The Courier News from Blytheville, Arkansas on May 7, 1954 · Page 5
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May 7, 1954

The Courier News from Blytheville, Arkansas · Page 5

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Blytheville, Arkansas
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Friday, May 7, 1954
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FRIDAY, MAY 7,1954 NOTICE OF SPECIAL REFERENDUM ELECTION Notice is hereby given that a special election will be held in the City of Blytheville, Arkansas on the 18th day of May, 1954, for the purpose of approving or disapproving Ordinance No. 549 of the Ordinances of the City of Blytheville passed and approves on the 20th day of April, 1954. The title and text of said Or dinance are hereinafter set out lull. The question will be placed on the ballot for the special election in the following form: Vote by placing an "X" in the square above the measure either for or against: For Ordinance No. 549 Q Against Ordinance No. 549 C Referendum of Ordinance No. 549 of the City of Blytehville, Arkan sas passed and approved on tin 20th day of April, 1954, and entitled: "An Ordinance Providing for . the Construction of Exten sions, Betterments and Improv- ments to the Sewer System of .the City of Blytheville, Arkansas; Providing for the Issuance of Sewer Revenue Bonds; Setting up Certain Funds for their payment; Prescribing Other Matters Relating Thereto; and Declaring an Emergency," which ordinance fixes rates to be charged for sewer services; provides for the con" struction of extensions, betterments and improvements to the Sewer System of the City of Blytheville, a brief general description of which is as follows: (1) Correction of the flooded conditions in the existing System by building necessary relief and correction lines within the presently served areas; (2) transportation of sewage from presently served and future, areas by a system of large trunk lines and pump stations; and (3) treatment of the sewage by installation of a modern, plant which will provide secondary treatment for existing sewage load as well as for a reasonable increase; provides for the sale of $850,000 in Sewer Revenue Bonds, with the right to convert to a lower rate of rates of interest, payable solely from the revenues of the Sewer System, to pay the cost of said extensions, betterments and improvements and necessary expenses incident thereto and to the issuance of the bonds; and other matters relating thereto. BLYTHEVILLE (ARK.) COURIER KIWi ment district*, and th« extensions betterments and improvements t are to b« financed by the reve shall be so constructed from th standpoint of sound, engineerin practices as to adequately handl the sewage of the entire City, • in eluding the said two areas, if ant when the necessary construction dent financing. Thus, the exten sions, betterments and improve ments to be constructed by the is suance of revenue bonds are within those areas of the City presentlj served by the existing Sewer Sys tern and within the area describe as follows: Tenth Street, Bel Street and Eleventh Street, from Lumerate Bayou to the alley north of Holly Street; Willow Street from Eleventh Street to Division Street and the entire area from Ruddle Road east to the city limits, ex cept that portion thereof presently served by the existing System. Section 2. That the City Counci hereby finds and declares that the period of usefulness of the Sewer System will be more than forty (40) years, which is longer than the term of the proposed revenue bonds. Section 3. That the Sewer System, during the construction and after the completion of the herein authorized extensions, betterments against said Ordinance No. 549. Only qualified voters of the City of Blytheville, Arkansas will have the right to vote on said question. The election will be held between the hours of 8:00 o'clock a.m. and 6:30 o'clock p.m. at the following polling places in the City of Blytheville, Arkansas, to-wit: Ward 1. City Hall Ward 2. Blytheville Water Co. Ward 3. Fire Station No. 2 Ward 4. Moore Bros. Store This 6th Day of May, 1954. Given by authority of the City Council this 20th day of April, 1954. W. I. Malin, City Clerk Win. Berryman, Sheriff the custody of and shall be operated, maintained and the revenue therefrom collected under the su- p-rvision of a Sewer Committee composed of three,J3) members, to be hereafter appointed, one for a ierm of two years, one for a term of four years, and one for a term of six years. Each successor mem- )er appointed shall serve for a per- .od of six (6) years and until his successor is appointed and quali'ied: All members shall be elected by a two-thirds (2/3) vote of the duly elected and qualified members of the City Council. In the event of a vacancy the remaining members shall appoint a successor member for the balance of the un- xpired team, subject to the approval of the City Council. All nembers shall make and file with he City Clerk, within ten (10) days f their appointment, the oath of ffice required by law of public fficials in the State of Arkansas, ubject to the approval of the City Council, the Committee shall have nd exercise the duties and powers efined by statute. Section 4. That under the authority of the Constitution and laws of the State of Arkansas, maturltie* of th* bonds of each rate. No bid of less than par and accrued interest based upon the rate or rates submitted by the bidder , will be entertained and the award, if made, will