Ord G-07(07-46) o mANcE NOo
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF DELRAY BEACH,
FLORIDA, AUTHORIZING THE ISSUANCE OF $350,000 WATER SYSTEM REFENUE
CERTIFICATES, SERIES 1956, OF THE CITY OF DELRAY BEACH, PROVIDING
FOR THE SALE THEREOF, PROVIDING FOR THE PAYMENT OF SUCH CERTIFI-
CATES AND ENTERING INTO CERTAIN COVENAN~ AND AGREEMENTS IN THAT
CONNEOTION,
WHEREAS the City of Delray Beach owns and presently
operates its waterworks plant and system (hereinafter referred
to as "the system") as a municipally owned utility; and
WHEREAS the system was originally acquired through the
issuance of general obligation bonds of the City of Delray
Beach payable from taxes levied on the taxable proper~y in
the City and the system has been from time to time improved and
extended with the proceeds of various city funds; and
WHEREAS it has now become necessary for the city to make
improvements and extensions to said system at an estimated cost
of $350,000 and to issue revenue certificates, payable from the
revenues of the system; amd
WHEREAS the charter of the city, being Chapter
of the Laws of Florida, 1937, authorizes the city, through its
City Council:
1. To acquire property, real or personal, or any estate
therein, within or without the city, to be used for the constru-
ction of works for supplying said city with water, and to im-
prove, sell, lease, mortgage, pledge or otherwise dispose of the
same or any part thereof for the benefit of the city to the same
extent that natural persons might do (Section 7).
2. To expend the money of the city for all lawful
purposes {Section 7).
3_. To make end maintain public improvements of all kinds
(Section 7).
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~. To furnish any and all local public service (Section
~. To purchase, hire, construct, own, ~intain, operate
or lease local public utilities, including works for supplying
the city and its inhabitants with water (Section
6. To establish, impose and enforce water rates, and
rates and charges for all public utilities or other service or
convenience operated, rendered or furnished by the city (Section
[. To enter into contracts on behalf of the city
(Section 25), and
8. To enjoy all powers, privileges and provisions of the
Revised General Statutes of the State of Florida governing cities
and towns when not in conflict with the terms of the charter; and
WNE~$ the Supreme Court of!Florida has heretofore held
in numerous reported decisions that any city granted the above
enumerated powers by its city charter has authority to own and
operate a waterworks system and to anticipate the collection of
the revenues to be derived from the operation of such system
through the issuance of revenue certificates in order to raise
the funds needed to provide improvements, additions and ex-
tensions to the system, the exercise of such powers being an
ordinary and usual function of fiscal m. nagement incident to the
city's authority to own and operate a public utility; and
WEE~ the system as it presently exists has become
inadequate to serve the inhabitants of the City of Delray Beach
and it is imperative that essential additions and extensions be
added to the system in order to preserve the system and to enable
the system to serve the purposes for which the statutes provide
it shall be maintained;and
W~EREAS the revenues to be derived by the city from the
operation of said system have not been pledged or hypothecated
in any manner or for any purpose; and
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~ the revenues to be so derived are more than ample
to pay all operating and maintenance costs and to pay principal
of and interest on the certificates herein authorized, the
net revenues derived.from the operation of the system during
each of the past three fiscal years being as hereinafter set out;
NOW, THEREFORE, BE IT ORDAINED by the City Council of
the City of Delray Beach, Palm Beach County, Florida, as
follows:
SECTION !' That the City Council has made due investi-
gation and has ascertained and hereby formally finds and recites
that the net earnings of the waterworks plant and system of the
City of Delray Beach (being the gross revenues after the
deduction of all maintenance and operation expenses) for each
of the past three completed fiscal years have been as follows:
For the fiscal year ending September 30, 1953:$33,138...~8
For the fiscal year ending September 30, 19~$: $35,767.2?
For the fiscal year ending September 30, 1955: $38,306.$~
and that therefore the net revenues of said plant and system are
fully sufficient to pay principal of and interest on the certifi-
cates hereinafter authorized.
