Title
Authorizing, generally, the continued issuance and sale by the City of Philadelphia of Gas Works Revenue Notes of the City, prescribing the forms of notes and providing for their execution and payment, pledging certain revenues of the Gas Works as security, adopting a rate covenant and directing the imposition and collection of rates and charges sufficient to comply therewith, prescribing the conditions precedent to the issue of specific series of notes, including a resolution passed by the Bond Committee providing for establishment of credit support for notes, providing for designation of a fiscal agent and sinking fund depositary, providing for establishment of a sinking fund and its management, providing remedies upon default, and providing for amendments and modifications.
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THE COUNCIL OF THE CITY OF PHILADELPHIA HEREBY ORDAINS:
SECTION 1.
ARTICLE I
AUTHORIZATION, SCOPE AND PURPOSE _
SHORT TITLE
This Ordinance is enacted pursuant to the provisions of The City of Philadelphia Municipal Utility Inventory and Receivables Financing Act (Act No. 231, approved December 7, 1982) for the purpose of authorizing the issuance from time to time of Gas Works Revenue Notes of the City to be secured by a pledge of certain revenues of the Gas Works as security, in an aggregate principal amount not exceeding one hundred million dollars ($100,000,000) at any one time outstanding, as shall from time to time be authorized by resolution of the Bond Committee as more particularly hereinafter set forth. This Ordinance is intended to continue the authority for issuance of Gas Works Revenue Notes contained in the General Inventory and Receivables Gas Works Revenue Note Ordinance of 1998, Bill No. 980234, approved April 30, 1998 (the “1998 Ordinance”), subject to the terms and conditions hereof. At such time as Gas Works Revenue Notes are issued pursuant to the authority contained in this Ordinance, no additional Gas Works Revenue Notes shall be issued under the 1998 Ordinance. For so long as any Gas Works Revenue Notes are outstanding under the 1998 Ordinance, the principal amount thereof shall be included for purposes of calculating the maximum principal amount of Gas Works Revenue Notes that may be issued and outstanding under this Ordinance. This Ordinance shall be known as the General Inventory and Receivables Gas Works Revenue Note Ordinance of 2002.
ARTICLE II
DEFINITIONS AND OTHER PROVISIONS OF
GENERAL APPLICATION
Section 2.01. Definitions
For all purposes of this Ordinance and any ordinance supplemental hereto, except as otherwise expressly provided or unless the context otherwise requires:
Act means the act of December 7, 1982 (P.L. 827, No. 231) known as The City of Philadelphia Municipal Utility Inventory and Receivables Financing Act (53 P.S. 1699.1 to 1699.21), as amended from time to time.
Bond Committee means the Mayor, the City Controller and the City Solicitor, or any two of them, being the bond committee referred to in the Act.
Chief Fiscal Officer means the person appointed by the Manager as chief fiscal officer of PGW or, in the absence of such an appointed person, the person acting as chief fiscal officer of PGW.
City means The City of Philadelphia.
City Charges means the proportionate charges, if any, for services performed for PGW by all officers, departments, boards or commissions of the City which are contained in the computation of operating expenses of PGW, including, without limitation, the expenses of the Gas Commission, and also means the base payments to the City contained in the Management Agreement and all other payments made to the City from Gas Works Revenues.
City Controller means the controller of the City, including a person acting as controller under applicable law.
City Solicitor means the solicitor of the City, including a person acting as solicitor under applicable law.
Code means the Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder and applicable thereto.
CP Notes means the City of Philadelphia Gas Works Revenue Notes, CP Series, authorized to be issued hereunder, as more particularly described in Sections 3.01(b) and 3.02(b) hereof.
Credit Support Entity means any bank, insurance company or other appropriate entity providing a Credit Support Instrument with respect to any Notes.
Credit Support Instrument means a letter of credit, line of credit, policy of insurance or other mechanism for providing funds or a standby source of funds to be drawn upon by the City or by the Fiscal Agent on behalf of or as trustee for the Noteholders to pay the principal of or interest on any Notes or to make a deposit in the Sinking Fund.
Dealer means any securities dealer, broker or other entity acting as purchaser of, or broker for, the Notes pursuant to an agreement with the City.
Director of Finance means the chief financial, accounting and budget officer of the City as established by the Philadelphia Home Rule Charter, including a person acting as director of finance under applicable law.
