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HomeMy WebLinkAbout1982-061RESOLUTION NO. $2-61 RESOLUTION COMBINING ALL WATER AND/OR SEWER SYSTEMS OF INDIAN RIVER COUNTY, FLORIDA, INTO ONE INTEGRATED SYSTEM; PLEDGING THE GROSS REVENUES OF SUCH COMBINED SYSTEM TO SECURE PAYMENT OF THE PRINCIPAL OF AND INTEREST ON .ALL WATER AND/OR SEWER REVENUE OBLIGATIONS OF THE COUNTY; REVISING CERTAIN COVENANTS IN THE RESOLUTIONS AUTHORIZING THE ISSUANCE OF ALL OUTSTANDING WATER AND/ OR SEWER REVENUE OBLIGATIONS OF THE COUNTY; AND PROVIDING FOR THE RIGHTS OF THE HOLDERS OF SUCH OBLIGATIONS. BE IT RESOLVED BY THE BOARD OF COUNTY COMMISSIONERS OF INDIAN RIVER COUNTY, FLORIDA, as follows: ARTICLE I GENERAL 1.01 Definitions. When used in this Instrument, the following terms shall have the following meanings, unless the text clearly otherwise requires: "Amortization Installment," with respect to any Terra Bonds of a series, shall mean an amount or amounts so designated which is or are established for the Term Bonds of such series, provided that the aggregate principal amount of such installments and/or the aggregate principal amount of the Federal Securities, hereinafter defined, purchased with such install- ments, as the case may be, for each maturity of Term Bonds of such series shall equal the aggregate principal amount of each maturity of Term Bonds of such series delivered on original issuance. "Annual Budget" shall mean the Annual Budget adopted by the Issuer pursuant to Section 3.04(A) of this Instrument. "Board" shall mean the Board of County Commissioners of the Issuer. "Bonds" shall mean, collectively, the outstanding Water and Sewer Revenue Bonds, Series 1979, dated August 30, 1979, and Water and Sewer Revenue Bonds, Second Series 1979, dated May 21, -1- 1981, of the Issuer; the Water Revenue Bonds, Series 1980 (South County Water System), of the Issuer, authorized but unissue:l, and any obligations issued hereafter by the Issuer pursuant to the provisions of Section 3.04 (J) of this Instrument. "Bond Service Requirement" for any Bond Year, as applied to the Bonds of any series, shall mean the sum of: (1) The amount required to pay the interest becoming due on Bonds to w�iicn the BO -c" Service Requireitent rel -- tes during the Bond Year, except to the extent that such interest shall have been provided by payments into the Sinking Fund out of Bond proceeds for a specified period of time, and except as pro- vided in (4) below; (2) The amount required to pay the principal. of Serial Bonds maturing during the Bond Year; (3) The amount of Amortization Installments for Term Bonds required to be deposited in the Bond Amortization Account during the Bond Year; and (4) In the event the Issuer has purchased or entered into an agreement to purchase Federal Securities from money in the Sinking Fund, then the income received or to be received on such Federal Securities from the date of acquisition thereof to the date of maturity thereof, shall be taken into con- sideration in calculating the payments which will be required to be made into the Sinking Fund. "Bond Year" shall mean the annual period ending on a Bond principal. or interest maturity or payment date. "Chairman" shall mean the Chairman of the Board. "Clerk" shall mean the Clerk of the Circuit Court of Indian River County, Florida, ex officio Clerk of the Board. "Federal Securities" shall mean only direct obliga- tions of, or obligations fully guaranteed as to principal and interest by, the United States of. America. "Fiscal Year" shall mean the period commencing on October 1 of each year and continuing to and including the suc- ceeding September 30. "Gifford Bonds" shall mean the outstanding Water and Sewer Revenue Bonds, Series 1979, dated August 30, 1979, and -2- t Water and Sewer Revenue Bonds, Second Series 1979, dated May 21, 1981, of the Issuer. "Government" shall mean the United States of America, acting through the Farmers Home Administration, U.S. Department of Agriculture. "Gross Revenues" shall mean ell money received from rates, fees, rentals or other charges or income received by the issuer or accruing to it in the management and operation of the System, including Impact Fees, all calculated in accordance with accepted accounting methods employed in the operation of public water and sewer systems similar to the System. "Impact Fees" shall mean the fees or charges lawfully imposed by the Issuer upon new customers of the System to finance all or a portion of the cost of additions, extensions and impro- vements to the System made necessary by the inclusion of such new customers. "Instrument" shall mean this resolution and all resolu- tions amendatory hereof which may be hereafter duly adopted by the Issuer. "Issuer" shall mean Indian River County, Florida. "Maximum Bond Service Requirement" shall mean, as of any particular date of calculation, the greatest amount of aggre- gate Bond Service Requirements for the then current or any future Bond Year. "Net Revenues" shall mean Gross Revenues less Operating Expenses. "Notes" shall mean the outstanding Water Revenue Bonds, Series 1980 (South County Water System), Anticipation Notes, dated May 1, 1981, of the Issuer. "Operating Expenses" shall mean the current expenses, paid or accrued, for the operation, maintenance and repair of all facilities of the System, as calculated in accordance with accepted accounting methods, and shall include, without limiting the generality of the foregoing, insurance premiums, administra- tive expenses of the Issuer related solely to the System, labor, cost of materials and supplies used for such operation and charges for the accumulation of appropriate reserves for current expenses not annually recurrent but which are such as may rea- sonably be expected to be incurred in accordance with such accepted accounting methods, but shall exclude payments into the -3- Sinking Fund or the Reserve Account therein and any allowance for depreciation or for renewals or replacements of capital assets of the System. "Operation and Maintenance Fund" shall mean the account created pursuant to the provisions of Section 3.04(D) of this Instrument for the purpose of receiving funds transferred from the Revenue Fund for the payment of Operatl.g Expenses. "Renewal and Replacement Fund shall mean the account created pursuant to the provisions of Section 3.04(E) of this Instrument, into which Gross Revenues shall he deposited for the purpose of financing renewals and replacements to the System. "Revenue Fund" shall mean the account created pursuant to the provisions of Section 3.04(B) of this Instrument, into which all Gross Revenues shall be deposited by the Issuer. "Serial Bonds" shall mean any Bonds for the payment of the principal of which, at the maturity thereof, no fixed man- datury sinking fund or bond redemption deposits are required to be made prior to the 12 month period immediately preceding the stated date of maturity of such Serial Bonds. "Sinking Fund" shall mean the account created pursuant to Section 3.04(C) of this Instrument, into which money shall be transferred from the Revenue Fund for the payment of the prin- cipal of and interest on the Bonds and, to the extent necessary, the Notes. "South County Water System Revenues" shall mean the gross revenues as defined in the resolution of the Board authorizing the issuance of the Notes. "System" shall mean the combined water and sewer facili- ties of the Issuer, together with any and all improvements, exten- sions and additions thereto hereafter constructed or acquired. "Term Bonds" shall mean the Bonds of a series, all of which shall be stated to mature on one date and which shall be subject to retirement by operation of the Bond Amortization Account. 