1974-41 Authorizing Issuance of General Obligation Bondsn 2 S 1 7
Bond
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ORDINANCE NO. T'< +4
AN ORDINANCE of the Kodiak Island Borough, Alaska, authorizing
the issuance of $1,900,000 principal amount of general obligation
refunding bonds of the borough for the purpose of providing the
funds necessary to refund certain of the borough's outstanding
general obligation bonds; providing and authorizing the purchase
of certain obligations with the proceeds of the sale of such refund-
ing bonds and for the use and application of the moneys to be
delved from such investments; providing for the redemption of
the outstanding bonds to be refunded; providing the date, form,
terms, maturities and convenants of said refunding bonds to be
issued and for unlimited tax levies to pay the principal thereof
and interest thereon; and confirming the sale thereof.
WHEREAS, the Kodiak Island Borough, Alaska (hereinafter called the
"Borough "), now has outstanding its general obligation bonds in the aggre-
gate principal amount of $3,920,000 issued under date of April 1, 1974
(of which the bonds maturing in the years 1986 to 1992 inclusive in the
amount of $2,050,000 are to be refunded hereunder and of which the bonds
numbered 38 to 42, inclusive, 66 to 70, inclusive, 95 to 99, inclusive, 125 to
129, inclusive, 156 to 160, inclusive, 189 to 193, inclusive, 223 to 227,
inclusive, 258 to 262, inclusive, 295 to 299, inclusive, 339 to 343, inclusive,
386 to 390, inclusive, maturing in the years 1975 to and including 1985 are
to be refunded as to principal only, all of which bonds to be refunded exclusive
of the interest coupons attached to the bonds maturing prior to 1986 shall
be referred to hereinafter as the "Outstanding Bonds "), which bonds mature
on August 1 in each of the following years in the following amounts and bear
interest as follows:
Interest
Amounts Rates
17-42 1975 $130,000 5.00%
43 -70 1976 140,000 5.00%
71 -99 1977 145,000 5.00%
100 -129 1978 150,000 5.00%
130 -160 1979 155,000 5.00%
161 -193 1980 165,000 5.00%
194 -227 1981 170,000 5.25%
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Bond Interest
Numbers Years Amounts Rates
228 -262 1982 175,000 5.25%
263 -299 1983 185,000 5.25%
300 -343 1984 220,000 5.25%
344-390 1985 235,000 5.25%
391 -440 1986 250,000 5.25%
441 -493 1987 265,000 5.40%
494-548 1988 275,000 5.50%
549 -606 1989 290,000 5.55%
607 -667 1990 305,000 5.60%
668 -732 1991 325,000 5.65%
733 -800 1992 340,000 5.70%
WHEREAS, the proceedings of the Assembly of the Borough authorizing
the issuance of the 1974 Bonds provide that the Borough may call such
bonds for redemption on February 1, 1983, or on any interest payment date
thereafter, at par plus accrued interest to date of redemption, plus a pre-
mium equal to 1% for bonds called on February 1 or August 1, 1983; Ya %
for bonds called on February 1 or August 1, 1984; V2 % for bonds called
on February 1 or August 1, 1985; Va % for bonds called on February 1 or
August 1, 1986; and 0% for bonds called thereafter; and
WHEREAS, after due consideration it appears to this Assembly that the
Outstanding Bonds may be refunded by the issuance and sale of the general
obligation refunding bonds of the Borough authorized herein (hereinafter
called the "Refunding Bonds ") so that a substantial saving to the Borough
and its taxpayers will be effected by the issuance of the Refunding Bonds and
the redemption of the Outstanding Bonds on August 1, 1989; and
WHEREAS, in order to effect such refunding in the manner that will be
most advantageous to the Borough and its taxpayers, it is hereby found nec-
essary and advisable that certain "Acquired Obligations" (hereinafter des-
cribed), bearing interest and maturing at such time or times as necessary
to pay the principal of and interest on the Outstanding Bonds as the same
shall become due and to so redeem the Outstanding Bonds, be purchased
out of the proceeds of sale of the Refunding Bonds;
Now, THEREFORE, BE IT ORDAINED by the Assembly of the Kodiak
Island Borough, Alaska, as follows:
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Section 1. For the purpose of providing the moneys required to pay the
principal maturing in the years 1975 to 1989, inclusive and interest on the
Outstanding Bonds coming due to and including August 1, 1989 (exclusive
of the interest on the Outstanding Bonds which mature prior to 1986) and
to redeem and retire on August 1, 1989 the Outstanding Bonds maturing on
or after said date, the Borough shall issue the Refunding Bonds in the aggre-
gate principal amount of $1,900,000.
