05-28-1957 HUCM(86 ) 91
SPECIAL TV2ETING
MAY 28, 1957.
A special meeting of the Hutchinson Utilities Commission was held
on the aforesaid date at the office of Dr. R. I. Sheppard. o c Cn m
Commissioner A. J. Thompson introduced the following Resolution m m m c
and moved its adoption. -n. o
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R E S O L U T I O N -0 o o
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BE IT RESOLVED by the Hutchinson Utilities Commission of the M -0'o
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City of Hutchinson, Minnesota, that any and all financial :3
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arrangements previously made between said Hutchinson Utilities
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Commission and Carleton D. Beh Co., Des Moines, Iowa, be and the rn a
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same hereby are in all things cancelled and declared to be null 00
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and voids rn
Meeting was adjourned.
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ATTEST:
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Extract of Minutes of Meeting
of Utilites Commission
City of Hutchinson, McLeod County, Minn.
May 28, 1957.
Pursuant to due call and notice thereof, a special meeting
of the Utilities Commission of the City of Hutchinson, Minnesota,
was held at the light plant in said city on the 28th day of May, 1957,
at noon o'clock a.in., all Commissioners being present as follows;
President; Dr. R. I. Sheppard
Vice President; Dr. A. j. Thompson
Secretary; R. W. Dahl
Commissioner Dahl introduced the f ollowing resolution
and moved its adoption;
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RESOLUTION AUTHORIZIN'1 THE ISSUANCE AND SALE
OF LIGHT AND POWER PLANT REVENUE BONDS
BE IT RESOLVED by the utilities 8ommission of the City
of Hutchinson, Minnesota, as follows,
1. It is hereby found, determined and declared that
under and pursuant to the provisions of Chapter 17 of the Home Rule
Charter of the City of Hutchinson, adopted June 1, 1913, as amended
September 26, 1936 and Dec. 17, 1954. This Commission is granted
and exercises full, absolute and exclusive control of and power
over the City power and light plant and all parts, attachments and
appurtenances thereto as well as all apparatus and material of
every kind and description used or to be used in operating said
light and power plant, including authority to enter into contracts
and to sue and be sued in its own name, to regulate the distribution,
use and sale of light and power from said plant within and without
the City limits, to collect for services, and to fix the rates for
all sales and services for public and private use, subject to the
veto power of the City Council in the case of changes in rates,
and authority to extend, add to, change and modify the light and
power system and do any and all things deemed necessary and proper
for the operation of said plant, and power to pledge the net earn-
ings of said plant, after providing for payment of all operating
and maintenance charges, to secure payment for equipment purchased
for said plant and system and of interest and principal require-
ments of obligations created for such purpose; that said plant is
presently in need of improvement by the installation of additional
equipment required for the production of sufficient electricity to
supply the present demand therefor within the City limits; that
this Commission has duly contracted for the installation of such
equipment, at an estimated total cost of $400,000 over and above
moneys presently on hand and available to pay such cost; that said
cost can and should be paid out of the net revenues to be derived
from the operation of the plant, by the issuance and sale of the
revenue bonds herein described and authorized; and that the
Secretary shall be and is hereby authorized and directed to cause
notice of the sale of such bonds to be published in accordance
with law, setting forth in such notice the time and place of said
sale and the terms of said bonds as herein provided.
2. For the purpose of paying the cost of said equipment,
there shall be forthwith issue, sold and delivered to the purchaser
thereof negotiable coupon revenue bonds of the City of Hutchinson
in the aggregate principal amount of 400,0001 to be dated as of
June 1, 1957, and to be designated as "Light and Power Plant Revenue
Bonds ". Said bonds shall be 400 in number and numbered from 1 to
400, inclusive, each in the denomination of $1,000, shall bear
interest at a rate or rates resulting in the lowest average annual
net interest cost obtainable upon public advertisement for bids,
payable December 1, 1957, and semiannually thereafter on June 1
and December 1 of each year, and shall mature serially, without
option of prior payment, in the amount of $70,000 on December l
in each of the years 1957 through 1961 and $50,000 on December 1,
1962. The principal thereof and interest thereon shall be pay-
able at a suitable banking institution to be designated by the
(88) 93
successful bidder and approved by the Utilities Commission, and the
reasonable and customary charges of said paying agent shall be paid
as incurred, as a cost of operation of said light and power plant.