be to the bid- cost to the City, the interest cost to be determined by computing the aggregate amount of interest at the rate or rates bid and deducting therefrom the amount of any premium offer. The bonds will not be general ob- structing extension*, betterments and Improvements to the Sewer System of the City of Blytheville, Arkansas. This bond and the terie* of which it forms a part are issued pursuant to and full compliance with the PAGEFIV* of Arkansas, particularly Act 132 of the Acts of Arkansas of 1933, and pursuant to an ordinance of the City of Blytheville, duly adopted, and do not constitute an indebtedness of the City of Bly- ligations of the City of Blytheville | theville within any constitutional or but will be special obligations payable from and secured by a specific pledge of the net revenues of the Sewer System. The purchaser shali have the right to convert the bonds to an issue bearing a lower rate or rates of interest in accordance with the Universal Bond Values Tables and subject to the approval of the City Council, upon such terms that the City will receive no less and pay no more than it would receive and pay if the bonds were not converted. payment prior to maturity in inverse numerical order at par and accrued interest on any interest paying date from surplus revenue derived from the operation of the Sewer System. On and after April 1, 1962, they shall be callable for payment prior to maturity in inverse numerical order at par and accrued interest on any interest saying; date with funds derived from any source. Notice of the call or redemption shall be published by the Sewer Committee once a .Arkansas of 1933, City of Blytheville authorized and ordered sold in the principal amount of Eight Hundred Fifty Thousand Dollars ($850,000) ORDINANCE NO. 549 AN ORDINANCE PROVIDING FOR THE CONSTRUCTION OF EXTENSIONS, BETTERMENTS AND' IMPROVEMENTS TO THE SEWER SYSTEM OF THE CITY OF BLYTHEVILLE, ARKANSAS; PROVIDING FOR THE ISSUANCE OF SEWER REVENUE BONDS; SETTING UP CERTAIN FUNDS FOR THEIR PAYMENT; PRESCRIBING OTHER MATTERS RELATING THERETO; AND DECLARING AN EMERGENCY WHEREAS the Sewer System presently serving the City of Blytheville, Arkansas, is wholly inadequate for the needs of the inhabitants of the City and it is necessary that certain extensions, betterments and improvements be constructed; and WHEREAS the City has had prepared by Max A. Mehlburger, Consulting Engineer, Little Rock, Arkansas, a detailed report and estimates of cost for the needed extensions, betterments and improvements, which report has been submitted to and studied by the City Council; and WHEREAS the City Council has determined that the proposed extensions, betterments and improvements should be constructed and has determined to take the necessary steps to accomplish the same, subject to the approval of the electors of the City; and WHEREAS the City .- is without funds to make the needed extensions, betterments and improvements, but can obtain the same by the issuance and sale of Sewer Revenue Bonds under the authority of Act 132 of the Acts of Arkansas of 1933; NOW, THEREFORE, BE IT OR DAINED by the City Council of the City of Blytheville, Arkansas: Section 1. That the extensions betterments and improvement; are necessary to provide sufficient funds to pay the cost of constructing the said extensions, betterments and improvements to the Sewer System, including engineering and other expenses incidental thereto and to the issuance of the bonds, and twelve (12) months' interest on the bonds. Said bonds shall be sold at public sale, shall be dated April 1, 1954 and interest shall be payable on April 1 and October 1 of each year, commencing October 1, 1954, at the rate fixed in the bid hereinafter accepted by the City after the public sale of said bonds. The interest shall be evidenced by interest coupons and the principal and interest shall be payable in lawful money of the United States upon presentation of the bond or proper coupon at the office of the Paying Agent designated by the purchaser. The bonds shall be subject to the conversion.privileges set forth in the notice of sale and date of such redemption in a newspaper published in the City of Litle Rock, Arkansas, and having a general circulation throughout the itate of Arkansas, giving the num- :>er and maturity of each bond being called, the first publication to e at least fifteen (15) days prior o the redemption date, and after he date fixed for redemption each ond so called shall cease to bear interest, provided funds for its payment are on deposit with the Paying Agent at that time. The purchaser may name the 'aying Agent and Trustee. All ex- enses of the issue, including the rinting of the bonds, the Trustee's ee, the publication expense, and the fee of Mehaffy, Smith & Wilams, bond counsel, Little Rock, Arkansas, upon whose approving pinion the bonds will be issued, will be paid by the City's fiscal agent. statutory limitation. Said bonds are not general obligations of the City, but are special obligations payable solely from an amount of the net revenues "of the Sewer System which has been duly set aside and pledged as a special fund for that purpose identified as the Sewer Revenue Bond Fund, created by Ordinanc No. of the City of Blytheville, Arkansas duly passed on the day of March, 1954, under which this bond is authorized to be issued, and the City of Blytheville has fixed and has covenanted and agreed to maintain rates for sewer services which shall be