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Authorizing and Providing for the Issuance of $4,500,000 Water Revenue Bonds of the Town of Fairfax, for the purpose of acquiring a supply of water and constructing works and improvements for the municipal water System. AN ORDINANCE authorizing and providing for the issuance of $4,500,000 Water Revenue Bonds of the Town of Fairfax, Virginia, for the purpose of acquiring a supply of water and constructing works and improvements for the municipal Water System of said Town, prescribing the form of said proposed bonds and providing for the payment of the prin- cipal and interest thereof and setting forth the terms and conditions upon which the said bonds and additional bonds ranking on a parity therewith are to be and may be issued and outstanding. t � WHEREAS by ordinance heretofore adopted by the Council of the Town of Fairfax, Virginia, on March 15, 1956, it has been proposed that said Town acquirea new supply of water and con- struct works and improvements for the municipal water system of said Town, same being a specific undertaking from which said Town will continue to derive a revenue, and in and by said ordinance it was further proposed to borrow money and issue bonds of said Town to the amount of $4,500,000 for the purpose aforesaid under the provisions of Clause (b) of Section 127 of the Constitution of Virginia, and Section 15-591 at seq. of the Code of Virginia, 1950, as amended, so that said bonds are not to be included within the limitation of indebtedness of said Town contained in Section 127 of the Constitution of Virginia and Section 15-592 of the Code of Virginia, 1950, as amended, but are to be payable as to both principal and interest exclusively from the receipts and revenues of the undertaking; and WHEREAS pursuant to an order by the Circuit Court of Fairfax County entered upon filing with it of a certified copy of said ordinance an election was duly called and held in and for said Town whereat there was submitted the question whether such bonds shall be issued, and whereas from the certification of the results as filed with this Council by the Clerk of said Circuit Court at said election on April 5, 1956, more than a majority of the qualified voters of said Town voting upon the question voted in favor of the issuance of said bonds and said proposition was declared duly carried; and WHEREAS Chapter 6440 of the Acts of the General Assembly of Virginia, 1958 provides that the governing body of any town which has heretofore done or taken any acts or proceedings for the issuance of bonds under the provisions of Chapter 19 of Title 15 of the Code of Virginia, 1950, as amended, as it stood prior to the passage of said Chapter 6)40 may complete such acts and • proceedings s.and issue such bonds in the same manner as if the said Chapter 640 had not been passed, and whereas it is deemed advisable by the Town Council as the governing body of the Town of Fairfax to issue said bonds in such manner; and WHEREAS it is .deemed necessary at this time to adopt .an ordinance authorizing and providing for the issuance of said bonds and forth the terms and aredtoobes and and any may be issued and outstanding; NOW, THEREFORE, Be It and It Hereby Is Ordained by the Town Council of the Town of F,.irfax, Virginia, as follows: YFRO XCRO XEROi '.COPY COPY 4 Section 1. The following terms shall have the following meanings in this ordinance unless the text otherwise expressly requires: (a) "Town" shall mean the Town of Fairfax, Virginia. (b) "Bonds" shall mean the $4,500,000 Water Revenue Bonds originally authorized to be issued pursuant to this ordi- . nance and the interest coupons attached to said Bonds, and shall also be deemed to include any Bonds, and the interest coupons attached thereto, subsequently issued pursuant to and within the limitations, restrictions and conditions contained in this ordi- nance providing for the creation of additional parity obligations payable from the revenues of said Water System and having parity as to lien and source and security for payment from said revenues with the $4,500,000 originally authorized by this ordinance. (c) "Holder of Bonds" or "Bondholder" or any similar term shall mean any person who shall be the bearer or owner of any outstanding Bond or Bonds registered to bearer or not registered, or the registered owner of any outstanding Bond or Bonds which shall at the time be registered other than to bearer, or of any coupons representing interest accrued or to accrue on said Bonds. (d) "Water System" shall mean the complete water system now owned by said Town, or hereafter constructed or acquired, in- cluding the extensions, additions and improvements to be con- structed or acquired from the proceeds of the Bonds authorized by this ordinance, or from any other sources, together with all lands or interest therein, plants, buildings, machinery, franchises, pipes, fixtures, equipment, and all property now or hereafter owned or used in connection therewith, and including all parts thereof. (e) "Revenues" shall mean all moneys received by the Town in the payment of the rates, fees and charges for water fur- nished by the Water System and all other income derived by the Town from the operation or ownership of the Water System. (f) "Current Expenses" shall mean the Town's reasonable and necessary current expenses of maintenance, repair and opera- tion of the Water System and shall include, without limiting the generality of the foregoing, all ordinary and usual expenses of maintenance, repair and operation, which may include expenses not annually recurring, all administrative expenses and any reasonable payments to pension or retirement funds properly chargeable to the Water System, insurance premiums, engineering expenses relating to maintenance, repair and operation, fees and expenses of the paying agents for the Bonds, as hereinafter set forth, legal expenses, any taxes which may be lawfully imposed on the Water System or the income therefrom and reserves for such taxes, and any other ex- penses required to be paid by the Town under the provisions of this ordinance or by law, but shall not include any reserves for extraordinary maintenance or repair, or any allowance for depreci- ation or any deposits to the credit of the special funds created by this ordinance. (g) "Net Revenues" for any particular period shall mean the amount of the excess of the Revenues of the Water System over Current Expenses during such period. Section 2. That the Town acquire a new supply of water and construct works and improvements for the municipal Water System of said Town which is a specific undertaking from which -2- XERO XI PO XERO' COPY COPY- _ .