984 Bonds prior to the
commencement of and completion of the undertaking herein
contemplated and for six (6) months after the date of completion
of the project and the reasonable fees of the Paying Agent for
the payment of such interest; (b) The cost of indemnity and
fidelity bonds either to secure deposits in the Construction
Fund or to insure the faithful completion of any contract
pertaining to said improvements; (c) Any taxes or any charges
lawfully levied or assessed against the undertaking; (d) Fees
and expenses of Consulting Engineers for engineering studies,
surveys and estimates, and the preparation of plans and
III-3
s
supervising the construction; (e) Legal expenses and fees,
fiscal agent's expenses and fees, costs of audits and of
preparing and issuing the bonds and ail other items of expense
not elsewhere in this Section specified incident to said
undertaking; (f) Payments made for labor, contractors, builders
and materialmen in connection with the improvements contemplated
by the undertaking and payment for machinery and equipment and
for the restoration of property damaged or destroyed in connec-
tion therewith; (g) The cost of acquiring by purchase, and the
amount of any award or final judgment in any proceeding to
acquire by condemnation, lands and rights of way necessary for
the improvements and appurtenances in connection therewith, and
options and payments thereon, and any easements or rights or any
damages incident to or resulting from the making of such
improvements; and (h) To repay any advances or loans made tor
the purpose of paying any of the aforementioned costs prior to
the receipt of the proceeds of the Series 1984 Bonds.
Section 5. All payments from the Construction Fund shall
be made upon checks signed by the officers of the City properly
authorized to sign in its behalf, but before they shall sign any
such checks there shall be filed with the Depository: (a) A
requisition for such payment (the above mentioned checks may be
deemed a requisition for the purpose of this Section), stating
each amount to be paid and the name of the person, firm or
corporation to whom payment thereof is due; and (b) A certifi-
cate attached to the requisition and certifying: 1. That an
obligation in the stated amount has been incurred, and that the
same is a proper charge against the Construction Fund and has
not been paid, specifying the purpose and circumstances of such
obligation in reasonable detail and to whom such obligation is
owed, accompanied by the bill or statement of account for such
obligation, or a copy thereof; 2. That they have no notice of
any vendor's, mechanic's or other liens or rights to liens,
chattel mortgages, conditional sales contracts or any security
III-4
interest, which should be satisfied or discharged before such
payment is made; and 3. That such requisition contains no item
representing payment on account or any retained percentages
which the City is, at the date of such certificates, entitled to
retain. (c) No requisition for payment shall be made until the
City has been furnished with proper certificate of the
Consulting Engineers that insofar as such obligation was
incurred for work, materials, supplies or equipment in
connection with the undertaking, such work was actually
performed or such materials, supplies or equipment were actually
installed in or about the construction or delivered at the site
of the work for that purpose.
No certificate of said Engineers shall be required for the
City to make payments for the costs and expenses incurred
pursuant to paragraphs (a) through (e) and paragraphs (g) and
(h) of Section 4 of this Article and not subject to the
supervision of said Engineers.
Section 6. That the City will do all things, and take all
reasonable and prudent measures, necessary to effect the prompt
commencement of construction and to expend the moneys deposited
in the Construction Fund as expeditiously as possible in order
to assure the completion of the project, in accordance or
substantially in accordance with said engineering report, on the
earliest practicable date following the issuance and delivery of
the bonds of this issue, and will indemnify itself against the
usual hazards incident to the construction of an undertaking of
this type, and without in any way limiting the generality of the
above, agrees to: (a) require each construction contractor, and
each subcontractor to furnish a bond, or bonds, of such type and
in amounts adequate to assure the faithful performance of their
contracts and the payment of all bills and claims for labor and
material arising by virtue of such contract; and (b) require
each construction contractor or the subcontractor to maintain at
all times until the completion and acceptance of the undertaking
adequate compensation insurance for all of their employees and
III-5
adequate public liability and property damage insurance for the
full and complete protection of the City from any and all claims
of every kind and character which may arise by virtue of the
operations under their contracts, whether such operations be by
themselves or by anyone directly or indirectly for them, or
under their control.
Section 7. All requisitions and certificates required by
this Article shall be retained either by the Depository or by
the City, subject at all times to inspection by any officer of
the City, the Consulting Engineers and the duly authorized
representative of the original purchasers of the bonds issued
hereunder.
Section 8. When the additions and improvements to the
system shall have been completed, such tact shall be evidenced
by a certificate from the Consulting Engineers stating the date
of completion, and should there then be any balance in the
Construction Fund, such balance, unless otherwise provided,
shall be paid into the City of Smyrna Water and Sewerage System
Sinking Fund created in Article IV hereof.
III-6
ARTICLE IV
REVENUES AND FUNDS
The City covenants and agrees:
Section 1. The water and sewerage system is now being and
will continue to be operated on a fiscal year basis commencing
on the 1st day of July in each year and extending through the
30th day of June in the next year, but it reserves the right to
change its fiscal year by adoption of proper proceedings to that
effect.
Section 2. Commencing with the month in which the Series
1984 Bonds are actually issued and delivered, all revenues
arising from the ownership and operation of the water and
sewerage system and properties in connection therewith as then
existent and as thereafter added to, extended and improved shall
be collected by the City or by its agents or employees and
deposited promptly with the depository to the credit of a
special fund which is hereby created and designated as "City of
Smyrna Water and Sewerage System Revenue Fund" (hereinafter
sometimes referred to as "Revenue Fund") and the City shall
continue to maintain said Revenue Fund separate and apart from
its other funds so long as the Series 1984 Bonds herein
authorized to be issued and any future issue or issues of parity
bonds therewith hereafter issued are outstanding and unpaid or
until provision shall have been duly made for the payment
thereof. Said revenues shall be disbursed from the Revenue Fund
to the extent and in the following manner and order:
1. There shall first be paid from said Revenue
Fund the reasonable and necessary costs of operating,
maintaining and repairing the water and sewerage system,
including salaries, wages, the payment of any contractual
obligations incurred pertaining to the operation of said
system, cost of materials and supplies, rentals of leased
property, real or personal, insurance premiums, audit fees
and such other charges as may properly be made for the
purpose of operating, maintaining and repairing said
IV-1
system in accordance with sound business practice, but
before making provision for depreciation.
2. There shall next be paid from said Revenue
Fund into the special fund which is hereby created and
designated as "City of Smyrna Water and Sewerage System
Sinking Fund" (herein sometimes referred to as "Water and
Sewerage System Sinking Fund" or "Sinking Fund"), and said
Sinking Fund shall consist of two accounts which are to be
held therein, one of which is hereby created and
designated as "Debt Service Account" and the other is
hereby created and designated as "Debt Service Reserve
Account" (hereinafter sometimes referred to as "Reserve
Account").
