HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 03/18/2003 - FIRST READING OF ORDINANCE NO. 042, 2003, AUTHORIZ AGENDA ITEM SUMMARY ITEM NUMBER: 12
FORT COLLINS CITY COUNCIL DATE: March 18, 2003
STAFF: Alan Krcmarik
SUBJECT:
First Reading of Ordinance No. 042, 2003, Authorizing the Issuance of City of Fort Collins Sales
and Use Tax Revenue Refunding Bonds, Series 2003A, in the Aggregate Principal Amount of
$5,860,000.
RECOMMENDATION:
Staff recommends adoption of the Ordinance on First Reading.
FINANCIAL IMPACT:
The remaining Sales and Use Tax bonds from the 1993 issue carry rates that range from 5.0% to
5.375%. Due to the recent drop in interest rates, the blended rate on the refunding bonds, which
mature in 2009, is projected to be 2.25%. Staff projects a reduction in future interest costs of
110 $600,000. This refinancing plan will reduce the amount of outstanding sales and use tax debt and
lower the annual debt service indicator by 0.53%. ('Phis is a percentage of operating expenditures.)
The bonds will be paid from fee revenues from the Sales and Use Tax fund.
EXECUTIVE SUMMARY:
This Ordinance authorizes the bond documents necessary to issue$5,860,000 of Sales and Use Tax
Revenue Refunding Bonds to refinance the remaining 1993 Bonds. Essentially, the City is
refinancing a portion of its outstanding debt to reduce future payments. The refinancing will save
the City approximately$85,000 per year; the total debt service reductions over the next 6-1/2 years
is estimated to be $600,000. The Finance Department will conduct the sale of the bonds through
a public competitive process on April 1. Based on the current market rates,staff estimates the bonds
will have an interest rate of about 2.25%compared to rates of 5% to 5.375% on the current bonds.
BACKGROUND:
In the early 1980s, the City issued bonds and other types of indebtedness to finance street
improvements, acquisition of land, improvements near the Anheuser-Busch plant, golf course
improvements,and other public works. In 1986,the City refinanced all of these projects in one$30
million package of Sales and Use Tax Revenue Bonds. According to the terms of the 1986 bonds,
they could not be called (paid off early) until 1993. As interest rates had fallen dramatically by
1993,staff refinanced the bonds to save debt service payments for the City. In the 1993 refinancing,
the bond documents set the earliest call date for the new bonds for 2003. Interest rates have
continued to trend downward, and now, they are at their lowest levels in over 40 years. Under the
DATE: ITEM NUMBER:
Master Agreement with Anheuser-Busch, the City will reduce the amount of annual supplemental
user fee that Anheuser-Busch will pay on its share of the bonds.
The Bonds
Staff has set the debt payments on the$5.86 million into approximately level annual payments. The
debt service schedule calls for the final payments for the bonds to occur in 2009.
Sources
Bond Proceeds $ 5,860,000
Scheduled 6/l/03 Payment 630,879
Additional Cash Contribution 1,281,545
Total Sources $7,772,424
Uses
Refunded Principal $7,400,000
Underwriters Discount 29,300
Refunded Interest at 6/l/03 195,879
Premium 69,650
Bond Ratings 12,900
Bond Counsel 40,000
Financial Advisor 7,500
Printing&Mailing 7,500
Paying Agent and Misc. Costs 8,100
Contingency 1,595
Total Uses $ 7,772,424
The Finance Department has arranged to sell the bonds at a competitive sale on April 1,2003. Final
amounts,rates,and costs will be determined after the bids have been received. On Second Reading,
staff will read the necessary changes into the record at the Council meeting.
Recommendation
Staff recommends the Council adopt the Ordinance on First Reading. Staff will coordinate with the
financial advisor to proceed with the issuance and complete the bond sale. Final costs and interest
rates will be incorporated into the Ordinance on Second Reading. Staff believes the historically low
market rates now available make this an optimal time to refund.
ORDINANCE NO. 042, 2003
AN ORDINANCE AUTHORIZING THE ISSUANCE OF CITY OF FORT
COLLINS, COLORADO, SALES AND USE TAX REVENUE REFUNDING
BONDS, SERIES 2003A, DATED APRIL 1, 2003, IN THE AGGREGATE
PRINCIPAL AMOUNT OF $5,860,000.
BE 1T ORDAINED BY THE COUNCIL OF THE CITY OF FORT COLLINS,
COLORADO, THAT:
Section 1. Definitions and Construction.
A. Definitions. In this Ordinance the following terms have the following
respective meanings unless the context hereof clearly requires otherwise:
(1) Act: part 1 of article 56 of title 11, Colorado Revised Statutes, as
amended.
(2) Additional Parity Bonds: any Parity Securities issued after the
issuance of the Bonds.
(3) Average Annual Debt Service Requirements: the aggregate of all Debt
Service Requirements (excluding any redemption premiums) due on the Bonds or any
other given issue of Parity Securities or any portion thereof for all Bond Years beginning
with the Bond Year in which Debt Service Requirements of the Bonds or such Parity
Securities or any portion thereof are first payable after the computation date and ending
with the Bond Year in which the last of the Debt Service Requirements are payable
divided by the whole number of such years.
(4) Beneficial Owners: those Persons having beneficial ownership
interests in Bonds registered in the name of the Securities Depository or a nominee
therefor.
(5) Bonds: the City of Fort Collins, Colorado, Sales and Use Tax Revenue
Refunding Bonds, Series 2003A, dated April 1, 2003, in the aggregate principal amount
of$5,860,000.
(6) Bond Year: the twelve (12) months commencing on the second day of
December of any calendar year and ending on the first day of December of the next
succeeding calendar year.
(7) Charter: the Home Rule Charter of the City, as amended.
(8) City: the City of Fort Collins, Colorado.
(9) Code: the Code of the City.
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(10) Combined Average Annual Debt Service Requirements: the sum
of the Average Annual Debt Service Requirements for all issues of Bonds or Parity
Securities or portions thereof for which the computation is being made.
(11) Combined Maximum Annual Debt Service Requirements: the
Maximum Annual Debt Service Requirements for all issues of Bonds or Parity Securities
or portions thereof for which the computation is being made, treated as a single issue.
(12) Commercial Bank: a state or national bank or trust company that is
an eligible public depository under the laws of the State, a member of the Federal
Deposit Insurance Corporation and a member of the Federal Reserve System, which has a
combined capital and surplus of $25,000,000 or more, and which is located within the
United States of America.
(13) Comparable Bond Year: in connection with any Fiscal Year, the
Bond Year which ends in such Fiscal Year. For example, for the Fiscal Year
commencing on January 1, 2004, the Comparable Bond Year for the Bonds commences
on December 2, 2003, and ends on December 1, 2004.
(14) Council: the governing body of the City.
(15) Debt Service Requirements: the principal of, interest on and any
premium due in connection with the redemption of the Bonds, any Additional Parity
Bonds, any Parity Securities and any other securities payable from the Pledged Revenues.
(16) Escrow Account: the special fund created and referred to in
Section 5A hereof.
(17) Escrow Agreement: the Escrow Agreement, dated as of April 1,
2003, between the City and the Escrow Bank.
(18) Escrow Bank: The Bank of Cherry Creek, a Branch of Western
National Bank, Denver, Colorado, or its successors.
(19) Event of Default: one of the events described in Section IOA
hereof.
(20) Excess Investment Earnings Account: the special fund created
and referred to in Section 51 hereof.
(21) Federal Securities: bills, certificates of indebtedness, notes, bonds
or similar securities which are direct obligations of the United States of America or are
obligations the principal and interest of which are unconditionally guaranteed by the
United States of America or shares in money market funds investing solely in such
obligations.
(22) Fiscal Year: the twelve (12) months commencing on the first day
of January of any calendar year and ending on the last day of December of such calendar
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year or such other twelve-month period as may from time to time be designated by the
Council as the fiscal year of the City.
(23) Interest Payment Date: a date designated by ordinance for the
payment of interest on the Bonds or any other designated Security.
(24) Maturity Date: a date designated by ordinance for the payment of
principal on the Bonds or any other designated securities.
(25) Maximum Annual Debt Service Requirements: the maximum
aggregate amount of Debt Service Requirements (excluding redemption premiums) due
on the Bonds or any other given issue of Parity Securities or any portion thereof in any
Bond Year beginning with the Bond Year in which Debt Service Requirements of the
Bonds or such Parity Securities or any portion thereof are first payable after the
computation date and ending with the Bond Year in which the last of the Debt Service
Requirements are payable.
(26) Moodys: Moody's Investors Service, Inc., or its successors.
(27) MSRB: The Municipal Securities Rulemaking Board.
(28) Net Revenue: the amount of Sales and Use Tax collected by the
City(after deduction by the retailer or vendor of the 3% collection expense allowance).
(29) NRMSIR: a nationally recognized municipal securities
information repository recognized by the Securities and Exchange Commission pursuant
to SEC Rule 15c2-12.
(30) Official Notice of Bond Sale: the Official Notice of Bond Sale,
dated March 24, 2003, prepared and distributed by the City.
(31) Ordinance: this Ordinance No._, 2003, of the City.
(32) Ordinance No. 58, 1967: Ordinance No. 58, 1967, of the City
which provides for the imposition of the initial one percent (]%) Sales and Use Tax
within the City.
(33) Ordinance No. 140, 1979: Ordinance No. 140, 1979, of the City,
which provides for the imposition of the additional one percent (1%) Sales and Use Tax
within the City.
(34) Ordinance No. 149, 1981: Ordinance No. 149, 1981, of the City,
which provides for the imposition of the additional twenty-five hundredths percent
(.25%) Sales and Use Tax within the City.
(35) Outstandine: as of any particular date, all Bonds, Additional Parity
Bonds, Parity Securities or any such other securities payable in whole or in part from the
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Pledged Revenues that have been authorized, executed and delivered except the
following:
(a) Any Bond, Additional Parity Bond, Parity Security or other
security cancelled by the City, by the Paying Agent or otherwise on the behalf of
the City on or before such date;
(b) Any Bond, Additional Parity Bond, Parity Security or other
security held by or on behalf of the City;
(c) Any Bond, Additional Parity Bond, Parity Security or other
security of the City for the payment or the redemption of which moneys or
Federal Securities sufficient (including the known minimum yield available for
such purpose from Federal Securities in which such amount wholly or in part may
be initially invested) to meet all of the Debt Service Requirements of such Bond,
Additional Parity Bond, Parity Security or other security to the Maturity Date or
specified Redemption Date thereof shall have theretofore been deposited in
escrow or in trust with a Trust Bank for that purpose; and
(d) Any lost, destroyed, or wrongfully taken Bond, Additional
Parity Bond, Parity Security or other security of the City in lieu of or in
substitution for which another bond or other security shall have been executed
and delivered.