--- said Town derives a revenue, and for the purpose of paying the cost thereof there be borrowed by and on behalf of said Town the sum of Four Million Five Hundred Thousand Dollars ($4,500,000) , and in evidence thereof there be issued Water Revenue Bonds of said Town in the principal amount of $4,500,000 which bonds shall not be included within the limitation of indebtedness of said Town contained in Section 127 of the Constitution of Virginia and Sec- tion 15-592 of the Code of Virginia, 1950, as amended, but shall be payable as to both principal and interest exclusively from the Revenues of said Water System, all as hereinafter more specifical- ly provided. Section 3. That said Water Revenue Bonds be numbered consecutively 1 to 4500, inclusive, of the denomination of $1,000 each, be dated June 1, 1956, and become due and payable in numer- ical order on June 1 of the respective years as follows: Year Amount Year Amount 1962 $ 10,000 1977 $160,000 1963 20,000 1978 170,000 1964 30,000 1979 180,000 1965 40,000 1980 190,000 1966 50,000 1981 200,000 1967 60,000 1982 210,000 1968 70,000 1983 215,000 1969 80,000 1984 220,000 1970 90,000 1985 225,000 1971 100,000 1986 235,000 1972 110,000 1987 245,000 1973 120,000 1988 255,000 1974 130,000 1989 260,00o 1975 140,000 1990 265,000 1976 150,000 1991 270,000 provided, however, all of said bonds shall be optional for redemp- tion prior to maturity in part in the inverse order of their maturities (less then all of a single maturity to be selected by lot) and in amounts of not less than $5000 for the purpose of per- mitting the application of available excess revenues from the operation of the municipal Water System of said Town, on any interest payment date on or after June 1, 1961 at the redemption prices set forth below, together with the interest accrued thereon to the date fixed for redemption. Said bonds numbered 151 to 4500, inclusive, shall also be optional for redemption prior to maturity as a whole for refunding purposes at any time on or after June 1, 1966 at the redemption prices set forth below, together with the interest accrued thereon to the date fixed for redemption. If Redeemed Redemption Price (Percentage of Principal Amount) On or after June 1, 1961, to and including June 1, 1971 104% Thereafter to and including June 1, 1976 103% Thereafter to and including June 1, 1981 102% Thereafter to maturity 101% Notice of any such redemption identifying the bonds to be redeemed will be given by publication at least once not less than thirty ( 30) days prior to the redemption date in a newspaper or financial journal of general circulation published in the City of New York, New York. All of said bonds thus called for redemption and for the redemption of which funds are duly provided will cease to bear interest on such redemption date. - 3 - XERO x!'PO COP COPY r f,1'Y COPT Y That said bonds numbered 1 to 1050, inclusive, shall bear interest at the coupon rate of three and three-quarters per cent (3-3/4 ) per annum; and bonds numbered 1051 to 4500, inclu- sive, at the rate of three and seven-eights per cent (3-7/81) per annum, which interest shall be payable semi-annually on Tune 1 and December 1 in each year; that such interest at the coupon rate aforesaid be evidenced by proper coupons attached to each of said bonds and that both principal and interest be payable in law- ful money of the United States of America at the principal office of The First and Merchants National Bank of Richmond, in the of Richmond, Virginia, or, at the option of the holder of the respective bonds and interest coupons at the principal office of The Chase Manhattan Bank of New York City in the City of New York, New York. Said bonds shall be signed by the Mayor of said Town, sealed with the corporate seal of said Town, and attested by the Clerk of said Town, and the interest coupons attached to said bonds shall be executed with the facsimile signatures of said Mayor and said Clerk, and said officials, by the execution of said bonds, shall adopt as and for their own proper signatures their respective facsimile signatures appearing on said coupons . All of said bonds, together with the interest thereon and any addi- tional bonds ranking on a parity therewith shall be payable as hereinafter more specifically provided only out of the Principal and Interest Fund, hereinafter created, and said bonds shall be a valid claim of the holder thereof only against said fund and the portion of the Net Revenues of the municipal Water System of said Town hereinafter ordered set aside to such fund. Section 4. That upon presentation at the office of the Clerk of said Town of any of said bonds same may be registered as to principal in the name of the owner on the books in his office, such registration to be noted on the reverse side of the bonds by the Clerk, and thereafter the principal of such registered rbonds shall be payable only to the registered holder, his repre- sentatives or assigns . Such registered bonds shall be transfer- able to another registered holder or back