(a) After there have been paid from the Revenue
Fund the sums required or permitted to be paid pur-
suant to the provisions of Paragraph 1 above, there
shall be paid into said Debt Service Account for the
purpose of paying the principal of and interest on
the Series 1984 Bonds as same become due and payable,
either at maturity or by proceedings for mandatory
redemption, in the then current sinking fund year,
commencing with the month of October, 1984 and from
month to month thereafter to June, 1985, inclusive,
an amount equal to one -ninth (1/9) of the debt
service coming due in the sinking fund year ending
July 1, 1985 and commencing with the month of July,
1985 and continuing from month to month thereafter an
amount equal to one -twelfth (1/12) of the maximum
debt service requirement on the Series 1984 Bonds
coming due in the then current or any future sinking
fund year, such monthly payments to continue from
month to month until sufficient funds are on hand in
said Sinking Fund to pay all of the outstanding
Series 1984 Bonds as same mature or are acquired by
mandatory redemption and the interest which will
IV-2
become due and payable thereon. Such monthly
payments into the Debt Service Account shall be
sufficient to provide funds required for the
mandatory redemption of the Series 1984 Bonds on
July 1, in the principal amounts and in the years, as
follows:
Year Amount Year Amount Year Amount
2001 $ 345,000 2002 $ 380,000 2003 $ 415,000
(b) After making the payments required to
comply with subparagraph (a) above, there shall next
be paid into said Debt Service Reserve Account,
commencing with the month of October, 1984, in sub-
stantially equal monthly payments, taking into
consideration the amount deposited therein simul-
taneously with the issuance and delivery of said
Series 1984 Bonds, amounts sufficient to create in
said Reserve Account by October 1, 1989 a debt
service reserve equal to the maximum debt service
requirement coming due in any succeeding sinking fund
year on the Series 1984 Bonds. When the balance in
the Reserve Account shall be equal to the maximum
required, no further payments shall be required to be
made into the Reserve Account unless the Reserve
Account shall fall below its required balance.
During the period of accumulation and after the
Reserve Account shall have been accumulated in the
full amount required to be maintained therein as
aforesaid, it shall be maintained for the purpose of
paying the principal of and interest on the Series
1984 Bonds falling due in any year as to which there
would otherwise be a detault and if money is taken
from said Reserve Account for the payment of such
principal and interest, the money so taken shall be
replaced in said Reserve Account from the first
moneys in the Revenue Fund thereafter available and
not required to be used for maintenance and operation
IV-3
charges and not required to be paid into the Debt
Service Account as hereinabove provided in
subparagraph (a).
(c) All sums required to be paid to comply with
the provisions of subparagraphs (a) and (b) above
shall be paid on or before the last day of the month
in which the payment is due, and if, in any month,
for any reason, the full amount herein required to be
paid in such month shall not be paid into the Sinking
Fund, any deficiency shall be added to and shall
become a part of the amount required to be paid into
the said Sinking Fund in the next succeeding month;
provided, however, the City covenants and agrees that
in the event it hereafter elects to issue parity
bonds, pursuant to the provisions of this ordinance,
the above stated payments into the Sinking Fund will
be increased to the extent necessary to pay the
combined debt service requirements on the Series 1984
Bonds and on any parity bonds therewith then out-
standing and on the bonds proposed to be issued
coming due in the then current sinking fund year and
to create and maintain within five (5) years from the
date of the bonds to be issued a reserve for that
purpose in an amount at least equal to the maximum
debt service requirement coming due in any succeeding
sinking fund year on the then outstanding Series 1984
Bonds, any outstanding parity bonds and on the bonds
proposed to be issued.
It is expressly provided, however, that if on
the 2nd day of July in any year there are on deposit
in said Sinking Fund moneys and securities (such
securities to be valued at the lower of their market
value or face amount, plus accrued interest thereon
to July 2nd) the aggregate amount of which is in
excess of the amount then required to be on deposit
in said Sinking Fund, such excess shall be withdrawn
IV-4
from the Sinking Fund and immediately deposited into
the Revenue Fund. The calculation and determination
of such excess amounts in accordance with this
provision shall be the responsibility of the chief
fiscal officer of the City and such fiscal officer
shall notify the Sinking Fund Custodian and make or
cause to be made any transfer of funds required
pursuant to the provisions of this subparagraph.
The net revenues remaining in the Revenue Fund after the
payment of the sums required or permitted to be paid under
the provisions of the preceding Paragraph 1 of this
Section 2 are hereby pledged to the payment of the princi-
pal of and the interest on the Series 1984 Bonds issued
hereunder, and any future parity bonds issued under the
provisions of this ordinance. Said revenues so pledged
shall immediately be subject to the lien of this pledge
without any physical delivery thereof or further act and
the lien of this pledge shall be valid and binding against
it and against all parties having claims of any kind" -
against it, whether such claims shall have arisen in
contract, tort or otherwise and irrespective of whether or
not such parties have notice hereof.
3. After there have been paid from the Revenue
Fund in each month the sums required or permitted to be
paid under the provisions of Paragraphs 1 and 2 of this
Section and after reserving in the Revenue Fund as a
working capital reserve an amount not to exceed one
month's estimated costs of operating and maintaining the
system as determined by the chief fiscal officer of the
City, then there shall next be paid at the end of each
month into a special fund which is hereby created and
designated as "City of Smyrna Water and Sewerage System
Renewal and Extension Fund" (hereinafter sometimes
referred to as "Renewal and Extension Fund"), all moneys
remaining in said Revenue Fund. Expenditures shall be
IV-5
made from said Renewal and Extension Fund only for the
purpose of: (a) Effecting the transfer of moneys to the
City's general fund to be used for any lawful corporate
purpose; (b) In case of an emergency having a major effect
upon the water and sewerage system caused by some
extraordinary occurrence which makes it necessary to use
the funds of the said system for the alleviation or
removal of such effects and an insufficiency of money
exists in the Revenue Fund to meet such emergency; (c)
Making replacements, additions, extensions and
improvements and acquiring equipment deemed to be
reasonable and to the best interest of the City and the
bondholders; (d) Payment of the charges of the Depository
for investment services; or (e) Paying principal of and
interest on any revenue bonds then outstanding and falling
due at any time for the payment of which money is not
available in the sinking fund securing the payment of same
and the interest thereon.
It is expressly provided, however, that should bonds
be hereafter issued ranking as to lien on the revenues of
said system junior and subordinate to the lien securing
the payment of the Series 1984 Bonds authorized to be
issued hereunder, including any issue or issues of parity
bonds therewith hereafter issued, then such payments into
the Renewal and Extension Fund as provided in Paragraph 3
of this Section may be suspended and such moneys shall be
available to the extent necessary to pay the principal of
and interest on such junior lien bonds and to create and
maintain a reasonable reserve therefor and such moneys may
be allocated and pledged for that purpose.