Final Maturity means, as to a series of CP Notes, the date stated in the Resolution authorizing such series as the final maturity date of such series, which shall be not later than the fifth anniversary of the date of enactment of this Ordinance.
Fiscal Agent means any bank, bank and trust company or trust company named as such pursuant to Section 5.02 hereof or its successor.
Fiscal Year means each fiscal year of PGW.
Gas Commission means the Gas Commission provided for by the Philadelphia Home Rule Charter as presently constituted or hereafter reconstituted in accordance with law.
Gas Works or PGW means all property, real and personal, owned by the City and used in the acquisition or manufacture, storage and distribution of natural, liquefied, synthetic or manufactured gas or in the maintenance, management or administration thereof and all activities ancillary and related thereto, and also, as the context may require, means the business entity managed by the Manager.
Gas Works Revenue Bonds means Gas Works revenue bonds of the City presently or hereafter issued pursuant to the Act of October 18, 1972 (P.L. 955, No. 234) known as The First Class City Revenue Bond Act (53 P.S. 15901 to 15924), or other applicable statute, and the General Gas Works Revenue Bond Ordinance of 1975 (Bill No. 1871, approved May 30, 1|10 13|75, as amended and supplemented), the General Gas Works Revenue Bond Ordinance of 1998 (Bill No. 980232, approved April 30, 1998, as amended and supplemented, and as the same may be further amended) and any other ordinance enacted pursuant to The First Class City Revenue Bond Act.
Gas Works Revenues means all operating and nonoperating revenues of the Gas Works derived from its activities and assets involved in the supply, manufacture, storage and distribution of gas, including all rents, rates and charges imposed or charged by the City upon the owners or occupants of properties connected to, and upon all users of, gas distributed by the Gas Works and all other revenues derived therefrom and all other income derived by the City from the Gas Works. Revenues derived from activities unrelated to the supply, manufacture, storage and distribution of gas or assets related thereto shall not be included in Gas Works Revenues, provided that the Gas Works receives fair payment for the use of gas related assets and personnel of the Gas Works used in such activities, which payments shall be included in Gas Works Revenues. In particular, Gas Works Revenues shall not include revenues from enterprises or functions not related to gas activities (e.g. activities involving the supply, generation or distribution of electricity). Gas Works Revenues shall not include those portions of the Gas Works’ rents, rates and charges which are securitized and sold pursuant to Section 4.03(b) of the General Gas Works Revnue Bond Ordinance of 1998 (Bill No. 980232) or any similar provision in any successor to such ordinance.
Installment means any issuance of CP Notes intended to be treated as part of a single issue under Section 1.150-1 (c)(4)(ii) of the Treasury Regulations promulgated under the Code.
Inventory means any fuel, materials or supplies acquired by PGW, used directly or indirectly to provide service to the public, and which would be shown as a current asset on a balance sheet of PGW prepared in accordance with generally accepted accounting principles.
Management Agreement means the Agreement dated December 29, 1972 between the City and the Manager for the management and operation of PGW, as presently or hereafter amended, or any successor agreement which may be entered into by the City pertaining to the management of PGW.
Manager means Philadelphia Facilities Management Corporation currently managing PGW pursuant to the Management Agreement, or its successor or such other person, corporation, commission or department of the City that may be designated by the City to manage PGW.
Mayor means the Mayor of the City, including a person acting as mayor under applicable law.
Natural Gas Choice and Competition Act means the Act of June 22, 1999, P.L. 122, No. 21, as amended from time to time.
Net Operating Expenses means Operating Expenses exclusive of City Charges.
1998 Notes means any gas works revenue note or notes of the City issued and outstanding pursuant to the Act and the 1998 Ordinance.
Note or Notes means any Gas Works revenue note or notes of the City, issued and outstanding pursuant to the Act and this Ordinance, including Refunding Notes, CP Notes and Revenue Notes.
Noteholder or Holder means the holder of any Note.