to bearer only upon presentation to the Clerk with a legal assignment duly acknowl- edged or proved. Registration of any of such bonds shall not affect the negotiability of the coupons thereto attached, but such coupons shall be transferable by delivery merely. Section 5. That said bonds and coupons and provisions for registration shall be in substantially the following form: (Form of Bond) UNITED STATES OF AMERICA COMMONWEALTH OF VIRGINIA COUNTY OF FAIRFAX TOWN OF FAIRFAX WATER REVENUE BOND $1,000 No. KNOW ALL MEN BY THESE PRESENTS, that the Town of Fairfax, in the County of Fairfax, and Commonwealth of Virginia, for value received hereby promises to pay to bearer, or if this bond be registered to the registered holder hereof, as hereinafter pro- vided, the sum of One Thousand Dollars ($1,000) on .the first day of June, 19 , and interest on said sum from the date hereof until paid at the rate of per cent ( o) per annum, payable semi-annually on June l and December 1 in each year, except as the provisions hereinafter set forth with respect to prior redemption may be and become applicable hereto, all such interest as may accrue on and prior to maturity hereof to be paid - 4 - M!r YCRO XERO XERO COPY upon presentation and surrender of the annexed interest coupons as the same severally mature, both principal and interest being pay- able in lawful money of the United States of America at the princi- pal office of The First and Merchants National Bank of ffRihehndder in the City of Richmond, Virginia, or, at hereof, at the principal office of The Chase Manhattan Bank of Nev York. City, in the City of New York, New York. This bond is one of a series of bonds numbered consecu- tively 1 to 4500, inclusive, aggregating $4,500,000 principal amount, issued by said Town for the purpose of paying the cost of acquiring a new supply of water and constructing works and improve- ments for the municipal Water System for said Town as authorized by the qualified voters of said Town voting at an election duly called, noticed and held for said purpose, under and in full com- pliance with the Constitution and Statutes of Virginia, including among others Clause (b) of Section 127 of said Constitution and n ,d Section 15-591 et seq, of the Code of Virginia, 1950, as and pursuant to an ordinance duly adopted by the Council of said Town. The bonds of the series of which this bond is one, shall be optional for redemption prior to maturity in part in the inverse order of their maturities (less than all of a single 0mtutyhto be selected by lot) and in amounts of not less than $5, 0 for purpose of permitting the application of available excess revenues from the operation of the municipal Water System of said Town, on any interest payment date on or after June 1, 1961, at the redemp- tion prices set forth below, together with accrued interest thereon to the date fixed for redemption and said bonds numbered 151 to 4500, inclusive, of the series of which this bond is one, shall also be optional for redemption prior to maturity as a whole for refunding purposes at any time on or after June 1, 1966, at the redemption prices set forth below, together with the interest accrued thereon to the date fixed for redemption. If Redeemed Redemption Price (Percentage of Principal Amount) On or after June 1, 1961 to and including June 1, 1971 104% Thereafter to and including June 1, 103% Thereafter to and including June 1, 1981 101% Thereafter to maturity Notice of any such redemption identifying the bonds to be redeemed will be given by publication at least once not less than thirty (30) days prior to the redemption date in a newspaper or financial journal of general circulation published in the City of New York, New York. All of said bonds thus called for redemption and for the redemption of which funds are duly provided will cease to bear interest on such redemption date. This bond and the series of which it is one, with inter- est thereon, and any additional bonds ranking on a parity therewith that may be issued and outstanding under the conditions and re- strictions set forth in said ordinance, are payable only from Net Revenues to be derived from the operation of said municipal Water System, a sufficient portion of which has been ordered set aside and pledged as a special fund and identified as the "Principal and Interest Fund" , created under the provisions of said ordinance pur- suant to which this bond and the series of which it is one have been issued. This bond does not constitute an indebtedness of said, Town within the meaning of any constitutional, statutory or charter limitations, but said Town covenants that it will fix such - 5 XERO XI PO XERO- COPY IIY '.. .-. COPY rates and charges for services rendered by said Water System and collect and account for receipts and revenues therefrom sufficient to pay promptly the principal of and interest on this bond and the series of which it is one and all other bonds ranking on a parity therewith as may be outstanding from time to time, This bond is fully negotiable but may be registered as to principal only in the name of the holder on the books of said Town in the office of its Clerk, such registration being noted hereon by the Clerk, and after such registration no transfer shall be valid unless made on said books and similarly noted on the bond, but it may be discharged from such registration by being trans- ferred to bearer, after which it shall be transferable by delivery, but it may be again registered as before. The registration of this bond as to principal shall not restrain the 'negotiability of the coupons by delivery merely. It is hereby certified, recited and declared that all acts, conditions and things required to exist, happen and be per- formed precedent to and in the issuance of this bond and the series of bonds of which it is one have existed, have happened and have