(36) Owner: the holder of any bearer instrument or registered owner of
any registered instrument.
(37) Parity Securities: bonds, warrants, notes, securities, leases or other
contracts evidencing borrowings and payable from the Pledged Revenues equally or on a
parity with the Bonds.
(38) Participants: underwriters, securities brokers or dealers, banks;
trust companies, closing corporations or other Persons for which or whom the Securities
Depository holds the Bonds.
(39) Paving Agent: The Bank of Cherry Creek, a Branch of Western
National Bank, Denver, Colorado, or its successors.
(40) Permitted Investments: any investments or deposits permitted by
the ordinances of the City and, to the extent applicable, the laws of the State.
(41) Person: any individual, firm, partnership, corporation, company,
association, joint-stock association, or body politic or any trustee, receiver, assignee, or
other similar representative thereof.
(42) Pledged Revenues: the Net Revenue collected by the City from the
Sales and Use Tax plus any amounts designated as "supplemental user fees" under that
certain Master Agreement, dated December 31, 1982, as amended, between the City and
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Anheuser-Busch, Incorporated that are payable on account of obligations issued by the
City and payable from the Net Revenue plus all income or gain, if any, from any
investment of the foregoing and of the proceeds of Securities payable from the Pledged
Revenues (except any income or gain from investment of the proceeds of Securities
deposited in the Escrow Account or other similar fund or account or required to be
deposited in the Excess Investment Earnings Account).
(43) Preliminary Official Statement: the Preliminary Official
Statement, dated March 24, 2003, relating to the Bonds.
(44) Principal and Interest Account: the special fund created by
Ordinance No. 87, 1981, of the City and referred to in Section 5C hereof.
(45) Prior Bonds: the City of Fort Collins, Colorado, Sales and Use Tax
Revenue Refunding Bonds, Series 1993, dated June 1, 1993, in the original aggregate
principal amount of$26,210,000.
(46) Purchaser: the syndicate managed by
(47) Redemption Date: the date fixed for the redemption prior to
maturity of any Bonds or other designated securities payable from the Pledged Revenues
in any notice of prior redemption given by or on behalf of the City.
(48) Registrar: The Bank of Cherry Creek, a Branch of Western
National Bank, Denver, Colorado, or its successors.
(49) Regular Record Date: the fifteenth day of the calendar month next
preceding an Interest Payment Date for the Bonds.
(50) Reserve Account: the special fund created by Ordinance No. 87,
1981, of the City and referred to in Section 5D hereof.
(51) Sales and Use Tax: the sales and use tax established by Ordinance
No. 58, 1967, Ordinance No. 140, 1979, and Ordinance No. 149, 1981, upon sales and
purchases of tangible personal property at retail and storage, use, distribution and
consumption of tangible personal property purchased or acquired at retail, within the
City, in such percentages as set forth in said ordinances or any supplements thereto or
amendments thereof.
(52) Sales and Use Tax Fund: the special fund created by Ordinance
No. 87, 1981, of the City and referred to in Section 513 hereof.
(53) Securities Depository: The Depository Trust Company, a limited
purpose trust company organized under the laws of the State of New York.
. (54) Security: any bond issued by the City or any other evidence of the
advancement of money to the City.
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(55) SID: the state information depository for the State recognized by
the Securities and Exchange Commission pursuant to SEC Rule 15c2-12.
(56) Snecial Record Date: the date fixed by the Paying Agent for the
determination of ownership of Bonds for the purpose of paying interest not paid when
due or interest accruing after maturity.
(57) Standard & Poor's: Standard & Poor's Ratings Services, a division
of The McGraw-Hill Companies, or its successors.
(58) State: the State of Colorado.
(59) Subordinate Bonds or Subordinate Securities: bonds or securities
payable from the Pledged Revenues having a lien thereon subordinate or junior to the lien
thereon of the Bonds.
(60) Superior Bonds or Superior Securities: bonds or securities payable
from the Pledged Revenues having a lien thereon superior or senior to the lien thereon of
the Bonds.
(61) Tax Code: the Internal Revenue Code of 1986, as amended.
(62) Transfer Agent: The Bank of Cherry Creek, a Branch of Western
National Bank, Denver, Colorado, or its successors.
(63) Trust Bank: a Commercial Bank that is authorized to exercise and
is exercising trust powers.
B. Construction. This Ordinance, except where the context by clear implication
herein otherwise requires, shall be construed as follows:
(1) Words in the singular number include the plural, and words in the
plural include the singular.
(2) Words in the masculine gender include the feminine and the neuter,
and when the sense so indicates words of the neuter gender refer to any gender.
(3) Articles, sections, subsections, paragraphs and subparagraphs
mentioned by number, letter or otherwise correspond to the respective articles, sections,
subsections, paragraphs and subparagraphs of this Ordinance so numbered or otherwise
so designated.
(4) The titles and headlines applied to articles, sections and subsections of
this Ordinance are inserted only as a matter of convenience and ease in reference and in
no way define or limit the scope or intent of any provisions of this Ordinance.
(5) Any inconsistency between the provisions of this Ordinance and those
of the Act is intended by the Council. To the extent of any such inconsistency the
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. provisions of this Ordinance shall be deemed made pursuant to the Charter and shall
supersede to the extent permitted by law the conflicting provisions of the Act.
(6) The provisions of §11-57-208(2), Colorado Revised Statutes, as
amended, shall apply to the Bonds.
Section 2. Recitals.
A. Prior Bonds. The City has heretofore issued and sold the Prior Bonds.
There is outstanding of the Prior Bonds the aggregate principal amount of
$7,400,000, maturing on the following dates in the following years in the following aggregate
principal amounts and bearing interest at the following per annum interest rates:
Principal Interest
Dates Amounts Rates
June 1, 2003 $ 435,000 5.000%
December 1, 2003 470,000 5.000
June 1, 2004 455,000 5.100
December 1, 2004 490,000 5.100
December 1, 2006 2,045,000 5.375
December 1, 2009 3,505,000 5.375
The Prior Bonds maturing on or before June 1, 2003, are not subject to optional
redemption prior to their respective Maturity Dates. The Prior Bonds maturing on or after
December 1, 2003, are subject to optional redemption prior to their respective Maturity Dates, in
whole or in part in-such order as may be determined by the City, on June 1, 2003, and on any
Interest Payment Date thereafter at a price equal to the principal amount of each Prior Bond so
redeemed plus accrued interest thereon to the Redemption Date plus a premium expressed as a
percentage of the principal amount of each Prior Bond so redeemed, depending on the
Redemption Date, as follows:
Redemption
Dates Premiums
June 1, 2003, and December 1, 2003 1.0%
June 1, 2004, and December 1, 2004 0.5
June 1, 2005, and Thereafter None
The City wishes to refund, pay and discharge the Prior Bonds in order to reduce
the net effective interest rate; reduce the total interest payable; reduce the total principal and
interest payable or the principal and interest payable in any particular year or years, or effect
other economies; or any combination of the foregoing.
B. Authority. Pursuant to art. XX, sec. 6 of the State Constitution, Art. V,
Sections 19.3 and 19.4 of the Charter, and the Act, the City is authorized by Council action and
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without an election to issue the Bonds for the purpose of refunding, paying and discharging the
Prior Bonds. Pursuant to art. X, sec. 20(4) (b) of the State Constitution, the Bonds may be issued
without voter approval in advance for the purpose of refinancing the Prior Bonds at a lower
interest rate.
Section 3. The Bonds.
A. Authorization. The Bonds are hereby authorized to be issued for the aforesaid
purposes.
B. Bond Details.
(1) Generally. The Bonds shall be issuable in fully registered form and
shall initially be registered in the name of the Securities Depository or a nominee
therefor. Purchases by Beneficial Owners shall be made in book-entry form in the
principal amount of$5,000 or any integral multiple thereof. The Beneficial Owners shall
not receive certificates evidencing their interests in the Bonds. No Bond shall be issued in
any denomination larger than the aggregate principal amount maturing on the Maturity
Date of such Bond, and no Bond shall be made payable on more than one Maturity Date.
The Bonds shall be initially issued so that a single Bond shall evidence the obligation of
the City to pay all principal due on each of the Maturity Dates set forth herein.
Pursuant to the recommendations of the Committee on Uniform Security
Identification Procedures, CUSIP numbers may be printed on the Bonds.
The Bonds shall mature on December 1 in the following years in the
following aggregate principal amounts and shall bear interest from April 1, 2003, or the
Interest Payment Dates to which interest has been paid next preceding their respective
dates, whichever is later, to their respective Maturity Dates, except if redeemed prior
thereto, at the following per annum interest rates:
Principal
Years Amounts Interest Rates
2003 $300,000 %
2004 890,000
2005 905,000
2006 915,000
2007 930,000
2008 950,000
2009 970,000
Said interest shall be payable on December 1, 2003, and semiannually
thereafter on the first day of June and the first day of December of each year. If upon
presentation at maturity the principal of any Bond is not paid as provided herein, interest
shall continue thereon at the same interest rate until the principal is paid in full.
The Debt Service Requirements of the Bonds shall be payable in lawful
money of the United States of America, to the Owners of the Bonds by the Paying Agent.
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The principal and the final installment of interest shall be payable to the Owner of each
Bond upon presentation and surrender thereof at maturity or upon prior redemption, by
check or draft mailed to such Owner at the address appearing on the registration books of
the City maintained by the Registrar or by wire transfer to such bank or other depository
as the Owner shall designate in writing to the Paying Agent. Except as hereinbefore and
hereinafter provided, the interest shall be payable to the Owner of each Bond determined
as of the close of business on the Regular Record Date, irrespective of any transfer of
ownership of the Bond subsequent to the Regular Record Date and prior to such Interest
Payment Date, by check or draft or wire transfer directed to such Owner as aforesaid.
Any interest not paid when due and any interest accruing after maturity shall be payable
to the Owner of each Bond entitled to receive such interest determined as of the close of
business on the Special Record Date, irrespective of any transfer of ownership of the
Bond subsequent to the Special Record Date and prior to the date fixed by the Paying
Agent for the payment of such interest, by check or draft or wire transfer directed to such
Owner as aforesaid. Notice of the Special Record Date and of the date fixed for the
payment of such interest shall be given by sending a copy thereof by certified or
registered first-class, postage-prepaid mail, at least fifteen (15) days prior to the Special
Record Date, to the Owner of each Bond upon which interest will be paid determined as
of the close of business on the day preceding such mailing at the address appearing on the
registration books of the City. Any premium shall be payable to the Owner of each Bond
redeemed upon presentation and surrender thereof upon prior redemption, by check or
draft or wire transfer directed to such Owner as aforesaid. If the date for making or
giving any payment, determination or notice described herein is a Saturday, Sunday,
legal holiday or any other day on which the office of the Paying Agent or Registrar is
authorized or required by law to remain closed, such payment, determination or notice
shall be made or given on the next succeeding day which is not a Saturday, Sunday, legal
holiday or other day on which the office of the Paying Agent or Registrar is authorized or
required by law to remain closed.