sufficient at all times to provide for the proper and reasonable expenses of operation and maintenance of the System, for the payment of the principal of and interest on the bonds of this issue as the same become due and payable, and to make adequate provision for the depreciation of the System. This bond is expressly made negotiable under Act No. 132 .of the Acts of Arkansas of 1933 and is issued with the intent that the laws of the State of Arkansas shall govern the construction thereof. The bonds of this issue shall be callable for payment prior to maturity in inverse numerical order at par and accrued interest on any interest paying date from surplus revenue derived from the operation of the Sewer System. They shall be callable on and after April 1, 1962 in inverse numerical order at par and accrued interest on any interest paying date with funds from any source. Notice of the call for redemption shall be published once trial users whose average monthly water consumption for the calendar year 1953 was 25,000 gallons or more, but lets than 100,000 gallons 10.00 Class 5 — Commercial and Industrial users whose average monthly water consumption for the calendar year 1953 was 100,000 gallons or more 20.00 i The phrase ''commercial and industrial users, as used in Classes 2, 3, 4 and 5 is hereby defined to mean all users of the sewer system other than residences and churches.) Class 6 — Individual units In each present or future Government Housing Project 1.00 per unit Class 7 — Residences and churches within the area described as follows: Tenth Street, Bell Street and Eleventh Street from Lumer- ate Buyou to the alley north of Holly Street; Willow Street from Eleventh Street to Division Street; and the entire area from Ruddle Road east to the city limits, except that portion thereof presently served by the existing sewer system 3.00 In establishing the rates for Class 7, the Council has considered the expenditures heretofore made by property owners in the area presently served by the existing system. The extensions, betterments and improvements now planned will cover the area served by the existing- system and the area described in Class 7 above, and the rates in the latter area have been fixed at the higher level because the property owners in that area have not heretofore financed the cost, of a basic sys- forded by the Sewer System, the reasonable valut of the scrvicM or facilities *o afforded shall be charged against th* City or nuch department, agency or instrumentality and ihall be paid for as the charges therefor accured. The revenues so received shall be deemed to be revenue derived from the operation of the Sewer System and shall b« used and accounted for in the same manner as any other revenues derived from the operation of the Sewer System; provided, however that nothing herein shall be construed as requiring the City or any department, agency or instrumentality thereof services afforded by the system. Section 11. That the City Treai- dates o/ not to «xce«d ton (10) year* from date of purchase. (3) If the revenues of the Sewer System are insufficient to make the required payment on the first business day of the following month into the Sewer Revenue Bond Fund, then the amount of any such de- difiency in the payment made shall required to be paid Into the Sewer Revenue Bond Fund on the first business day of the next month. (4) If for any reason the Treasurer shall fail at any time to make revenues derived from the operation of the Sewer System and shall give bond for the faithful discharge of his duties as such custodian. The amount of the bond shall be $15,000.00 and the bond shall be approved by the Trustee. From and after date for such redemption in a newspaper published in the City of Little Rock, Arkansas and having a general circulation throughout the State of Arkansas, giving the number and maturity of each bond being called, the first publication to be at least fifteen (15) days No contingent provisions may be j p r i or to t^ redemption date, and included in the bids. The sale will be held upon auction bids at the day of o'clock —.m. on 1954, in which are set forth in detail in the above mentioned report of Max A Mehlburger, Consulting Engineer Little Rock, Arkansas, b e con structed. A brief general descrip tion of the same is as follows: (1) Correction of the flooded conditions in the existing System by -building necessary relief and corrector lines within the presently served areas; (2) transportation of sewage from presently served and future areas by a system of large trunk lines and pump stations; and (3) treatment of the sewage by installation of a modern plant which will provide secondary treatment for existing sewage load as well as for a reasonable increase. The estimated cost of constructing said extensions, betterments and improve ments, including engineering and other expenses incidental thereto and to the issuance of bonds, and to the providing of funds for the first year's interest on the proposed bonds, during which the said construction will be accomplished, is Eight Hundred Fifty Thousand Dollars ($850,000). Also included in the overall project are planned extensions of sewage facilities to certain unserved areas of the City by two systems of collection laterals, but inasmuch as the inhabitants of those areas have not heretofore financed the basic cost of a sewer system, extensions in two such j urea's must be made by indepen- year as reflected in said notice of sale, the form of