1.02 Authority for this Instrument_. This Instrument is adopted pursuant to the provisions of Ch. 125, Fla. Stat. (1901), and other applicable provisions of law. 1.03 Findings. It is hereby found and determined that: (A) The Issuer presently owns and operates a water system for the benefit of its inhabitants in southern Indian River County, Florida, more commonly known as the South County Water System, and presently owns and operates a water distribu- tion and sewage collection and treatment facility more commonly known as the Gifford facility, both of which are being operated as separate and independent utilities by the Issuer. It is necessary for the continued preservation cu the health, welfare, convenience and safety of the Issuer and its inhabitants to com- bine such facilities into one integrated water and sewer facility. (B) The Government, the holder of the outstanding Gifford Bonds and the prospective purchaser of the Water Revenue Bonds, Series 1980 (South County Water System), of the Issuer, has consented to the integration of the System and the adoption of this resolution. (C) The revenues to be derived annually from the rates, rentals, fees and other charges made and collected for the ser- vices and facilities of the System will be sufficient to pay, as the same shall become due and payable, the principal of and interest on the Bonds and the Operating Expenses. (D) It is deemed necessary and desirable to substitute certain provisions of this resolution for certain provisions of the resolutions authorizing the Bonds, and to pledge the Gross Revenues to the payment of the principal of and interest on the Bonds and the Notes. The lien upon and pledge of the South County Water System Revenues in favor of the holders of. the Notes will be prior and superior to the lien thereon of the holders of the Bonds. No part of the Gross Revenues have been pledged or hypothecated except with respect to the Bonds and the Notes. (E) This Instrument is declared to be and shall consti- tute a contract between the Issuer and all of the holders of the Bonds and the Notes; and the covenants and agreements herein set forth to be performed by the Issuer are and shall be for the equal benefit, protection and security of all of the legal holders of any and all of the Bonds and the Notes, all of which shall be of equal rank and without preference, priority or distinction of any of the Bonds and Notes over any other, except as hereinafter provided. (F) The Issuer is not, under this Instrument, obligated to levy any ad valorem taxes on any real or personal property situated within its corporate territorial limits to pay the prin- cipal of or interest on the Bonds and the Notes or to pay I&M SII► i � �, �� � � _ Operating Expenses. The Bonds and the Notes shall not constitute a lien upon the System or any other property of the Issuer or situated within its corporate territorial limits. .1.04 Water and Sewer Facilities Combined_. All the water and/or sewer facilities of the Issuer are hereby combined into one integrated water and sewer facility, herein described as the System. ARTICLE II AUTHORIZATION, TERMS, EXECUTION AND REGISTRATION OF BONDS 2.01. Incorporation of Prior Provisions. All provisions in the resolutions authorizing the Bonds and the Notes with respect to the authorization, terms, execution, registration and form of the Bonds and the Notes are hereby incorporated herein by reference. ARTICLE III COVENANTS, SPECIAL FUNDS AND APPLICATION THEREOF 3.01 Bonds Not to Be Indebtedness of Issuer. Neither the Bonds, nor the Notes, nor the coupons attached thereto shall be or constitute general obligations or an indebtedness of the Issuer as "bonds" within the meaning of Art. VII, §12, Fla. Const. (1968), but shall be payable from and secured by a lien upon and pledge of the Gross Revenues as herein provided, and, with re- spect to the Notes, shall be additionally secured as provided in the resolution authorizing the issuance of the Notes. No owner Dr holder of any Bond or Note, or coupon appertaining thereto, shall ever have the right to compel the exercise of any ad valorem taxing power to pay such Bond, Note or coupon or Operating Expenses, or be entitled to payment of such Bond, Note or coupon from any money of the Issuer except from the Gross Revenues or other funds of the Issuer in the manner provided herein and in the resolution authorizing the issuance of the Notes. 3.02 Security for Bonds and Notes. The payment of the principal. of and interest on the Bonds and the Notes shalt he secured as provided in the resolutions authorizing their issuance; provided, however, that all references in such resolu- tions to the "System" and the "Gross Revenues" shill be deemed to mean the System and the Gross Revenues, respectively, as defined -6- in this Instrument; and further provided, however, that the lien upon and pledge of the Gross Revenues in favor of the holders of the Bonds shall be junior, subordinate and inferior to the lien upon and pledge of the South County System Revenues in favor of the holders of the Notes, but the lien upon a pledge of the Gross Revenues, excluding the South County Water System Revenues, in favor of the holders of the Notes shall be junior, subordinate and inferior to the lien thereon in favor of the holders of the Bonds. 3.03 Application of Bond and Note Proceeds. The provi- C ions 1:: t�;e r-- � i- Y1 -...r bi. n ....7 a �_ '\- s--1.u�. ions aU -1 1. ming -1- DVl1Uj C1ilU tI1C Notes WLtll respect to the application of the proceeds of the sale of the Bonds and the Notes are hereby incorporated herein by reference, except that any surplus funds remaining on deposit in the various Construction Funds after completion of the applicable projects shall be deposited into the Sinking Fund, created and established by this resolution; subject, however, to the prior lien of the holders of the Notes on the proceeds of the sale of the Notes. 