Section 107-595; Ord. 19226; Amending and supplementing Ordinance No. 018028 of the City relating to the Water and Electric System Revenue Bonds of the City and prescribing other matters relating thereto


Ordinance No. 19226                            Council Bill No. B 381-06

AN ORDINANCE


amending and supplementing Ordinance No. 018028 of the City relating to the Water and Electric System Revenue Bonds of the City and prescribing other matters relating thereto; and fixing the time when this ordinance shall become effective.



WHEREAS, the City of Columbia, Missouri, a municipal corporation duly created, organized and existing under and by virtue of the laws of the State of Missouri (the “City”), owns and operates a revenue producing municipal water and electric light works system (the “System”) serving the City and its inhabitants; and

WHEREAS, the System is operated as one plant and under one management, and the revenues produced by the water facilities and the revenues produced by the electric facilities are accounted to a common Revenue Fund, as herein provided; and

WHEREAS, the City is authorized by its Charter and the Constitution and laws of the State of Missouri, including particularly Section 27 of Article VI of the Constitution of Missouri (the “Act”) to issue its water and electric system revenue bonds and on March 30, 2004, the City adopted Ordinance No. 018028) of the City (which Ordinance, as amended and supplemented is referred to herein as the “Master Bond Ordinance”) which created and established an issue of Bonds of the City designated as “Water and Electric System Revenue Bonds” (the “Bonds”); and
WHEREAS, the City is desirous of amending certain provisions of such Master Bond Ordinance as herein provided.

    NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF COLUMBIA, MISSOURI, AS FOLLOWS:  

    SECTION 1.  Definitions.  Section 1.01 of the Master Bond Ordinance is amended by deleting the definition of “System” and inserting a new definition in its place and adding the following additional definitions (Capitalized words and terms not otherwise defined herein shall have the meanings as set forth in the Master Bond Ordinance):

    “Electric Utility” means (i) properties and assets relating to the City’ s wholly-owned Electric Utility which is an operating component of the System to which legal title is vested in the City and all properties and assets acquired by the City as renewals and replacements, additions and expansion, and improvements thereto, as recorded in the books of the City pursuant to standard governmental accounting practices, and (ii) all renewals and replacements, additions and expansions and improvements thereto paid for or financed in whole or in part from Revenues, proceeds of Bonds, Subordinate Bonds or other funds under the Master Bond Ordinance.  Electric Utility as used in the Ordinance shall not include any facilities for the generation of power and energy financed by the City through the issuance of obligations of the City which shall be secured in part by contracts with other utilities for the sale of the power and energy from such facilities.

    “Electric Utility Net Revenues” means Electric Utility Revenues less Electric Utility Operating Expenses.

    “Electric Utility Operating Expenses” means the City’ s expenses of operating the Electric Utility, including all costs due under any type of contractual arrangement in respect of power and power entitlements, operation, maintenance, generation, production, transmission, distribution, repairs, replacements, engineering, transportation, administrative and general, audit, legal, financial, pension, retirement, health, hospitalization, insurance, taxes, and other expenses actually paid or accrued, including, without limitation, any expenses of the City applicable to the Electric Utility, as recorded on its books pursuant to standard governmental accounting practice and any other expenses of the City applicable to the Electric Utility, as recorded on its books pursuant to standard governmental accounting practice.  Electric Utility Operating Expenses shall not include any costs or expenses for new construction, charges for depreciation, voluntary payments in lieu of taxes, payments in respect of any “take or pay” power contract under which no power is available to the City for such payment, or payment of principal or interest on the Bonds.

    “Electric Utility Revenues” means all revenues, income and rents accrued by the City from the ownership and operation of the Electric Utility and the proceeds of any insurance covering business interruption loss relating to the Electric Utility, including interest received on any moneys or securities held pursuant to the Master Bond Ordinance and paid into the Electric Utility Account.  

    “System” means (i) properties and assets relating to the City’ s Water Utility and Electric Utility to which legal title is vested in the City and all properties and assets acquired by the City as renewals and replacements, additions and expansion, and improvements thereto, as recorded in the books of the City pursuant to standard governmental accounting practices, and (ii) all renewals and replacements, additions and expansions and improvements thereto paid for or financed in whole or in part from Revenues, proceeds of Bonds, Subordinate Bonds or other funds under the Master Bond Ordinance.  System as used in the Ordinance shall not include any facilities for the production of water or generation of power and energy financed by the City through the issuance of obligations of the City which shall be secured in part by contracts with other utilities for the sale of water or power or energy of from such facilities.