3. Said bonds and the interest coupons appurtenant thereto
shall be in substantially the following forms
UNITED STATES OF AMERICA
STATE OF MINNESOTA
COUNTY OF McLEOD
CITY OF HUTCHINSON
LIGHT AND POI ER PLANT REVENUE BOND
No.
$1,000
KNOW ALL MEN BY THESE PRESENTS that the City of Hutchinson,
a duly organized municipal corporation of McLeod County, Minnesota,
by its Utilities Commission, acknowledges itself to be specially
indebted and for value received promises to pay to bearer, but only
out of the Sinking Fund Account of its Light and Power Fund, the sum of
ONE THOUSAND DOLLARS
on the 1st day of December, 19 , without option of prior payment,
and to pay interest thereon out of said account at the rate of
per cent( Q per annum from the
date hereof until said principal sum is paid, payable December 1,
1957, and semi - annually thereafter on the 1st day of June and the
1st day of December of each year, interest to maturity being payable
in accordance with and upon presentation and surrender of the
interest coupons appurtenant hereto. Both principal and interest
are payable at
, in any coin or currency of the Untted States of
erica which at the time of payment is legal tender for public
and private debts.
This bond is one of an issue in the total principal
amount of $400,000,all of like date and tenor except as to serial
number,(interest rate) and maturity, and is ussued pursuant to and
in full conformity with the Constitution and laws of the State of
Minnesota thereunto enabling and an authorizing resolution duly
adopted by the unanimous vote of the Utilities Commission of said
City and concurred in by the City Council, for the purpose of
paying the cost of the installation "of equipment in the municipal
light and power plant required to furnish electricity sufficient to
meet the immediate demand therefor within the corporate limits of
the City, and is payable solely from and as a first lien and charge
upon the net revenues to be derived from the operation of said light
and power plant, in excess of current, reasonable and necessary costs
of the operation and maintenance thereof, which net revenues have
• been pledged and appropriated to said Sinking Fund Account to the
extent required for the payment of principal and interest on said
bonds when due and for the creation and maintenance in said account
94 (89)
of an additional reserve in a sum at 11 times.equal to the
maximum amount of such principal and interest to become due in any
subsequent fiscal year.
IT IS HEREBY CERTIFIED, RECITED, COVENANTED AND AGREED
that all acts, conditions and things required by the Constitution
and laws of the State of Minnesota and the Home Rule Charter and
ordinances and resolutions of said City to exist, to happen and
to be performed precedent to and in the issuance of this bond,
in order to make it a v,;lid and binding special obligation of
said City in accordance with its terms, do exist, have happened
and have been performed in regular and due form, time ,and manner
as so required; that in and by said authorizing and concurring
resolutions the City of Hutchinson has validly made and entered
into additional covenants and agreements for the security of
each holder of this bond, which will be fully and promptly per-
formed by the City and each of its officers and agents concerned
therewith, including a covenant that the City has established
rates and charges for all services, products and by- products of
its light and power plant which are estimated to be sufficient,
and will revise said rates and charges whenever and as often as
required to assure that the same will be sufficient, for the
payment of all costs of operation and maintenance as incurred
and for the production of net revenues adequate to pay the
principal and interest on all bonds of this issue when due and
to create and maintain said reserve; that no additional bonds or
other obligations will be made payable in future from said net
revenues on a parity except as expressly permitted in said
authorizing resolution; and that the issuance of this bond did
not cause either the special'or general indebtedness of said
City to exceed any constitutional of statutory limitation.