Section 3. That the City has placed into effect a
schedule of rates, fees and charges for the services, facilities
and commodities furnished by the water and sewerage system and
as often as it shall appear necessary the City shall revise and
adjust such schedule of rates, fees and charges for either water
IV-6
or sewerage services and facilities, or both, to the extent
necessary to produce funds sufficient to operate and maintain
said water and sewerage system on a sound business like basis
and to create and maintain the Sinking Fund as herein provided
in amounts sufficient to discharge the payment of the principal
of and the interest on the Series 1984 Bonds and any future
parity issues as the same become due and payable in the then
current sinking fund year, either at maturity or by proceedings
for mandatory redemption, and to create and maintain a reserve
therefor in the amount as required herein or such larger amounts
as may be required in any proceedings authorizing any such issue
or issues of parity bonds, as well as to create and maintain a
reserve for extensions and improvements to the system. Such
rates, fees and charges, in addition to the foregoing require-
ments, shall be maintained at such level so as to produce net
revenues (after payment of the reasonable and necessary costs of
operating and maintaining said system, but before provision for
depreciation) equal to at least one and two -tenths (1.2) times
the amount required to be paid into the Sinking Fund in the then
current sinking fund year as herein provided, or such larger
amount as may be required in any proceedings authorizing the
issuance of any parity bonds with the Series 1984 Bonds. In the
event that at any time the net revenues are not being maintained
at such minimum level, the governing body of the City shall
revise its schedule of rates, fees and charges to the extent
necessary to produce net revenues at least equal to said 1.2
times requirement.
The rates, fees and charges shall be classified in a
reasonable manner to cover users of the services and facilities
furnished by the system so that as near as practicable such
rates, fees and charges shall be uniform in application to all
users falling within any reasonable class. No free services
shall at any time be furnished from the system and it will
undertake within its health powers or such other applicable
powers now or hereafter provided by law, to require the owners
IV-7
of all improved property abutting any water line or sewerage
line to connect with the system. No customer shall be connected
to the system or served by the City without a proper meter
having been first installed. All services shall be furnished in
accordance with rates now or hereafter established, including
services furnished to any County, municipal corporation or other
public board or body.
In the event the City shall fail to adopt a schedule or
schedules of rates, fees and charges, or to revise its schedule
or schedules of rates, fees and charges, in accordance with the
provisions of this Section, any bondholder without regard to
whether any default, as defined in Article VII of this
ordinance, shall have occurred, may institute and prosecute in
any court of competent jurisdiction, an appropriate action to
compel the City to adopt a schedule or schedules of rates, fees
and charges, or to revise its schedule or schedules of rates,
fees and charges in accordance with the requirements of this
Section.
Section 4. All transfers from the Revenue Fund and all
payments from said Revenue Fund shall be made by checks signed
by the proper officers of the City duly authorized for such
purpose.
Section 5. That the Sinking Fund herein provided shall be
kept as a trust account in a bank separate from other deposits
of the City, said bank to be designated as "Sinking Fund
Custodian", and is hereinafter named in Article V hereof and it
shall comply with all of the applicable provisions of this
ordinance.
Section 6. Subject to the terms and conditions set forth
in this ordinance, moneys in the Sinking Fund shall be disbursed
for (a) the payment of the interest on the bonds secured hereby
as such interest becomes due and payable; (b) the payment of the
principal of the bonds secured hereby as same becomes due and
payable, either at maturity or by proceedings for mandatory
redemption; (c) the optional redemption of bonds secured hereby
IV-8
�1 S
before maturity at the price and under the conditions provided
therefor in Article II hereof; (d) the purchase of bonds in the
open market; provided, however, the price paid shall not exceed
the authorized call price; (e) the transfer of excess moneys, if
any, in the Sinking Fund (as defined in subparagraph (c) of
Paragraph 2 of Section 2 of this Article IV) to the Revenue
Fund; (f) the payment of charges for paying the bonds and
interest thereon and the charges for the registration of the
bonds secured hereby and their transter or exchange in accor-
dance with the terms thereof; and (g) the payment of any charges
for investment services.
Moneys in the Sinking Fund not immediately required to pay
the interest falling due on January 1, and not immediately
required to pay the principal and interest falling due on July 1
in any year shall be invested upon passage of a resolution of
the governing body to that effect and proper evidence of same
being delivered to the Custodian, in the following securities
maturing within seven (7) years from date of purchase or the
final maturity date of the Series 1984 Bonds or any additional
parity bonds therewith whichever is earlier: (a) any bonds or
other obligations of the United States of America, which as to
principal and interest, constitute direct obligations of the
United States of America, or any obligations of subsidiary
corporations of the United States of America fully guaranteed as
to payment by the United States of America; (b) obligations of
the Federal Land Bank; (c) obligations of the Federal Home Loan
Bank; (d) obligations of the Federal Intermediate Credit Bank;
(e) obligations of the Central Bank for Cooperatives; (f)
certificates of deposit of national or state banks located
within the State of Georgia which have deposits insured by the
Federal Deposit Insurance Corporation ("FDIC") (including the
certificates of deposit of any bank acting as depository,
custodian or trustee pursuant to this ordinance; provided,
however, that the portion of such certificates of deposit in
excess of the amount insured by the FDIC, if any, shall be
IV-9
secured by deposit with the Federal Reserve Bank of Atlanta,
Georgia, or with any national or state bank located within the
State of Georgia, of any of the obligations included in (a)
through (e) above, in a principal amount and with a market value
exclusive of accrued interest always at least equal to such
excess. Any such securities so purchased shall be held by the
Sinking Fund Custodian in trust until paid at maturity or sold,
and all income or increments therefrom shall be immediately
deposited to the credit of said Sinking Fund. The moneys in the
Sinking Fund and all securities held in and for said Sinking
Fund, and all income and increments therefrom are hereby pledged
to and charged with the payments mentioned in this Section.