    “Water Utility” means (i) properties and assets relating to the City’ s wholly-owned water utility which is an operating component of the System to which legal title is vested in the City and all properties and assets acquired by the City as renewals and replacements, additions and expansion, and improvements thereto, as recorded in the books of the City pursuant to standard governmental accounting practices, and (ii) all renewals and replacements, additions and expansions and improvements thereto paid for or financed in whole or in part from Revenues, proceeds of Bonds, Subordinate Bonds or other funds under the Master Bond Ordinance.  Water Utility as used in the Ordinance shall not include any facilities for the production and distribution of water financed by the City through the issuance of obligations of the City which shall be secured in part by contracts with other utilities for the sale of the water produced from such facilities.

    “Water Utility Net Revenues” means Water Utility Revenues less Water Utility Operating Expenses.

    “Water Utility Operating Expenses” means the City’ s expenses of operating the Water Utility, including all costs due under any type of contractual arrangement in respect of power and power entitlements, operation, maintenance, generation, production, transmission, distribution, repairs, replacements, engineering, transportation, administrative and general, audit, legal, financial, pension, retirement, health, hospitalization, insurance, taxes, and other expenses actually paid or accrued, including, without limitation, any expenses of the City applicable to the Water Utility, as recorded on its books pursuant to standard governmental accounting practice and any other expenses of the City applicable to the Water Utility, as recorded on its books pursuant to standard governmental accounting practice.  Water Utility Operating Expenses shall not include any costs or expenses for new construction, charges for depreciation, voluntary payments in lieu of taxes, payments in respect of any “take or pay” power contract under which no power is available to the City for such payment, or payment of principal or interest on the Bonds.

    “Water Utility Revenues” means all revenues, income and rents accrued by the City from the ownership and operation of the Water Utility and the proceeds of any insurance covering business interruption loss relating to the Water Utility, including interest received on any moneys or securities held pursuant to the Master Bond Ordinance and paid into the Water Utility Account.  

    SECTION 2.  Ratification of Funds and Accounts.  Section 502 (a) of the Master Bond Ordinance is deleted and the following new Section 502 (a) is inserted in its place:

    Section 502 (a)  Water and Electric Utility Fund of the City  (the “System Revenue Fund”) held in the name of the City by a Depository, which shall include an Electric Utility Revenue Account (the “Electric Utility Revenue Account”) and a Water Utility Revenue Account (the “Water Utility Revenue Account”);

    SECTION 3.  System Revenue Fund.  Section 701 of the Master Bond Ordinance is deleted and the following new Section 701 is inserted in its place:

    Section 701.  System Revenue Fund

.  The City Council covenants and agrees that as long as any of the Bonds remain outstanding and unpaid, all Revenues will be paid and deposited into the System Revenue Fund, and that said Revenues shall be segregated and kept separate and apart from all other moneys, revenues, funds and accounts of the City and shall not be commingled with any other moneys, revenues, funds and accounts of the City and further provides that all Electric Utility Revenues shall be paid and deposited into the Electric Utility Revenue Account and that all Water Utility Revenues shall be paid and deposited into the Water Utility Revenue Account.  The System Revenue Fund shall be administered and applied solely for the purposes and in the manner provided in this Ordinance, and so long as any of the Outstanding Parity Bonds remain outstanding and unpaid, in the manner provided in the Original Ordinance.

    SECTION 4.  Application of Moneys in Funds and Accounts.  Section 702 of the Master Bond Ordinance is deleted and the following new Section 702 is inserted in its place:

    Section 702.  Application of Moneys in Funds and Accounts

.  The City covenants and agrees that so long as any of the Bonds shall remain outstanding and unpaid, the Revenue Fund shall be expended and used by the City in the manner and order specified below, to wit:

    (a)    Operating Expenses of the System shall be payable, as a first charge, from the Revenue Fund as the same become due and payable and the City shall pay, to the extent moneys are available in such accounts for such purposes, the Electric Utility Operating Expenses from the Electric Utility Revenue Account and the Water Utility Operating Expenses.  

    (b)    There shall next be transferred from the Revenue Fund and deposited into the Bond Account, on each Payment Date, the amount of principal and interest due and payable on the Parity Bonds Outstanding on such date and the City shall pay, to the extent moneys are available in such accounts for such purposes, the debt service on Bonds which funded improvement to the Electric Utility from the Electric Utility Revenue Account and the debt service on Bonds which funded improvements to the Water Utility from the Water Utility Revenue Account.    All amounts paid and credited to the Bond Account shall be expended and used by the City for the sole purpose of paying the principal of, redemption premium, if any, and interest on the Parity Bonds as and when the same become due.

If at any time the moneys in the Revenue Fund shall be insufficient to make in full the payments and credits at the time required to be made to the Bond Account and to the subaccounts in the Bond Account for any Parity Bonds Outstanding, the available moneys in the Revenue Fund shall be divided among such debt service accounts in proportion to the respective principal amounts of said Series of Parity Bonds at the time Outstanding which are payable from the moneys in said debt service accounts.