IN WITNESS WHEREOF the City of Hutchinson, McLeod
County, Minnesota, by its Utilities Commission, has caused this
bond to be executed in its behalf by the signatures of the
President and Secretary of said Commission, which signatures are
attested by the City Clerk, and the corporate seal of the City
to be hereto affixed, and has caused the interest coupons
appurtenant hereto to be executed and authenticated by the
facsimile signatures of said officers, an "s caused this bond
to be dated as of June 1, 1957. _� n
Attest;
City Clerk
(SEAL)
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T? Kui.,;i,_i'Gies u mmission
f Utilities Commission
(Facsimile signature) (Facsimile signature) (Facsimile signature)
City Clerk Secretary of Utilities Commission President of
Utilities Commission
4. This Commission shall meet at the light plant in the
City of Hutchinson on the day of June, 1957, for the purpose
of opening, receiving and considering sealed bids for and
awarding the sale of said revenue bonds, and fixing the precise
interest rate or rates and designated the paying agent therefor.
Said bonds shall then be prepared for execution under the
supervision of the Secretary of the Commission, and when prepared
shall be executed by the signatures of the President and Secretary
of the Commission, attested by the City Clerk, and the corporate
seal of the City shall be affixed thereto, and the interest
coupons appurtenant thereto shall be executed and authenticated
by the printed, lithographed or engraved facsimile signatures
of said officers. The bonds shall then be delivered by the
City Treasurer to the purchaser thereof, upon payment of the
agreed purchase price, and said purchaser shall not be obliged
to see to the application of the purchase price.
5. For the proper administration of the moneys to be
borrowed on said bonds and of the revenues pledged to the
Payment thereof, the City shall continue to maintain its Light
and Power Fund in accordance with the provisions of Chapter 17
of the City Charter as amended, and shall maintain financial
records of all receipts and disbursements relating to the light
and power plant and system, herein referred to as the "ut.ility ",
in which records there shall be established and maintained
subdivisions of sAid fund for the purposes and in the amounts
as follows;
5.1 A Capital Expenditure Account, into which shall be
paid all moneys borrowed hereunder, and from which there shall
be paid all, but only, those items of capital cost necessarily
incurred and to be incurred in the installation of said equipment
under the contracts heretofore executed. Moneys shall be with -
drawn from said account only upon verified orders or warrants
drawn on the City Treasurer and signed by the President and
Secretary of this Commission, and all warrants and orders drawn
on said account shall be paid by said Treasurer in order of their
as moneys are received in said account from the
proceeds of sale of the bonds herein authorized. When the cost
of the installation of said equipment has been fully paid, any
balance remaining in said account shall be transferred to the
Sinking Fund Account described below.
(90) 95
( Form of
Coupon)
No.
On
Hutchinson,
the lst day of June
McLeod County, Minnesota,
(December), 19
, the City of
t
to bearer
will pay-
out of
the Sinking
Fund Account of its
Light and Power
Fund at
t e sum of
DOLLARS for
interest then dde_on its Light
and Power Plant
Revenue Bond
dated June
1, 1957, No. .
(Facsimile signature) (Facsimile signature) (Facsimile signature)
City Clerk Secretary of Utilities Commission President of
Utilities Commission
4. This Commission shall meet at the light plant in the
City of Hutchinson on the day of June, 1957, for the purpose
of opening, receiving and considering sealed bids for and
awarding the sale of said revenue bonds, and fixing the precise
interest rate or rates and designated the paying agent therefor.
Said bonds shall then be prepared for execution under the
supervision of the Secretary of the Commission, and when prepared
shall be executed by the signatures of the President and Secretary
of the Commission, attested by the City Clerk, and the corporate
seal of the City shall be affixed thereto, and the interest
coupons appurtenant thereto shall be executed and authenticated
by the printed, lithographed or engraved facsimile signatures
of said officers. The bonds shall then be delivered by the
City Treasurer to the purchaser thereof, upon payment of the
agreed purchase price, and said purchaser shall not be obliged
to see to the application of the purchase price.