So long as the Owner of any Bond is the Securities Depository or a
nominee therefor, the Securities Depository shall disburse any payments received,
through its Participants or otherwise, to the Beneficial Owners.
Neither the City nor the Paying Agent shall have any responsibility or
obligation for the payment to any Participant, any Beneficial Owner or any other Person
(except an Owner of Bonds) of the Debt Service Requirements of the Bonds.
(2) Reserved. .
(3) Redemption. The Bonds shall not be subject to optional redemption
prior to their respective Maturity Dates.
(4) Interest Rates. The maximum net effective interest rate authorized for
the Bonds is 15% per annum. The weighted average interest rate for the Outstanding
Prior Bonds is _._% per annum. The net effective interest rate for the Bonds is
__% per annum.
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(5) Execution and Authentication. The Bonds shall be executed by and on
behalf of the City with the facsimile or manual signature of the Mayor, shall bear a
facsimile or manual impression of the seal of the City, shall be attested with the facsimile
or manual signature of the City Clerk, shall be countersigned with the facsimile or
manual signature of the Financial Officer of the City, and shall be authenticated with the
manual signature of the Registrar. Should any officer whose facsimile or manual
signature appears on the Bonds cease to be such officer before delivery of the Bonds to
the Purchaser, such facsimile or manual signature shall nevertheless be valid and
sufficient for all purposes. No Bond shall be valid or become obligatory for any purpose
or be entitled to any security or benefit under this Ordinance unless and until the
certificate of authentication on such Bond shall have been duly executed by the Registrar,
and such executed certificate upon any such Bond shall be conclusive evidence that such
Bond has been authenticated and delivered under this Ordinance.
(6) Registration, Transfer and Exchange. Upon their execution and
authentication and prior to their delivery the Bonds shall be registered for the purpose of
payment of principal and interest by the Registrar. Initially, each Bond shall be
registered in the name of the Securities Depository or a nominee thereof Except as
hereinafter provided, all of the Bonds shall continue to be registered in the name of the
Securities Depository or a nominee thereof. To the extent that typewritten Bonds, rather
than printed Bonds, are to be delivered, such modifications to the form of Bond as may
be necessary or desirable in such case are hereby authorized and approved. There shall be
no substantive change to the terms and conditions set forth in the form of Bond, except as
otherwise authorized by this Ordinance or any amendment thereto.
Neither the City nor the Registrar shall have any responsibility or
obligation with respect to the accuracy of the records of the Securities Depository or a
nominee therefor or any Participant regarding any ownership interest in the Bonds or the
delivery to any Participant, Beneficial Owner or any other Person (except an Owner of
Bonds) of any notice with respect to the Bonds.
The Bonds shall be transferable only upon the registration books of the
City by the Transfer Agent at the request of the Owner thereof or his, her or its duly
authorized attomey-in-fact or legal representative. A Bond may be transferred upon
surrender thereof together with a written instrument of transfer duly executed by the
Owner or his, her or its duly authorized attomey-in-fact or legal representative with
guaranty of signature satisfactory to the Transfer Agent, containing written instructions
as to the details of the transfer, along with the social security number or federal employer
identification number of the transferee and, if the transferee is a trust, the names and
social security numbers of the settlors and the beneficiaries of the trust. The Transfer
Agent shall not be required to transfer ownership of any Bond during the fifteen (15)
days prior to the first mailing of any notice of redemption or to transfer ownership of any
Bond selected for redemption on or after the date of such mailing. The Owner of any
Bond or Bonds may also exchange such Bond or Bonds for another Bond or Bonds of
authorized denominations. Transfers and exchanges shall be made without charge, except
that the Transfer Agent may require payment of a sum sufficient to defray any tax or
other governmental charge that may hereafter be imposed in connection with any transfer
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or exchange of Bonds. No transfer of any Bond shall be effective until entered on the
registration books of the City. In the case of every transfer or exchange, the Register shall
authenticate and the Transfer Agent shall deliver to the new Owner a new Bond or Bonds
of the same aggregate principal amount, maturing in the same year, and bearing interest
at the same per annum interest rate as the Bond or Bonds surrendered. Such Bond or
Bonds shall be dated as of their date of authentication. New Bonds delivered upon any
transfer or exchange shall be valid obligations of the City, evidencing the same
obligation as the Bonds surrendered, shall be secured by this Ordinance, and shall be
entitled to all of the security and benefits hereof to the same extent as the Bonds
surrendered. The City may deem and treat the Person in whose name any Bond is last
registered upon the books of the City as the absolute Owner thereof for the purpose of
receiving payment of the Debt Service Requirements of such Bond and for all other
purposes, and all such payments so made to such Person or upon his, her or its order shall
be valid and effective to satisfy and discharge the liability of the City upon such Bond to
the extent of the sum or sums so paid, and the City shall not be affected by any notice to
the contrary.
Neither the City nor the Transfer Agent shall have any responsibility or
obligation with respect to the accuracy of the records of the Securities Depository or its
Participants regarding any ownership interest in the Bonds or transfers thereof.
(7) Resignation or Removal of Agents. If the Paying Agent, Registrar,
Transfer Agent or Escrow Bank shall resign as such, or if the City shall reasonably
determine that the Paying Agent, Registrar, Transfer Agent or Escrow Bank has become
incapable of fulfilling its duties under this Ordinance, the City may, upon notice mailed
to the Owners of the Bonds at the addresses shown on the registration books of the City,
accept the resignation of or remove the Paying Agent, Registrar, Transfer Agent or Escrow
Bank and select and appoint a successor paying agent, registrar, transfer agent or escrow
bank. Every such successor paying agent, registrar, transfer agent or escrow bank shall
be a Trust Bank. It shall not be required that the same institution serve as paying agent,
registrar, transfer agent and escrow bank, but the City shall have the right to have the
same institution serve as paying agent, registrar, transfer agent and escrow bank. Any
such resignation or removal shall become effective only upon the appointment of a
successor.
(8) Resignation or Removal of Securities Depository. The City may
remove the Securities Depository and the Securities Depository may resign by giving
sixty (60) days' written notice to the other of such removal or resignation. Additionally,
the Securities Depository shall be removed sixty (60) days after receipt by the City of
written notice from the Securities Depository to the effect that the Securities Depository
has received written notice from Participants having interests, as shown in the records of
the Securities Depository, in an aggregate principal amount of not less than fifty percent
(50%) of the aggregate principal amount of the then Outstanding Bonds to the effect that
the Securities Depository is unable or unwilling to discharge its responsibilities or a
continuation of the requirement that all of the Outstanding Bonds be registered in the
name of the Securities Depository or a nominee thereof or is not in the best interests of
the Beneficial Owners. Upon the removal or resignation of the Securities Depository, the
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Securities Depository shall take such action as may be necessary to assure the orderly
transfer of the computerized book-entry system with respect to the Bonds to a successor
securities depository or, if no successor securities depository is appointed as herein
provided, the transfer of the Bonds in certificate form to the Beneficial Owners or their
designees. Upon the giving of notice by the City of the removal of the Securities
Depository, the giving of notice by the Securities Depository of its resignation or the
receipt by the City of notice with respect to the written notice of Participants referred to
herein, the City may, within sixty (60) days after the giving of such notice, appoint a
successor securities depository upon such terms and conditions as the City shall impose.
Any such successor securities depository shall at all times be a registered clearing agency
under the Securities Exchange Act of 1934, as amended, or other applicable statute or
regulation, and in good standing thereunder. If the City fails to appoint a successor
securities depository within such time period, the Bonds shall no longer be restricted to
being registered in the name of the Securities Depository or a nominee thereof or, but
may be registered in whatever name or names Owners transferring or exchanging Bonds
shall designate.
(9) Replacement of Bonds. If any Bond shall have been lost, destroyed or
wrongfully taken, the City shall provide for the replacement thereof in the manner set
forth and upon receipt of the evidence, indemnity bond and reimbursement for expenses
provided in Sec. 8-41 of the Code.
(10) Recitals in Bonds. Each Bond shall recite in substance that the
Bond is payable solely from the Pledged Revenues and that the Bond is not payable in
whole or in part from ad valorem taxes of the City and that the full faith and credit of the
City is not pledged to pay the principal of or interest on such Bond. Each Bond shall
further recite that it is issued under the authority of the State Constitution, the Charter,
the Act and this Ordinance. The Act provides that such recital conclusively imparts full
compliance with all of the provisions and limitations thereof and that the Bonds
containing such recital are incontestable for any cause whatsoever after their delivery for
value.
(11) Form of Bonds. The Bonds shall be in substantially the following
form:
12
[Form of Bond]
UNITED STATES OF AMERICA
STATE OF COLORADO COUNTY OF LARIMER
CITY OF FORT COLLINS
SALES AND USE TAX REVENUE REFUNDING BOND
SERIES 2003A
No. R S
Interest Maturity Original
Rate Date Date CUSIP
% December 1, April 1, 2003
REGISTERED OWNER: Cede & Co.
PRINCIPAL SUM: Thousand Dollars
The City of Fort Collins, in the County of Larimer and State of Colorado, for
value received, hereby promises to pay to the Registered Owner (specified above), or registered
assigns, solely from the special funds provided therefor, as hereinafter set forth, the Principal
Sum (specified above), in lawful money of the United States of America, on the Maturity Date
(specified above), with interest thereon from the Original Date (specified above), or the interest
payment date to which interest has been paid next preceding the date hereof, whichever is later,
to the Maturity Date, except if redeemed prior thereto, at the per annum Interest Rate (specified
above), payable semiannually on the first day of June and the first day of December of each year,
commencing on December 1, 2003, or the first such date after the date hereof, whichever is later,
in the manner provided herein. If upon presentation at maturity payment of the Principal Sum is
not made as provided herein, interest continues at the Interest Rate until the Principal Sum is
paid in full.
The Bonds are not subject to optional redemption prior to their respective
maturity dates.