which is hereinafter set forth in Section 5, but are callable as hereinafter provided. Section 5. That the bonds shall be sold at public sale upon auction bids, and the time, place and terms of the sale shall be as set forth in the following' form of notice, which notice shall be given by the Mayor by publishing the same in substantially the following form in a newspaper published and having a general circulation in the City of Blytheville, Arkansas and by such other means as the Mayor shall deem to be in the best interest of the City. NOTICE OF BOND SALE OF THE CITY OF BLYTHEVILLE, ARKANSAS $850,000 SEWER REVENUE BONDS Notice is hereby given that the City of Blytheville, Arkansas will sell for cash on auction bids $850,000 principal amount of negotiable coupon Sewer Revenue Bonds, which are being issued for the purpose of financing the cost of certain extensions, betterments and improvements to the Sewer System of the City of Blytheville, Arkansas. Blytheville, Arkansas. Each bidder will be required to file a certified or cashier's check in the amount of $17,000 on a bank that is a member of the Federal Deposit Insurance Corporation, payable to the City, to be kept as liquidated damages if the bidder is awarded the sale of the bonds and fails to complete the purchase. Checks of unsuccessful bidders will be promptly returned. The City reserves the right to reject any and all bids. For further information, address the undersigned. Given this day of 1954. CITY OF BLYTHEVILLE, ARKANSAS By E. R. JACKSON, Mayor. Section 6. That the terms.of the sale of the bonds and the conversion thereof, if any, shall be submitted to and approved by the City Council. After approval by the City :ouncil, the bonds of the issue so approve^ shall be executed on behalf of the City by the Mayor and City Clerk and shall have im- after the date fixed for redemption, each bond so called shall cease to bear interest, provided funds for its payment are on deposit with the Paying Agent at that time. This bond shall not be valid until it shall have been authenticated by the certificate hereon duly signed by : . IT IS HEREBY CERTIFIED, RECITED AND DECLARED that all acts, conditions and things required to exist, happen and be performed, precedent to and in the issuance of this bond, have existed, have City. Interest coupons attached to each of said bonds may have the facsimile signature of the Mayor lithographed or printed thereon, which signature shall have the same force and effect as if he had personally signed each of said coupons. The bonds, together with interest thereon, shall be payable solely, out of the Sewer Revenue Bond Fund, as hereinafter \ set forth, and shall be a valid claim of the holders thereof only against such fund, and the amount of revenue pledged to such fund, which amount of said revenues is hereby The bonds will be dated April i, 1954 and interest will be payable on April 1 and October 1 of each year commencing October 1, 1954. The bonds will mature on April 1 of each year as follows, but are callable as hereinafter set forth: $16,000 in each of the years 1956 and 1957 $17,000 in 1958 $18,000 in each of the years 1959 and 1960 $19,000 in each of the years 1961 and 1962 $20,000 in 1963 $21,000 in 1964 $22,000 in 1965 $23,000 in 1966 $24,000 in 1967 $25,000 in 1968 $26,000 in 196& $27,000 in 1970 $28,000 in each of the years 1971 and 1972 $30,000 in 1973 $31,000 in 1974 $32,000 in 1975 $33,000 in 1976 $34,000 in 1977 $36,000 in 1978 $37,000 in 1979 $38,000 in 1980 $40,000 in 1981 $41,000 in 1982 $42,000 in 1983 $44,000 in 1984 $45,000 in 1986 Each bidder shall specify the in- erest rate or rates upon which his id is bascrt and er-ch ladder : -.ust equal and ratable payment of the bonds of this issue and shall be used for no other purpose other than to pay the principal of and interest on said bonds and the Paying Agent's fees, except as hereinafter specifically provided. The bonds and interest thereon shall not constitute an indebtedness of the City within any constitutional or statutory limitation. Section 7. That the bonds and coupons shall be in substantially in due time, form and manner, as required by law; that the indebtedness represented by this bond and the issue of which it forms a part does not exceed any constitutional or statutory limitations; and that sufficient of the income and revenue which is deemed to be derived from the operation of the Sewer System has been pledged to and will be set aside into said special fund for the payment of the principal of and interest on said bonds. IN WITNESS WHEREOF, the City of Blytheville, Arkansas, by its City Council has caused this bond to be signed by the Mayor and City Clerk thereof and sealed With the corporate seal of said City, and has caused the coupons the facsimile signature of said Mayor, all as of the first day of April, 1954. CITY OF BLYTHEVILLE, ARKANSAS By E. R. JACKSON, Mayor. W. I. MALTN, City Clerk. SEAL ( FORM OF COUPON) No. $ On the first day of October, 19—, the City of Blytheville, Mississippi County, Arkansas, unless the bond to which this coupon is attached is paid prior thereto, hereby promises to pay to bearer, solely out of the fund specified in the bond to which this coupon is attached $ : jn lawful money of the United States of America at the office of — , being six (6) months' interest then due on its Sewer Revenue Bond dated April 1, 1954 and numbered . Extensions into the other areas of the city must be made by independent financing, such as