3.04 Covenants of the Issuer. So long as any of the principal of or interest on any of the Bonds or the Notes shall be outstanding and unpaid, or until there shall have been set apart in the Sinking Fund, including the Reserve Account therein, a sum sufficient to pay, when aue, the entire principal of the Bonds and the ;.totes remaining unpaid, together with interest accrued and to accrue thereon, the Issuer, covenants with the holders of any and all of the Bonds and the Notes as follows: (A) Annual Budget of Operating Expenses. The Issuer covenants and agrees that on or before the first day of each Fiscal Year during which any of the Bonds or Notes are outstanding, it will adopt an Annual Budget of Operating Expenses for the ensuing Fiscal Year, and will mail a copy of such Annual Budget or amendments thereto to any requesting holder of Bonds or Notes. The Issuer covenants that the Operating Expenses incurred in any year will not exceed the reasonable and necessary amounts required therefor, and that it will not expend any amount or incur any obligations for the operation, maintenance and repair of. the System in excess of the amount provided for Operating Expenses in the Annual Budget, except upon resolution of the Board that such expenses are necessary to operate and maintain the System. (B) Revenue Fund. The Issuer covenants and agrees that it will establish with a depository in the State of Florida, which is a member_ of the Federal Deposit Insurance Corporation and which is eligible under the laws of the State of Florida to receive county funds, and maintain so long as any of the Bonds and Notes are outstanding, a special fund to be known as the "Indian River. County Water and Sewer System Revenue Fund," into the Revenue Fund the Issuer shall. deposit promptly as receivea all MrAM Gross Revenues. The Revenue Fund shall be held by the Issuer separate and apart from all other funds and shall be expended and used only in the manner and order specified in this subsection (B) and in subsections (C), (D), (E) and (F) of this section; provided, however, that Impact Fees shall be used only in the manner specified in subsections (C) and (E) of this section. (C) Bond and Interest Sinking Fu,id. The Issuer cove- nants and agrees to establish with a depository in the State of Florida, which is a member of the Federal Deposit Insurance Corporation, and which is eligible tinder the laws of the State of Florida to receive county funds, a special fund or funds, collec- tively called the "Indian River County Water and Sewer System Sinking Fund," to be used exclusively for the purposes hereinafter mentioned. The Issuer shall transfer on or before the 15th day of each month from the Revenue Fund and deposit to the credit of the Sinking Fund the following amounts: (1) A sum equal to 1/6 or 1/12, as the case may be, of the amount of one year's interest on all the Bonds then outstanding, together with the amount of any deficiency in prior deposits for interest; and (2) A sum equal to 1/12 of the principal of the Serial Bonds maturing on the next succeeding anniversary date, together with the amount of any deficiency in prior deposits for pri,.cipal. (3) Into the Bond Amortization Account on a parity with the deposits provided in subsection (C)(2) above, a sum equal to 1/12 of the amount of the Amortization Installments for Term Bonds which shall become due and payable during the current Bond Year, plus the amount of the premium, if any, on a principal amount of such Term Bonds equal to the amount of such Amortiza- tion Installment which would be payable on the next maturity date if such principal amount of Term Bonds were to be redeemed prior to their maturity from money held in the Bond Amortization Account. If, at the stated dates of maturity of any Term Bonds, the proceeds on deposit in the Bond Amortization Account are insufficient to retire the principal amount of maturing Term Bonds remaining outstanding, the Issuer shall transfer from the Reserve Account to the Bond Amortization Account sufficient money to make up such deficiency. (4) After fulfillment of the requirements of subsec- tions (C)(1), (2) and (3), the Issuer shall transfer on or before the 15th day of each month from the Revenue Fund and deposit to the credit of a Reserve Account in the Sinking Fund the sum of 1/12 of 20% of the Maximum Bond Service Requirement until such time as the funds and investments therein shall equal the Maximum Bond Service Requirement, and monthly thereafter such amount as may be necessary to maintain in the Reserve Account the Maximum Bond Service Requirement, but not exceeding 1/12 of the Maximum Bond Service Requirement monthly. Money in the Reserve Account shall be used only for paying the principal of and interest on and Amortization installments for the Bonds in the event that the other money in the Sinking Fund shall ever be insufficient to meet auch 'pay+Mients . (5) Impact Fees on deposit in the Sinking Fund shall only be applied pursuant to subsections (c)(1), (2), (3) and (4) with respect to Bonds allocated to finance the cost of additions, extensions and improvements to the System made necessary by the inclusion of new customers of the System. (6) Money held for the credit of the Bond Amortization Account shall be applied to the retirement of. Term Bonds as follows: (a) Subject to the provisions of paragraph (c) below, the Issuer shall endeavor to purchase Term Bonds then outstanding at the most advantageous price obtainable with reasonable diligence, such price not to exceed the principal of such Term Bonds plus the amount of the premium, if any, which would be payable on the next redemption date to the holders of such Term Bonds if such Term Bonds should be called for redemption on such date from money in the Bond Amortization Account. The Issuer shall pay the interest accrued on such Term Bonds to the date of delivery thereof from the Sinking Fund and the purchase price from the Bond Amortization Account, but no such purchase shall be made by the Issuer within the period of 45 days immediately pre- ceding any interest payment date on which Term Bonds are subject to call for redemption, except from money in excess of the amounts set aside or deposited for the redemption of Term Bonds. (b) Subject to the provisions of paragraph (c) below, whenever sufficient money is on deposit in the Bond Amortization Account to redeem $5,000 or more principal amount of Term Bonds, the Issuer shall call for redemption from money in the Bond Amortization Account such amount of Term Bonds then subject to redemption as, with the redemption premium, if any, will exhaust the money then held in the Bond Amortization Account as nearly as may be practicable. Prior to calling Term Bonds for redemption, the Issuer shall withdraw from the Sinking Fund and from the Bond Amortization Account and set aside in separate accounts or depo- sit with the paying agents the respective amounts required for 1= r 4 � paying