Operating Expenses means all costs and expenses of PGW necessary and appropriate to operate and maintain the Gas Works in good operable condition during each Fiscal Year, and shall include, without limitation, the Manager’s fee, salaries and wages, purchases of service by contract, costs of materials, supplies and expendable equipment, maintenance costs, costs of any property or the replacement therefor for any work or project related to the Gas Works which does not have a probable useful life of at least five (5) years, pension and welfare plan and workmen’s compensation requirements, provision for claims, refunds and uncollectible receivables and for City Charges, all in accordance with generally accepted accounting principles consistently applied, but shall exclude depreciation and interest and sinking fund charges. Operating Expenses shall not include Unrelated Expenses.
Outstanding means, when used with reference to the Notes, as of any particular date, the aggregate of all Notes authenticated and delivered under this Ordinance, except:
(a) Notes cancelled by the Fiscal Agent or delivered to the Agent for cancellation;
(b) Notes for the payment of which payments in the necessary amount have been theretofore deposited in an account in the Sinking Fund for the holders such Notes; and
(c) Notes in lieu of or in substitution for which other Notes shall have been authenticated and delivered pursuant to Section 3.08 hereof.
Project means the Inventory or Receivables, or both, or any part thereof.
Project Costs means all costs of acquisition or funding of a Project including, but not limited to, costs, fees and expenses of financial advisors, attorneys and other experts engaged in connection with the Project, fees and expenses of the Fiscal Agent and rating agencies, financing costs including bond discount, additional security costs including fees and expenses related to a Credit Support Instrument, interest on money borrowed to finance the Project if capitalized, the repayment of temporary loans made in connection with the Project and reimbursement for any of the foregoing costs incurred or paid prior to or after the issuance of Notes.
Public Utility Commission means the Pennsylvania Public Utility Commission as presently constituted or hereafter reconstituted in accordance with law.
Rate Covenant means the rate covenant contained in Section 4.03(b) hereof.
Receivables means accounts receivable billed to customers of PGW, but not yet paid, as would be shown as a current asset on a balance sheet of PGW prepared in accordance with generally accepted accounting principles.
Refunding Notes means Notes issued to provide funds to pay the principal of and interest on Notes or 1998 Notes previously issued, including prior issues of Refunding Notes; Refunding Notes may be issued as Notes or Revenue Notes.
Reimbursement Agreement means the Credit Agreement, previously entered into by the City and First Union National Bank, PNC Bank, National Association, The Bank of Nova Scotia, Mellon Bank, N.A., and Morgan Guaranty Trust Company of New York, as Agent, dated as of May 28, 1999, as amended and restated as of June 12, 2001, and any agreement between the City and a Credit Support Entity governing the terms and conditions upon which a Credit Support Instrument will be provided and the terms and conditions of the City’s Reimbursement Obligation.
Reimbursement Obligation means the obligation of the City to repay to a Credit Support Entity amounts provided under a Credit Support Instrument, together with premium, if any, and interest thereon; the City’s Reimbursement Obligation may be evidenced by a promissory note or notes of the City.
Resolution means a resolution duly passed by the Bond Committee authorizing the issuance of Notes hereunder or taking any other action required or permitted hereunder.
Revenue Notes means the City of Philadelphia Gas Works Revenue Notes, authorized to be issued hereunder, as more particularly described in Section 3.01(c) and 3.02(c) hereof.
Sinking Fund means a sinking fund established pursuant to Section 5.01 hereof.
Sinking Fund Depositary means the Fiscal Agent named pursuant to Section 5.02 hereof or its successor.
Stated Maturity means, as to a particular CP Note, the maturity date of such CP Note, which shall be not less than one (1) day after the issue date of such CP Note and not later than two hundred seventy (270) days from the date of issuance of the particular CP Note; provided, however, that the Stated Maturity shall not be later than the earlier of 13 months following the date of initial issuance of any Installment of CP Notes or the Final Maturity.
Unrelated Expenses means expenses unrelated to the supply, manufacture, storage and distribution of gas or assets related thereto.
Section 2.02. Interpretation. All references in this Ordinance to articles, sections and other subdivisions of the Ordinance are to the designated articles, sections or other subdivisions of this Ordinance as originally enacted. The words “herein,” “hereof,” “hereby” and “hereunder” and other words of similar import refer to this Ordinance as a whole and not to any particular article, section or other subdivision, except as otherwise specifically provided.
Section 2.03. Descriptive Headings. The descriptive headings of the several articles and sections of this Ordinance are inserted for convenience only and shall not control or affect the meaning or construction of any of its provisions.