The principal of, interest on and any premium due in connection with the
redemption of this Bond are payable to the Registered Owner by The Bank of Cherry Creek, a
Branch of Western National Bank, Denver, Colorado, or its successors, as:paying agent. The
principal and the final installment of interest are payable to the Registered Owner upon
presentation and surrender of this Bond at maturity or upon prior redemption, by check or draft
13
e
mailed to the Registered Owner at the address appearing on the registration books of the City
maintained by The Bank of Cherry Creek, a Branch of Western National Bank, Denver,
Colorado, or its successors, as registrar, or by wire transfer to such bank or other depository as
the Registered Owner shall designate in writing to the paying agent. Except as hereinbefore and
hereinafter provided, the interest is payable to the Registered Owner determined as of the close
of business on the regular record date, which is the fifteenth day of the calendar month next
preceding the interest payment date, irrespective of any transfer of ownership hereof subsequent
to the regular record date and prior to such interest payment date, by check or draft or wire
transfer directed to the Registered Owner as aforesaid. Any interest hereon not paid when due
and any interest hereon accruing after maturity is payable to the Registered Owner determined as
of the close of business on the special record date, which is to be fixed by the paying agent for
such purpose, irrespective of any transfer of ownership of this Bond subsequent to such special
record date and prior to the date fixed by the paying agent for the payment of such interest, by
check or draft or wire'transfer directed to the Registered Owner as aforesaid. Notice of the
special record date and of the date fixed for the payment of such interest is to be given by
sending a copy thereof by certified or registered first-class postage-prepaid mail, at least fifteen
(15) days prior to the special record date, to the registered owner of each Bond upon which
interest will be paid determined as of the close of business on the day preceding such mailing, at
the address appearing on the registration books of the City. Any premium is payable to the
Registered Owner upon presentation and surrender of this Bond upon prior redemption, by check
or draft or wire transfer directed to the Registered Owner as aforesaid. If the date for making or
giving any payment, determination or notice described herein is a Saturday, Sunday, legal
holiday or any other day on which the office of the paying agent or registrar is authorized or
required by law to remain closed, such payment, determination or notice is to be made or given
on the next succeeding day which is not a Saturday, Sunday, legal holiday or other day on which
the office of the paying agent or registrar is authorized or required by law to remain closed.
So long as the Registered Owner is the securities depository or a nominee thereof
or, the securities depository is to disburse any payments received, through its participants or
otherwise, to the beneficial owner or owners hereof.
Neither the City nor the paying agent has any responsibility or obligation for the
payment to any participant, any beneficial owner hereof or any other person or entity (except the
Registered Owner) of the principal of, interest on or any premium due in connection with the
redemption of this Bond.
Neither the City nor the registrar has any responsibility or obligation with respect
to the accuracy of the records of the securities depository or a nominee thereof or any participant
with respect to any ownership interest in the Bonds or the delivery to any participant, beneficial
owner or any other person or entity (except the Registered Owner) of any notice with respect to
the Bonds.
Payment of the principal of, interest on and any premium due in connection with
the redemption of this Bond is to be made solely from, and as security for such payment there
are irrevocably (but not necessarily exclusively) pledged, pursuant to the Ordinance authorizing
the issuance of this Bond, two special funds identified as the "City of Fort Collins, Colorado,
Sales and Use Tax Revenue Bonds, Principal and Interest Account" and the "City of Fort
14
Collins, Colorado, Sales and Use Tax Revenue Bonds, Reserve Account," into which funds the
City has covenanted in the Ordinance to pay from Pledged Revenues consisting of net receipts
from the City's sales and use tax and certain other revenues sums sufficient to pay when due the
principal of, interest on and any premium due in connection with the redemption of the Bonds
and any other parity securities payable therefrom and to accumulate and maintain a specified
reserve for such purposes.
It is hereby recited, certified and warranted that for the payment of the principal
of, interest on and any premium due in connection with the redemption of this Bond the City has
created and will maintain said special funds and will deposit the Pledged Revenues therein out of
the amounts and revenues specified in the Ordinance and out of said special funds, as an
irrevocable charge thereon, will pay the principal of, interest on and any premium due in
connection with the redemption of this Bond in the manner provided by the Ordinance.
The Bonds are equitably and ratably secured by a lien on the Pledged Revenues,
and such Bonds constitute an irrevocable and first lien (but not necessarily an exclusive first
lien) upon the Pledged Revenues. Bonds and other types of securities, in addition to the Bonds,
subject to expressed conditions, may be issued and made payable from the Pledged Revenues
having a lien thereon subordinate and junior to the lien of the Bonds or, subject to additional
expressed conditions, having a lien thereon on a parity with the lien of such Bonds in accordance
with the provisions of the Ordinance. Except as otherwise expressly provided in this Bond and
the Ordinance, the Pledged Revenues are assigned, pledged and set aside to the payment of the
principal of and interest on the Bonds in anticipation of the collection of the Pledged Revenues.
The City covenants and agrees with the Registered Owner that it will keep and
will perform all of the covenants of this Bond and of the Ordinance.
This Bond is authorized and issued for the purpose of refunding, paying and
discharging and refinancing at a lower interest rate certain outstanding sales and use tax revenue
refunding bonds of the City pursuant to, by virtue of and in full conformity with the Constitution
of the State of Colorado, the City Charter, part 1 of article 56 of title 11, Colorado Revised
Statutes, as amended, and all other laws of the State of Colorado thereunto enabling, and
pursuant to the Ordinance duly adopted prior to the issuance of this Bond. The foregoing recital
conclusively imparts full compliance with all of the provisions and limitations of the above-cited
statute, and said statute provides that this Bond is incontestable for any cause whatsoever after
its delivery for value.
Reference is hereby made to the Ordinance, and to any and all modifications and
amendments thereof, for a description of the provisions, terns and conditions upon which the
Bonds are issued and secured, including, without limitation, the nature and extent of the security
for the Bonds, provisions with respect to the custody and application of the proceeds of the
Bonds, the collection and disposition of the revenues and moneys charged with and pledged to
the payment of the principal of, interest on and any premium due in connection with the
redemption of the Bonds, the terms and conditions on which the Bonds are issued, a description
of the special funds referred to above and the nature and extent of the security and pledge
afforded thereby for the payment of the principal of, interest on and any premium due in
connection with the redemption of the Bonds, and the manner of enforcement of said pledge, as
15
well as the rights, duties, immunities and obligations of the City and the members of its Council
and also the rights and remedies of the registered owners of the Bonds.
To the extent and in the respects permitted by the Ordinance, the provisions of the
Ordinance, or any instrument amendatory thereof or supplemental thereto, may be modified or
amended by action of the City taken in the manner and subject to the conditions and exceptions
provided in the Ordinance. The pledge of revenues and other obligations of the City under the
Ordinance may be discharged at or prior to the maturity or prior redemption of the Bonds upon
the making of provision for the payment of the Bonds on the terms and conditions set forth in the
Ordinance.
It is hereby recited, certified and warranted that all the requirements of law have
been fully complied with by the proper officers of the City in the issuance of this Bond; that it is
issued pursuant to and in strict conformity with the Constitution and all other laws of the State of
Colorado, including the City Charter, and with the Ordinance; that this Bond does not contravene
any constitutional or statutory limitation of the State of Colorado or any limitation of the City
Charter; and that this Bond is issued under the authority of the Ordinance.
This Bond is transferable only upon the registration books of the City by The
Bank of Cherry Creek, a Branch of Western National Bank, Denver, Colorado, or its successors,
as transfer agent, at the request of the Registered Owner or his, her or its duly authorized
attorney-in-fact or legal representative, upon surrender hereof together with a written instrument
of transfer duly executed by the Registered Owner or his, her or its duly authorized attorney-in-
fact or legal representative with guaranty of signature satisfactory to the transfer agent,
containing written instructions as to the details of the transfer, along with the social security
number or federal employer identification number of the transferee and, if the transferee is a
trust, the names and social security numbers of the settlors and the beneficiaries of the trust. The
transfer agent is not required to transfer ownership of this Bond during the fifteen (15) days prior
to the first mailing of any notice of redemption or to transfer ownership of any Bond selected for
redemption on or after the date of such mailing. The Registered Owner may also exchange this
Bond for another Bond or Bonds of authorized denominations. Transfers and exchanges are to be
made without charge, except that the transfer agent may require payment of a sum sufficient to
defray any tax or other governmental charge that may hereafter be imposed in connection with
any transfer or exchange of Bonds. No transfer of this Bond is to be effective until entered on the
registration books of the City. In the case of every transfer or exchange, the registrar is to
authenticate and the transfer agent is to deliver to the new registered owner a new Bond or
Bonds of the same aggregate principal amount, maturing in the same year, and bearing interest at
the same per annum interest rate as the Bond or Bonds surrendered. Such Bond or Bonds are to
be dated as of their date of authentication. The City may deem and treat the person or entity in
whose name this Bond is last registered upon the books of the City as the absolute owner hereof
for the purpose of receiving payment of the principal of, interest on and any premium due in
connection with the redemption of this Bond and for all other purposes, and all such payments so
made to such person or entity or upon his, her or its order will be valid and effective to satisfy
and discharge the liability of the City upon this Bond to the extent of the sum or sums so paid,
and the City will not be affected by any notice to the contrary.
16
Neither the City nor the transfer agent has any responsibility or obligation with
respect to the accuracy of the records of the securities depository or its participants regarding any
ownership interest in the Bonds or transfers thereof.
The City may remove the securities depository and the securities depository may
resign by giving sixty (60) days' written notice to the other of such removal or resignation.
Additionally, the securities depository is to be removed sixty (60) days after receipt by the City
of written notice from the securities depository to the effect that the securities depository has
received written notice from participants having interests, as shown in the records of the
securities depository, in an aggregate principal amount of not less than fifty percent (50%) of the
aggregate principal amount of the then outstanding Bonds to the effect that the securities
depository is unable or unwilling to discharge its responsibilities or a continuation of the
requirement that all of the outstanding Bonds be registered in the name of the securities
depository or a nominee thereof or is not in the best interests of the beneficial owners. Upon the
removal or resignation of the securities depository, the securities depository is to take such
action as may be necessary to assure the orderly transfer of the computerized book-entry system
with respect to the Bonds to a successor securities depository or, if no successor securities
depository is appointed as herein provided, the transfer of the Bonds in certificate form to the
beneficial owners or their designees. Upon the giving of notice by the City of the removal of the
securities depository, the giving of notice by the securities depository of its resignation or the
receipt by the City of notice with respect to the written notice by participants referred to herein,
the City may, within sixty (60) days after the giving of such notice, appoint a successor
securities depository upon such terms and conditions as the City shall impose. Any such
successor securities depository must at all times be a registered clearing agency under the
Securities Exchange Act of 1934, as amended, or other applicable statute or regulation and in
good standing thereunder. If the City fails to appoint a successor securities depository within
such time period, the Bonds are no longer to be restricted to being registered in the name of the
securities depository or a nominee therefor, but may be registered in whatever name or names
registered owners transfer-ring or exchanging Bonds shall designate.
This Bond is a special and limited obligation of the City payable solely out of and
secured by an irrevocable assignment and pledge (but not necessarily an exclusive assignment
and pledge) of the Pledged Revenues, as more specifically provided in the Ordinance. This Bond
does not constitute a debt or an indebtedness of the City within the meaning of any
constitutional, statutory or City charter provision or limitation of the State of Colorado or of the
City. This Bond is not payable in whole or in part from ad valorem taxes of the City, and the full
faith and credit of the City is not pledged for the payment of the principal of or interest on this
Bond.