improvement districts, and "when this has been done, property owners in such areas will be in the same position as those in the areas presently served, from the standpoint of having financed their basic system, and thereafter will pay the same monthly charges as set out in Class 1. Class 2. Class 3, Class 4, Class 5 and Class 6. Connection Charge No charge will be made for any connection to the sewer system prior to January 1, 1957. During the calender year 1957 a connection charge of $10.00 shall be paid by all customers connecting to the system, and the said connection charge shall increase $10.00 on the first day of each calendar year thereafter, until it- reaches $100.00. Thereafter all customers shall pay a connection charge of $100.000 The Sewer Committee is authorized and directed to recompute the average monthly water comsump- tion of each commercial and indus- trail user every five (5) years and thereafter the limits and rates set forth in Class 2;v Class* 3, Class 4, and Class 5 shall be applicable to the average monthly water consumption of each commercial and industrial user for the new base year until again so recomputed; provided, however, the Sewer Committee, in its discretion, may re- compute the average monthly water consumption for any commercial or industrial user at the end of any calendar year and upon request of any commercial or industrial user shall do so, and thereafter the limits and rates set forth in Class 2, Class 3, Class 4 and Class 5 shall be applicable to the average monthly water consumption of each commercial and industrial user for the new base year until again so recomputed. All bills for sewer service shall be rendered monthly. A penalty of ten pei- cent (10%) of the amount of the bill shall be added to all bills under the provisions of this ordinance, the Sewer System shall be continuously operated as a revenue producing undertaking. All moneys received by the Treasurer the Sewer Revenue Bond Fund, any sums then held as a reserve for contingencies shall be used to the extent necessary in the payment of the principal of and interest on the bonds, but such reserve shall be reimbursed from the Sewer Fund before any of the moneys in the Sewer Fund shall be used for any other purpose except for mtnt prior to maturity according to the terms Mt out in th« bond form. Section M. As long as any of th« bonds authorised hereby are outstanding the City shall not issue or attempt to issue any bonds claimed to be entitled to a priority of lien on the revenues of th» Sewer System over the lien securing the bonds of this iwue. includ- required to be made Into the Sewer depository or depositories for the City as may be lawfully designated from time to time by the City Council, subject, however, to the giving of security as now or as hereinafter may be required by law. and provided that such depository or depositories shall hold membership in the Federal Deposit insurance Corporation. All deposits shall be in the name of the City and shall be so designated as to indicate the particular fund to which the revenues belong. Any deposit in excess of the amount secured by the Federal Deposit Insurance Corporation shall be secured by bonds .or other direct or fully guaranteed obligations of the United States. Section 12. Sewer Fund. All reve- and Into the Sewer Revenue Bond Fund. Said reserve for contingencies shall be used solely as herein provided. (5) When the moneys held in the Sewer Revenue Bond Fund, including the reserve for contingencies. the Sewer System, including the herein authorized extensions, betterments and improvements after their completion, shall be paid into a special fund, which is hereby created and designated "Sewer Fund". Such revenues so deposited in the Sewer Fund are hereby pledged and shall be applied to the payment of the reasonable and necessary ex- of the Sewer System, to the payment of the principal of and interest on the bonds of this issue, and to the providing of an adequate depreciation fund, in the manner hereinafter set forth. Section 13. Sewer Operation and Maintenance Fund. There shall be paid by the Treasurer from the Sewer Fund into a fund which is hereby created and designated "Sewer Operation and Maintenance Fund" on CITY OF following ^form, and the Mayor! BLYTHEVILLE, ARKANSAS CMiTV l.lPT*lr £)f^ h^aroHTT Avi-ii-rtr.*-. T»— -m ' •»-* T + *-*•*•»• /•**-*<*"«> * *• and City Clerk are hereby expressly authorized and directed to make all recitals contained therein UNITED STATES OF AMERICA STATE OF ARKANSAS COUNTY OF MISSISSIPPI CITY OF BLYTHEVILLE % SEWER REVENUE BOND dent financing, such as improve-1 specify in his bid th« amount ana No. $_ KNOW ALL MEN BY THESE' PRESENT: That the City of Blytheville, County .of Mississippi, and State owe and for value received hereby By E: R. JACKSON, Mayor. On each bond shall appear the following CERTIFICATE hereby certifies that this is one of a series of bonds described herein aggregating $ numbered from 1 to , inclusive, all of like tenor and effect except as to number, denomination, rate of interest and maturity. By 1954 from the special fund provided as sum of —— DOLLARS in lawful money of the United States of America on the first day of April, 19— and to pay solely from said special fund interest hereon at the rate of per cent (—%) per annum from date, semi-annually on the first days of April and October, commencing October 1, 1954, upon presentation and surrender of the annexed coupons as they severally become due. Both