The Refunding Bonds shall be dated August 1, 1974, shall be in the
denomination of $5,000 each, shall be numbered, mature August 1, and
shall bear interest payable semiannually on the first days of February and
August of each year (commencing February 1, 1975) from date of issue as
follows:
Bond Interest
Numbers Year Amounts Rates
1 -43 1986 $215,000 7.25%
44-90 1987 235,000 7.25%
91 -140 1988 250,000 7.25%
141 -194 1989 270,000 7.25%
195 -252 1990 290,000 7.25%
253 -314 1991 310,000 7.25%
315 -380 1992 330,000 7.25%
Both principal of and interest on the Refunding Bonds shall be payable
in lawful money of the United States of America at the main office of Central
Bank and Trust Company, Denver, Colorado.
Section 2. The Borough hereby reserves the right to redeem any or all
of the Refunding Bonds outstanding in whole, or in part in inverse numerical
order, on February 1, 1982, or on any interest payment date thereafter, at a
price equal to the principal amount of bonds to be redeemed, plus accrued
interest to the date of redemption.
Notice of any such intended redemption shall be given by one publica-
tion thereof in a financial journal of general circulation in the City of New
York, New York, not more than 40 days nor less than 30 days prior to such
redemption date and by mailing a like notice at the same time to E. F. Hutton
and Company, Inc., at its main office in Denver, Colorado, or to the suc-
cessor in business of said firm, if any, at its main office. Interest on any
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Refunding Bond or Bonds so called for redemption shall cease on such
redemption date unless the same are not redeemed upon presentation made
pursuant to such call.
In addition to such publication and mailing the Borough shall also
mail notice of any such intended redemption to Standard & Poor's Corpora-
tion and Moody's Investors Service, Inc., New York, New York, or to their
business successors, if any. The mailing of such notice shall not, however,
be a condition precedent to the call on any of the Refunding Bonds for
redemption, and failure to give such notice shall not affect the right of the
Borough to redeem the Refunding Bonds called for redemption in the manner
set forth in the preceding paragraph.
Section 3. The Refunding Bonds shall be in substantially the following
form:
UNITED STATES OF AMERICA
No $5,000
STATE OF ALASKA
KODIAK ISLAND BOROUGH
GENERAL OBLIGATION REFUNDING BOND, 1974, SERIES 2
The Kodiak Island Borough, Alaska (hereinafter called the "Bor-
ough"), hereby acknowledges itself to owe and for value received prom-
ises to pay to bearer on the first day of August, 19 —, the principal
amount of
FIVE THOUSAND DOLLARS
together with interest thereon at the rate of 7.25% per annum payable
on the first days of February and August of each year from date of
issue (commencing February 1, 1975) upon presentation and surrender
of the attached interest coupons as they severally become due. Both
principal of and interest on this bond are payable in lawful money
of the United States of America at the main office of Central Bank and
Trust Company, Denver, Colorado.
The Borough has reserved the right to redeem any or all of the
outstanding bonds of this issue in whole, or in part in inverse numerical
order; on February 1, 1982, or on any interest payment date thereafter,
at a price equal to the principal amount of bonds to be redeemed, plus
accrued interest to the date of redemption.