17
IN WITNESS WHEREOF, the City has caused this Bond to be executed with the
facsimile or manual signature of the Mayor of the City, to be sealed with a facsimile or manual
impression of the seal of the City, to be attested with the facsimile or manual signature of the
City Clerk of the City, and to be countersigned with the facsimile or manual signature of the
Financial Officer of the City.
CITY OF FORT COLLINS, COLORADO
(CITY) By: (Facsimile or Manual Signature)
(SEAL) Mayor
ATTEST:
(Facsimile or Manual Signature)
City Clerk
Countersigned:
(Facsimile or Manual Signature)
Financial Officer
CERTIFICATE OF AUTHENTICATION
This Bond is issued pursuant to the Ordinance herein described. Printed on the reverse hereof is
the complete text of the opinion of bond counsel, Ballard Spahr Andrews & Ingersoll, LLP,
Denver, Colorado, a signed copy of which, dated the date of the first delivery of the Bonds
herein described, is on file with the undersigned.
THE BANK OF CHERRY CREEK
a Branch of Western National Bank
as registrar
By: (Manual Signature)
Authorized Officer
Dated:
18
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this
Bond, shall be construed as though they were written out in full according to applicable laws or
regulations.
TEN COM - as tenants in common
TEN ENT - as tenants in common
JT TEN - as tenants in common
- as joint tenants with the right of
survivorship and not as tenants
in common
UNIF TRANS MIN ACT - Custodian
(Cust) Minor)
under Uniform Transfers to Minors Act
(State)
Additional abbreviations may also be used
though not on the above list.
19
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned sells, assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
(Name and Address of Assignee)
this Bond and does hereby irrevocably constitute and appoint
or its successors,
to transfer this Bond on the books kept for registration thereof.
Dated:
Signature guaranteed:
(Eligible Guarantor Institution)
NOTICE: The signature to this assignment
must correspond with the name of the Registered
Owner as it appears upon the face of this Bond in
every particular without alteration or enlargement
or any change whatever.
[End of Form of Bond]
20
C. Bonds Equally Secured. The covenants and agreements herein set forth to be
performed on behalf of the City shall be for the equal benefit, protection and security of the
Owners of the Bonds, all of which, regardless of the time or times of their maturity, shall be of
equal rank without preference, priority or distinction of any of the Bonds over any other thereof,
except as otherwise expressly provided in or pursuant to this Ordinance.
D. Special Obligations. All of the Bonds, as to all Debt Service Requirements
thereof, shall be payable solely out of the Pledged Revenues. The Owners of the Bonds may not
look to the general or any other fund of the City for the payment of the Debt Service
Requirements thereof, except the special funds pledged thereof or, and the Bonds shall not be
considered or held to be general obligations of the City but shall constitute special and limited
obligations of the City. The Bonds are not payable in whole or in part from ad valorem taxes of
the City, and the full faith and credit of the City is not pledged for payment of the Bonds.
Section 4. Sale of Bonds.
A. Purchaser's Bid. On March 24, 2003, the Financial Officer of the City caused
to be distributed to prospective bidders the Official Notice of Bond Sale and the Preliminary
Official Statement. The Council hereby approves and ratifies such distribution to prospective
bidders as adequate and sufficient notice of public sale of the Bonds. On April 1, 2003, the
Financial Officer of the City received bids for the purchase of the Bonds and determined that the
bid of the Purchaser to purchase the Bonds at a price equal to the aggregate principal amount
thereof plus accrued interest thereon from the date thereof to the delivery date thereof_ a
of $ is the best bid therefor, and the Financial Officer of the City has
recommended that said bid be accepted by the Council.
B. Award of Contract. The contract for the purchase of the Bonds is hereby
awarded to the Purchaser at the price specified in the Purchaser's bid and upon the terms set forth
in this Ordinance.
C. Approval of Preliminary Official Statement. The Council hereby approves the
Preliminary Official Statement and ratifies the use and distribution thereof by the Purchaser in
marketing the Bonds.
D. Delivery. After the Bonds have been duly executed, authenticated and
registered as provided herein, the Financial Officer of the City shall cause the Bonds to be
delivered to the Purchaser upon receipt of the agreed purchase price.
Section 5. Disposition of Bond Proceeds and Pledged Revenues• Funds and
Accounts Adopted or Created by Ordinance• Security For Bonds. The proceeds of the sale of the
Bonds and the Pledged Revenues received by the City shall be deposited by the City in the funds
described in this Section 5, to be accounted for in the manner and priority set forth in this
Section 5.
Neither the Purchaser nor any subsequent Owner of any Bond shall be responsible
for the application or disposal by the City or by any of its officers, agents and employees of the
moneys derived from the sale of the Bonds or of any other moneys designated in this Section 5.
21
The Pledged Revenues and all moneys and securities paid or to be paid to or held
or to be held in any fund or account hereunder (except the Escrow Account and the Excess
Investment Earnings Account) are hereby assigned and pledged to secure the payment of the
Debt Service Requirements of the Bonds and any other Parity Securities. This assignment and
pledge shall be valid and binding from and after the date of the first delivery of the Bonds, and
the moneys, as received by the City and hereby assigned and pledged, shall immediately be
subject to the lien of this assignment and pledge without any physical delivery thereof, any
filing, or further act. The lien of this assignment and pledge and the obligation to perform the
contractual provisions hereby made shall have priority over any or all other obligations and
liabilities of the City (except as herein otherwise expressly provided), and the lien of this
assignment and pledge shall be valid and binding as against all parties having claims of any kind
in tort, contract or otherwise against the City (except as herein otherwise expressly provided),
irrespective of whether such parties have notice thereof.
A. Escrow Account: Redemption of Prior Bonds: Notice of Refunding and
Redemption of Prior Bonds. The City shall deposit in a separate special fund and trust account
hereby created and designated as the "City of Fort Collins, Colorado, Sales and Use Tax
Revenue Refunding Bonds, Series 2003A, Escrow Account," forthwith upon receipt of the
proceeds of the Bonds, proceeds of the Bonds in the approximate amount of$
and other funds of the City in the approximate amount of $ to be used only as
provided in this Section 5A. The City shall apply said sum to the purchase of the Federal
Securities in which the moneys in the Escrow Account are to be invested and the funding of any
required cash balance as provided in the Escrow Agreement. The Escrow Account shall be
maintained in an amount at the time of the deposit therein, and at all times subsequently, at least
sufficient, without regard to income derived from the investment of the deposit therein or any
part thereof in Federal Securities, to pay the principal of, interest on and any premium due in
connection with the redemption of the Prior Bonds as the same become due. Moneys shall be
withdrawn by the Escrow Bank from the Escrow Account in sufficient amounts and at times to
permit the payment of the principal of, interest on and any premium due in connection with the
redemption of the Prior Bonds on the specified payment date. Any moneys remaining in the
Escrow Account after provision has been made for the payment of the Prior Bonds may be
applied to any lawful purpose of the City. If for any reason the amount in the Escrow Account
shall at any time be insufficient for the purposes hereinbefore set forth, the City shall forthwith
from the first Pledged Revenues available thereof or deposit therein such additional moneys as
shall be necessary to permit the payment in full of the principal of, interest on and any premium
due in connection with the redemption of the Prior Bonds as herein provided.
The City hereby exercises its option to redeem the Prior Bonds maturing on or
after December 1, 2003, prior to their respective Maturity Dates, on June 1, 2003, at a price
equal to the principal amount of each such Prior Bond so redeemed plus accrued interest thereon
to the Redemption Date plus a premium equal to 1.0% of the principal amount of each such Prior
Bond so redeemed.
The Escrow Bank, on behalf of the paying agent for the Prior Bonds, is hereby
authorized and directed to give not later than May 2, 2003, notice of refunding and redemption
of the Prior Bonds. The notice of refunding and redemption of the Prior Bonds shall be given by
sending a copy of such notice by certified or registered first-class postage-prepaid mail to the
22
Owners of the Prior Bonds determined as of the close of business on the day preceding the first
mailing of such notice at the addresses appearing on the registration books of the City. The
notice of refunding and redemption of the Prior Bonds shall be in substantially the following
form:
23
[Form of Notice]
NOTICE OF REFUNDING AND REDEMPTION
OF
CITY OF FORT COLLINS, COLORADO
SALES AND USE TAX REVENUE REFUNDING BONDS
SERIES 1993
DATED JUNE 1, 1993 - $26,210,000
NOTICE IS HEREBY GIVEN to the registered owners of all outstanding City of
Fort Collins, Colorado, Sales and Use Tax Revenue Refunding Bonds, Series 1993, dated June 1,
1993, in the original aggregate principal amount of$26,210,000 (the "Prior Bonds") that the City
of Fort Collins, Colorado (the "City"), has issued Sales and Use Tax Revenue Refunding Bonds,
Series 2003A, dated April 1, 2003, in the aggregate principal amount of $5,860,000, and
deposited a portion of the proceeds thereof and other funds of the City in escrow with The Bank
of Cherry Creek, a Branch'of Western National Bank, Denver, Colorado, which proceeds and
other funds have been invested in bills, certificates of indebtedness, notes, bonds or similar
securities which are direct obligations of, or the principal and interest of which obligations are
unconditionally guaranteed by, the United States of America for the payment of the principal of,
interest on and any premium due in connection with the redemption of the Prior Bonds as the
same become due.
The escrow, without regard to income derived from such investments, is fully
sufficient at the time of the deposit and at all times subsequently to pay the principal of, interest
on and any premium due in connection with the redemption of the Prior Bonds as such payments
become due.
NOTICE IS FURTHER HEREBY GIVEN that the City has exercised its option
to redeem the Prior Bonds maturing on or after December 1, 2003, which are numbered
prior to their respective maturity dates, on June 1, 2003, at a price equal to the
principal amount of each such Prior Bond so redeemed plus accrued interest thereon to the
redemption date plus a premium equal to 1.0% of the principal amount of each such Prior Bond
so redeemed.
On the redemption date there will become due and payable at the office of U.S.
Bank, National Association, in St. Paul, Minnesota, the principal amount of each such Prior
Bond so redeemed plus accrued interest thereon to the redemption date plus a premium equal to
1.0% of the principal amount of each such Prior Bond so redeemed, and from and after the
redemption date interest will cease to accrue. Each such Prior Bond will be redeemed on or after
the redemption date upon presentation and surrender thereof.