principal and interest of this revenue bond are made payable at Section *. That the following monthly rates be, and they are hereby, fixed as rates to be charged for services to be furnished by the Sewer System of the City of Blytheville, Arkansas, which rates the Council hereby This bond is one of a series of— ( ) revenue bonds, aggregating Dollars ($ ), dated April 1, 1954, numbered from one (1) to ( ), inclusive, all of like tenor and effect, except as to number, denomination, rate of interest and maturity and are issued for the purpose of providing for the payment of the cost of con- and necessary minimum rates to be charged: Monthly Sewer Charges By Classification Class I — All residences and churches now served or hereafter served by the sanitary sewer system except residences and churches in the area hereinafter described in and covered by Class 7 $ 1.80 Class 2 — Commercial and industrial users whose average monthly water consumption for the cal- 5,000 gallons 4.00 Class 3 — Commercial and industrial users whose average monthly water consumption for the calendar year 1953 was 5,000 gallons or more, but less than 25,000 gallons .. . 6.00 Cl*§a 4 — Oommercial and Indus- unpaid after the tenth of the month. Under the provisions of Ark. Stats. 19-4113, a lien is fixed upon the land for any unpaid sewer service charge, even though the use of the sewer system is by a tenant or lessee instead of the owner, and if any charge is not paid within thirty (30) days after the same is due, suit shall be brought to enforce the lien for the delinquent payment, ten per cent (10%) penalty and a reasonable attorney's fee. Vacant unoccupied property not actually using the sewer system shall not be subject to a charge, but the burden of proving vacancy and non-use shall rest upon the owner of the property. The rates herein fixed shall not be effective until September 1, 1954 and said rates shall take effect on that date only if the bonds herein authorized are actually issued and sold prior thereto. Section 9. That the City hereby covenants and agrees with the holders of the bonds and coupons that said rates will produce a total revenue sufficient to pay the operation and maintenance expense of the Sewer System, to provide for the payment of the bonds herein authorized to be issued, both principal and interest ,as the same become due and payable, to provide adequate depreciation funds for necessary replacements to the Sewer System, and to create and maintain the funds hereinafter described, and the City covenants and agrees that said rates shall, if and when necessary, be increased to an amount sufficient to provide for the maintenance of the funds hereinafter described. while any of the bonds of this issue shall be outstanding, an amount sufficient to pay the reasonable and necessary monthly expenses of operation, repair and maintenance of the Sewer System for such month and from which disbursements shall be made only for those purposes. Fixed annual charges such as insurance premiums and the cost of major repair and maintenance expenses, may be computed and set up on an annual basis and one- twelfth (1/12) of the amount thereof may be paid into the Sewer* Operation and Maintenance Fund each month. If in any month for any reason there shall be a, failure to transfer and pay the required amount into said fund, the amount of any deficiency shall be added to the amount otherwise required to be transferred and paid Into said fund in the next succeeding month. If in any pay the principal of and interest on all the bonds then outstanding, and the Paying Agent's fees, the Treasurer shall not be.obligated to make any further payments into the said Sewer Revenue Bond Fund. (6) All moneys in the Sewer Revenue Bond Fund shall be used solely for the purpose of paying the principal of and interest on the bonds of this issue and the Paying Agent's fees, except as herein specifically provided. If a surplus shall exist in the Sewer Revenue Bond Fund over and above the amount required for making all principal and interest payments during the succeeding twelve (12) months on all outstanding bonds and the Pay- Ing Agent's fees and over and above the reserve for contingencies, such surplus may be applied only to the payment of the principal of and interest on any bonds that may be called for redemption prior to maturity or for the construction of extensions, betterments and improvements to the Sewer System. (7) It shall be the duty .of the Treasurer to withdraw from the Sewer Revenue Bond Fund at least five (5) days before the maturity date of any bond or interest coupon issued hereunder and to deposit with the Paying Agent an amount equal to the amount of such and all future extensions, betterments and improvements. Nothing in this ordinance »haH be construed to prevent the istu- ance by the City of Blytheville of additional bonds to finance or pay the cost of constructing any future extensions, betterment* and improvements to the Sewer System; provided, however, the City shall not authorize or issue any such additional bonds ranking on a parity with the outstanding bonds of this issue, unless and until there shall have been procured and filed with the Trustee a statement by a competent certified public accountant not in the regular employ of th« City reciting the opinion based upon necessary investigation that gross revenues derived from the operation of the Sewer System in each of the preceding two fiscal years were sufficient to provide for