been performed in due time, form and manner as required by law, and that the amount of this bond, together with all other obliga- tions of said Town, does not exceed any limit prescribed by the Constitution or Statutes of Virginia, and that a sufficient por- tion of the Net Revenues of said Water System has been ordered set aside and will be set aside into said special fund by said Town and applied to the payment of the principal of and interest on this bond as the same will become due. IN WITNESS WHEREOF, said Town of Fairfax, in the Common- wealth of Virginia, has caused this bond to be signed by its Mayor and its corporate seal to be hereunto affixed, attested by its Clerk, and the coupons hereto attached to be executed with the facsimile signatures of said Mayor and Clerk, which officials by the execution of this bond do adopt as and for their own proper signatures their respective facsimile signatures appearing on said coupons, and this bond to be dated the first day of June, 1956. Mayor Attest; Clerk (Form of Coupon) No. $ On the first day of , 19 , the Town of Fairfax, Virginia, will pay to bearer Dollars ($ ) out of the Principal and Interest Fund at The First and Merchants National Bank of Richmond, in the City of Richmond, Vieginia, or, at the option of the holder hereof, at The Chase Manhattan Bank of New York City, in the City of New York, New York, as provided in and being interest then due on its Water Revenue Bond dated June 1, 1956, Number Attest: Mayor Clerk - 6 XERO 'YU RO ,_,. ': XERO' -COPY r (Form for Registration to be printed on the Back of each bond) Date of • In Whose Name • Signature of Registration • Registered • Clerk • • • • �i'-- Section 6. Said Town hereby covenants and agrees with each successive holder of the bonds hereby authorized and the cou- pons thereto attached that it will fix and maintain rates and col- lect charges for the services and facilities afforded by the Water System fully sufficient at all times, (1) to pay the reasonable and necessary Current Expenses ; (2) to.• pay the interest on and the principal of said bonds as the same may fall due; and (3) to provide a Reserve Fund as hereinafter provided. From and after the issuance of any bonds hereby author- ized the Revenues of the Water System shall be deposited as received in an account separate and apart from all other Town funds or accounts, to be designated the "Revenue Fund" and the monies in said fund shall be set aside on the first day of each month into separate and special funds as follows, in the following manner and order of priority: (a) Operation and Maintenance Fund. The municipal Water System shall be operated on an annual budget year commencing as of January 1 of each year and at least 30 days preceding the end of each such budget year the Town Council shall adopt an annual bud- get for Current Expenses of slid Water System for the next succeed- ing calendar year. There shell be a fund known as the "Operation and Maintenance Fund" into which there shall be paid an amount, which together with any balance therein, will be equal to one-sixth of the annual budget for Cur ?ent Expenses, for the purpose of the payment of Current Expenses, as defined in Section 1(f) hereof. Any funds in said Operation and Maintenance Fund in excess of the amount required for Current Expenses for the current month may be invested upon orders of the Town Council in direct obligations or guaranteed bonds or securities of the United States of America, having a maturity date or being subject to redemption at the op- tion of the holder thereof, not more than three months subsequent to the date of investment therein. If invested, the income from such investments shall be transferre. -• ti e ;ev-nu- un• . (b) Principal and Interest Fund, There shall be a fund known as the "Principal and Interest Fund" into which there shall next be paid, ,commencir..g the first month after completion of the project as set forth in Section 15, or on December 1, 1960, which- ever date is the earlier, an amount not less than one-sixth of the amount of interest which will mature and become due on the next semi-annual interest payment date and an amount not less than one- twelfth of the amount of principal of bonds issued pursuant to this ordinance which will mature and become due on the next annual principal maturit: date. Monies in the Principal and Interest Fund shall be used solely and only for and is hereby pledged to the payment of the principal of and the interest on the bonds hereby - 7 - XERO '!(RO YCRO� XERO. COPY sir authorized and any additional bonds ranking on a parity therewith that may be issued and outstanding under the conditions and restrictions hereinafter set forth. Monies in said Principal and Interest Fund may be invested upon orders of the Town Council in direct obligations or guaranteed bonds or securities of the United States of America, having a maturity date or being subject to re- demption at the option of the holder thereof, not later than one week preceding the date upon which payments are to be made from such Fund. If invested) the income from such investments a a1L be transferred`to the Revenue. und. (c) Reserve Fund. There shall be a fund known as the "Reserve Fund" into which there shall next be paid, commencing the first month after completion of the project as set forth in Sec- tion 15, or December. 