Section 7. Moneys in the Renewal and Extension Fund, not
immediately needed for the purposes set forth in Paragraph 3 of
Section 2 of this Article shall be invested upon passage of a
resolution of the governing body to that effect and proper
evidence of same being delivered to the Depository in the
following securities: (a) any bonds or other obligations of the
United States of America, which as to principal and interest,
constitute direct obligations of the United States of America,
or any obligations of subsidiary corporations of the United
States of America fully guaranteed as to payment by the United
States of America; (b) obligations of the Federal Land Bank; (c)
obligations of the Federal Home Loan Bank; (d) obligations of
the Federal Intermediate Credit Bank; (e) obligations of the
Central Bank for Cooperatives; (f) certificates of deposit of
national or state banks located within the State of Georgia
which have deposits insured by the Federal Deposit Insurance
Corporation ("FDIC") (including the certificates of deposit of
any bank acting as depository, custodian or trustee pursuant to
this ordinance; provided, however, that the portion of such
certificates of deposit in excess of the amount insured by the
FDIC, if any, shall be secured by deposit with the Federal
Reserve Bank of Atlanta, Georgia, or with any national or state
bank located within the State of Georgia, of any of the obliga-
IV-10
I
tions included in (a) through (e) above, in a principal amount
and with a market value exclusive of accrued interest always at
least equal to such excess. Any such securities so purchased
shall be held by the Depository of the Renewal and Extension
Fund in trust until paid at maturity or sold, and all income or
increments therefrom shall be immediately deposited the credit
of said fund. The moneys in the Renewal and Extension Fund and
all securities held in and for said Renewal and Extension Fund,
and all income and increments therefrom are hereby pledged to
and charged with the payments set forth in Paragraph 3 of
Section 2 of this Article.
Section 8. That no other bonds or obligations of any kind
or nature will hereafter be issued which are payable trom or
enjoy a lien on the revenues of the water and sewerage system
prior to the lien created for the payment of the Series 1984
Bonds and any future issue or issues of parity bonds herein
authorized to be issued. Nothing contained herein, however,
restricts the issuance of additional bonds or obligations from
time to time payable from the net revenues of said system and
secured by a lien on said revenues junior and subordinate to the
lien herein created.
It is expressly provided however, that additional revenue
bonds or obligations may be issued, from time to time, ranking
as to lien on the revenues of the system on a parity with the
Series 1984 Bonds herein authorized to be issued, provided all
of the following conditions are met:
(a) The payments covenanted to be made into the
"City of Smyrna Water and Sewerage System Sinking Fund"
created in Paragraph 2 of Section 2 of this Article, as
the same may have been enlarged and extended in any
proceedings authorizing the issuance of any additional
parity bonds, must be currently being made in full amount
as required and said "Debt Service Account" and "Debt
Service Reserve Account" held within said Sinking Fund
must be at their proper respective balances.
IV-11
(b) The net earnings of the system for a period of
twelve (12) consecutive months out of the eighteen (18)
consecutive months preceding the month of adoption of the
proceedings authorizing the issuance of such additional
bonds must have been equal to at least one and twenty -
hundredths (1.20) times the maximum debt service require-
ment for any succeeding sinking fund year on the Series
1984 Bonds and any other issue or issues of parity bonds
therewith then outstanding and on the bonds proposed to be
issued, or in lieu of the foregoing tormula, if a new
schedule of rates and charges for the services, facilities
and commodities furnished by the system shall have been
adopted and an independent and recognized firm of
Certified Public Accountants shall certify that had this
new rate schedule been in effect during the period
described above the net earnings of the system would have
been equal to at least one and twenty -hundredths (1.20)
times the maximum debt service requirement for any
succeeding sinking fund year on the Series 1984 Bonds and
any parity bonds therewith then outstanding and on the
bonds proposed to be issued. Net earnings for the purpose
of this provision shall be construed to be the gross
earnings of the system remaining after the payment of the
sums required or permitted to be paid to operate and
maintain said system pursuant to the provisions of
Paragraph 1 of Section 2 of this Article, but betore
provision for depreciation.
(c) An independent and recognized firm of Certified
Public Accountants shall certify in triplicate to the
governing body of the City that the requirements of
Paragraph (a) above are being complied with and that the
requirements of Paragraph (b) above have been met. A copy
of the certificate of the Certified Public Accountants
shall be furnished to the designated representative of the
IV-12
original purchasers of the Series 1984 Bonds herein
authorized.
(d) Except when bonds are being issued solely for
the purpose of refunding outstanding revenue bongs, the
Consulting Engineers for the City shall provide the City
with a written report recommending the additions, exten-
sions and improvements be made to the system and stating
that same are feasible, designating in reasonable detail
the work and installation proposed to be done and the
estimated cost of accomplishing such undertaking. Said
engineers shall set forth in said report the projected net
earnings to be derived from the system which will be
available for debt service payments over the life of the
Series 1984 Bonds and any parity bonds therewith then
outstanding and the bonds proposed to be issued and shall
indicate the projected coverage of such debt service
payments in each succeeding sinking fund year. Projected
net earnings in each year for the purpose of this
subparagraph (d) shall be estimated gross earnings of the
system in each sinking fund year remaining after payment
of the estimated cost required or permitted to be paid
pursuant to the provisions of Paragraph 1 of Section 2 of
this Article IV for said period to operate, repair and
maintain said system as added to, extended and improved,
but before provision for depreciation.
An executed duplicate original of such report of said
Engineers as required by this provision shall be furnished
to the designated representative of the original
purchasers of the Series 1984 Bonds issued hereunder not
less than ten (10) days before any proceedings are taken
to actually issue such additional bonds.
(e) The governing body of the City shall pass proper
proceedings reciting that all of the above requirements
have been met, shall authorize the issuance of said bonds
and shall provide in such proceedings, among other things,
IV-13
the date such bonds shall bear, the rate or rates of
interest and maturity dates, as well as the registration
and redemption provisions. The interest on the bonds of
any such issue shall fall due on January 1 and July 1 of
each year, and the bonds shall mature in installments on
July 1, but, as to principal, not necessarily in each year
or in equal installments. Any such proceeding or pro-
ceedings shall require the City to increase the monthly
payments then being made into the Sinking Fund to the
extent necessary to pay the principal of and the interest
on the Series 1984 Bonds and on all such parity bonds
therewith then outstanding and on the bonds proposed to be
issued as same become due and payable, either at maturity
or by proceedings for mandatory redemption, in the then
current sinking fund year, and to create within five (5)
years from the date of the bonds to be issued a reserve in
the Reserve Account at least equal to the maximum debt
service requirement coming due in any succeeding sinking
fund year on the Series 1984 Bonds and any parity bonds
therewith then outstanding and on the bonds proposed to be
issued and to maintain said reserve in an amount
sufficient for that purpose. Any such proceeding or
proceedings shall restate and reaffirm, by reference, all
of the applicable terms, conditions and provisions of this
ordinance.
(f) Such additional bonds or obligations and all
proceedings relative thereto, and the security theretor,
shall be validated as prescribed by law.
Section 9. All bonds paid, purchased or redeemed, either
at or before maturity, shall be cancelled and destroyed and such
bonds shall not be reissued. A record of such destruction shall
be made and preserved in the permanent records of the Bond
Registrar pertaining to such bonds and in the permanent records
of the City of Smyrna.