24
• 2003. GIVEN BY ORDER OF THE CITY COUNCIL this day of
THE BANK OF CHERRY CREEK
a Branch of Western National Bank
as escrow bank
[End of Form of Notice]
25
a
B. Sales and Use Tax Fund. For so long as any of the Bonds shall be
Outstanding, as to any Debt Service Requirements, except as otherwise provided herein, the
entire Pledged Revenues, upon their receipt from time to time by the City, shall be set aside and
credited immediately to a separate special fund heretofore created and designated as the "City of
Fort Collins, Colorado, Sales and Use Tax Fund."
For so long as any of the Bonds shall be Outstanding as to any Debt Service
Requirements, the Sales and Use Tax Fund shall be accumulated and administered, and the
moneys on deposit therein shall be applied, in the following order of priority:
(1) First, to the Principal and Interest Account to pay any Debt Service
Requirements of the Bonds, any Additional Parity Bonds and any other Parity Securities
then Outstanding in the manner set forth in Section 5C hereof,
(2) Second, to the Reserve Account, in the manner set forth in Section 5D
hereof;
(3) Third, to the payment of Debt Service Requirements of Subordinate
Bonds or other Subordinate Securities in accordance with Section 5F hereof, and
(4) Fourth, to be used in accordance with Section 5G hereof.
C. Principal and Interest Account. The City shall deposit in a separate special
fund heretofore created as a restricted account within the Sales and Use Tax Fund and designated
as the "City of Fort Collins, Colorado, Sales and Use Tax Revenue Bonds, Principal and Interest
Account" forthwith upon receipt of the proceeds of the Bonds, interest accrued thereon from
their date of issue to the date of delivery thereof to the Purchaser, to apply to the payment of
interest first due on the Bonds.
The City shall deposit in the Principal and Interest Account from the Pledged
Revenues on the last day of May, 2003, the aggregate amount of interest accruing on the Bonds
in the months of April and May, 2003, and one-half(1/2) of the aggregate amount of the next
installment of principal due on the Bonds on the next payment date in the current Bond Year and
on or before the last day of each month beginning June, 2003, the following amounts (with
credits for amounts on deposit in the Principal and Interest Account on account of the Prior
Bonds and the amount of any accrued interest on the Bonds deposited in the Principal and
Interest Account and not theretofore credited):
(1) Interest Payments. One-sixth (1/6) of the aggregate amount of the next
installment of interest due on the next Interest Payment Date in the then-current Bond
Year plus any other amounts due for interest on the Bonds, any Additional Parity Bonds
and any other Parity Securities then outstanding.
(2) Principal Payments. One-twelfth (1/12) of the aggregate amount of the
next installment of principal due on the next principal payment date in the then-current
Bond Year plus any other amounts due for principal of the Bonds, any Additional Parity
Bonds and any other Parity Securities then outstanding.
26
Such interest and principal shall be promptly paid when due.
The moneys credited to the Principal and Interest Account shall be used to pay the
Debt Service Requirements of the Bonds, any Additional Parity Bonds and any other Parity
Securities then Outstanding, as such Debt Service Requirements become due, except as
otherwise provided in this Ordinance.
Nothing herein shall be construed so as to prevent the City from creating separate
subaccounts within the Principal and Interest Account for the Bonds and any Additional Parity
Bonds and accounting separately for any deposits made thereto on account of the Bonds and any
Additional Parity Bonds or from creating separate principal and interest accounts for Additional
Parity Bonds, if such action is deemed by the City to be necessary or desirable in order to
comply with any statute or regulation governing the exclusion from gross income for federal
income tax purposes of interest on any such Additional Parity Bonds, provided that any such
separate subaccounts shall have claims to the Pledged Revenues equal to and on a parity with
those of the other such subaccounts and any such separate principal and interest account shall
have a claim to the Pledged Revenues equal to and on a parity with that of the Principal and
Interest Account.
D. Reserve Account. The City shall maintain a separate special fund heretofore
created as a restricted account within the Sales and Use Tax Fund and designated as the "City of
Fort Collins, Colorado, Sales and Use Tax Revenue Bonds, Reserve Account." No deposit need
be made to the Reserve Account unless and until the amount of Pledged Revenues collected by
the City in any Fiscal Year is less than 200% of the Debt Service Requirements of the Bonds,
any Additional Parity Bonds and any other Parity Securities then Outstanding in the same Fiscal
Year. In that event, subject to the payments required by Section 5C hereof, except as provided in
Section 5E hereof, from and to the extent of any moneys remaining in the Sales and Use Tax
Fund, the City shall deposit to the Reserve Account in twenty-four (24) equal monthly
installments an amount equal to the Average Annual Debt Service Requirements of the Bonds.
Subject to the payments required by Section 5C hereof, except as provided in Section 5E hereof,
from and to the extent of any moneys remaining in the Sales and Use Tax Fund, there shall be
credited as hereinafter provided and from time to time thereafter to the Reserve Account moneys
sufficient to maintain the Reserve Account at an amount at least equal to the Combined Average
Annual Debt Service Requirements of all Outstanding Bonds, Additional Parity Bonds and other
Parity Securities for which the Reserve Account is maintained. For purposes of this Section 5D,
the Debt Service Requirements of any Additional Parity Bonds and other Parity Securities
bearing interest at a variable or adjustable rate shall be computed on the following assumptions:
If interest on such Additional Parity Bonds or other Parity Securities is excludable from gross
income for federal income tax purposes under the Tax Code, such Additional Parity Bonds or
other Parity Securities shall be assumed to bear interest at the rate stated in the most recently
published Bond Buyer 25 Revenue Bond Index (or if no longer published, a comparable index)
plus fifty (50) basis points. If interest on such Additional Parity Bonds or other Parity Securities
is not excludable from gross income for federal income tax purposes under the Tax Code, such
Additional Parity Bonds or other Parity Securities shall be assumed to bear interest at a rate
equal to the rate on direct Federal Securities of comparable maturities plus fifty(50)basis points.
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Said amount shall be maintained as a continuing reserve for the payment of the
Debt Service Requirements of the Bonds, any Additional Parity Bonds and any other Parity
Securities for which the Reserve Account is maintained. No payment need be made into the
Reserve Account so long as the moneys therein shall equal not less than said amount. In the
event that the amount of the Reserve Account falls below the minimum amount required to be
maintained therein, the City shall credit to the Reserve Account that sum of money needed to
reaccumulate the amount therein so that at all times the amount of the Reserve Account equals
said minimum amount. The moneys in the Reserve Account shall be set aside, accumulated, and,
if necessary, reaccumulated as provided herein, from time to time, and maintained as a
continuing reserve to be used, except as hereinafter provided in Section 5E and Section 9 hereof,
only to prevent deficiencies in the Principal and Interest Account resulting from failure to
deposit therein sufficient sums to pay such Debt Service Requirements of the Bonds, any
Additional Parity Bonds and any other Parity Securities for which the Reserve Account is
maintained as the same become due.
If at any time the City shall for any reason fail to pay into the Principal and
Interest Account the full amount above stipulated, then an amount shall be paid into the Principal
and Interest Account at such time from the Reserve Account equal to the difference between that
paid from the Pledged Revenues in the Sales and Use Tax Fund and the full amount so
stipulated. The money so used shall be replaced to the Reserve Account from the first moneys
credited to the Sales and Use Tax Fund thereafter received and not required to be otherwise
applied by Section 5C hereof.
If Additional Parity Bonds are Outstanding and a separate reserve fund or account
is maintained thereof or, then the moneys replaced in the Reserve Account and such separate
reserve fund or account shall be replaced on a pro rata basis, as moneys become available thereof
or.
If at any time the City shall for any reason fail to pay into the Reserve Account
the full amount stipulated herein from the moneys credited to the Sales and Use Tax Fund, the
difference between the amount paid and the amount stipulated shall in a like manner be paid
therein from the first moneys credited to the Sales and Use Tax Fund thereafter received and not
required to be applied otherwise by Section 5C hereof.
Nothing in this Ordinance shall be construed as limiting the right of the City to
substitute for the cash deposit required to be maintained hereunder a letter of credit, surety bond,
insurance policy, agreement guaranteeing payment, or other undertaking by a financial
institution to ensure that cash in the amount otherwise required to be maintained hereunder will
be available to the City as needed, provided that any such substitution shall be submitted to
Moody's and Standard & Poor's and shall not cause the then-current ratings of the Bonds to be
adversely affected. Any such credit instrument shall be deposited with the Paying Agent, which
shall ascertain the necessity for a claim against or draw upon the credit instrument and provide
notice to the issuer of such credit instrument in accordance with its terms not later than three (3)
days (or such longer period as may be necessary, depending on the permitted time period for
honoring claims or draws thereunder).prior to each Interest Payment Date. If a letter of credit is
substituted for the cash deposit required to be maintained hereunder, the Paying Agent shall
draw upon such letter of credit prior to its expiration or termination unless an alternate credit
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. instrument conforming with the provisions hereof has been substituted therefor or the amount
otherwise required to be maintained hereunder is on deposit in the Reserve Account.
E. Termination of Deposits. No payment need be made into the Principal and
Interest Account or the Reserve Account if the amount of cash and Permitted Investments in the
Principal and Interest Account and the amount in the Reserve Account total a sum at least equal
to the entire principal amount of the Outstanding Bonds and any Outstanding Additional Parity
Bonds or other Parity Securities, as to all Debt Service Requirements, to their respective
Maturity Dates or to any Redemption Date or Redemption Dates on which the City shall have
exercised or shall have obligated itself to exercise its option to redeem, prior to their respective
Maturity Dates, any Bonds, any Additional Parity Bonds or any other Parity Securities then
Outstanding and thereafter maturing, both accrued and not accrued (provided that, solely for the
purpose of this Section 5E, there shall be deemed to be a credit to the Reserve Account cash or
Permitted Investments, accounted for in any other account or accounts of the City and restricted
solely for the purpose of paying the Debt Service Requirements of the Bonds, any Additional
Parity Bonds or any other Parity Securities), in which case cash or Permitted Investments in the
Principal and Interest Account and the Reserve Account in an amount, except for any known
interest or other gain to accrue from any investment or deposit of moneys pursuant to Section 6B
hereof from the time of any such investment or deposit to the time or respective times the
proceeds of any such investment or deposit shall be needed for such payment, at least equal to
such Debt Service Requirements, shall be used together with any such gain from such
investments and deposits solely to pay such Debt Service Requirements as the same become due;
and any moneys in excess thereof in the Principal and Interest Account and the Reserve Account
and any other moneys derived from the Pledged Revenues may be used in any lawful manner
determined by the City.