5. For the proper administration of the moneys to be
borrowed on said bonds and of the revenues pledged to the
Payment thereof, the City shall continue to maintain its Light
and Power Fund in accordance with the provisions of Chapter 17
of the City Charter as amended, and shall maintain financial
records of all receipts and disbursements relating to the light
and power plant and system, herein referred to as the "ut.ility ",
in which records there shall be established and maintained
subdivisions of sAid fund for the purposes and in the amounts
as follows;
5.1 A Capital Expenditure Account, into which shall be
paid all moneys borrowed hereunder, and from which there shall
be paid all, but only, those items of capital cost necessarily
incurred and to be incurred in the installation of said equipment
under the contracts heretofore executed. Moneys shall be with -
drawn from said account only upon verified orders or warrants
drawn on the City Treasurer and signed by the President and
Secretary of this Commission, and all warrants and orders drawn
on said account shall be paid by said Treasurer in order of their
as moneys are received in said account from the
proceeds of sale of the bonds herein authorized. When the cost
of the installation of said equipment has been fully paid, any
balance remaining in said account shall be transferred to the
Sinking Fund Account described below.
96 (91)
5.2 An Operation and Mlaintenance Account, to which there
shall be charged.and from which there shall be paid all, but
only, those items of disbursements which, under sound accounting
practices, constitute normal, reasonable and current costs of
operation and maintenance of said utility. Upon each distri-
bution of moneys received as gross revenues of said utility there
shall be credited to this account such portion thereof as is
needed to make current and prompt payment of all costs, thereto-
fore incurred, of operation and maintenance as above defined,
plus a reasonable excess to be held as a reserve for emergencies.
All gross revenues from time to time received in excess of the
amounts hereby appropriated to the Operation and Maintenance
Account are herin termed 'net revenues'.
5.3 A Sinking Fund Account, to which there shall be
credited the accrued interest paid by the purchaser of said bonds,
and the amounts herein appropriated and pledged to said account
out of said net revenues, and from which there shall be paid the
principal of and interest on said bonds and any additional bonds
authorized in paragraph 6 to be made payable from said net
revenues on a parity herewith, as such principal and interest
become due, the excess from time to time in said account being
held as a reserve for the further security of said payments.
There is hereby appropriated to said account out of net revenues
now on hand the sum of 2,000.00as an initial reserve, which
shall be used only to pay maturing principal and interest when
other moneys in the account are insufficient, and if ever so
used, shall be restored to said amount out of the next net rev-
enues thereafter received. There si -all also be paid into said
account each month, out of said net revenues, a sum equal to at
least one- twelfth of the total amount of principal and interest
to become'due on all bonds payable from said account within the
next succeeding twelve months' period.
5.4 A Surplus Account, to which there shall be credited
as received all net revenues over and above the amounts appropri-
ated to the Sinking Fund Account. Moneys from time to time in
said Surplus Account may by resolution of this Commission be used
for the repair, replacement, improvement or extension of the
utility, or may be transferred to the General Fund.of the City
if directed by this Commission, and used for any proper municipal
purpose authorized by the City Council, but all moneys on hand
in said account at any time s'nall be available and shall be used
to the full extent necessary to restore any deficiency in the
Sinking Fund Account.
6. The City of Hutchinson hereby- certifies and
represents to and covenants and agreeswith the purchaser and the
holders from time to time of each bond issued hereunder as
follows;
6.1 The City will cause proper and adequate books and
records of account to be kept, reflecting all receipts and
disbursements relating to said utility and its operation, which
books and records shall be open to inspection and copying at all
reasonable times by the holder of any of said bonds or his agent
or attorney, and the City will, without cost, furnish copies of
any portions thereof reasonably requested by any bondholder. The
City will cause annual operating statements of the utility to be
prepared within thirty days after the close of each fiscal year,
1
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(g2) 9i
and will cause said books and records to be audited annually by
a certified public accountant, and will furnish a copy of said
operating; statement and audit without cost to the purchaser of
said bonds, and will furnish a copy of said annual operating
statement without cost to any bondholder requesting the same.
6.2 The City has heretofore established rates and charges
for all services, facilities, products and by- products of said
utility which are estimated to be sufficient, and will revise
said rates and charges whenever and as often as necessary to make
the same sufficient, to pay all costs of operation and main-
tenance of the utility as incurred and to produce net revenues
adequate to meet all payments of principal and interest on the
bonds herein authorized and to maintain the reserve herein agreed.