1, 1960, whichever date is the earlier, an amount equal to 20% of the monthly payments required to be paid into the Principal and Interest Fund as set forth herein above until there is accumulated in the Reserve Fund an amount equal to the maximum amount that will become due in any succeeding calendar year for both principal and interest on the bonds then outstanding, which are payable from said Principal and Interest Fund. Monies in the Reserve Fund may be used only to transfer funds to the Principal and Interest Fund rhenever there are insufficient funds in said Principal and Interest Fund;; Monies in the Reserve Fund may be invested upon orders of the Town Council in direct obliga- tions or guaranteed bonds or securities of the United States of America, without limitation as to maturity. If invested, such in- vestments are to be valued at cost or current market value, which- ever is lower and the income therefrom shall be transferred to the Revenue Fund. Any monies in the Reserve Fund ex e s_os_the re- quired monies in sal• and sha •e WMATerred to the Revenue Fund. (d) Renewal, Replacement and Extension Fund. There shall be a fund known as the "Renewal, Replacement and Extension Fund" into which there shall next be paid an amount equal to one-twelfth of 5% of the Revenues of the prior calendar year until the amount in said Fund shall aggregate $1.00,000, and whenever withdrawals are made from said Fund as to reduce the balance therein to less than $100,000, then the transfers and payments therein shall con- tinue as aforesaid so as to restore the amount therein to at least $100,000. Withdrawals and disbursements may be made from said Fund upon orders of the Town Council for the purpose of meeting special or unforseen emergencies or repair or replacement work in connec- tion with the operation of the municipal Water System or for the payment of the cost of constructing extensions, improvements, bet- terments •or additions to said system, and provided also, that the withdrawals and disbursements shall be made from said Fund to the Principal and Interest Fund for the payment of interest on or principal of said bonds to whatever extent and if for any reason funds in the Principal and Interest Fund and the Reserve Fund are insufficient for that purpose. All funds in the Renewal, Replace- ment and Extension Fund shall be kept apart from all other Town funds and all or any part thereof may be invested in direct obliga- tions or guaranteed bonds or securities of the United States of America, maturing or being subject to retirement at the option of the holders within not more than ten years from the date of such investment. If invested, the income from such investments shall be transferred to the Revenue Fund. (e) Excess Revenues . Whenever all specified and required monthly transfers and payments into the special funds hereinbefore provided have been made and there is a balance in the Revenue Fund in excess of the estimated amounts required to be so transferred and paid into said special funds in the succeeding month, all or - 8 - XERO Xi EE O XERO XE-Rr Ce" rpoy any part of such excess nay be transferred upon order of the Town Council to the Renewal, Replacement and Extension Fund, the Bond Redemption Fund, hereby created, or to be used in any other manner required or permitted bj lair. Monies in the Bond Redemption Fund, when there is a balance in excess of $5,000 in said Fund, shall be used only for the purpose )f purchasing or calling for redemption bonds herein authorized ir. advance of maturity to the extent of the available monies therefor . Section 7. In ;he event the Net Revenue during any month are inadequate or if for any other reason there be a failure to make the required payments into the Principal and Interest Fund and the Reserve Fund, the deficiency shall be made up and paid as aforesaid from the Net Revenues therafter received and the same shall be in addition to the payments otherwise provided to be made in such suc- ceeding month or months. Section 8. Al? monies in the several funds herein estab- lished while retained by the Town and pending remittance to the places of payment shall oe deposited in a bank or banks separate and apart from all othe:., Town funds, and all such deposits in ex- cess of $10,000 in any pne bank shall be continually secured by a surety bond or bonds f:.rnished by a surety company or companies qualified or authorized to do business in Virginia or by the valid pledge of direct obliEations or guaranteed bonds or securities of the United States of America, having an equivalent market value. Section 9. Whenever there is in the Bond Redemption Fund funds in the amount of $5,000 or more for the purchase or retire- ment of the bonds, it 31-2111 be used in the following manner: The entire surplus made available by deposit in the Bond Redemption Fund for the retirement of bonds computed as aforesaid shall be used to purchase bonds on the open market on the best available terms or after advertisement for sealed tenders to pur- chase : onds offered at the lowest price or prices, but no such purchase of bonds shall be made upon terms or at prices exceeding the terms of redemption thereof on the next succeeding redemption date, or such surplus shall be used to call bonds for redemption, and to whatever exte.it bonds are not so purchased within forty-five days preceding the next interest payment date, said Council shall proceed to call bonds for redemption as hereinbefore provided. All bonds so purchased or redeemed shall be cancelled. -r-7 e — Section 10. While the bonds authorized hereunder, or any of them, remain outstanding and unpaid, the rates for all services rendered by the said Water System to said Town and its citizens, corporations or others served thereby, shall be reasonable and just, taking into account and consideration the cost and value of said system and the cost of maintaining and operating the same and the proper and necessary ;ransfers of moneys to the funds created herein, and there shall b : charged against such Town, citizens, corporations and others, ;uch rates and amounts as shall be ade- quate to meet the requirenents of this and the preceding sections hereof. Compensation for services rendered or facilities afforded to said Town by said Water System shall be charged against the Town, and payment for sate from the corporate funds shall be made into the Revenue Fund created by this ordinance as other revenues, and shall be apportioned as such other revenues . Said Town agre-:s that so long as any of the bonds hereby authorized remain outstanding it will keep proper books of record and account, separate fr)m all other municipal records and accounts, showing complete and correct entries of all-transactions relating - 9 XERO . 