    (c)    So long as the Reserve Account for any series of Parity Bonds Outstanding aggregates the Reserve Requirement with respect to such bonds, no further payments into said Account shall be required, but if (i) the City shall ever be required to expend and use a part of the moneys in any said Account for the purposes for which such reserve was provided and such expenditure shall reduce the amount of said Account below the Reserve Requirement with respect to such account or the value (determined in accordance with Section 802 hereof) of the amount held in any such Reserve Account is less than the Reserve Requirement with respect to such account due to market fluctuations, on or before each April 1 and October 1, after paying all Operating Expenses and making the required transfers pursuant to subparagraphs (a) and (b) hereof the City Council shall transfer from the Revenue Fund to such Reserve Account, one-half of the amount expended from said Account during the previous six month period or one-half of such deficiency, as the case may be, so that said Account shall aggregate at the time of making the second of such transfers a sum equal to the Reserve Requirement.  In making any such transfers into a Reserve Account, the City shall use, to the extent moneys are available in such accounts for such purposes, moneys in the Electric Utility Revenue Account to fund Reserve Accounts securing Bonds which funded improvements to the Electric Utility and moneys in the Water Utility Revenue Account to fund Reserve Accounts securing Bonds which funded improvements to the Water Utility.

If at any time the moneys in the Revenue Fund shall be insufficient to make in full the payments and credits at the time required to be made to any debt service reserve accounts established to protect the payment of any Parity Bonds Outstanding, the available moneys in the Revenue Fund shall be divided among such debt service reserve accounts in proportion to the respective principal amounts of said series of Parity Bonds at the time Outstanding which are payable from the moneys in such debt service reserve accounts.

    (d)    So long as the Renewal and Replacement Account aggregates the Renewal and Replacement Requirement, no further payments shall be required, but if the amount in said account is less than the Renewal and Replacement Requirement, after making the required transfers pursuant to subparagraphs (a), (b) and (c) hereof, on or before each April 1 and October 1, the City Council shall transfer from the Revenue Fund to the Renewal and Replacement Account, one-half of such deficiency so that said Account shall aggregate at the time of making the second of such transfers a sum equal to the Reserve Requirement.  In making any such transfers into the Renewal and Replacement Account, the City shall use, to the extent moneys are available in such accounts for such purposes, moneys in the Electric Utility Revenue Account to fund renewal and replacement requirements attributable to the Electric Utility and moneys in the Water Utility Revenue Account to fund renewal and replacement requirements attributable to the to the Water Utility.

All moneys in the Renewal and Replacement Account may be drawn on and used by the City Council for the purpose of paying the cost of unusual or extraordinary maintenance or repairs, renewals and replacements, not paid as part of the ordinary and normal expense for the operation of the System.

    (e)    After making the required transfers pursuant to subparagraphs (a), (b), (c) and (d) hereof, the amounts remaining in the Revenue Fund shall be transferred to satisfy  any deficiencies in or satisfy any funding requirements for the Accounts described in paragraphs (a), (b), (c) and (d) above, and then shall be deposited into the Surplus Fund (the “Surplus Fund”) which shall contain an Electric Utility Surplus Account (the “Electric Utility Surplus Account”) and a Water Utility Surplus Account (the “Water Utility Surplus Account”).  Moneys in the Surplus Fund shall be applied, as the City Council may from time to time direct, but only for any of the following purposes:  

    (i)    For the payment of debt service on any special obligations bonds or other bonds, notes or other obligations (“ Financing Obligations”) of the City issued to fund the construction and acquisition of any extensions and improvements to the System, including the pledge of moneys in the Water Utility Surplus Account to secure the payment of Financing Obligations issued to fund improvements to the Water Utility and which Financing Obligations were approved by the voters as “utility revenue bonds” pursuant to the Act and the pledge of moneys in the Electric Utility Surplus Account to secure the payment of Financing Obligations issued to fund improvements to the Electric Utility and which Financing Obligations were approved by the voters as “utility revenue bonds” pursuant to the Act;

    (ii)    For payments into the general Revenue Fund of the City of an amount substantially equivalent to that sum which would be paid in taxes if the System were privately-owned;

    (iii)    For the construction and acquisition of and extensions and improvements to the System;

    (iv)    For the redemption of Bonds prior to maturity;

    (v)    For payment in respect of any “take or pay” electric or contract under which no electricity or water is received by the City for such payment; or

    (vi)    For any lawful purpose connected with the System.



SECTION 5.  Severability

.  If any section, subsection, paragraph, sentence, clause, or phrase of this Ordinance, or of the Bonds, shall ever be held to be unconstitutional or otherwise invalid by any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance, or of the Bonds, but this Ordinance, and the Bonds shall be construed and enforced as if such illegal or invalid provision had not been contained herein or therein.

SECTION 6.  

Governing Law.  This Ordinance shall be governed exclusively by and constructed in accordance with the applicable laws of the State of Missouri.

    SECTION 7.    This ordinance shall be in full force and effect from and after its passage.

PASSED this 18th day of September, 2006.