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Notice of any such intended redemption shall be given by one
publication thereof in a financial journal of general circulation in the
City of New York, New York, not more than 40 nor less than 30 days
prior to such redemption date and by mailing a like notice at the same
time to E. F. Hutton & Company, Inc., at its main office in Denver,
Colorado, or to the successor in business of said firm, if any, at its
main office. Interest on any bond or bonds so called for redemption
shall cease on such redemption date unless the same are not redeemed
upon presentation made pursuant to such call.
This bond is one of an issue of 380 bonds of like amount, date
and tenor except as to number, rate of interest and date of maturity in
the aggregate principal amount of $1,900,000, which bonds are issued
for the purpose of providing the moneys necessary to refund certain out-
standing general obligation bonds of the Borough.
The bonds of this refunding issue are issued under and in accord-
ance with the provisions of the Constitution and applicable statutes of the
State of Alaska and ordinances duly passed by the Borough Assembly.
The Borough hereby irrevocably covenants that it will levy taxes
annually upon all the taxable property in the Borough without limi-
tation as to rate or amount and in amounts sufficient, with other moneys
legally available therefor, to pay the principal of and interest on the
bonds of this issue as the same shall become due. The full faith, credit
and resources of the Borough are hereby irrevocably pledged for the
annual levy and collection of such taxes and the prompt payment of
such principal and interest.
It is hereby certified that all acts, conditions and things required
to be done precedent to and in the issuance of this bond have happened,
been done and performed and that the total indebtedness of the Borough,
including this bond and the bonds of this issue, does not exceed any con-
stitutional or statutory limitation.
IN WITNESS WHEREOF, Kodiak Island Borough, Alaska, has caused
this bond to be signed by the Mayor of the Borough, to be attested by
its Clerk, to be sealed with the seal of the Borough and the interest
coupons attached hereto to be signed with the facsimile signatures of
said officials this first of August, 1974.
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[SEAL]
ATTEST:
ATTEST:
r•
Borough Clerk
Borough Clerk
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By
KODIAK ISLAND BOROUGH, ALASKA
Borough Mayor
The interest coupons attached to the Refunding Bonds shall be in sub -
tantially the following form:
No $5,000
On the first day of , 19—, the Kodiak Island Borough,
Alaska, will pay to bearer at the main office of Central Bank and Trust
Company, Denver, Colorado, the amount shown hereon in lawful money
of the United States of America, said amount being interest due that date
on its General Obligation Refunding Bond, Series 2, dated August 1,
1974, and numbered
By
KODIAK ISLAND BOROUGH, ALASKA
Borough Mayor
Section 4. The Refunding Bonds shall be signed in the corporate name
of the Borough by the Borough Mayor and the Borough Clerk. Each of the
interest coupons attached thereto shall be signed with the facsimile signatures
of said officials.
Section 5. The Borough hereby irrevocably covenants that for as long as
any of the Refunding Bonds are outstanding it will make annual levies of ad
valorem taxes without limitation as to rate or amount upon all the property
within the Borough subject to taxation which, with other moneys legally
available therefor, will be sufficient in amount to pay the principal of and
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interest on the Refunding Bonds as the same shall become due. The full
faith, credit and resources of the Borough are hereby irrevocably pledged
for the annual levy and collection of such taxes and for the prompt payment
of such principal and interest.
Section 6. There is hereby created a special fund of the Borough known
as the "1974 General Obligation Bond Refunding Fund" (hereinafter called
the "1974 Fund "), which Fund is to be drawn upon for the sole purpose
of paying the principal of and interest on the Outstanding Bonds.