SECTION 2. That for the purpose of paying the cost of
~improving and extending the waterworks plant and system of the
Cityof Beach (which and and
Delray
plant
system
without the boundaries of the city, including all property of
every kind, both real and personal, owned by the city and used or
useful in connection therewith and including all additions,
improvements and extensions thereto which may be made while any
of the certificates herein authorized remain outstanding, are
hereinafter in this ordinance referred to as "thesystem#}, there
be issued the negotiable revenue certificates of the City of
Delray Beach (sometimes hereinbefore and hereinafter referred
to as "the city") in the total aggregate amount of $350,000,
which certificates are hereinafter sometimes referred to as "the
certificates." The certificates shall be dated ~une 1, 19~6, shall
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be in the denomination of $1,000 each, shall be numbered i to
350, inclusive, shall be payable in lawful money of the United
States of America as to both principal and interest at Chase
National Bank 'in the City of New York, New York, shall bear
interest until paid at the rate of two per cent (2%~ per annum,
which interest shall be payable semi-annually on the first days
of December and June of each year, and the certificates shall
mature serially in numerical order on June 1 of each year as
follows:
Year Am ..un .ear Amom t
l%S $ 2,000 1961 $ 15,000
1959 5,000 1962 16,000
1950 S, 000 1963 17,000
1951 10,000~ 1965 17,000 ~o~%~
1952 10,000~ 1965 18,000~
195~ ~0,000 1966 l~~
1955 ll, 000 1967 1~, 000 ( ~ ~1
1955 ll,000 1968 25~ ? b ~
1956 12,000 1969 20~0~ ~
1957 12,000 1970 2~; 000 ~
195s 13, ooo 1971 j
1959 13,000 1972 2G~
1960 1~,000
Oertificates numbered 26 to 350, inclusive, of the issue of
which this is one, are callable for redemption at the option of
the city in inverse numerical order on June 1, 1951 and on any
interest payment date thereafter at the principal amount thereof,
plus acoraed interest to the date fixed for redemption, plus
a premiu~ of thirty dollars ($30) as to each certificate redeemed.
Notice of redemption shall be given not less than thirty days prior
to the date fixed for redemption through the publication of an
appropriate notice one time in a financial newspaper or journal
published in the City of New York, New York, or Chicago, Illinois,
and one time in a newspaper having general circulation in the
City of Delray Beach and by filing such notice at the place of
payment of the certificates. If any certificate is registered as
to principal at the time of such call for redemption, similar
notice shall be sent by registered mail to the registered holder.
~ECTI. ON ~. That said certificates shall be signed by the
Mayor of the City of Delray Beach and attested by the City Clerk,
and shall have impressed thereon the corporate seal of the
City of Delray Beacht Interest falling due on said certificates
prior to maturity shall be represanted by semi-annual coupons
attached to'said certificates signed with the facsimile sig-
natures of said Mayor and Clerk, and said officials, by the
execution of the certificates shall adopt as and for their own
proper signatures their facsimile signatures appearing on said
ooupoI~,
BE~,,TION ~. That the certificates and the provisions
to appear on the back thereof shall be in substantially the
following for~:
(Form of Certificate)
UNITED STATES OF AMERICA
STATE OF FLORID~
COUNTY OF PALM BEACH
CITY OF DELRAY BEACH
WATER SYSTE~ I~UE CERTIFICATE, SERIES
~u~ber
' $ 1,000.
The City of Delray Beach, in Palm Beach County, State of
Florida, for value received hereby promises to pay to bearer, or
if this certificate be registered as to principal then to the
registered owner hereof, solely from the special fund provided
thereforas hereinafter set forth, on the first day of ~une, 19. ,
the principal sum of One Thousand Dollars ($1,000), and to pay
from said special fund, interest thereon at the rate of two per
cent (2%) per annum from date hereof until paid, payable simi-
annually on the first days of ~une and December of each year,
such interest to the maturity date of this certificate to be
paid only upon presentation and surrender of the annexed interest
coupons as they severally become due. Both principal of and
interest on this certificate are payable in lawful money of the
United States of America at Chase National Bank in the City of
New Yerk, New York.