IV-14
Section 10. When sufficient moneys are deposited with the
Sinking Fund Custodian or the Paying Agent Bank, as the case may
be, to pay all outstanding bonds of this issue, or any issue or
issues of parity bonds therewith hereafter issued, and the
interest due or to become due thereon, and also including any
premium required to be paid should said issue or issues be
called for redemption, or provision having been duly made
therefor, same shall constitute payment in full of said bonds of
such issue or issues.
IV-15
ARTICLE V
DEPOSITORIES OF MONEYS AND SECURITIES FOR DEPOSIT
Section 1. Except as otherwise provided in this ordinance,
all moneys received by the City under the terms hereof shall,
subject to the giving of security as hereinafter provided, be
deposited with the proper Depository or with the Sinking Fund
Custodian in the name of the City. All moneys deposited under
the provisions hereof shall be deposited in banks insured by the
Federal Deposit Insurance Corporation and such moneys shall be
applied in accordance with the terms and for the purposes set
forth in this ordinance and shall not be subject to lien or
attachment or any type of security interest by any creditor of
the City.
No moneys belonging to any of the funds created hereunder
shall be deposited or remain on deposit with the Depository
and/or Sinking Fund Custodian in an amount in excess of the
amount guaranteed by the Federal Deposit Insurance Corporation,
unless such institution shall have pledged for the benefit of
the City and the owners of the bonds as collateral security for
the moneys deposited direct obligations of or obligations the
principal and interest of which are unconditionally guaranteed
by the United States of America, or other marketable securities
eligible as security for the deposit of trust funds under
regulations of the Board of Governors of the Federal Reserve
System and having a market value (exclusive of accrued interest)
at least equal to the amount of such deposits.
Section 2. Trust Company of Cobb County, Smyrna, Georgia, is
hereby designated as Depository for the Construction Fund; First
National Bank of Cobb County, Smyrna, Georgia, is hereby desig-
nated as Depository for the Revenue Fund and for the Renewal and
Extension Fund; and Trust Company of Cobb County, Smyrna, Georgia,
is hereby designated Sinking Fund Custodian; and Trust Company
V-1
Bank, Atlanta, Georgia, is hereby designated as Paying Agent
Bank and Bond Registrar for the Series 1984 Bonds.
The City may, from time to time, designate a successor
Sinking Fund Custodian; provided said Custodian complies with
all of the provisions of this Article and the applicable
provisions of this ordinance, and the City may, trom time to
time, designate a successor Depository or Depositories of any or
all of said funds, provided said successor Depository or
Depositories complies or comply with all of the provisions of
this Article and the applicable provisions of this ordinance and
the City may designate a successor Paying Agent Bank and Bond
Registrar; provided said successor complies with all the
applicable provisions of this ordinance.
v-2
ARTICLE VI
PARTICULAR COVENANTS
The City covenants:
Section 1. That it will promptly pay the principal of, and
interest on, every bond issued hereunder and secured hereby at
the place, on the dates and in the manner herein, and in said
bonds specified, and any premium required for the redemption of
said bonds, according to the true intent and meaning thereof.
The principal, interest and premiums, if any, and the charges of
the Paying Agent Bank and Bond Registrar are payable solely out
of the revenues of the system, which revenues are hereby pledged
to the payment thereof in the manner and to the extent
hereinbefore particularly specified, and nothing herein or in
the bonds shall be construed as an obligation of the City to
levy or to pledge any form of taxation whatever therefor or to
make any appropriation for their payment, except from the
revenues of the system, and no bondholder shall ever have any
recourse to the power of taxation.
Section 2. That it has and will continue to enforce
reasonable rules and regulations governing the system and the
operation thereof, and that all compensation, salaries, fees and
wages paid by it in connection with the operation, repair and
maintenance of such system will be reasonable, and that no more
persons will be employed by it than are necessary, and that it
will operate same in an efficient and economical manner, and
will at all times maintain the same in good repair and in sound
operating condition, and will make all necessary repairs,
renewals and replacements, and that it will comply with all
valid acts, rules, regulations, orders and directions of any
legislative, executive, administrative or judicial body
applicable to such undertaking and enterprise. The City will
also cause to be bonded its officials, employees or agents
handling funds of the system, same to be in such amount or
amounts as may be considered adequate for its protection.
.
VI-1
Section 3. That any contract relating to the installation,
extension, improvement, maintenance or repair of any water or
sewerage facilities shall provide for the retention of ten per
centum (10%) of the gross value of the completed work; provided,
however, that no amounts shall be retained on estimates or
progress payments submitted after fifty per centum (50%) of the
work has been completed, if, in the opinion of the City, such
work is satisfactory and has been completed on schedule. If,
after discontinuing the retention, the City determines that the
work is unsatisfactory or has fallen behind schedule, the ten
per centum (10%) retention may be resumed. Nothing herein
contained shall affect the retained amounts on the first fifty
per centum (500) of the work which shall continue to be held to
ensure satisfactory completion of the work. Final payment shall
be made after certification by the Consulting Engineers that the
work has been satisfactorily completed and is accepted in
accordance with the contract and plans and specifications
pertaining thereto.
Section 4. That it will not create or suffer to be
created, in the operation and maintenance of the system, any
lien, security interest or charge thereon, or any part thereof,
or upon the revenues derived therefrom, ranking equally with or
prior to the lien and charge herein authorized upon such
revenues, and that it will pay, or cause to be discharged, or
will make adequate provisions to satisfy and discharge, within
sixty (60) days after the same shall accrue, all lawful claims
and demands for labor, materials, supplies or other objects,
which, if unpaid, might by law become a lien upon such system,
or any part thereof, or upon the revenues derived therefrom;
provided, however, that nothing contained in this Section shall
require the City to pay, or cause to be discharged, or make
provision for, any such lien, security interest or charge, so
long as the validity thereof shall be contested in good faith
and by appropriate legal proceedings.
Section 5. That it shall procure and maintain or cause to
be procured and maintained so long as the bonds and any parity
VI-2
bonds therewith are outstanding; (a) Fire and extended coverage
insurance on the insurable portions of the system in a
responsible insurance company or companies authorized and
qualified to be business under the laws of the State of Georgia.
Coverage by such insurance shall be maintained in amounts not
less than eighty per centum (80%) of the full insurable value;
(b) Public liability insurance relating to the operation of the
system within the limits of not less than $100,000 for inquiry
to or death of one individual; $500,000 for injury or death
growing out of any one accident and $50,000 property damage
insurance for any one accident; (c) Vehicular public liability
insurance on any vehicle owned by the City and used in the
operation of the system within the limits of not less than
$100,000 for injury to or death of one individual, $500,000 for
injury or death growing out of any one accident and 550,000
property damage insurance for any one accident. The proceeds of
such fire and extended coverage policies are pledged as security
for the bonds, but shall be available for and shall, to the
extent necessary and desirable, be applied to the repair and
replacement of the damaged or destroyed property. In the event
the proceeds of such policies are not used for that purpose,
then same shall be deposited in the Renewal and Extension Fund.