10 XEROX co-- copy to said Water System and that the holders of any of said bonds shall have the right at all reasonable times to imspect the properties and all records, accounts and data of the Town relating thereto. Said Town hereby further covenants and agrees that it - will cause said books and accounts to be audited annually by an independent certified public accountant and will make annually available to the holders of any of the bonds the balance sheet and the profit and loss statement of the municipal Water System as certi- fied by such accountant. Said audit shall state whether the Town has complied with the terms and conditions contained in this ordi- nance. Section 11. The said Town hereby covenants and agrees with the holder or holders of the bonds herein authorized to be issued, or any of them, that it will faithfully and punctually per- form all duties with reference to said Water System required by the Constitution and laws of Virginia, including the making and collecting of reasonable and sufficient rates for services ren- dered thereby, and will segregate the receipts and revenues of said system and make the application thereof into the respective funds created by this ordinance; and the Town hereby irrevocably cove- nants, binds and obligates itself not to sell, lease, mortgage or in any manner dispose of said Water System, including any and all extensions and additions that may be made thereto, until all the bonds herein authorized to be issued shall have been paid in full, both principal and interest, or unless and until full provision for such payment shall have been made, and the Town further cove- nants and agrees with the holders of said bonds to maintain in good condition and continuously operate said system and to charge and collect such rates and charges for services rendered thereby so that the Revenues will be sufficient at all times to provide for the payment of the operation and maintenance thereof, and main- tain the Principal and Interest Fund and the Reserve Fund, as pro- vided herein. Notwithstanding the foregoing provision, the Town shall have the right to sell, lease or otherwise dispose of any of the property of the Water System which is found by the Town Council and the superintendent in charge of the operation of said system to be no longer necessary and useful in the operation of said system. The proceeds received from the sale, lease, or disposal of any such property, shall be paid into the Renewal, Replacement and Extension Fund. Section 12. That for the further protection of the holders of the bonds herein authorized to be issued and the cou- pons attached thereto, any holder of said bonds or of any of the coupons, may either at law or in equity, by suit, action, mandamus or other proceeding, enforce and compel performance of all duties imposed by law and this ordinance, including the making and col- lecting of sufficient rates and segregation of the Revenues and the application thereof. If there be any default in the payment of the principal of or interest on any of said bonds then upon the filing of suit by any holder of said bonds, or of any of the coupons, any court having jurisdiction of the action may appoint a receiver to administer said system on behalf of the Town, with power to charge and collect rates sufficient to provide for the payment of any bonds or obligations outstanding against said Revenues, and for the payment of the Current Expenses, and to apply the Revenues in conformity with this ordinance and the provisions of the laws of Virginia. - 10 - XERO YIP() XERO COPY Section 13. The bonds hereby authorized from time to time outstanding, together with any additional bonds ranking on a parity therewith, issued under the restrictions and conditions hereinafter set forth, shall not be entitled to priority one over the other in the application of the Revenues of said Water System, regardless of the time or times of their issuance. Said Town hereby covenants and agrees so long as any of the bonds issued pursuant to this ordi- nance are outstanding and unpaid no other bonds or obligations pay- able from the Net Revenues of said Water System or from any improve- ments or extensions-thereof will be issued or incurred unless the security and obligation of payment from such Net Revenues are made subject to the priority of the payments from the Revenue Fund into the Principal and Interest Fund and Reserve Fund for account of the bonds hereby authorized and any additional parity bonds as herein- before provided; however, in the event the proceeds derived from the issuance and sale of the bonds authorized hereby are not sufficient to fully accomplish the stated purpose thereof said Town hereby reserves the right and privilege of issuing additional bonds from time to time payable from said Principal and Interest Fund ranking on a parity with the bonds herein authorized for the purpose of completing the acquisition of a new supply of water and construction of works and improvements for the municipal Water System, as shown and described by the report prepared by the firm of Alvord, Burdick and Howson, Chicago, Illinois, and now on file with the Town Clerk, but prior to the adoption of any ordinance for the issuance of any such additional bonds for the purpose aforesaid there shall be prepared and submitted to the Council of said Town by said firm or by an independent consulting engineer or firm of con- sulting engineers employed by the Town for that purpose a certificate