This certificate is one of an issue of $350,000 all of
like date and tenor except as to maturity and option of redemption~
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issued by said city pursuant to the provisions of its ohar~er,
and pursuant to an ordinance duly adopted by the City Council
of said city fo~ the purpose of i~proving and extending the
waterworks plant and system of said city. it is provided in said
ordinance that the City Council of said city shall fix and maintain
rates and collect charges for the facilities and services afforded
by said plant aris system sufficient to provide revenues adequate
at all times to pay the cost of operating, maintaining and
repairing such plant and system and to~ay into a special fund
created by said ordinance a~ounts fully sufficient, above such
costs of operating, maintaining and repairing the system, to
provide for the payment of the interest on and principal of said
certificates promptly as each falls due. For a more particular
statement of the security pledged to such payment and of the
conditions under which obligations may hereafter be issued on a
parity with said certificates, reference is made to said ordinance.
This certificate, including interest hereon, is payable solely
from said fund and the City of Delray Beach is under no obligation
to pay this certificate or interest thereon except from the
revenues of the aforesaid plant and system.
Certificates numbered 26 to 350, inclusive of the issue
of which this is one are calzable for redemption at the option of
the city in inverse numerical order on June 1, 1951 and on any
interest payment date thereafter at the principal amount
thereof, plus accrued interest to the date fixed for redemption,
plus a premium of thrity dollars ($30) as to each certificate
redeemed. Notice of redemption is to be given not less than
thirty days prior to the date fixed for redemption through the
publication of an appropriate notice one time in a financial newspaper
or journal published in the City of New York, New York, or Chicago,
Illinois, and one time in a newspaper having general circulation
in the 0ity of Delray Beach and by filing such notice at the
place of payment of the certificates. If any certificate is
registered as to principal at the time of such call for redemption,
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similar notice is to be sent by registered mail to the registered
holder.
This certificate, with interest coupons hereunto apper-
taining, is~issued upon the following terms and conditions, to
all of which each taker and owner hereof and of the interest
coupons consents and agrees:
(a) Title to this certificate, unless registered as
herein provided, and to the annexed interest coupons, may be
transferred by delivery in the same menner as ~ negotiable instru-
ment payable to bearer; and
(b) Any person in possession of this certificate, unless
registered as herein provided, or of the interest coupons hereunto
appertaining, regardless of the manner in which he shall have
acquired possession, is hereby authorized to represent himself as
the absolute owner thereof, and is hereby granted power to trans-
fer absolute title thereto by delivery thereof to a bona fide
purchaser, that is, to anyone who sh~ll purchase the same for
value (present or antecedent) without notice of prior defenses or
equities or claims of ownership enforceable against his transferror;
every prior taker or owner of this certificate, unless registered
as herein provided, and of the annexed interest coupons, waives
and renounces all of his equities or rights therein in favor of
every such bona fide purchaser, and every such bona fi~e purchaser
shall acquire absolute title thereto and to all rights represented
thereby; and
(c) The Oity of Delray Beach may treat the bearer of this
certificate, unless registered as herein provided, or of the
interest c~Apons hereunto appertaining, as the absolute owner
thereof for all purposes without being affected by any notice to
the contrary.
All acts, conditions, and things required by the
Constitution and Laws of Florida and the charter of said city
to happen, exist and be performed precedent to and in the issuance
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of this certificate, have happened, exist and have been performed
as so requirede
This certificate is registerable as to principal alone
in accordance with the provisions endorsed hereon.
~NWITNESS ~F, the City of Delray Beach has caused
this certificate to be signed by its Mayor and attested by its
City Clerk, under its corporate seal, and the interest coupons
hereto attached to be executed with the facsimile signatures of
said Mayor and City Clerk, all as of the first day of ~une, 1956.
Mayor o~ the City Of :~elray BeaCh
Attest:
lerkJ ' City' of zelray
B~ach
Approved as to form, language
and execution.
.... ~lSyA~'t0rney ....