the interest on and the principal of and redemption pre- mium applicable to the Term Bonds so called for redemption. (c) Money in the Bond Amortization Account shall be applied by the Issuer in each Bond Year to the retirement of Term Bonds then outstanding in the following order: (i) The Term Bonds of each issue of Bonds to the extent of the Amortization Installment, if any, for such Bond Year for the Term Bonds of each such issue then outstanding, plus the applicable premium, if any, and, if the amount available in such Bond Year shall not be sufficient therefor, then in propor- tion to the Amortization Installment, if any, for such Bond Year for the Term Bonds of each such issue then outstanding, plus the applicable premium, if any; provided, however, that if the Term Bonds of any such issue shall not then be subject to redemption from money in the Bond Amortization Account and if the Issuer shall at any time be unable to exhaust the money applicable to the Term Bonds of such issue under the provisions of this clause or in the purchase of such Term Bonds under the provisions of paragraph (a) above, such money or the balance of such money, as the case may be, shall be retained in the Bond Amortization Account and, as soon as it is feasible, applied to the Term Bonds of such issue; and (ii) Any balance then remaining, other than money retained under the first clause of this paragraph (c), shall be applied to the retirement of such Term Bonds as the Issuer in its sole discretion shall determine, but only, in the case of the redemption of Term Bonds of any issue, in such amounts and on such terms as may be provided in the resolution authorizing the issuance of the Bonds of such issue. (d) In lieu of purchasing or redeeming Term Bonds prior to maturity under paragraphs (a) through (c) hereof, the Issuer may elect to retain the funds deposited into the Bond Amortization Account, or any portion thereof, until the stated maturity date of such Term Bonds, and invest such funds in Federal Securities maturing not later than the stated maturity date of such Term Bonds. Such election may be made, as to all or a part of the Term Bonds, either prior to the delivery of such Terra Bonds, in which case such election shall be binding on the Issuer, or may be made from time to time at the option of the Issuer, in which case such election shall not be binding until made prior to the purchase or redemption of Term Bonds pursuant to paragraphs (a) through (c) hereof; provided, however, that if an election is made to retain the funds in the Bond Amortization Account until the stated maturity dates of such Term Bonds, such -'1V- Term Bonds may nevertheless be subject to redemption prior to maturity at the option of the Issuer on such terms and conditions as shall be fixed by resolution of the Issuer at or prior to the delivery of the Term Bonds, and that no election shall be made which, in the opinion of bond counsel to the Issuer, would cause the Bonds to the "arbitrage bonds" within the meaning of the Internal Revenue Code. The funds and principal of and interest on investments in the Bond Amortization Account shall be applied exclusively for payment of Term Bonds of each respective series, or maturity within a series, for which such funds and investments were depo- sited into the Bond Amortization Account, by purchase, redemption or payment at maturity, as applicable, and shall not be available for payment or purchase or redemption of Term Bonds of any other series, or any other maturity within the series, or for transfer to the Sinking Fund to make up any deficiencies in required payments therein; provided, however, that the interest on such investments not necessary for the payment of the current interest requirements on the Term Bonds of each respective series, or maturity within a series, for which such investments were depo- sited into the Bond Amortization Account, may be deposited into the Sinking Fund. (e) The Issuer shall deposit into the Bond Amortization Account, Amortization Installments for the amortization of the principal of the Term Bonds, together with any deficiencies for prior required deposits, such Amortization Installments to be in such amounts and to be due in such years as shall be determined by resolution of the Board prior to the delivery of the Term Bonds. The Issuer shall pay from the Sinking Fund all expenses in connection with any such purchase or redemption. (D) Operation and Maintenance Fund. The Issuer cove- nants and agrees to establish with a depository in the State of Florida, which is a member of the Federal Deposit Insurance Corporation, and which is eligible under the laws of the State of Florida to receive county funds, a special fund to be known as the "Indian River County Water and Sewer System Operation and Maintenance Fund," which shall be used exclusively for the pur- pose of receivingfunds to be transferred monthly by the Issuer from the Revenue Fund, and for paying, as they accrue, Operating Expenses pursuant to the Annual Budget. After having made the deposits to the Sinking Fund as provided in subsection (C) above, the Issuer shall transfer on or before the 15th day of each month from the Revenue Fund and deposit to the credit of the Operation -11- and Maintenance Fund a sum sufficient to pay Operating Expenses for the current month, all in accordance with the Annual Budget. Any balance remaining in the Operation and Maintenance Fund at the end of each Fiscal Year and not required to pay costs incurred during such Fiscal Year shall be deposited promptly into the Revenue Fund. (E) Renewal and _Replacement Fund_. :lie Issuer covenants and agrees to establish with a depository in the State of Florida, which is a member of the Federal Deposit Insurance Corporation, and which is eligible under the laws of the State of Florida to receive county funds, a special fund to be known as the "Indian River County Water and Sewer System Renewal and Replacement Fund," into which shall be deposited from the Revenue Fund, after having made the deposits as provided in subsections (C) and (D) above, an amount equal to 1/12 of 10% of the Gross Revenues of the System for the preceding Fiscal Year. Such fund shall be used only for the purpose of paying the cost of extensions, enlargements or additions to or the replacement of capital assets of the System, and for emergency repairs thereto. Impact Fees on deposit in the Renewal and Replacement Fund shall only be used to pay the cost of extensions, enlargements or addi- tions to the System made necessary by the inclusion of new custo- mers of the System. (F) Deficiency or Excess Funds. Subject to the provi- sions for the disposition of Gross Revenues in subsections (C), (D) and (E), which are cumulative, the Issuer. shall, on or before the 15th day of each month, transfer to the Reserve Account in the Sinking Fund the balance of