showing the total amount of work to be completed, the estimated cost of such completion, and the estimated amount of the deficiency of funds to pay such costs, and further reciting the opinion, based upon the necessary investigations, that the annual Net Revenues of the municipal Water System of said Town in each future calendar year will be not less than the combined interest and principal requirements for the corresponding calendar years for all bonds to be outstanding after the issuance of such additional bonds . Said Town further : reserves the right and privilege from time to time to issue parity bonds as aforesaid in order to pay the cost of future extensions, betterments or improvements to the municipal Water System of said Town, but before any such bonds ranking on a parity may be issued for such future extensions, betterments or improvements, there shall be procured and filed with the Clerk of said Town a statement by an • independent consulting engineer or firm of consulting engineers reciting the opinion based upon necessary investigations that the estimated Net Revenues of the municipal Water System of said Town in each of the succeeding calendar years will be not less than 1.30 times the combined interest and principal requirements for the corresponding calendar years for all bonds to be outstanding after the issuance of such additional bonds. In making the foregoing computations such consulting engineer or firm of consulting engineers shall take into consideration the past experienced revenues of said Water System with adjustments to reflect any increases by reason of any revision in the schedule of rates and charges being imposed at the time of the issuance of such additional bonds, by reason of the extensions, betterments and improvements the cost of which is to be paid through the issuance of such additional bonds and by reason of any projected population growth in the area served by said Water System. In no event shall any such additional bonds be issued un- less prior to the issuance thereof contracts for the immediate construction or acquisition of the extensions, betterments and improvements for account of which such additional bonds are to be - 11 - XERO i XC:RO. XORO COPY ICOPY COPY � • i issued shall have been entered into. The interest payment dates for all such additional parity bonds shall be semi-annually on June land December 1 of each year with the principal maturities thereof on June .1 of any year in which any such principal is scheduled to become due. At or before the time of issuance of any such additional parity bonds , as aforesaid, provision shall be made for the payment into the Principal and Interest Fund each year in equal monthly installments of sufficient additional Net Revenues of said Water System to pay the interest on such additional bonds as it becomes due, to pay the principal thereof at or before maturity, and to accumulate in the Reserve Fund within the first ten years after the issuance of such additional bonds a reserve equal to at least the maximum amount of principal and interest becoming due in any succeeding calendar year on all the bonds then outstanding. Section 14. So long as any of the bonds herein authorized are outstanding the Town shall maintain insurance for the benefit of the holders of said bonds on the insurable parts of the properties of the kinds and in the amounts such as would normally be carried by private companies engaged in the operation of similar properties in Virginia. All insurance shall be placed with reputable insurance companies . Section 15. The proceeds of the bonds hereby authorized exclusive of accrued interest and except as hereinafter otherwise provided shall be applied to the extent necessary in paying the cost of acquiring a new supply of water and constructing works and improvements for the municipal Water System of said Town and in- cluding the acquisition of a new source of water supply from Goose Creek in Loudoun County, Virginia, at a location approximately two and one-half miles southwest of its crossing of United States Route 7, and tying in the said new water supply to the present Town Water System and such costs to include the construction or the acquisition, by purchase, lease, gift, condemnation, or otherwise, of the necessary lands, waters, rights, works, filters, dams, water lines, pumping equipment, facilities, appurtenances and improvements, and other necessary costs, and provided further that interest accruing on said bonds during such acquisition and construction shall be deemed an item of construction cost. The proceeds of said bonds thus set apart for acquisition and construction costs, exclusive of interest ac- cruing on said bonds during the acquisition and construction period, shall be paid out only upon certification by the firm of Alvord, Burdick and Howson or other independent consulting engineer or firm of consulting engineers retained by the Town to supervise the ac- quisition and construction work to the effect that the respective amounts of such expenditures• represent amounts due and payable for land acquisition, materials furnished, or work or services performed incnnection with the acquisition of such new supply of water or the construction of the works and improvements for the municipal Water System being financed by the bonds hereby authorized. Pending expenditures such proceeds shall be deposited in a bank or banks and each such deposit to the extent it causes the aggregate deposit by said Town in any such bank to be in excess of $10,000 shall be secured by a surety bond or bonds furnished by a surety company or companies, qualified or authorized to do busiss in Virginia, or rities by a pledge of direct obligations or by guaranteed of the United States of America having a market value equivalent to such deposit. If the Council shall determine at any time that the amount of