All insurance policies shall be open to the inspection of the
bondholders or their duly authorized representatives at all
reasonable times.
Section 6. That it will keep the funds and accounts of the
system separate from all other funds and accounts of the City,
or any of its departments, and no payment will be made from the
revenues derived from the water and sewerage system which is not
properly payable from such revenues, and that it will keep
accurate records and accounts of all items of cost and all
expenditures relating to the system, and of the revenues
collected and the application thereof, and of the number of
customers, and that it will keep said records and accounts with
VI-3
respect to the physical properties in such manner that it will
be possible at all times to indentify both the amounts and the
items of all additions and retirements. Such records and
accounts shall be open to the inspection of all interested
persons.
Section 7. That in the month immediately following the end
of each fiscal year, or as soon thereafter as practicable, it
will cause an annual audit to be made of the books and accounts
pertaining to the system by an independent and recognized firm
of Certified Public Accountants of suitable experience and
responsibility, to be chosen by the governing body of the City.
The annual audit shall include, among others, a statement of the
income and expenses and a balance sheet, both in reasonable
detail, a list of insurance policies paid .for and in force
respecting the system and its operation, comments by the auditor
respecting compliance by the City with the provisions of this
ordinance and that it is complying therewith or point out where,
if any, the City is not in compliance therewith.
Such annual audit shall be open to the inspection of all
interested persons and copies of the same shall be sent to the
designated representative of the original purchasers of the
bonds. It will also cause any additional reports or audits
relating to such system to be made, as required by law, and that
from time to time, as often as may be requested, it will furnish
to the designated representative of the original purchasers of
the bonds issued hereunder such other information concerning
such system, or the operation thereof, as may be reasonably
requested.
Section 8. That it will permit the owner of any of the
bonds, or their agent or attorney duly appointed and authorized
in writing, to examine and inspect the system and all papers,
books, records, accounts and data relating thereto at all
reasonable times, and will permit copies or transcripts thereof
to be made by any such person or persons at all reasonable
times.
VI-4
Section 9. That so long as any of the bonds shall be
outstanding, it will not encumber the system or any part
thereof, and it will not sell or otherwise dispose of the system
or any integral part thereof, except it may sell such system as
a whole, or substantially as a whole, if the proceeds of such
sale be at least sufficient to provide for the payment of the
bonds authorized under and secured by this ordinance and any
interest accrued or to accrue thereon, and that the proceeds of
any such sale shall be deposited with the Sinking Fund Custodian
in trust and applied by it to the extent necessary to purchase
or redeem the bonds. Nothing contained herein, however, shall
preclude sale of a part of the system where the sale would not,
in any way, adversely affect the revenues of the system, and
provided further that the proceeds from such sale are used for
extensions and improvements to the system, or deposited with the
Sinking Fund Custodian in trust and applied toward the purchase
or redemption of the bonds.
It will not create, or permit to be created, any charge,
lien or encumbrance or any security interest in or on the
revenues of such system, as it now exists and as it will
hereafter be extended and improved, ranking prior to the lien on
said revenues created to secure payment of the bonds, or ranking
equally with said charge or lien of the bonds, except that it
may issue additional bonds standing on a parity herewith in
accordance with the provisions of this ordinance.
VI-5
ARTICLE VII
REMEDIES
Section 1. Each of the following events is hereby declared
an "event of default", that is to say, if: (a) Payment of the
principal of any of the bonds shall not be made when the same
shall become due and payable, at its maturity or by proceedings
for mandatory redemption or optional redemption; or (b) Payment
of any installment of interest shall not be made when the same
becomes due and payable, or within thirty (30) days thereafter;
or (c) The City shall, for any reason, be rendered incapable of
fulfilling its obligations hereunder; or (d) An order or decree
shall be entered, with the consent or acquiescence of the City,
appointing a Receiver, or Receivers, of the system, or of the
revenues thereof, or any proceedings shall be instituted, with
the consent or acquiescence of the City, for the purpose of
effecting a composition between the City and its creditors, or
for the purpose of adjusting claims of such creditors, pursuant
to any Federal or State statute now or hereafter enacted, if the
claims of such creditors are under any circumstances payable out
of the revenues of the system, or if such order or decree,
having been entered without the consent and acquiescence of the
City, shall not be vacated or discharged or stayed on appeal
within sixty (60) days after entry thereof, or if such
proceeding, having been instituted without the consent or
acquiescence of the City, shall not be withdrawn, or any orders
entered shall not be vacated, discharged or stayed on appeal,
within sixty (60) days after the institution of such
proceedings, or the entry of such orders; or (e) The City shall
make a default in the due and punctual performance of any other
of the covenants, conditions, agreements or provisions contained
in the bonds or in this ordinance, on the part of the City to be
performed, and such default shall continue for thirty (30) days
after written notice, specifying such default and requiring same
to be remedied, shall have been given to the City by any
bondholder.
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Section 2. Upon the happening and continuance of any event
of default specified in Section 1 of this Article, then and in
every such case the owners of not less than fifty-five per
centum (55%) in the principal amount of the bonds then out-
standing may, by a notice in writing to the City, declare the
principal of all of the bonds then outstanding (if not then due
and payable) to be due and payable immediately, and upon such
declaration the same shall become and be immediately due and
payable, anything in the bonds or herein contained to the
contrary notwithstanding; provided, however, that if at any time
after the principal of the bonds shall have been so declared to
be due and payable, all arrears of interest, if any, upon the
bonds then outstanding, and all other indebtedness secured
hereby, except the principal of any bonds not then due by their
terms, and the interest accrued on such bonds since the last
interest payment date, shall have been paid, or shall have been
provided for by deposit with the Paying Agent Bank for such
bonds of a sum sufficient to pay the same, and every other
default in the observance or performance -of any covenant,
condition or agreement in the bonds, or herein contained, shall
be made good, or provisions therefor satisfactory to such
bondholders shall have been made, then and in every such case
the owners of not less than fifty-five per centum (55%) in
principal amount of the bonds then outstanding may, by written
notice to the City, rescind and annul such declaration and its
consequences, but no such rescission or annulment shall extend
to, of affect, any subsequent default or impair any right
consequent thereto.
Section 3. Upon the happening and continuance of any event
of default, as provided in Section 1 of this Article, then and
in every such case any bondholder may proceed, subject to the
provisions of Section 5 of this Article, to protect and enforce
the rights of the bondholders hereunder by a suit, action or
special proceedings in equity, or at law, either for the
appointment of a Receiver of the system as authorized by the
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Revenue Bond Law, or for the special performance of any covenant
or agreement contained herein or in aid or execution of any
power herein granted, or for the enforcement of any proper legal
or equitable remedy as such bondholder shall deem most effectual
to protect and enforce the rights aforesaid, insofar as such may
be authorized by law.