money remaining in the Revenue Fund until the funds and investments in the Reserve Account equal the Maximum Bond Service Requirement and thereafter whenever funds and investments in the Reserve Account equal the Maximum Bond Service Requirement, the Issuer may use the surplus funds in the Revenue Fund for the purchase or redemption of Bonds or Notes or for any other lawful purpose. (G) Trust Funds; Investments. The funds and accounts created and established by this Instrument shall constitute trust funds for the purpose provided herein for such funds. All of such funds, except as hereinafter provided, shall be continuously secured in the same manner as county deposits of funds are required to be secured by the laws of the State of Florida. The cash required to be accounted for in each of the foregoing funds and accounts may be deposited in a single bank account, and funds allocated to the various accounts established herein may be invested in a common investment pool; provided, that adequate accounting records are maintained to reflect and control the -12- restricted allocation of the cash on deposit therein and such investments for the various purposes of such funds and accounts as herein provided. The designation and establishment of the various funds and accounts in and by this Instrument shall not be construed to require the establishment of any completely independent, self -balancing funds as such term is commonly defined and used in governmental accounting, but rather is intended solely to constitute an earmarki-9 of certain revenues for certain purposes and to establish certain priorities for application of such revenues as herein provided. The Issuer shall separately account for Impact Fees in order to insure use only for those purposes specified in subsections (C) and (E) of this section. Money on deposit to the credit of the Reserve Account shall be invested by the depository bank, upon request, by the Issuer, in direct obligations of, or obligations the principal of and interest on which are guaranteed by, the United States of America and which shall be subject to redemption at face value at anytime at the option of such holder; and the money on deposit to the credit of the Revenue Fund, Sinking Fund, Operation and Maintenance Fund and Renewal and Replacement Fund may be so invested in such obligations which shall mature not later than 15 days prior to the date on which such money shall be needed for the purposes of such funds. The securities so purchased as an investment of funds shall be deemed at all times to be a part of the account from which such funds were withdrawn, and any loss resulting from such investment shall be charged to such account, and any interest accruing on such investment or any other profit realized therefrom shall be deposited to the Reserve Account until there shall be on deposit to the credit of the Reserve Account the maximum amount required by this Instrument, after which such interest or profit shall be deposited in the Revenue Fund. (H) Transfer of Fund Balances. The amounts on deposit in the Revenue Fund, Sinking Fund (including the Reserve Account therein), and Operation and Maintenance Fund, created and esta- blished by the resolutions authorizing the issuance of the Gifford Bonds, shall be transferred to the corresponding funds and account established by this Instrument. After defeasance of the lien of the holders of the Notes on the security pledged to the payment of the principal of and interest on the Notes, the amounts on deposit, if any, in the Revenue Fund, Sinking Fund (including the Reserve Account therein), and Operation and Maintenance Fund, created and established by the resolution authorizing the issuance of the Water Revenue Bonds, Series 1980 (South County Water System), shall be transferred to the corresponding funds and account established by this Instrument. -13- (I) Rates and Charges. The Issuer covenants and agrees that it will fix, establish, revise from time to time whenever necessary and maintain always, such schedule of rates, fees, ren- tals and charges for the services and facilities of the System which will produce revenues which shall be sufficient to provide 120% of the current Bond Service Requirement and 100% of all other payments required by this Instrument; and that such rates, fees, rentals or other charges will not be reduced so as to be insufficient to provide funds for such purposes. The Issuer covenants and aq_rees that at the same time and in like manner that the Issuer prepares its Annual Budget of Operating Expenses, the Issuer shall annually prepare an estimate of Gross Revenues for the ensuing Fiscal Year, and to the extent that Gross Revenues are insufficient to pay 120% of such Bond Service Requirement during such ensuing year, build up and maintain the required reserves for the Bonds, pay Operating Expenses and pay the current required deposit into the Renewal and Replacement Fund, the Issuer shall revise the fees and rates charged for the use of the services and facilities of the System sufficiently to provide the funds required. (J) Issuance of Other Obligations. (1) The Issuer covenants and agrees that it will not issue any other obligations payable from or secured by the Gross Revenues, or any part thereof, unless the conditions hereinafter set forth shall be met, or unless the lien of such obligations is junior and subordinate in all respects to the lien of the holders of the Bonds and the Notes. (2) The Issuer shall not issue any obligations payable on a parity from the South County Water System Revenues with the Notes. (3) The Issuer shall have the right to finance addi- tional water and/or sewer facilities and related auxiliary facilities, by the issuance of one or more additional series of Bonds to be secured by a parity lien on and ratably payable from the Gross Revenues with the Bonds, provided in each instance that: (a) The facility or facilities to be acquired or built from the proceeds of the additional parity Bonds is or are made a part of the System and its or their revenues are pledged as addi- tional security for the additional parity Bonds and the outstanding Bonds. (b) The Issuer is in compliance with all covenants and undertakings of the Issuer (i) herein contained, in connection -14- with all Bonds and Notes then outstanding and (ii) made with respect to any other bonds or other obligations of the Issuer payable from the Gross Revenues or any part thereof; and has not been in default as to any payments required to be made under this Instrument for a period of at least the next preceding 24 months, or if at such time the Bonds or Notes shall not h.7ve been outstanding for 24 months, then for the period that the Bonds or Notes shall have been outstanding. (c) The annual Net Revenues for the Fiscal Year next preceding the issuance of additional parity Bonds are certified by