F. Pavment of Additional Subordinate Securities. After there has been deposited
to the Principal and Interest Account an amount sufficient to pay all the Debt Service
Requirements due or to become due during the current Bond Year on all Bonds, Additional
Parity Bonds and other Parity Securities then Outstanding and after the accumulations to and
replenishments of the Reserve Account to be made in the current Bond Year have been made,
any moneys remaining in the Sales and Use Tax Fund in any Bond Year may be used by the City
for the payment of Debt Service Requirements of Subordinate Securities payable from the
Pledged Revenues and authorized to be issued in accordance with this Ordinance, including
reasonable reserves for such Subordinate Securities; but the lien of such Subordinate Securities
on the Pledged Revenues and the pledge thereof for the payment of such Subordinate Securities
shall be subordinate to the lien and pledge of the Bonds, any Additional Parity Bonds and any
other Parity Securities as herein provided.
G. Use of Remaining Revenues. After the payments hereinabove required to be
made by Sections 5C through 5F hereof are made, at the end of any month, or whenever in any
month there shall have been credited to the Principal and Interest Account and to the Reserve
Account for the payment of the Bonds and any other securities payable from the Pledged
Revenues all amounts required to be deposited in those funds at that time, as herein provided,
any remaining Pledged Revenues shall be transferred to such fund of the City as the City shall
determine.
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H. Budget and Appropriation of Sums. The proceeds of the Bonds and other
funds of the City to be used for payment of the costs of issuance of the Bonds and for the deposit
specified in Section 5A hereof and the Pledged Revenues to be used to make the payments
specified in Sections 5C, 5D, 5F and 51 hereof are hereby appropriated for said purposes, and
said amounts for each year shall be included in the budgets and the annual appropriation
ordinances or measures to be adopted or passed by the Council in each year while any of the
Bonds, as to either principal or interest, are Outstanding and unpaid. No provisions of any
constitution, charter, statute, ordinance, resolution, or other order or measure enacted after the
issuance of the Bonds shall in any manner be construed as limiting or impairing the obligation of
the City to keep and perform the covenants contained in this Ordinance so long as any of the
Bonds remain Outstanding and unpaid.
.1. Excess Investment Earnings Account. The Financial Officer shall transfer into
and pay from a separate special fund hereby created as a restricted account within the Sales and
Use Tax Fund and designated as the "City of Fort Collins, Colorado, Sales and Use Tax Revenue
Refunding Bonds, Series 2003A, Excess Investment Earnings Account" the amount of required
arbitrage rebate, if any, due to the federal government under Sections 103 and 148(f) (2) of the
Tax Code and regulations promulgated thereunder. The Financial Officer shall determine such
amounts in the manner required by said sections and related regulations. Transfer of the required
arbitrage rebate amounts shall be made from the Principal and Interest Account and the Reserve
Account, provided, however, that required arbitrage rebate payments shall be made to the federal
government from legally available funds regardless of whether there are any remaining proceeds
or other funds attributable to the Bonds that are available for the purpose.
All amounts in the Excess Investment Earnings Account, including income
earned from investment thereof, shall be held by the Financial Officer free and clear of any lien
created by this Ordinance, and the Financial Officer shall pay over to the federal government
from time to time as the Financial Officer shall determine provided that the Financial Officer
shall so pay over to the federal government not less frequently than once each five (5) years after
the date of issuance of the Bonds, an amount equal to ninety percent (90%) of the required
arbitrage rebate amount earned during such period (and not theretofore paid to the federal
government) and not later than sixty (60) days after the redemption of the last Bond, one
hundred percent (100%) of the required arbitrage rebate amount.
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Section 6. General Administration of Funds and Accounts.
A. Places and Times of Deposits. Each of the special funds or accounts referred
to in Section 5 hereof shall be maintained and kept separate and apart from all other accounts or
funds of the City as trust accounts solely for the purposes herein designated therefor. For
purposes of investment of moneys, nothing, except as specifically provided herein, prevents the
commingling of moneys accounted for in any two or more such funds or accounts pertaining to
the Pledged Revenues or to such fund and account and any other funds or accounts of the City
adopted or created under this Ordinance. Such funds or accounts shall be continuously secured to
the fullest extent required and permitted by the laws of the State for the securing of public funds
and shall be irrevocable and not withdrawable by anyone for any purpose other than the
respective designated purposes of such funds and accounts. Each periodic payment shall be
credited to the proper fund or account not later than the date thereof or herein designated, except
that when any such date shall be a Saturday, a Sunday or a legal holiday, then such payment
shall be made on or before the next preceding business day.
B. Investment of Funds and Accounts. Any moneys in any fund or account
described in this Ordinance (except the Escrow Account) may be deposited, invested, or
reinvested only in Permitted Investments. Securities or obligations purchased as such an
investment shall either be subject to redemption at any time at face value by the Owner thereof at
the option of such Owner or shall mature at such time or times as shall most nearly coincide with
the expected need for moneys from the fund or account in question. Securities or obligations so
purchased as an investment of moneys in any such fund or account shall be deemed at all times
to be a part of the applicable fund or account; provided that, with the exception of the Escrow
Account, the Reserve Account and the Excess Investment Earnings Account, the interest
accruing on such investments and any profit realized therefrom shall be credited to the Sales and
Use Tax Fund, and any loss resulting from such investments shall be charged to the particular
fund or account in question. Interest and profit realized from investments in the Reserve Account
shall be credited to the Reserve Account, provided that, so long as the amount in the Reserve
Account equals at least the minimum amount specified in Section 5D hereof, such interest and
profit may be transferred to the Principal and Interest Account and distributed in the same
manner as other moneys in the Principal and Interest Account. Any loss resulting from such
investments in the Reserve Account shall be charged to the Reserve Account. Investments in the
Reserve Account shall have a term to maturity not greater than five (5) years, except that Direct
Obligations and Agency Obligations may have a term in excess of five (5) years but not longer
than the final maturity of the Bonds. Investments in the Reserve Account shall be valued by the
City at the market value thereof, exclusive of accrued interest. If on any valuation date the
market value of investments in the Reserve Account is less than the amount required by Section
5D hereof to be maintained therein due to market fluctuations, the deficiency shall be remedied
no later than the next quarterly valuation date. The City shall present for redemption or sale on
the prevailing market any securities or obligations so purchased as an investment of moneys in a
given fund or account whenever it shall be necessary to do so in order to provide moneys to meet
any required payment or transfer from such fund or account. The City shall not invest any
moneys accounted for hereunder if any such investment would contravene the covenant
concerning arbitrage in Section 80 hereof.
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C. No Liability for Losses Incurred in Performing Terms of Ordinance. Neither
the City nor-any officer of the City shall be liable or responsible for any loss resulting from any
investment or reinvestment made in accordance with this Ordinance.
D. Character of Funds. The moneys in any fund or account herein authorized
shall consist of lawful money of the United States of America or Permitted Investments or both
such money and Permitted Investments. Moneys deposited in a demand or time deposit account
in a Commercial Bank, appropriately secured according to the laws of the State, shall be deemed
lawful money of the United States of America.
E. Accelerated Payments Optional. Nothing contained herein prevents the
accumulation in any fund or account herein designated of any monetary requirements at a faster
rate than the rate or minimum rate, as the case may be, provided therefor, but no payment shall
be so accelerated if such acceleration shall cause a default in the payment of any obligation of
the City pertaining to the Pledged Revenues.
Section 7. Priorities: Liens, Issuance of Additional Bonds.
A. First Lien on Pledged Revenues. Except as expressly provided in this
Ordinance with respect to the issuance of Additional Parity Bonds, Parity Securities or
Subordinate Securities, the Pledged Revenues shall be and hereby are irrevocably assigned,
pledged and set aside to pay the Debt Service Requirements of the Bonds. The Bonds constitute
an irrevocable and first lien (but not necessarily an exclusive first lien) upon the Pledged
Revenues. The Bonds, any Additional Parity Bonds and any other Parity Securities authorized to
be issued and from time to time Outstanding are equitably and ratably secured by a lien on the
Pledged Revenues and shall not be entitled to any priority one over the other in the application of
the Pledged Revenues regardless of the time or times of the issuance of the Bonds, any
Additional Parity Bonds and any other Parity Securities, it being the intention of the Council that
there shall be no priority among the Bonds, any Additional Parity Bonds and any other Parity
Securities, regardless of the fact that they may be actually issued and delivered at different times.
B. Issuance of Additional Parity Bonds. Nothing herein, subject to the limitations
stated in Section 7F hereof, prevents the issuance by the City of Additional Parity Bonds payable
from the Pledged Revenues and constituting a lien on the Pledged Revenues on a parity with,but
not prior or superior to, the lien thereon of the Bonds; but before any such Additional Parity
Bonds are authorized or actually issued the following provisions must first be satisfied:
(1) Absence of Default. At the time of the issuance of the Additional
Parity Bonds as provided in Section 7F hereof, the City shall not be in default in making
any payments required by Section 5 hereof and there shall not have occurred and be
continuing any Event of Default.
(2) Historic Revenues Test. Except as hereinafter provided in the case of
Additional Parity Bonds issued for the purpose of refunding less than all of the Bonds
and other Parity Securities then Outstanding, the Net Revenue collected by the City from
the Sales and Use Tax, as certified by the Financial Officer of the City, derived in the last
complete Fiscal Year immediately preceding the date of the issuance of such Additional
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Parity Bonds shall have been sufficient to pay an amount at least equal to one hundred
fifty percent (150%) of the Combined Average Annual Debt Service Requirements or, if
the Combined Average Annual Debt Service Requirements are less than seventy-five
percent (75%) of the Combined Maximum Annual Debt Service Requirements, an
amount at least equal to one hundred fifty percent (150%) of the Combined Maximum
Annual Debt Service Requirements of the Outstanding Bonds, any Additional Parity
Bonds, any other Parity Securities and the Additional Parity Bonds proposed to be issued.
If additional Sales and Use Taxes in excess of those authorized as of the date hereof have
been imposed during such Fiscal Year, the amount of such Net Revenue may be adjusted
by adding the additional Net Revenue that would have been received by the City from the
imposition of such additional Sales and Use Taxes as if such additional Sales and Use
Taxes had been in effect during the entire Fiscal Year. For purposes of this Section
7B(2), when computing the Average Annual Debt Service Requirements for any issue of
Securities bearing interest at a variable, adjustable, convertible or other similar rate that
is not fixed for the entire term thereof, it shall be assumed that any such Securities
Outstanding at the time of the computation will bear interest during any period at the
highest of (a) the actual rate on the date of calculation, or if the Securities are not yet
outstanding, the initial rate (if established and binding), (b) if the Securities have been
outstanding for at least twelve (12) months, the average rate over the twelve (12) months
immediately preceding the date of calculation, and (c) (i) if interest on the Securities is
excludable from gross income under the applicable provisions of the Tax Code, the rate
stated in the most recently published Bond Buyer 25 Bond Revenue Index (or if no
longer published, a comparable index) plus fifty (50) basis points, or (ii) if interest is not
so excludable, the rate on direct Federal Securities of comparable maturities plus fifty
(50) basis points. It shall further be assumed that any such Securities that may be
tendered prior to maturity for purchase at the option of the Owner thereof will mature on
their stated Maturity Dates or mandatory Redemption Dates. The City shall be permitted
to treat any fixed rate payable under an interest rate exchange agreement or "swap"
contract as the interest rate on any such issue of Securities if the counterparty to such-
agreement or contract has unconditionally agreed to pay all interest due on such
Securities. In the case of Additional Parity Bonds issued for the purpose of refunding
less than all of the Bonds and other Parity Securities then Outstanding, compliance with
this Section 7B(2) shall not be required so long as the Debt Service Requirements
payable on all Bonds and other Parity Securities Outstanding after the issuance of such
Additional Parity Bonds on each Interest Payment Date does not exceed the Debt Service
Requirements payable on all Bonds and other Parity Securities Outstanding prior to the
issuance of such Additional Parity Bonds on such Interest Payment Dates.