Section 2.04. Severability. In case any one or more of the provisions contained in this Ordinance or in any Note issued pursuant hereto or the application thereof to any person or circumstance shall for any reason be held to be invalid, the remainder of this Ordinance or such Note and the application of such provision to other persons or circumstances, shall not be affected thereby, unless the court finds that the valid provisions are so essentially and inseparably connected with, and so depend upon, the void provision or application, that it cannot be presumed that City Council would have enacted or provided for the remaining valid provisions without the void one; or unless the court finds that the remaining valid provisions, standing alone, are incomplete and are incapable being executed in accordance with the intent of City Council.
Section 2.05. Powers Preserved. Nothing in this Ordinance is intended to or shall be construed to affect the authority of the Gas Commission under Section 5-902 of the Philadelphia Home Rule Charter or the Management Agreement, to the extent consistent with the Natural Gas Choice and Competition Act.
ARTICLE III
CONCERNING THE NOTES
Section 3.01. Forms of Notes.
(a) All Notes shall be in substantially the forms set forth in this Article, with such appropriate insertions, omissions, substitutions and other variations, including variations deemed necessary to issue the Notes in book_entry form, as may, consistently with this Ordinance and the Act, be determined by or in the manner specified by the Bond Committee in a Resolution. The Notes may be printed, lithographed or typewritten, with or without steel engraved borders. The Notes may also have printed thereon or on the reverse thereof the text of an approving legal opinion with respect thereto and an appropriate certificate as to its correspondence with an executed counterpart may be included on the face or on the reverse of the Notes. The Notes may also have printed thereon or on the reverse thereof or attached thereto a Credit Support Instrument or the text thereof. Any portion of the text of any Note may be set forth on the reverse thereof with an appropriate reference on the face of the Note.
(b) CP Notes shall be in substantially the following form:
(Form of CP Note)
THE CITY OF PHILADELPHIA, PENNSYLVANIA
GAS WORKS REVENUE NOTE
CP Series [Letter Designation]
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Principal Sum __________________ |
Issue Date _____________________
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Interest on Maturity ______________ |
Maturity Date ___________________
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Due at Maturity _________________ |
Number of Days ________________ |
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Interest Rate ___________________ |
The City of Philadelphia (the “City”), for value received, hereby promises to pay in lawful money of the United States of America to the bearer hereof, on the Maturity Date set forth above, the Principal Sum set forth above and to pay interest on said Principal Sum for each day from the Issue Date set forth above until payment of said Principal Sum has been made or duly provided for at the Interest Rate per annum set forth above, calculated on the basis of a three hundred sixty_five (365) day year or three hundred sixty_six (366) day year, as applicable, payable on the Maturity Date set forth above. The principal of and interest on this Note are payable in immediately available funds at the office of Fiscal Agent of the City, at _______________.
This Note is one of a duly authorized issue of Notes of the City designated as its Gas Works Revenue Notes of the Series designated hereon (the “CP Notes”), issued pursuant to the General Inventory and Receivables Gas Works Revenue Note Ordinance of 2002 (Bill No. ________ approved ______________, 2002) of the City (the “General Ordinance”) and a Resolution dated ______________ of the Bond Committee referred to in the General Ordinance. The City covenants to pay the CP Notes and interest thereon when due and such payments shall be made out of the Gas Works Revenues (as defined in the General Ordinance), except to the extent paid from the proceeds of Refunding Notes issued under the General Ordinance or funds provided by a Credit Support Instrument (as defined in the General Ordinance). All notes issued under the General Ordinance (the “Notes”), including the CP Notes, are secured equally and ratably by the pledge of and grant of a security interest in the Gas Works Revenues.
This Note is a special obligation which the City is obligated to pay solely from the Gas Works Revenues and from the proceeds of Refunding Notes. The CP Notes are not general obligations of the City and do not pledge its general credit or taxing power or create any debt or charge against the general revenues of the City. As defined in the General Ordinance, Gas Works Revenues include all operating and nonoperating revenues of the Philadelphia Gas Works (the “Gas Works”) derived from its activities and assets involved in the supply, manufacture, storage and distribution of gas, including all rents, rates and charges imposed or charged by the City upon the owners or occupants of properties connected to, and upon all users of, gas distributed by the Gas Works and all other revenues derived therefrom and all other income derived by the City from the Gas Works. The General Ordinance requires the Gas Works Revenues to be applied to net operating expenses of the Gas Works and the payment of debt service on certain Gas Works Revenue Bonds and certain other obligations of the Gas Works payable from Gas Works Revenues prior to payment of the principal of and interest on the Notes.