an independent certified public accountant not regularly employed by the Issuer, to have been equal to at leant 1.25 times the average Bond Service Requirement. (d) The estimated average annual Net Revenues of the facility or facilities to be constructed and acquired with the proceeds of such additional Bonds (and any other funds pledged and set aside for such purpose), when added to the estimated future average annual Net Revenues of the then existing System, shall be at least 1.25 times the average Bond Service Require- ment for all outstanding Bonds and the additional Bonds proposed to be issued. Estimates of future revenues and Operating Expenses shall be furnished by recognized independent consulting engineers and approved by the Board and by the Chairman thereof, and shall be forecast over a period of not exceeding 10 years from the date of the additional Bonds proposed to be issued. Provided, however, the conditions in this paragraph and in the next preceding paragraph (c) may be waived or modified by the written consent of the holders of 75% of the Bonds then outstanding. (4) The Issuer hereby covenants and agrees that in the event additional series of parity Bonds are issued, it will adjust the required deposits into and the maximum amount to be maintained in the Sinking Fund, including the Reserve Account therein, on the same basis as hereinabove prescribed, to reflect the Bond Service Requirement on the additional Bonds. (K) Disposal of Facilities. The Issuer covenants and agrees that it will maintain its corporate identity and existence and will not sell or otherwise dispose of any of the System faci- lities or any part thereof, and, except as provided for above, it will not create or perinit to be created any charge or lien on the revenues thereof ranking equal or prior to the charge or lien of the holders of the Bonds and the Notes. Notwithstanding the foregoing, the Issuer may at any time permanently abandon use of, or sell at fair market value, any of its System facilities, pro- vided that: -15- OW . , . (a) It is in compliance with all covenants and under- takings in connection with all of its Bonds and Notes then out- standing, and the debt service reserve for such Bonds has been fully established; (b) It will, in the event of sale, apply the proceeds to either (1) redemption of outstanding Bonds or Notes in accor- dance with the provisions governing repaymc--t of Bonds or Notes in advance of maturity, or (2) replacement of the facility so disposed of by another facility, the revenues of which shall be incorporated into the System as hereinbefore provided; (c) It is certified, prior to any abandonment of use, that the facility to be abandoned is no longer economically feasible of producing Net Revenues; and (d) It is certified that the estimated Net Revenues of the remaining System facilities for the next succeeding Fiscal Year, plus the estimated Net Revenues of the facility, if any, to be added to the System, satisfy the earnings test hereinbefore provided in this subsection governing issuance of additional parity Bonds. (L) Insurance on System. The Issuer shall carry at least the following insurance coverage to the extent deemed necessary by the Issuer's Attorney: (1) Fire and extended coverage on the insurable por- tions of the System, in amounts sufficient to provide for not less than full. recovery whenever a loss from perils insured against does not exceed 80% of the full insurable value of the damaged facility; and flood damage insurance shall be carried to the full insurable value, as recommended by consulting engineers, of all property of the System which may be subject to flood damage and shall be situated in flood plain area. (2) Public liability insurance relating to the opera- tion of the System, with limits of not less than $100,000 for one person and $300,000 for more than one person involved in one accident, to protect the Issuer from claims for bodily injury and/or death, and not less than $10,000 for claims for damage to property of others which may arise from the Issuer's operation of the System. (3) If the Issuer owns or operates a vehicle in the operation of the System, vehicular public liability insurance with limits of not less than $100,000 for one person and $300,000 for more than one person involved in one accident to protect the -16- Issuer from claims for bodily injury and death, and not less than $10,000 against claims for damage to property of others which may arise from the Issuer's operation of vehicles. All such insurance shall be carried for the benefit of the holders of the Bonds and the Notes. All money received by the Issuer by reason of insurance coverage, except liability coverage, shall be deposited to the credit of the }reserve Account and are hereby pledged by the Issuer as security for the Bonds and the Notes,, unt--d unless I annless such proceeds aro usedto remedy the loss or damage for which such proceeds are received, either by repairing the property damaged or replacing the property destroyed within 90 days from the receipt of such proceeds. The lien upon such proceeds in favor of the holders of the Bonds is junior, subordinate and inferior to the lien thereon of the holders of the Notes. (M) Maintenance of System. The Issuer will maintain the System in good condition and continuously operate the same in an efficient manner at a reasonable cost. (N) No Free Services. The Issuer will not render or cause to be rendered any free services of any nature by its System, nor will any preferential rates be established for users of the same class; and if the Issuer shall avail itself of the facilities or services provided by the System, or any part thereof, then the same rates, fees or charges applicable to other customers receiving like service under similar circumstances shall be charged to the Issuer. Such charges shall be paid as they accrue, and the Issuer shall transfer from its general funds sufficient sums to pay such charges. The revenues so received shall be deemed to be revenues derived from the operation of the System, and shall be deposited and accounted for in the same manner as other revenues derived from such operation of the System. (0) Failure of User to Pay for Services. Upon failure of any user of any product, services or facilities of the System to pay for the same within 60 days after the Issuer shall have billed such user therefor, the Issuer shall shut off the connec- tion of such user and shall not furnish him or permit him to receive from the System further service until. all obligations owed by him to the Issuer on account of services, including disconnection and reconnection charges, shall have been paid in full. This covenant shall not, however, prevent the Issuer from causing any System connection to be shut off sooner. (P) Enforcement of Collections. The Issuer will dili- gently enforce and