bond proceeds being held for acquisition and construction costs is in excess of th° amount necessary to be disbursed therefrom for the authorized purpo° es during the ensuing month, it may invest - 12 - vl XERO XERO COPY such excess in interest bearing bonds or other direct and general obligations of the United States of America having a maturity date or being subject to retirement at the option of the holder not more than 18 months subsequent to the date of such investment, and all such investments as well as all income therefrom shall be carried to the credit of such acquisition and construction fund. Any surplus remaining after accomplishing the aforesaid purposes shall be con- verted into the Reserve Fund. All accrued interest which may be received from the sale of any of the bonds hereby authorized, to- gether with funds representing interest during acquisition and con- struction, as aforesaid, shall be converted into said Principal and Interest Fund. Section 16. That the bonds hereby authorized to the amount of $260,000 consisting of bonds numbered and maturing as follows: Maturity Bond Numbers Amounts ( inclusive) 1962 1-10 $10,000 1963 11-20 10,000 1964 31-45 15,000 1965 61-80 1966 101-125 25,000 1967 151-175 5 2 000 � 1968 211-240 30,000 1969 281-310 30,000 1970 361-390 30,000 1971 451-480 30,000 1972 551-585 35,000 be prepared and executed as herein provided as soon after the adoption of this ordinance as may be, and thereupon the Mayor, Clerk and Treasurer of said Town are hereby directed to sell and deliver said bonds to Stifel, Nicolaus & Co. , Inc. , Chicago, Illinois, the pur- chaser, and the agreement for such sale and delivery is hereby ratified and confirmed. The balance of the bonds hereby authorized shall be pre- pared for issuance and delivery to the said Stifel, Nicolaus & Co. , Inc. , upon terms and conditions satisfactory to the Town, or otherwise to any other purchaser upon terms and conditions satis- factory to the Town, in such amount or amounts and at such times or from time to time as may be provided by a supplemental ordinance or ordinances adopted by the Council of said Town, provided, how- ever, that no portion of said remaining bonds shall be issued or delivered unless and until contracts for the construction of said works and improvements for account of which said bonds were authorized have been awarded and are secured by 100% performance bonds, or bids for substantially all of such construction work capable of acceptance by said Town have been received, and if any of the proceeds of said bonds are to be used to pay the cost of acquiring any real property or easements the Town has obtained from its counsel a written opinion that upon payment of such cost mer- chantable fee simple title to or permanent easements over such real property will be vested in said Town free and clear of all liens and encumbrances and, provided further that there is on file in the office of the Clerk of said Town a written statement by the firm of Alvord, Burdick & Howson or other independent consulting engineer or firm of consulting engineers not in the regular employ of said Town confirm- ing that the proceeds of bonds to be issued and delivered at that time, together with unexpended proceeds of any of the bonds thereto- fore issued and any other funds of said Town which at the time are available will be sufficient to complete the acquisition of said water - 13 - XERO XERO XI 110 Cory supply and the construction of such works and improvements as at that time are recommended by said engineer or firm of engineers and to pay all costs in connection therewith and relating thereto. Section 17. The term "independent consulting engineer or firm of consulting engineers" as used in this ordinance shall be deemed to mean the firm of Alvord, Burdick and Howson of Chicago, Illinois, so long as said firm is retained by said Town upon terms which are satisfactory to and agreeable with said Town or otherwise any other consulting engineer or firm of consulting engineers of similar reputation in water system matters that may be hereafter retained by said Town to act in a similar capacity. Section 18. No material modification or amendment of this ordinance or of any ordinance amendatory hereof or supple- mental hereto, may be made without the consent in writing of the holders of two-thirds or more in principal amount of the bonds then outstanding, providing, however, that no modification or amendment shall permit a change in the maturity of such bonds or a reduction in the rate of interest thereon, or in the amount of • the principal obligation or effecting the unconditional promise of the town to pay the principal of and interest on the bonds as the same shall become due from the Net Revenues of the Water System, without the consent of the holder of such bonds . Section 19. If any section, paragraph, clause or provi- sion of this ordinance shall be held to be invalid, the invalidity of such section, paragraph, clause or provision shall not affect any of the remaining provisions of this ordinance. Section 20. All ordinances, resolutions and orders, or parts thereof in conflict with the provisions of this ordinance, are to .the_ extent of such conflict hereby repealed. Section 21. This ordinance shall be in full force and effect upon its adoption and approval by the Mayor. Adopted by the Council, September 3, 1958. Approved, September 3, 1958. Mayor Attest: Clerk COMMONWEALTH OF VIRGINIA SS. COUNTY OF FAIRFAX I , Clerk of-the Town of Fairfax, Virginia, do hereby certify that the foregoing constitutes a true, correct and complete transcript of the official record of proceedings iss and by the Council 00 000 said Town for the issuance of $�+,5 , June 1, 1956. WITNESS my official signature and the seal of said Town at Fairfax, Virginia, this 3rd day of September, 1958. Clerk (SEAL) XERO it RO XERO Co Y ..