(Form of Coupon)
Number .. $10qq...
on the first day of , 19 , unless the
hereinafter mentioned certificate is then subject to redemption
and has been called for redemption and provision for the
redemption thereof duly made, the City of Delray Beach, Florida,
will pay to bearer at Chase National Bank, in the City of New York,
New York, the sum of Dollars
($. ), solely from the special fund referred to in and
for the semi-annual interest then due upon its Water System Revenue
Certificate, Series 19~6, dated ~une 1, 19~6, and numbered _ .
Mayor.
Attest:
' c~ty 5lark.
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(Form°f Validation Certifloate)
Validated and confirmed by a decree of the 0ircuit
Court of the Fifteenth ~udicial Circuit, in and for P~lm Beach
County, Florida, rendered on the . day of , 19~6.
..... Clerk~ o~' the' Clrcui~ ~ourt', '
Palm Beach coun~ty, Florida.
(Certificate of Registratlon):
'This certificate may be registered as to principal
on the books of the City Clerk, notation of said registration to
be made hereon by said Clerk, and this certificate may thereafter
be transferred on said books by a written assignment by the
registered owner or his attorney, duly acknowledged or proved,
such transfer to be endorsed hereon by said Clerk. Such transfer
may be to bearer and thereby transferability by delivery shall be
restored, subject however, to successive registration and transfers
as before. The principal of this certificate, if registered, un-
less registered to bearer, shall be payable only to the registered
owner, or his legal representative, but the coupons appertaining
hereto will remain payable to bearer, notwithstanding registration
of this certificate.
Date of Signature of
Reg~.s~a~lQn , ,~ Name of Registered Holder. Clerk
~SECTION~, That the Water System Revenue Certificates,
Series 19~6, shall be reglsterable as to principal in accordance
with the provisions for registration hereinabove provided for
endorsement upon said certificates, and the City Clerk is hereby
appointed and designated registrar for such purpose. No charge
shall be made to any holder of said certificates for the privilege
of registration.
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~SECTION .6- That the City of Delray Beach hereby covenants
and agrees with each successive holder of the certificates and the
coupons thereto attached that it will fix and maintain rates
and collect charges for the facilities and services afforded by
the system fully sufficient at all times,
(a) To pay the reasonable and necessary cost of operating,
maintaining and repairing the system;
(b) To maintain and pay ~romptly as hereinafter required
into a fund to be known as the "Water System Revenue Certificates
Sinking Fund" amounts fully sufficient to pay and from which there
shall be paid without distinction between the certificates or
obligations of various series, principal of and interest on the
certificates herein authorized, and all obligations which m.y be
issued in the future on a parity herewith under the provisions of
Section 8 of this ordinance. Said fund shall be maintained at all
times in an amount sufficient to provide for the prompt payment of
such principal and interest as they fall due and to provide a
reserve for contingencies in the manner hereinafter set out; and
(c~ To provide an adequate depreoAation fund for the
sys tam.
~. That the gross revenues of t~e system shall
be deposited as received in an account separate and apart from
all other city funds or accounts, to be designated as the "Water
System Revenue Account," and the moneys in said Water System
Revenue Account shall be set aside on the first day of each month
into separate and special funds as follows:
(a) Operation a,.nd. Maintenance_ Fund: The fund knows as
t~e "Operation and Maintenance Fund," into which there shall be
paid out of the gross revenues a Sufficient amount for the
reasonable current expenses of operating, maintaining and
repairing the system.
(b) Water S~atem Revenue Certif_i..oates_ sinki_.n~ l~_And:
The fund described in sub-section (b) of Section 6 above, which
fund is hereinafter sometimes referred to as the ~sinking fund~.