all cost* of operation, maintenance- and depreciation of the Sewer System and leave a balance equal to at least one hundred fifty per cent (150%) of the maximum amount that will become due in any year for principal, interest and service charges on the bopds then outstanding and the bonds then proposed to be issued. Section 22. It is covenanted and agreed by the City with the holder or holders of the bonds, or any of them, that it will faithfully and punctually perform all duties with reference to the Sewer System required by the Constitution and statutes of the State of Arkansas, including the charging and collecting of reasonable and sufficient rates lawfully established for services rendered by the Sewer System, segregating the revenues of the of paying the same, together with the Paying Agent's fee of U^c for each $100 par value of bonds and 5c per coupon .and no withdrawal of funds from said Sewer Revenue Bond Fund shall be made for any authorized in this ordinance. Such fiscal year a surplus shall be accumulated in the Sewer Operation above the amount which shall be and necessary costs of operation, repair and maintenance of the Sewer System during the remainder of the then current fiscal year and the next ensuing fiscal year, such surplus may be transferred and deposited in the Sewer Revenue Bond Fund or the Sewer Depreciation Fund, as the Sewer Committee may designate; provided, however, that any such transfer into the Sewer Revenue Bond Fund shall be in addition to all other payments required to be ma.de into said fund. Section 14. Sewer Revenue Bond Fund. (1) After making the monthly deposit in the Sewer Operation and Maintenance Fund, the Treasurer shaU transfer and pay from the Sewer Fund into a special fund, which is. hereby created and designated "Sewer Revenue Bond Fund", the sums in the amounts and at the times hereinafter stated in subsection (2) for the purpose of providing funds for the payment of the principal and interest on the bonds herein authorized as they mature according to a schedule to be set up and approved by the City Council after the terms of the sale of the bonds and the conversion thereof, if any, have been approved by the City Council, and as a reserve for contingencies, (2) There shall be paid by the Treasurer from the SeWer Fund into the Sewer Revenue Bond Fund, beginning on the first business day of the month of September, 1954 and continuing on the first business day of each month thereafter of the City and shall not operate as a payment of the bonds or coupons until BO applied. (8) The bonds of this issue shall be specifically secured by a pledge of all the revenue required to be placed into the Sewer Revenue Bond Fund. Said pledge in favor of the bonds is hereby irrevocably made according to the terms of this ordinance, and said City and its officers and employees shall execute, perform and carry out the terms thereof In strict conformity with the provisions of this ordinance. Section 15. Sewer Depreciation Fund. After making the required payments into the Sewer Operation and Maintenance Fund and the Sewer Revenue Bond Fund, there shall be paid by the Treasurer from the Sewer Fund into a fund, which is hereby created and de s i g n a t e d "Sewer Depreciation Fund," on the first business day of each month while any of the bonds of this issue are outstanding, five per cent (5%) of the revenues of the Sewer System which remain after the required payment into the Sewer Operation and Maintenance Fund has been made. The m6neys in the Sewer Depreciation Fund shall be used solely for the purpose of paying the cost of replacement made necessary by the to the respective funds herein created. Section 23. The City covenants agrees that it will maintain the Sewer System in good condition and operate the same in an efficient manner and at a reasonable cost. While any of the bonds are outstanding, the City agrees to main* tain fire-lightning and tornado insurance on the property of tho Sewer System in an amount which normally would be carried by a private company engaged in a similar type of business. These insurance policies are to be taken with companies approved by the Trustee, are to carry a clause making as its interest may appear, are to be kept continuously in force and are to be placed in the custody of the Trustee. In the event of loss, the proceeds of such insurance shall be applied solely toward the reconstruction, replacement or repair of the System. In such event, the City will, with reasonable promptness, cause to be commenced and completed the reconstruction, replacement and repair. Nothing herein shall be construed as requiring the City to expend any funds for operation and maintenance of the Sewer System or for are derived from sources other than the operation of the Sewer System, but nothing herein shall the Sewer Sys- The City further convenants and until all outstanding bonds of this agrees that said rates shall never be reduced, while any of the bonds herein authorized and coupons thereto attached are outstanding, unless there is obtained from an independent certified public accountant a written opinion that, based upon the number of customers appearing from the audit of the independent certified public accountant for the then next preceding fiscal year, the proposed new rates will produce sufficient revenue to provide for all costs of operation, maintenance and depreciation of the Sewer System and leave a balance equal to at least 150% of the maximum amount that will