6.3 The City will not issue any additional bonds,
warrants, certificates or evidences of indebtedness or incur or
suffer to be incurred any obligation which shall be payable from
or a charge upon the net revenues, unless such obligations are
expressly made subject and junior to the lien or charge on the
net revenues in favor of the bonds of the issue herein authorized,
save and except that (a) additional bonds or other revenue
obligations may be issued and sold, if needed for capital
improvements to the utility, and made payable as to principal
and interest out of net revenues appropriated to the Sinking Fund
Account, on a parity with the bonds of the issue herein author-
ized, provided that the average of the annual net revenues re-
ceived during; the two fiscal years immediately preceding the
issuance of such additional obligations shall have been not less
than one and one- quarter times the largest amount of principal
and interest payable in any fiscal year of the then remaining;
term of all. then outs tat-ad in r bonds payable from said account, on
such bonds and on such additional obligations, and provided
further, that in and by the resolution authorizing such additional
obligations the City shall provide for the increase of the bond
reserve within a period not exceedinV;four years to an amount
equal to the largest amount of principal and interest thereafter
payable in any one fiscal year out of said Sinking Fund Account;
and (b) additional bonds may be issued and sold if and to the
extent needed to refund maturing bonds of the issue herein
authorized, in case of any deficiency in the Sinking Fund Account,
which refunding bonds may be placed on a parity herewith as to
interest payments but shall mature subsequent to all then out -
standing bonds pa-�Table from said account. For the purpose of
this paragraph 6.3, if the rates and charges for utility service
have been changed since the commencement of the first fiscal year
of the period for which said average net revenues are computed,
the net revenues for t1le period prior to such change s.all be
deemed to be those which would have been received from the
changed rates and charges, as applied to the quantities of service
actually furnished, after deduction of the operation and main-
tenance charges actually inclarred during, such period.
6.4 If moneys in said Sinking =Fund Account shall at any
time be insufficient for t1e payment of principal and interest
then due on the outstandin bonds payable from said account, and
cannot be made sufficient by transfer of moneys from the Surplus
Account, the available moneys shall be first applied to the pro
v (93)
rata payment of the interest then accrued on all such bonds, and
the remainder shall be applied to the payment of principal in
order of the maturity dates of said bonds, or, as between bonds
having the same maturity date, in order of date of issue, or, as
between bonds having the same issue and maturity dates, in order
of serial numbers, lowest numbers first.
6.5 As long as any or said bonds are outstanding the
City will continue its ownership and operation of said utility
as a revenue- producing utility and convenience, and will not
authorize or enfranchise the establishment or operation of any
other utility providing services or commodities in competition
therewith., and will maintain the utility free from all liens on
the physical properties thereof and in good and efficient
operating condition.
6.6 If anIT properties constituting capital assets of
said utility shall be sold or disposed of, it shall be only at
tl eir fair market value and the proceeds of such sale or dis-
position shall either be used to procure other capi-tal assets or
applied to pay principal of and interest on bonds issued here-
under. No such sale or sales shall be made at times or prices
such. as to imperil the prompt and full payment of the bonds
issued hereunder and the interest t'!ereon.
6.7 The City will procure and keep in force insurance
on said plant protecting against loss or damage by fire, tornado,
windstorm, flood and other causes customarily insured against for
like properties, and will procure and keep in force suitable
fidelity bonds covering employees handling moneys of said utility,
such policies and bonds to be [riven by insurers in good standing
and in such amounts as the Commission small determine will be
adequate to protect the City and the holders of revenue bonds
issued hereunder against loss due to an'T such casualty, and in
event of any such loss the proceeds s.-,all be used to repair or
restore the damage or to retire bonds payable from the revenues
Of Said Utility.