After making the payments into the Operation and Maintenance Fund
above provided there shall then be set apart and paid into said
sinking fund in approximately equal monthly installments an
amount of the remaining gross revenues received for the services
rendered by said system sufficient tO l~Y during each fiscal year
one hundred twenty per cent of the amount of the nex~ maturing
installment of principal and the amount of the interest payments
falling due on all obligations payable therefrom up to and includ-
ing the date on which the next maturing installment of principal
falls due. The surplus accumulated in the sinking fund by-
reason of the additional twenty par cent payments ~o be so made
shall be permitted so to accumulate until such time as there
shall be in said sinking fund money fully sufficient to pay all
principal of and interest on said obligations payable therefrom
which will fall due during the ensuing twelve (12) months. There-
after the payments so made into the sinking fund may be in the
amount of one hundred per cent rather than one hundred twenty
per cent of the amounts above specified and the remainder of s&id
gross revenues after payments have been m_~de into the Operation
and Maintenance Fund may be used for the establishment of a
depreciation fund or for such other purpose as the city may can-
sider advisable, provided however, that as soon as any money
has been paid out of the reserve in said sinking fund, then said
additional twenty per cent payments shall again be paid into said
sinking fund, until there is again in said I~nd money fully suf-
ficient to pay principal and interest falling due during the
ensuing twelve (12) months.
Ail money in the sinking fUnd is to be deposited in a
solvent bank as a fund separate and apart from ali other city
funds, and is to he continually secured by surety bond or bonds
written by a surety company or companies of recognized standing
or by the valid pledge of direct obligations of the United
States of America, having an aggregate market value, exclusive of
accrued interest, at all times equal to the sum on deposit.
_SECTION 8. That while ~ny of the Water System Revenue
Certificates, Series 19~6, issued hereUnder shall be outstanding,
the city will not issue any additional obligations payable
the revenues of the system unless the lien of such obligations
on the revenues of the system, ~ncluding such £mprovements and
extensions thereto as may hereafter be made, is made jUnior
and subordinate in all respects to the lien of the Water System
Revenue ~ertificates, Series 19~6, issued hereunder. The provisions of
this section shall inure to the benefit of and be enforceable by
any holder of the certificates issued hereunder.
The provisions of this section are subject to the
following exceptions:
1. If prior to the payment of the certificates herein
authorized it shall be found desirable to refund said certificates
under the provisions of any law then available, said certificates
or any part thereof may be refunded (but, unless the certificates
to be so refunded have matured or are optional for redemption and
have been duly'called for redemption, only with the consent of
the holders thereof~, and the refunding obligations so issued
shall enjoy complete equality of lien with the portion of said
certificates which is not refunded, if any there be, and the
refunding obligations shall continue to enjoy whatever priority
of lien over subsequent issues may have been enjoyed bY the
.certificates refunded, provided however, that if only a portion
of the certificates outsta~nding is so refunded and if such
certificates are refunded in such manner that the interest rate
borne by any of the refunded certificates is increased or that
the refunding obligations mature at a date earlier than the maturity
date of any of the certificates not refunded, then such certificates
may not be refunded without the consent of the holders of the
unrefunded portion of the certificates.
2. Additional obligations may be issued on a parity
with the certificates herein authorized, for the purpose of
repairing, improving or extending the system if all of the
following conditions are met:
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(a) The net earnings of the system (being the gross
revenues after the deduction of ell maintenance and operation
expenses) for each of the three completed fiscal years prior to
the issuance of such additional Obligations must have been equal
to at least one and one-half times the highest combined interest
and principal requirements for any succeeding twelve months'
period on all obligations payable from the revenues of the system,
including the obligations then proposed to be issued.
(b) The payments required to be made into the
respective funds provided in Section 7 of this ordinance must have
been made in full.
(c) There must be sufficient money in the Water System
Revenue Certificates Sinking Fund, including the reserve surplus,
to pay all principal of and interest on the certificates payable
therefrom and then outstanding, which principal and interest will
become due during the twelve months' period next succeeding the
issuance of the additional obligations.
(d) The additional obligations must be payable with
principal falling due on June first of each year and interact
falling due on June first and December first of each year.
(e) The proceeds of the additional obligations must be
used solely for the making of repairs, improvements or extensions
to the system.