Section 4. In case any proceeding taken by any bondholder
on account of any default shall have been discontinued or
abandoned for any reason, or shall have been determined
adversely to such bondholder, then and in every such case the
City and the bondholders shall be restored to their former
positions and rights hereunder, respectively, and all rights,
remedies, powers and duties of the bondholders shall continue as
though no such proceedings had been taken.
Section 5. No one, or more, owners of the bonds secured
hereby shall have any right in any manner whatever by his or
their action to affect, disturb, or prejudice the security
granted and provided for herein, or -to enforce any right
hereunder, except in the manner herein provided, and all
proceedings at law or in equity shall be instituted, had and
maintained for the equal benefit of all owners of such
outstanding bonds.
Section 6. No remedy herein conferred upon the bondholders
is intended to be exclusive of any other remedy, or remedies,
and each and every such remedy shall be cumulative, and shall be
in addition to every other remedy given hereunder or now or
hereafter existing at law or in equity, or by statute.
Section 7. No delay or omission of any bondholder to
exercise any right or power accruing upon any default occurring
and continuing as aforesaid, shall impair any such default or be
construed as an acquiescence therein and every power and remedy
given by this Article to the owners of the bonds, respectively,
may be exercised from time to time and as often as may be deemed
expedient.
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L,
ARTICLE VIII
SUPPLEMENTAL PROCEEDINGS
Section 1. The City may, from time to time and at any
time, adopt such ordinance or ordinances supplemental hereto as
shall be deemed necessary or desirable for the purpose of
modifying, altering, amending, adding to, or rescinding, in any
particular, any of the terms or provisions contained in this
ordinance or in any supplemental ordinance or in the Series 1984
Bonds; provided, however, that nothing herein contained shall
permit, or be construed as permitting: (a) the extension of the
maturity of any bond issued hereunder; (b) the reduction in the
principal amount of any bond or the alteration of the rate or
rates of interest thereon or any other modification of the terms
of payment of such principal or interest; (c) the reduction of
the percentage of the principal amount of bonds required for
consent to such supplemental ordinance; and (d) the creation of
any lien on the revenues of the system prior to or superior to
the lien created on the revenues of the system as the security
for the payment of the Series 1984 Bonds or any other issue of
parity bonds with the Series 1984 Bonds and the interest
thereon. A modification or amendment of the provisions with
respect to the Sinking Fund is not to be deemed a change in the
terms of payment.
Nothing herein contained, however, shall be construed as
making necessary the approval by the bondholders of any ordi-
nance not inconsistent with the terms and provisions of this
ordinance and any supplemental proceedings forming a part hereof
to cure any ambiguity or formal defect or omission in this
ordinance or in any supplemental proceedings or to grant any
additional rights, remedies, powers, authority or security that
may lawfully be granted to or conferred upon the bondholders by
the City.
After any supplemental ordinance requiring the consent of
the bondholders shall have been adopted, the City shall publish
a notice of the adoption of such ordinance once a week for two
VIII-1
I1 •
consecutive weeks in a financial newspaper or journal of general
circulation in the City of New York, New York, which said notice
shall be in substantially the following form:
TO THE OWNERS OF CITY OF SMYRNA, GEORGIA
WATER AND SEWERAGE REVENUE BONDS,
SERIES 1984
An ordinance was adopted by the governing body of the City
of Smyrna, Georgia, on the day of , 19_,
amending the ordinance authorizing the issuance of said bonds
adopted on , 1984, which supplemental ordinance will
become effective thirty (30) days after the owners of at least
65% in the aggregate principal amount of the said bonds now
outstanding shall have filed with the City properly executed
instruments approving the adoption of said supplemental ordi-
nance, the proof of ownership of the bonds to which such
instrument refers shall be such as is permitted by the provi-
sions of Section 7 of Article VIII of the above mentioned
ordinance of 1984.
Attest:
Clerk
Mayor
It is expressly provided, however, that should any parity bonds
or obligations with the Series 1984 Bonds be hereafter issued
then the form of notice hereinabove set forth shall be modified
to notify the owners of such issue or issues of parity bonds or
obligations, as well as the owners of the Series 1984 Bonds.
Section 2. On or before the date of the first publication
thereof, the City shall cause a copy of the above mentioned
notice to be mailed, postage prepaid, to all registered owners
of bonds appearing on the bond registration book kept by the
Bond Registrar and a copy of such supplemental ordinance shall
be mailed, postage prepaid, to the designated representative of
the original purchasers of the Series 1984 Bonds.
Section 3. No such supplemental ordinance shall become
effective unless the owners of at least sixty-five per centum
(65%) in aggregate principal amount of the Series 1984 Bonds and
any parity bonds therewith then outstanding shall have filed
with the Clerk within six months after the date of adoption of
such ordinance properly executed instruments approving the
VIII-2
a
adoption of such supplemental ordinance, each such instrument to
be accompanied by proof of ownership of the bonds to which such
instrument refers, which proof shall be such as is permitted by
the provisions of Section 7 of this Article.
Section 4. Any action or proceeding in any court objecting
to such supplemental ordinance or to any of the terms and provi-
sions therein contained or the operation thereof, or in any
manner questioning the propriety of the adoption thereof or the
execution by any bondholder of any instrument purporting to
approve the adoption of such ordinance, or to enjoin or restrain
the City from taking any action pursuant to the provisions
thereof, must be commenced within thirty (30) days after the
City shall have determined that the owners of at least sixty-
five per centum (65%) in aggregate principal amount of the
Series 1984 Bonds then outstanding, including any parity bonds,
have approved the adoption of such supplemental ordinance.
Upon the expiration of such 30 day period, or, if any such
action or proceedings shall be commenced, upon any judgment or
decree sustaining such supplemental ordinance becoming final,
this ordinance and any ordinance authorizing the issuance of
parity bonds with the Series 1984 Bonds shall be, and be deemed
to be, modified and amended in accordance with such supplemental
ordinance, and the respective rights, duties and obligations
under this ordinance and any ordinance authorizing the issuance
of parity bonds with the Series 1984 Bonds and all owners of
outstanding bonds shall thereafter be determined, exercised and
enforced hereunder; subject, in all respects, to such modifica-
tions and amendments.
Section 5. Any supplemental ordinance adopted and becoming
effective in accordance with the provisions of this Article
shall thereafter form a part of this ordinance and all condi-
tions of this ordinance for any and all purposes, and shall be
effective as to all owners of bonds then outstanding and no
notation or legend of such modifications and amendments shall be
required to be made thereon.