6.8 The City will cause all revenues of the light and
power plant system to be deposited as received and held on
deposit in a duly qualified depositary bank, except that the
moneys held in the reserve herein agreed to be maintained in
the Sinking Fund Account may be invested in general obligations
of the United States Government, maturint- within not more than
SIX months from the date on which the investment is made,
and moneTTS in the Surplus Account may be invested in any
securities authorized by T,innesota Statutes, Sections 475.56 and
475.66, or future acts amendatory thereof or supplemental thereto.
n
1
( 94 )
6.9 Holders of 20% or more in aggregate principal amount
of the bonds issued hereunder and at any time outstanding, mazy,
either at law or in equity, by suit, action or other pro-
ceedings, protect and enforce the riChts of all holders of
bonds issued hereunder which are then outstanding, and enforce
and compel the performance of any and all of the covenants and
duties herein specified to be performed by the City or its
officers and agents, including the fixing and maintaining of rates
and charges and the proper segregation and use of the revenues
derived therefrom.
6.10 Each and all of the foregoing provisions of this
resolution, including those contained in the form of bond and
coupon, which in anywise tend to secure or assure prompt and
full payment of the principal of and interest on bonds issued
hereunder will be promptly and faithfully performed and
carried out by the City and its officers and agents.
7. A certified cope of this resolution shall be
filed with the County Auditor of jMcLeod County by the
Secretary of the Commission, and said Auditor of McLeod County
by the Secretary of the Commission, and said Auditor shall be
requested to certify in accordance with Mlinnesota Statutes,
Section 475.63, that the issue has been duly entered on his
register.
9.9
B. The Secretary of the Commission and the City
Clerk and Treasurer and hereby authorized and directed to
furnish to the purchaser of said bonds and to the attorneys
approving the legality thereof certified copies of all
ordinances and resolutions of this Commission and of the City
Council relating, to the authorization and issuance of said
bonds, and all such certificates and affidavits relating to
other matters shown by their official records or otherwise
known to them, as may reasonably be required to evidence the
legality and marketability of said bonds, and all such
certified copies, certificates and affidavits, including any
heretofore furnished, shall be deemed the representations of
this Commission and of the City of Hutchinson as to the correct-
ness of all statements contained therein.
!t
President of Utilities Commission
Attest: '+ R •._D�h1_''__ ___ _ _ _ ._ �._
Secretary of ZJtilities Commission
The motion for the adoption of the foregoing
resolution was duly seconded by Commissioner A. j __,TjjQMpa_oM_ _,_ ,
and upon vote being taken theron, the following voted in f9vor
thereof:
(95)
and the following; voted against the same;
whereupon said resolution was declared duly passed and adopted.
Upon motion duly made, seconded and carried, the
Secretary was directed to submit a certified copy of said
resolution to the City Council of the City of Hutchinson for
their concurrence, with particular reference to those pro-
visions of said resolution concerning the fixing of rates and
charges for light and power plant service, and the revision
thereof when necessary, to assure the sufficiency of the net
revenues for the payment of said bonds.
The Secretary presented a proposed form of notice of
sale of the revenue bonds authorized by the forer -oing resolution,
providing for bids to be received and considered at a. meeting
of the Commission to be held June 12, 1957, at 9 o1clock A.1,1 -,
at the light plant in the City of Hutchinson. Said form of
notice was examined and found satisfactory, and upon motion
duly made, seconded and carried, the Secretary was instructed
to cause the same to be published in the official newspaper of
the City of Ditchinson and in the Commercial West, at Minneapolis,
Yinnesota, not less than ten days prior to the date fixed for
said meeting.
STATE OF MINNESOTA)
) ss.
COUNTY OF NC LECD )
I, the undersiE:ned, being, the duly qualified and acting
Secretary of the Utilities Commission of the City of Hutchinson,
McLeod County, Minnesota, hereby certify that the attached and
foregoing is a full, true and correct transcript of the minutes
1
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(96) ®1
of a meeting; of the Utilities Commission of said City duly
.called and held on the date therein indicated, so far as
such minutes relate to $400,000 Li ght and Power Plant Revenue
Bonds of said City, and that the resolution included therein
is a full, true and correct copy of the original thereof.
WITNESS my hand officially as such Secretary this
12th day of June , 1957.
"R. W. DAHL"
Secretary of Utilities Commission
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