The proceeds of sale of the Refunding Bonds shall be credited to such
Fund and used immediately upon the receipt thereof to discharge the obliga-
tions of the Borough under Ordinance 74 -18 -0 of the Borough authorizing
the issuance of the Outstanding Bonds by providing for the payment as here-
inafter set forth in this section of the principal of and interest on the Out-
standing Bonds. The Borough shall discharge such obligations by the purchase
of certain obligations of the United States government, or agencies thereof,
( "Acquired Obligations "), bearing such interest and maturing as to principal
and interest in such amounts and at such times so as to provide for the
payment of:
(a) Interest on the Outstanding Bonds which will become due and
payable on or before August 1, 1989 (exclusive of any interest on such bonds
which have a maturity date prior to 1986).
(b) The principal of the Outstanding Bonds which will mature on or
before August 1, 1989.
(c) The redemption price payable on August 1, 1989 for the principal
of the Outstanding Bonds maturing after that date.
Such money and Acquired Obligations shall be irrevocably deposited
with Central Bank and Trust Company, Denver, Colorado, (hereinafter
called the "Refunding Agent "). Any amounts described in subparagraphs
(a) through (c) of this section which are not provided for in full by such
money and the purchase and deposit of Acquired Obligations described in
this section shall be provided for by the irrevocable deposit of the necessary
amount out of the proceeds of sale of the Refunding Bonds or any other
moneys of the Borough legally available therefor with the aforesaid Refund-
ing Agent.
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Section 7. The Borough hereby irrevocably calls for redemption on
August 1, 1989 the Outstanding Bonds maturing after such date in accord-
ance with the provisions of Ordinance No. 74 -18 -0 of the Borough author-
izing the redemption and retirement of the Outstanding Bonds prior to their
fixed maturities.
Said call for redemption shall be irrevocable after the delivery of the
Refunding Bonds to the initial purchasers thereof.
The Refunding Agent, acting in concert with the Borough Clerk, is
hereby authorized and directed to provide for the giving of notice of the
redemption of the Outstanding Bonds in accordance with the applicable
provisions of said ordinance.
The Refunding Agent is hereby authorized and directed to pay to the
Borough Clerk, or, at the direction of the Clerk, to the paying agents for
the Outstanding Bonds, sums sufficient to pay, when due, the sums specified
in subparagraphs (a) through (c) of Section 6 of this Ordinance. All such
sums shall be paid from the moneys and Acquired Obligations deposited
with said Refunding Agent pursuant to the previous section of this ordinance,
and the income therefrom and proceeds thereof. All moneys and Acquired
Obligations deposited with said Refunding Agent and any income therefrom
shall be deemed assets of the 1974 Fund and shall be held, invested ( but only
at the direction of the Borough Clerk) and applied in accordance with the
provisions of this ordinance and with the laws of the State of Alaska for the
benefit of the Borough and the holders of the Outstanding Bonds. All moneys
held by the Refunding Agent pursuant to this ordinance, after August 1,
1989, shall be paid to the Borough.
The Borough will take such actions as are found necessary to see that
all necessary and proper fees, compensation and expenses of the Refunding
Agent for the Outstanding Bonds shall be paid when due. The proper officers
and agents of the Borough are directed to obtain from the Refunding Agent
an agreement setting forth the duties, obligations and responsibilities of the
Refunding Agent in connection with the redemption and retirement of the
Outstanding Bonds as provided herein and stating that such provisions for
the payment of the fees, compensation and expenses of such Refunding Agent
are satisfactory to it.
In order to carry out the purposes of the preceding section of this ordi-
nance and this section, the Borough Mayor and Clerk are authorized and
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directed to execute and deliver to Central Bank and Trust Company, Denver,
Colorado, a copy of such agreement when the provisions of it have been
fixed and determined.
Section 8. There is hereby created a special fund of the Borough to be
known as the "1974 General Obligation Bond Redemption Fund, Series 2"
which fund shall be drawn upon for the sole purpose of paying the principal
of and interest on the Refunding Bonds as the same shall become due. All
accrued interest received from the sale of the Refunding Bonds shall be paid
into the 1974 General Obligation Bond Redemption Fund, Series 2.