collect the rates, fees, rentals and other -17- De charges for the services and facilities of the System; and will take all steps, actions and proceedings for the enforcement and collection of such rates, fees, rentals and other charges as shall become delinquent to the full extent permitted or authorized by law; and will maintain accurate records with respect thereto. All such fees, rates, rentals, charges and revenues herein pledged shall, as collected be held in trust to be applied as provided in this Instrument and not otherwise. i„% ,uI (20m, wi1-11 Laws and Requldtions. The Issuer covenants and agrees to perform and comply with, in every respect, the loan and _grant agreements which it might have with the Government or with any other governmental agency, and all applicable federal and state laws and regulations. (R) Remedies. Any holder of the Bonds, the Notes or any coupons appertaining thereto, or any trustee acting for the holders of such Bonds, Notes and coupons, may either at law or in equity, by suit, action, mandamus or other proceedings in any court of competent jurisdiction, protect and enforce any and all rights, including the right to the appointment of a receiver, existing under the laws of the State of Florida, or granted and contained in this Instrument, and may enforce and compel the per- formance of all duties required by this Instrument or by any applicable state or federal statutes to be performed by the Issuer or by any officer thereof. Nothing herein, however, shall be construed to grant to any holder of such Bonds, Notes or coupons any lien on any real property of the Issuer. (S) Records and Audits. The Issuer shall keep books and records of the Gross Revenues, which such books and records shall be kept separate and apart from all other books, records and accounts of the Issuer, and any holder of a Bond, a Note or the coupons applicable thereto shall have the right, at all reasonable times, to inspect such books and records. The Issuer will furnish on or before 90 days after the close of each Fiscal Year, to any holder of a Bond or Note who shall request the same in writing, copies of an annual audit report prepared by an independent certified public accountant or an auditing official of the State of Florida, covering for the preceding Fiscal Year, in reasonable detail, the financial con- dition and record of operation of the System. (T) Connection with System. The Issuer will, to the full extent permitted by law, require all lands, buildings, resi- dences and structures within its corporate limits which can use the facilities and services of the System to connect therewith and use the facilities and services thereof and to cease the use of all other facilities. The Issuer will not grant a franchise for the operation of any competing water or sewer .system. (U) Government Approval of Financing. Anything herein to the contrary notwithstanding, while the Government is the holder of any of the Bonds, the Issuer will not borrow any money from any source in connection with making extensions of or impro- vements to the System, other than normal maintenance of the System, or permit others to do so, without obtaining the prior written consent of the Government. (V) Fidelity Bond. The Issuer will require each employee who may have possession of any revenues of the System to be covered by a fidelity bond written by a responsible indemnity company in an amount fully adequate to protect the Issuer from loss. (W) Reimbursement of Advances and Interest Thereon. While the Government shall be the holder of any of the Bonds, the Government shall have the right to make advances for the payment of insurance premiums and/or other advances which, in the opinion of the Government, may be required to protect the Government's security interest- In the event of any such advances, the Issuer covenants and agrees to repay the same, together with interest thereon at the same rate per annum as specified in the Bonds, upon demand made at any time after any such expenditure by the Government. Any such amount due the Government shall be secured by a pledge of and lien upon the Gross Revenues, on a parity with the lien thereon of the holders of the Bonds, and payment thereof shall take priority over any other payments from the Reserve Account for the Bonds. ARTICLE IV MISCELLANEOUS PROVISIONS 4.01 Modification or Amendment. No material modifica- tion or amendment of this Instrument may be made without the con- sent in writing of the holders of two-thirds or more in principal amount of the Bonds and Notes then outstanding; provided, however, that no modification or amendment shall permit a change in the maturity of such Bonds or Notes or a reduction in the rate of interest thereon, or in the amo::nt of the principal obligation, or affect the unconditional promise of the Issuer to charge and collect such rates, fees, rentals and charges f.o- the use of the -19- . ,.� ,F , 4b product, services and facilities of the System and apply the same as herein provided, or reduce the number of such Bonds and Notes the written consent of the holders of which are required by this Section for such modification or'amendment, without the consent of the holders of all such Bonds and Notes. 4.02 Creation of Superior Liens. The Issuer covenants that it will not issue any other Bonds, certificates or obliga- tions of any kind or nature or create or cause or permit to be created any debt, lien, pledge, assignment or encumbrance or charge payable from or enjoying a lien upon the Gross Revenues ra„;ing prior and superior to the lien created by this Instrument for the benefit of the holders of the Bonds and the Notes. 4.03 Arbitrage. No use will be made of the proceeds of the Bonds, the Notes or the Gross Revenues which will cause the Bonds or. the Notes to be "arbitrage bondst'within the meaning of the Internal Revenue Code. The Issuer at all times while the Bonds, the Notes and the interest thereon are outstanding will comply with the requirements of Section 103(c) of the Internal Revenue Code and any valid and applicable rules and regulations of the Internal Revenue Service issued thereunder. 