[Any Credit Support Instrument for the benefit of the Noteholders may be described here.]
IN WITNESS WHEREOF, the City hascaused this Note to be duly signed in its name by the manual or facsimile signatures of the Mayor, City Controller and City Solicitor and the seal of the City or a facsimile thereof to be affixed or imprinted hereon, and has caused this Note to be countersigned by two (2) duly authorized officers of __________________, the duly authorized Fiscal Agent of the City.
THE CITY OF PHILADELPHIA
By: ________________________
Mayor
[Seal]
By: _________________________
City Controller
By: _________________________
City Solicitor
COUNTERSIGNED: [FISCAL AGENT]
Fiscal Agent
By :____________________
By :____________________
Authorized Officers
(c) Revenue Notes shall be in substantially the following form:
(Form of Revenue Note)
THE CITY OF PHILADELPHIA, PENNSYLVANIA
GAS WORKS REVENUE NOTE
Series [Letter Designation]
No._____________________ Issue Date ___________
Principal Sum_________________ Maturity Date ____________
Interest Rate _____________
The City of Philadelphia, Pennsylvania (the “City”), for value received, hereby promises to pay in lawful money of the United States of America to the bearer hereof, on the Maturity Date set forth above, the Principal Sum set forth above and to pay interest on said Principal Sum for each day from the Issue Date set forth above until payment of said Principal Sum has been made or duly provided for at the Interest Rate per annum set forth above, calculated on the basis of a three hundred sixty-five (365) day year or three hundred sixty_six (366) day year, as applicable, payable on the Maturity Date set forth above. The principal of and interest on this Note are payable in immediately available funds at the office of Fiscal Agent of the City, at ___________.
This Note is one of a duly authorized issue of Notes of the City designated as its Gas Works Revenue Notes of the Series designated hereon (the “Revenue Notes”), issued pursuant to the General Inventory and Receivables Gas Works Revenue Note Ordinance of 2002 (Bill No.___________ approved, __________, 2002) of the City (the “General Ordinance”) and a Resolution dated _____________ of the Bond Committee referred to in the General Ordinance. The City covenants to pay the Revenue Notes and interest thereon when due and such payments shall be made out of the Gas Works Revenues (as defined in the General Ordinance), except to the extent paid from the proceeds of Refunding Notes issued under the General Ordinance or funds provided by a Credit Support Instrument (as defined in the General Ordinance). All notes issued under the General Ordinance (the “Notes”), including the Revenue Notes, are secured equally and ratably by the pledge of and grant of a security interest in the Gas Works Revenues.
This Note is a special obligation which the City is obligated to pay solely from the Gas Works Revenues and from the proceeds of Refunding Notes. The Revenue Notes are not general obligations of the City and do not pledge its general credit or taxing power or create any debt or charge against the general revenues of the City. As defined in the General Ordinance, Gas Works Revenues include all operating and nonoperating revenues of the Philadelphia Gas Works (the “Gas Works”) derived from its activities and assets involved in the supply, manufacture, storage and distribution of gas, including all rents, rates and charges imposed or charged by the City upon the owners or occupants of properties connected to, and upon all users of, gas distributed by the Gas Works and all other revenues derived therefrom and all other income derived by the City from the Gas Works. The General Ordinance requires the Gas Works Revenues to be applied to net operating expenses of the Gas Works and the payment of debt service on certain Gas Works Revenue Bonds and certain other obligations of the Gas Works payable from Gas Works Revenues prior to payment of the principal of and interest on the Notes.
[Any Credit Support Instrument for the benefit of the Noteholders may be described here.]
IN WITNESS WHEREOF, the City has caused this Note to be duly signed in its name by the manual or facsimile signatures of the Mayor, City Controller and City Solicitor and the seal of the City or a facsimile thereof to be affixed or imprinted hereon, and has caused this Note to be countersigned by two (2) duly authorized officers of ____________________, the duly authorized Fiscal Agent of the City.