~. ~..0TION..9. That the City of Delray Beach hereby covenants
and agrees with each and every successive holder of the bonds
issued hereunder:
(a) That the city will maintain the system in good
condition, and operate the same in an efficient manner and at
reasonable cost;
(b) That as long as any cf the certificates issued
under the provisions of this ordimance remain outstanding, the city
will maintain insurance on the system for the benefit of the
holder or holders of all obligations payable from the revenues of
the system of a kind and in an amount which vould nor~lly be
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carried by private companies engaged in similar business. The
cost of such insurance may be paid from the Operation and Maintenance
fund, for which provision is above made, and the proceeds of any
such insurance received by the city shall be used to replace the
part or parts of the system destroyed, or if not so used, shall be
placed in the sinking fund above created;
(c) That so long as any of the certificates issued
hereunder are outstanding the city will not ~ortgage, pledge or
otherwise encumber the system, or any part thereof, or any revenues
to be derived therefrom, except as provided in th~s ordinance,
and will not sell, lease, or otherwise dispose of any substantial
portion of the system;
(d) That the city will keep proper books, records and
accounts, separate from all other records and accounts, in which
complete and correct entries shall be made of all transactions
relating to the system. Said books and accounts shall be kept
as nearly as may be in accordance with the rules and regulations
commonly followed by privately owned utilities, and the city will
furnish to any holder of any of the certificates issued hereunder,
upon written request after the close of each fiscal year, complete
operating and income statements of the system in reasonable detail
covering such fiscal year;
(e) That the holder or holders of twenty-five per
cent in aggregate principal amount of the certificates issued
hereunder-at any time outstanding shall have the right at all
reasonable times to inspect the system and all records, accounts
and data of the city relating thereto, and thet upon request the
city will furnish to such holders such financial statemnts and
other information relating to the city and the system as such
holder or holders may from time to time reasonably require;
(f) That while the certificates authorized herein,
or any of them, remain outstanding and unpaid the rates for all
services rendered by the system to said city and to its citizens
and to all consumers within or without the boundaries of said city
shall be reasonable and Just, taking into account and considers-
tion the oost and value of the system and the oost of maintainin~
end operating the system, and the proper and necessary allowances
for the depreciation thereof, and the amounts necessary for the
retirement of the obligations payable from the revenues of the
system, and the payment of interest thereon, and there shall be
charged against all users of said service, including said ci~,
such rates and amounts for service, including fire protection
and hydrant service, as shell be adequate to meet the requirements
of this and the preceding sections hereof, ami that all revenues
received from such rates and charges will be placed in the
separate accounts and used as provided by Section ? hereof.
St~OTIO~N ,1,0. That no taxes shall ever be levied and no
moneys shall ever be taken or diverted from any fund of the city
for th~ payment of the principal of and interest on the certificates
issued hereunder, except as hereinbefore e~pressly provided.
SECTIO. N ,,1,1. That the sale of the certificates to Equitable
Securities Corporation of Nashville, Tennessee, for the price of
$336,~55 plus accrued interest thereon to the date of delivery
is hereby ratified and confirmed. The certificates shall be
prepared and executed as soon as may be after the adoption of
this ordinance and after the validation certificates on the back
thereof have been properly executed, shall be delivered to said
purchasers upon payment in accordance with the terms of sale.
,SECT!,,oN ,12,,. That the City Attorney is hereby authorized
and directed to take appropriate proceedings in the Circuit Court
of the Fifteenth Judicial Circuit of Florida, in and for Palm
Beach County, for the validation of said certificates, and the
Mayor and Clerk are authorized to sign any pleadings in such
proceedings for and in behalf of the City Oounc il of the City
of Delray Beach.
~ECTION 13. That if any section, paragraph, clause or
provision of this ordinance shall be held to be invalid or
unenforceable for any reason, the validity or unenf~ceability
of such section, paragraph, clause or provision shall not
an~ of the remaining provisions of this ordinance.
SECTION !$_, That this ordinance shall be published
one time by caption immediately after its adoption on second
and final reading in the Delray Beach News, a newspaper published
and having general circulation in the City of Delray Beach,
Palm Beach County, Florida.
Adopted on first reading, July 22,
Adopted on second reading, August 12, 1946.
~resldent, City council.
Mayor ·
ATTEST:
....
0ity Olerk.
The above ordinance and the forms of Water Syst~
Revenue Certificate and coupon therein ,contained are hereby
approved as to form, language and execution, this the 12th
/ v~ City AttOrney.
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