Fort Walton Beach Council minutes — 03-09-1954 Regular — reading text

District, ' hy accepting this franchise, shall there1; grant r to the lvfunicipality an option to purchase the Distrinution System, free and clear of liens and encum1;rances, at the option price and sU'hject to the terms and conditions hereinafter set forth: A) The option to purchase the Distri'hution System ~ y ne exercised ' hy the Municipality only 1;y notice in writing signed ny the Mayor or other chief executive officer of the Municipality and accompanied ' hy a resolution of the governing ' hody of the ~ funicipal- ity authorizing the exercise of the option. Said option may not ' he exercised until ten ( 10) years after the Completion Date. Said notice of the exercise of the option and accompanying resolution must ' he personally served on the Secretary of the District and on any Trustee provided in the Mortgage, at least ninety ( 90) days prior to the next interest payment (~ ate on the Bonds of the District, and the oDtion price as hereinafter provided must ' he paid ' hy the Municipality in nanka~le funds to said trustee on or ' ore hef said interest payment date. B) The option price for the purchase of the Distri~ution System shall ~ e an amount equal to the then unamortized cost of such System plus all cost and expenses, including redemption pre- miums, of redeeming Bonds of the District then sunject to redemp- tion in principal amount equal to such unamortized costs. The unamortized cost of the Distri~ution System shall ne determined as follows: 1) The initial acquiring, constructing and cost of financing the System, including, without Distrih' ution limiting the generality of the foregoing, the purchase of all rights of way and land, the ontaining of a supply of gas for the Distri'hution System, interest on the Ronds of the District paid from the proceeds of the sale thereof, and all engineering, legal, financing and other expenses incident to such acquisition, construction and financing, as certified n' T the engineer retained ' hy the District to supervise the acquisition and construction of the Distri- hution System, shall ' he added to:  2lj~j 2) The cost of acquiring and constructing all improve- ments and extensions to the Distrinution System which are of a nature customarily chargea~ le to capital account by I good accounting practices, as certified ~y the District' s Conculting Engineer. deducted: From the sum thus o~ tained shall be 3) Such amount paid into any ~ ond and interest fund, sinking de~ t service reserve fund, extension and fun:'), improvement fund and redemption fund provided for in the Moetgage and not applied to or held for the payment of any redemption premium on any Bonds of the District or for the payment of interest which has accrued or which shall have accrued on Bonds of the District on or ~ efore the interest payment date referred to in paragraph ( A) of this Section, as the ' hooks and records of the District shall show ' are paid from the net revenues derived from the sale of Non- interupti'hle Gas ' hy the Distrih' ution System. The amount thus O'htained shall ne the unamortized cost of the Distri~ution System. C) The option to purchase the Distrih'ution System may be exercised, however, only in the event that the Ap licah' le Net Revenues of each of the three ( 3) prededing Fiscal Years shall e in excess of 175% of the mazimum De'ht Service Requirement for the Fiscal Year in which such option is exercised and for any SUnse- quent Fiscal Year. D) The District shall file with the Municipality a certified I capy of all engineering certificates referred to in paragraph ( B) of this Section and such certificates shall ~ e final and ' hinding in determining the option pTice of the Distrih'ution System. The hooks and recores of the District shall, for the purposes of this Ordinance, ' he final and ' hinding as to the net revenues derived from the sale of Non- interruptinle Gas ~ y the Distrinution System and as to the amount paid therefrom into the funds referred to in paragraph ( B) of this Section. In order that such revenues and such amount may ne determined from the ' hooks and records of the District, the District shall m2intain proper ' hooks, records and accounts in accordanc~ with standard accounting practices, shall eep separate accounts of the operations of its transmission system and of each of its distri~ution systems, shall credit the Distrih' ution System with all rates, charges, and fees collected hy the District for the sale of Non- interuptih' le Gas, shall make allocations in said accounts of all overhead costs of administration and operation of each such system ( such ' hooks and records, however, to ' he final and ' hinding as to such allocations) and shall enter on such ' hooks, records, and accounts the cost of gas delivered to the Distri'hution System at such rates and charges as shall have heen estah'lished ~ y the Board of Directors of the District. E) Upon the exercise of the aforesaid option: I 1) The Vrumicipality shall take and purchase from the District its entire requirements of gas for use and for r-' f) ~ !i U ,1 resale in the communities and areas supplied ~ y the Distri- ution System, an{ the District shall sell and deliver to the Municipality such gas to the extent the same is availanle at such rates and charges as shall, su~ ject to the provisions of the Mortgage, ne estanlished from time to time ny the Board of Directors of the District at such level as shall produce that protion of the Required Revenues for each sUnsequent Fiscal Year of the District that the gross revenues received ny the District from the sale of Non- interruptinle Gas ny the Distrinution System during all Fiscal Years prior to the exe'rcise of the option ~ ears to the gross revenues re- ceived "hy the District dUTing such period from all sources. 2) The District shall, nevertheless, have the election to continue to supply any Interruptinle Customers theretofore supplied ~ y the Distri~ution System, including any such cus- tomers situated within the Corporate Limits of the Hunicipality. In the event the District so elects to continue to supply any such customer or customers, and shall so notify the Hunicipali ty in writing wi thin sixty ( 60 ) days af l; er receipt of the notice from the Municipality of the exercise of the option as provided in paragraph ( A) of this Section, the right, privilege, authority, and franchise granted ny the Municipality to the District ny this Ordinance shall continue in force and effect with respect to any such customer or customers, and the Munlcipality shall, without charge, permit the District to make such use of the facilities of such Distrinution System as may ne necessary to permit the District to supply such customer or customers. 3) The o"hligation of the District to make tbepayments provided for in Section 11 of this Ordinance shall thereupon cease and terminate. Section 14. The District, nY accepting this franchise, agrees that ti will cause an annual audit to "he made of its "hooRs, records and accounts ny a certified pUnlic accountant and will furnish a copy thereof to the ~ unicipality. Section15. All o"hligations undertaken "hy the District "hy the acceptance of the terms, conditions and provisions of thms Ordinance are paya~ le and dischargea~ le sOlely from the proceeds of the sale of the ' Ronels of the District or the revenues derived ny the District from the operation of its gas transmission system or systems and its gas distri"hution system or systems. Nothing contained in this Ordinance in intended to create any financial lianility upon the District except to the extent of such proceeds or such revenues. Section 16. The continuance of the franchise granted "hy this Ordinance shall not "he su~ ject to or conditioned or limited upon the making of the payments ~ y theDistrict provided in Section 11 of this Ordinance, nor ject to or conditioned or limited upon su;, compliance ~ the District with any other covenant or provision contained