4.04 Defeasance. If, at any time, the Issuer shall have paid, or shall have made provision for payment of, the principal, interest and redemption premiumis, 1f any, with respect to the Bonds and the Notes, then, and in that event, the pledge of and lien on the Gross Revenues in favor of the holders of the Bonds and the Notes shall be no longer in effect. For purposes of the preceding sentence, deposit by the Issuer of direct obliga- tions of, or obligations the principal of and interest on which are guaranteed by, the United States of America, none of which shall be redeemable prior to maturity at the option of the obligor (collectively, the "Government Securities"), or bank certificates of deposit fully secured as to principal and interest by Government Securities (or deposit of any other securities or investments which may be authorized by law from time to time and sufficient under such law to effect such a defeasance) in irrevocable trust with a banking institution or trust company, for the sole benefit of the holders of the Bonds and the Notes, in an aggregate prin- cipal amount which, together with interest to accrue thereon, will be sufficient to make timely payment of the principal of and redemption premiums, if any, and interest on the Bonds and the Notes in accordance with their terms, the paying agents' fees and expenses with respect thereto and any other expenses occasioned by escrow arrangements or provision for redemption, shall be con- sidered "provision for payment. Nothing herein shall be deemed to require the Issuer to call any of the outstanding Bonds or -20- Notes for redemption prior to maturity pursuant to any applicable optional redemption provisions, or to impair the discretion of the Issuer in determining whether to exercise any such option for early redemption, except that if any of the Bonds shall be held by the Government, the Bonds so held by the Governme,Lt shall. be called for redemption as a whole within a period not exceeding 6 months from the date of such deposit unless the Government shall agree otherwise in writing. Notwithstanding the above, any Bonds held by the Government shall be defeased only with the prior writ- ten approval of the Government. 4.05 Severability of Invalid Provisions. If any one or more of the covenants, agreements or provisions of this instrument or of the Bonds or Notes should be held contrary to any express provision of law or contrary to the policy of express law, though not expressly prohibited, or against public policy, or shall for any reason whatsoever be held invalid, then such covenants, agreements or provisions shall be null and void and shall be deemed separate from the remaining covenants, agreements or pro- visions of this Instrument and of the Bonds and the Notes. 4.06 Conflicts Repealed. All resolutions or parts of resolutions in conflict herewith are hereby repealed. 4.07 Effective Date. This Instrument shall take effect 4 --mediately upon its passage: The foregoing resolution was offered Lyons who moved its adoption. The seconded by Commissioner Bird and, upon vote, the vote was as follows: Chairman Don C. Scurlock, Jr. Vice -Chairman A. Grover Fletcher Commissioner Patrick B. Lyons Commissioner William C. Wodtke, Jr. Commissioner Dick Bird by Commissioner motion was being put to a Aye Nay Aye Aye Aye The Chairman thereupon declared the resolution duly passed and adopted this 7th day of duly , 1982. Attest:y� FREDA WRIGHT, Cle BOARD OF COUNTY COMMISSIONERS OF INDIAN RIVER COUNTY, FLORIDA By .4dAwz DON C. SCURLOCK, JR. Chairman 7 APPROVED AS TO FORM AND LEGAL SUFFICANCY , /% /'/ -21 f4. BRANDEN URG,Cou y Atto CERTIFICATE OF RECORDING OFFICER The undersigned HEREBY CERTIFIES that: 1. SHe is the duly appointed, qualified and acting rle.rk of the Board of Cour�Z Commissioners (herein called the ' Board "), and keeper of the records thereof, including the minutes of its proceedings; 2. The annexed copy of extracts from, the minutes of the Regular meeting of 1 -he Boated held on the 7th day of—-J111Y_,_____ , 198_, is a true, correct, and compared copy of the whole of the original minutes of the meeting on file and of record insofar as the same relate to the resolution referred to in such extracts and to the other matters referred to therein; 3. The meeting was duly convened in conformity with all applicable requirements; a proper quorum was present throughout the meeting and the resolution hereinafter mentioned was duly proposed, considered, and adopted in conformity with applicable requirements; and all other requirements and proceedings incident to the proper adoption of the resolution have been duly fulfilled, carried out, and otherwise observed; 4. SHe is duly authorized to execute this Certificate; and 5. The copy of the resolution annexed hereto entitled: RESOLUTION NO. $2-61 Resolution combining all water and/or sewer systems of Indian River County, Florida, into one integrated system; pledging the gross revenues of such combined system to secure payment of the principal of and interest on all water and/or sewer revenue obligations of the County; revising certain covenants in the Resolutions authorizing the issuance of all outstanding water and/or sewer revenue obligations of the County; and providing for the rights of the holders of such obligations. is a true, referred to and, to the approved by Board correct, and compared copy of the original resolution in the extracts and as finally adopted at the meeting Pxte— rarr,ii reui by ld`' +-1- I- .., as hereafter duly signed or the proper1Mofficer or officers of the which resolution is on file and of record. WITNESS my hand and the seal of the Clerk this day of jilt y .—, 19&2—. T -1 TT_ 1_/�, , Y i'reda w__imhL --, l iekk (SEAL) EXTRACTS FROM THE MINUTES OF A Regular MEETING OF THE Board of County CammissionPY4 OF Indian River County, Florida_ ^� HELD ON THE 7th DAY OF J111 y _► 19,82 The Board of County Commissioners of Indian River County, Florida Administration Building met in Regular meeting at 1840 25th St eet_____ in the City of Vero Beach ► Florida r at —2:30 o°clock P.M. on the 7th day of .T1f1y , 1982 , the place, hour, and date duly established for the holding of such meeting. The Chairman called the meeting to order and on roll call the following answered present: Don C. Scurlock, Jr. ► A. Grover Fletcher Dick Bird ► Patrick B. Lyons ► and the following were absent: None I W i l l i am r TWpa=, r The Chairman declared a quorum present. A resolution entitled: 82_f1 Resolution combining all water and/or sewer systems of Indian River Cot Florida, into one integrated system; pledging the gross revenues of suc combined system to secure payment of the principal of and interest on all water and/or sewer revenue obligations of the Cotuity; revising certain covenants in the Resolution author -'.zing the issuance of all. outstanding water and/or sewer revenue obligations of the County; and providing for the rights of the holders of such obligations. was introduced by Attorney Gary Brandenburg The resolution was then read in full and discussed and considered. Mr. Patrick B. Lyons then moved the adoption of the resolution as introduced and read. Mr, ' F) DiCri 1)- r d seconded the motion, and, on roll call, the following voted IlAye" : Patrick B. Lyons, Dick Bird, William C. Wodtke, Jr., and Don C. Scurlock, Jr. and the following voted "Nay": A. Grover Fletcher The Chairman thereupon declared the motion carried and the resolution adopted as introduced and read. There being no further business to come before the meeting, upon motion duly made and seconded; the meeting was adjourned.