Section 9. In the event that money and /or direct obligations of the
United States of America, and /or obligations guaranteed by the United States
of America, maturing at such time or times and bearing interest to be earned
thereon in amounts (together with such money, if necessary) sufficient to
redeem and retire the Refunding Bonds in accordance with their terms, are set
aside in the 1974 General Obligation Bond Redemption Fund, Series 2, of
the Borough to effect such redemption and retirement, and such moneys and
the principal of and interest on such obligations are irrevocably set aside and
pledged for such purpose, then no further payments need be made into the
1974 General Obligation Bond Redemption Fund, Series 2, for the payment
of the principal of and interest on the Refunding Bonds, and the Refunding
Bonds and the coupons appurtenant thereto shall cease to be entitled to any
lien, benefit or security of this ordinance except the right to receive the moneys
so set aside and pledged, and the Refunding Bonds and such coupons shall
be deemed not to be outstanding hereunder.
Section 10. The Borough hereby covenants that it will not make any use
of the proceeds of sale of the Refunding Bonds and any other funds of the
Borough which may be deemed to be proceeds of such Refunding Bonds
pursuant to Section 103(d) of the Internal Revenue Code and the applicable
regulations thereunder which, if such use had been reasonably expected on
the date of delivery of the Refunding Bonds to the initial purchasers thereof,
would have caused the Refunding Bonds to be "arbitrage bonds" within the
meaning of said section and said regulations. The Borough will comply with
the requirements of subsection (d) of Section 103 of the Internal Revenue
Code and the applicable regulations thereunder throughout the term of the
Refunding Bonds.
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This Assembly hereby finds and determines that the issuance and sale
of the Refunding Bonds at this time will effect a saving to the Borough and
its taxpayers. In making such finding and determination this Assembly has
given consideration to the interest to the fixed maturities of the Refunding
Bonds and the Outstanding Bonds being refunded, the relative amounts of
principal of the Outstanding Bonds and the Refunding Bonds, the costs of
the issuance of the Refunding Bonds and the known earned income from the
investment of the proceeds of sale of the Refunding Bonds pending redemp-
tion of the Outstanding Bonds.
This Assembly hereby further finds and determines that the moneys
and Acquired Obligations to be deposited with the Refunding Agent for the
Outstanding Bonds in accordance with Section 6 of this resolution will dis-
charge and satisfy the obligations of the Borough relative to the Outstanding
Bonds under Ordinance No. 74 -18 -0 authorizing the issuance of the Outstand-
ing Bonds and the pledges, charges, trusts, covenants and agreements of the
Borough therein made or provided for as to said Outstanding Bonds, and
that said Outstanding Bonds shall no longer be deemed to be outstanding
under said ordinance immediately upon the deposit of such moneys and the
Acquired Obligations with the Refunding Agent.
Section 11. The written offer of E. F. Hutton & Company, Inc., dated
September 12, 1974, to purchase the Refunding Bonds at the price specified
in such offer, and under the terms and conditions thereof as provided in said
offer and in this ordinance is hereby in all respects accepted and confirmed.
The proper Borough officials are hereby authorized and directed to do
everything necessary for the prompt execution and delivery of the Refunding
Bonds to said purchaser and for the proper application and use of the pro-
ceeds of sale thereof.
Section 12. If any one or more of the covenants or agreements pro-
vided in this ordinance to be performed on the part of the Borough shall
be declared by any court of competent jurisdiction to be contrary to law, then
such covenant or covenants, agreement or agreements, shall be null and
void and shall be deemed separable from the remaining covenants and agree-
ments in this ordinance and shall in no way affect the validity of the other
provisions of this ordinance or of the Bonds.
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Section 13. This ordinance shall become effective immediately upon
its passage.
a
Ano TED by the Assembly of the Kodiak Island Borough, Alaska, at
meeting thereof held this z
day of .�- ti.L� 1974.
KODIAK ISLAND BOROUGH, ALASKA
(SEAL]
ATTEST:
Borough Clerk
Borough Mayor