become due in any year for principal, interest and service charges on the bonds then outstanding. Section 10. That none of the facilities or services afforded by the without a charge being made ther- for. In the event that the City or any department, agency or instrumentality thereof shall avail itt«U issue with interest thereon have been paid in full, or provision made for such payment, a sum equal to one sixth (1/6) of the next installment of interest and one-twelfth (1/12) of the next installment of principal, and an amount sufficient to provide for the Paying Agent's fees, on all outstanding bonds. In addition, in orded to create a reserve for contingencies, there shall be paid by the Treasurer from the Sewer Fund into the Sewer Revenue Bond Fund the sum of Eight business day of the month of September, 1954 and continuing on the first business day of each month thereafter until a total reserve' of Forty-Eight Thousand Dollars ($48,000) has been accumulated. This reserve shall be maintained as hereinafter provided until full payment of all outstanding bonds and interest thereon has been made or provided for. The reserve may be invested in United States government obligations btvinf maturity depreciation of tern. If in any fiscal year a surplus shall be accumulated in the Sewer Depreciation Rind over and above the amount necessary to defray the cost of the probable replacements during the then current fiscal year and the next ensuing fiscal years, such surplus may be transferred and paid into the Sewer Revenue Bond Fund; provided, however, that such payments into the Sewer Revenue Bond Fund shall be in addition to all other payments hereinbefore required to be made into the said Sewer Revenue Bond Fund. Section 16. Payments from the respective funds shall be made by check or voucher, signed by the Treasurer and one other person designated by the Sewer Committee and drawn on the depository with which the moneys in said fund shall have been deposited, and each such check or voucher shall briefly specify the purpose of the expenditure. 17. Any surplus in the Sewer Fund after making full provision for the other funds herein- only to call the bonds of this issue for payment prior to maturity or for constructing extensions, betterments and improvements to the Sewer System. Section 18. The City hereby agrees that all payments on the bonds and interest shall be made only through the -Paying Agent. All bonds paid or purchased either at or before maturity shall be cancelled when such payment or purchase is made, together with all unmatured coupons appertaining thereto, and held by the Treasurer and shall not be reissued. All unpaid interest coupons maturing on or prior to the date of such payment or purchase shall continue to be payable to the respective bearers thereof. Section 19. The Sewer System shall be operated on a fiscal year basis beginning January 1 and ending December 31. Section 20. The bonds authorised htrabf stMU bt Mllfttofe lor pay* from doing so. Section 25. The City Treasurer and agrees that so long as any of the bonds of this issue are outstanding, that it will net mortgage, pledge or otherwise encumber the Sewer System or any part thereof or any revenue therefrom, except as herein provided, and will not sell, lease or otherwise dispose of any substantial portion of the same, except as herein provided. Stction 25. The City Treasurer shall keep proper books of accounts and records (separate from all other records and accounts) in which complete and correcC entries shall be made of all transactions, relating to the operation of the Sewer System, and such books shall be available for inspection by the holder of any of the bonds at reasonable times and under reasonable circumstances. The City agrees to have these records audited by an independent certified public accountant at least once each year, and a copy of the audit shall be delivered to the Trustee and made available to interested bondholders. In the event the City fails or refuses to make the audit, the Trustee, or any holder of the bonds may have the audit made, and the cost thereof shall be charged against the operation and maintenance funds of the Sewer System. Section 26. The owner or owners of all improved property lying within the area that will be served by the Sewer> System, after the proposed improvements and extensions have been made, are hereby directed and required to connect all toilet and waste water facilities of such improved property with said Sewer System as soon as the service is available; and the owners of property that is improved after the completion of the improvements and extensions to the said Sewer System shall immediately connect the toilet and waste water facilities of such property with the Sewer System. Section 27. The Sewer Committee shall send a written notice to any owner of improved property that can be served by the Sewer System but is not connected, to make such connection within two (2) weeks from the date of said notice. Any property owner failing or refusing to connect his improved after being notified to do so shall be guilty of a misdemeanor and upon conviction shall be fined in ($2.00) and not exceeding Ten Dollars ($10.00) and each day's fail* ure or refusal after the expiration of the time fixed in the notic* to make the connection shall be a separate offense. Section 38. The City further covenants and agrees that if default •*• OftMNANCE «* Pact 11

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