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Whenever referred to herein as "supplemental ordinance"
same shall be construed to mean such action as shall be taken by
the governing body of the City, as may be required to comply
with the law then in force and effect.
Section 6. In the event of the issuance of any bonds
ranking pari passu with the Series 1984 Bonds, then the provi-
sions of this Article shall likewise be applicable in all
respects to any such proceedings so authorizing such parity
bonds and in any supplemental ordinance amending such pro-
ceedings and the notice of such supplemental ordinance shall be
given such parity bondholders and any such modification and
amendment shall apply to any such parity bonds and the owners of
such bonds.
Section 7. Any request, waiver, direction, consent or
other instrument required by this ordinance to be signed or
executed by bondholders may be in any number of concurrent
writings of similar tenor and may be signed or executed by such
bondholders in person or by agent appointed in writing. Proof
of the execution of any such instrument, or of the writing
appointment such agent, and of the ownership of bonds, if made
in the following manner, shall be sufficient for any purpose of
this ordinance and shall be conclusive in favor of the City with
regard to any action taken under such instrument:
(a) The fact and date of the execution by any person of
any such instrument may be proved by the certificate of any
officer in any jurisdiction, who by the laws thereof, has power
to take acknowledgments within such jurisdiction, to the effect
that the person signing such instrument acknowledged before him
the execution thereof, or by an affidavit of a witness to such
execution.
(b) The fact of the ownership of the Series 1984 Bonds or
any issue of parity bonds therewith shall be determined and
proved by reference to the bond registration book kept by the
Bond Registrar for such issue or issues of bonds and the City
VIII-4
may conclusively assume that such ownership continues until
written notice to the contrary is served upon it.
Any request or consent of the owner of any bond shall bind
every future owner of the same bond in respect of anything done
by the City in pursuance of such request or consent.
VIII-5
ARTICLE IX
MISCELLANEOUS PROVISIONS AND DEFINITIONS
Section 1. Whenever used in this ordinance, the singular
shall include the plural and the plural shall include the
singular, unless the context otherwise indicates.
Section 2. In case any one or more of the provisions of
this ordinance, or the bonds issued hereunder, shall for any
reason be held illegal or invalid, such illegality or invalidity
shall not affect any other provisions of this ordinance or the
bonds, but this ordinance and said bonds shall be construed and
enforced as if such illegal or invalid provisions had not been
contained therein.
Section 3. The provisions of this ordinance shall consti-
tute a contract by and between the City of Smyrna and the owners
of the Series 1984 Bonds authorized to be issued hereunder and
the owners of any pari passu bonds subsequently issued, and
after the issuance of the bonds this ordinance shall not be
repealed or amended in any respect which will adversely affect
the rights and interest of the owners of said bonds, nor shall
the City pass any proceedings in any way adversely affecting the
rights of such owners, so long as any of the bonds authorized by
this ordinance, or the interest thereon, shall remain unpaid;
provided, however, that this covenant shall not be construed as
prohibiting modifications hereof or amendments hereto to the
extent and in the manner as provided in Article VIII hereof.
The provisions of this ordinance and every appropriate
sentence thereof shall be construed as including and as being
applicable to any future issue or issues of parity bonds, as
well as to the Series 1984 Bonds, and any parity bonds shall be
treated for all intents and purposes, unless otherwise specifi-
cally stated, just as if they had been issued together with the
bonds of this issue and pursuant to the terms of this ordinance.
Any subsequent proceedings authorizing the issuance of
additional bonds as provided in this ordinance shall in nowise
conflict with the terms and conditions of this ordinance, but
IX-1
4, '*
shall, for all legal purposes, reaffirm all of the applicable
covenants, agreements and provisions of this ordinance for the
equal protection and benefit of all bondholders.
Section 4. Any bank or trust company with, or into which
the Paying Agent Bank, Bond Registrar, any Depository or Custo-
dian designated in this ordinance may be merged or consolidated,
or to which the assets and the business of such Paying Agent
Bank, Bond Registrar, any Depository or Custodian may be sold,
shall be deemed the successor of such institution for the
purpose of this ordinance.
Section 5. The terms "Mayor and Council of the City of
Smyrna", "Mayor and Council" and "governing body" shall mean the
present governing body of the City of Smyrna and any person,
body or authority to whom, or to which, may hereafter be dele-
gated by law the duties, powers, authority, obligations or
liabilities of the present body, either in whole or in relation
to the water and sewerage system.
Section 6. For the purpose of this resolution and the
bonds issued hereunder the terms "original purchasers", "repre-
sentative of the original purchasers" and "designated represen-
tative of the original purchasers" shall be construed to mean
Lex Jolley & Co., Inc., Atlanta, Georgia, its successors or
assigns.
Section 7. The terms "water and sewerage system" and
"system" shall be construed as one and the same, and as consti-
tuting the water facilities and sewerage facilities as now
existent and as hereafter added to, extended, improved and
equipped, and owned by the City and used by it in furnishing
water and sewerage services and facilities.
Section 8. For the purpose of this ordinance the terms
"principal and interest requirements" and "debt service require-
ments" shall be construed to mean the amount required in each
sinking fund year to pay the principal of and interest on the
IX-2
.4V }.
Series 1984 Bonds and any parity bonds therewith hereafter
issued as the same become due and payable either at maturity or
by proceedings for mandatory redemption.
Section 9. The term "fiscal year" shall be deemed to be the
period commencing on the 1st day of July in each year and
extending through the 30th day of June in the next year, or such
other period as shall hereafter be adopted by the City as herein
provided. The term "sinking fund year" shall be deemed to be
the period commencing on the 2nd day of July in each year and
extending through the 1st day of July in the next year.
Section 10. The terms "Consulting Engineers", "Engineers",
"engineers" and "engineer" shall be construed to mean Welker &
Associates, Inc. Marietta, Georgia or such other engineers,
engineer or engineering firm as may hereafter be employed to
supervise the additions, extensions and improvements to the
system and in relation to the services to be rendered as contem-
plated by this ordinance.
Section 11. The term "engineering report" shall be con-
strued to mean the Engineering Report, dated August, 1984,
prepared by the City's Consulting Engineers,.same being approved
and ratified and by reference incorporated herein and made a
part hereof.
Section 12. The bonds herein authorized shall be validated
in the manner provided by law, and to that end notice of the
adoption of this ordinance and a copy thereof shall be served
upon the District Attorney of the Cobb Judicial Circuit, in
order that proceedings for the above purpose be instituted in
the Superior Court of Cobb County.
Section 13. Any and all ordinances or parts of ordinances
in conflict with this ordinance this day adopted be and the same
are hereby repealed, and this ordinance shall be in full force
and effect from and after its adoption.
Approved:
c-
Mayor, City of Smyrna, Georgia
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