(3) Adequate Reserves. The Reserve Account shall be fully funded in
accordance with Section 5D hereof, and the proceedings under which any such
Additional Parity Bonds are issued must provide for the deposit of moneys to the Reserve
Account on substantially the same terms as provided in Section 5D hereof and contain a
covenant by the City to maintain the Reserve Account in an amount at least equal to the
minimum amount required by Section 5D hereof. Alternatively, if such action is deemed
by the City to be necessary or desirable in order to comply with any statute or regulation
governing the exclusion from gross income for federal income tax purposes of interest on
any such Additional Parity Bonds, the proceedings under which any such Additional
33
Parity Bonds are issued may provide for the deposit of moneys to a reserve fund or
account (other than the Reserve Account) established and maintained for any such
Additional Parity Bonds on substantially the same terms as provided in Section 5D
hereof and contain a covenant by the City to maintain such reserve fund or account in an
amount at least equal to the minimum amount required by Section 5D hereof, except as
may be necessary to comply with such statute or regulation. Any such reserve fund or
account shall have a claim to the Pledged Revenues equal to and on a parity with the
Reserve Account.
C. Certification of Historic Revenues. In the case of the computation of the
historic revenues test provided in Section 7B hereof, the specified and required written
certifications by the Financial Officer of the City that such annual revenues are sufficient to pay
such amounts as provided in Section 7B hereof shall be conclusively presumed to be accurate in
determining the right of the City to authorize, issue, sell and deliver Additional Parity Bonds.
D. Subordinate Securities Permitted. Nothing herein, subject to the limitations
stated in Section 7F hereof, prevents the City from issuing Subordinate Bonds or Subordinate
Securities for any lawful purpose.
E. Superior Securities Prohibited. Nothing herein permits the City to issue
Superior Bonds or Superior Securities.
F. Supplemental Ordinances. Additional Parity Bonds or Subordinate Securities
shall be issued only after authorization thereof by ordinance, supplemental ordinance or other
instrument of the Council, in substantially the same form as this Ordinance, stating the purpose
or purposes of the issuance of such additional securities, directing the application of the proceeds
thereof to such purpose or purposes, directing the execution thereof, and fixing and determining
the date, series designation, principal amount, maturity or maturities, maximum rate or rates of
interest, and prior redemption privileges of the City with respect thereto, and providing for
payments to and from the Sales and Use Tax Fund in accordance with this Ordinance. All
additional securities shall bear such date, shall be payable as to principal on June 1 or
December 1 or both and as to interest on June 1 and December 1 and shall be subject to
redemption prior to maturity on such terms and conditions, as may be provided, and shall bear
interest at such rate or rates as may be fixed by ordinance, instrument or other document of the
Council. Nothing herein shall be construed to prohibit the issuance of additional securities
payable from the Pledged Revenues, the interest on which is payable more frequently than
semiannually.
Section 8. Covenants.
The City hereby particularly covenants and agrees with the Owners of the Bonds
from time to time, and makes provisions which shall be a part of its contract with such Owners,
which covenants and provisions shall be kept by the City continuously until all of the Bonds
have been fully paid and discharged:
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A. Continuance and Collection of Sales and Use Taxes.
(1) Ordinance No. 58, 1967, Ordinance No. 140, 1979, and Ordinance No.
149, 1981, as originally adopted, have not been repealed or amended, except by
Ordinance No. 4, 1968, Ordinance No. 6, 1968, Ordinance No. 23, 1974, Ordinance No.
137, 1977, Ordinance No. 87, 1981, Ordinance No. 113, 1984, Ordinance No. 122, 1986,
Ordinance No. 192, 1987, Ordinance No. 8, 1988, Ordinance No. 60, 1988, and
Ordinance No. 132, 1991, and are now in full force and effect. The City will not repeal or
amend said ordinances in any manner which would diminish the Pledged Revenues.
(2) The City shall continue to levy, impose, administer, enforce and
collect the Sales and Use Tax on sales and purchases of tangible personal property at
retail and storage, use, distribution and consumption of tangible personal property
purchased or acquired at retail, within the.City, in accordance with Ordinance No. 58,
1967, Ordinance No. 140, 1979, and Ordinance No. 149, 1981, without reduction in the
percentage rate of the Sales and Use Tax as set forth therein.
(3) The City shall maintain the Sales and Use Tax Fund as a fund of the
City separate and distinct from all other funds of the City and shall place the Pledged
Revenues therein. The Sales and Use Tax Fund shall be subject to appropriation only as
authorized by this Ordinance.
(4) All of the Pledged Revenues shall be subject to the payment of the
Debt Service Requirements of all securities payable from the Pledged Revenues,
including reserves thereof or, as provided herein or in any instrument supplemental or
amendatory hereto.
B. Defense of Legality of Pledged Revenues. There is not pending or threatened
any suit, action or proceeding against or affecting the City before or by any court, arbitrator,
administrative agency or other governmental authority that affects the validity or legality of this
Ordinance, Ordinance No. 58, 1967, Ordinance No. 140, 1979, or Ordinance No. 149, 1981, the
imposition and collection of the Sales and Use Tax, or any of the City's obligations under such
Ordinances.
The City shall, to the extent permitted by law, defend the validity and legality of
the Sales and Use Tax and Ordinance No. 58, 1967, Ordinance No. 140, 1979, and Ordinance
No. 149, 1981, and all amendments thereto against all claims, suits and proceedings which
would diminish or impair the Pledged Revenues. Furthermore, the City shall, to the extent
permitted by law, amend from time to time the provisions of Ordinance No. 58, 1967, Ordinance
No. 140, 1979, and Ordinance No. 149, 1981, as necessary to prevent impairment of the Pledged
Revenues as required to meet the Debt Service Requirements of the Bonds when due. _
Except as permitted in this Ordinance, the City has not assigned or pledged the
Pledged Revenues in any manner which would diminish the security for payment of the Bonds.
C. Performance of Duties. The City, acting and through its officers, or otherwise,
shall faithfully and punctually perform, or cause to be performed, all duties with respect to the
Pledged Revenues required by the Constitution and laws of the State, the Charter and the various
35
ordinances, resolutions and contracts of the City, including, without limitation, the proper
segregation of the proceeds of the Bonds and the Pledged Revenues and their application from
time to time to the respective funds provided thereof or.
D. Contractual Obligations. The City will perform all contractual obligations
undertaken by it under the Bond Purchase Agreement and any other agreements relating to the
Bonds and the Pledged Revenues.
E. Further Assurances. At any and all times the City shall, so far as it may be
authorized by law, pass, make, do, execute, acknowledge, deliver, and file or record all and
every such further instruments, acts, deeds, conveyances, assignments, transfers, other
documents, and assurances as may be necessary or desirable for the better assuring, conveying,
granting, assigning and confirming all and singular the rights, the Pledged Revenues and other
funds and accounts hereby pledged or assigned,.or intended so to be, or which the City may
hereafter become bound to pledge or to assign, or as may be reasonable and required to carry out
the purposes of this Ordinance. The City, acting by and through its officers, or otherwise, shall at
all times, to the extent permitted by law, defend, preserve and protect the pledge of the Pledged
Revenues and other funds and accounts pledged hereunder and all the rights of every Owner of
any of the Bonds against all claims and demands of all Persons whomsoever.
F. Conditions Precedent. Upon the date of issuance of any of the Bonds, all
conditions, acts and things required by the Constitution or laws of the United States of America,
the Constitution or laws of the State, the Charter, or this Ordinance, to exist, to have happened,
and to have been performed precedent to or in the issuance of the Bonds shall exist, have
happened and have been performed, and the Bonds do not contravene any debt or other
limitation prescribed by the Constitution or laws of the United States of America, the
Constitution or laws of the State or the Charter.
G. Records. The City will keep proper books of record and account, separate and
apart from all other records and accounts, showing complete and correct entries of all
transactions relating to the funds and accounts described herein.
H. Protection of Security. The City, its officers, agents and employees, shall not
take any action in such manner or to such extent as might prejudice the security for the payment
of the Debt Service Requirements of the Bonds and any other securities payable from the
Pledged Revenues according to the terms thereof. No contract shall be entered into nor any other
action taken by which the rights of any Owner of any Bond or other security payable from
Pledged Revenues might be materially impaired or diminished.
I. Accumulation of Interest Claims. In order to prevent any accumulation of
claims for interest after maturity, the City shall not directly or indirectly extend or assent to the
extension of the time for the payment of any claim for interest on any of the Bonds or any other
securities payable from the Pledged Revenues; and the City shall not directly or indirectly be a
party to or approve any arrangements for any such extension or for the purpose of keeping alive
any of such other claims for interest. If the time for the payment of any such installment of
interest is extended in contravention of the foregoing provisions, such installment or installments
of interest after such extension or arrangement shall not be entitled in case of default hereunder
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to the benefit or the security of this Ordinance, except upon the prior payment in full of the
principal of all of the Bonds and any such securities the payment of which has not been
extended.
J. Prompt Payment of Bonds. The City shall promptly pay the Debt Service
Requirements of every Bond on the dates and in the manner specified herein and in the Bonds
according to the true intent and meaning hereof.
K. Use of Principal and Interest Account and Reserve Account. The Principal
and Interest Account and the Reserve Account shall be used solely and only, and the moneys
credited to such accounts are hereby pledged, for the purpose of paying the Debt Service
Requirements of the Bonds, any Additional Parity Bonds or any other Parity Securities at
maturity, upon prior redemption or otherwise, subject to the provisions concerning surplus
moneys in Section 5E hereof and subject to Section 9 hereof.
L. Additional Securities. The City shall not hereafter issue any bonds or
securities payable from the Pledged Revenues without compliance with the requirements with
respect to the issuance of Additional Parity Bonds set forth herein to the extent applicable.
M. Other Liens. There are no liens or encumbrances of any nature whatsoever on
or against any of the Pledged Revenues, except to secure payment of the principal of and interest
on the City's Outstanding Downtown Development Authority Tax Increment Revenue Refunding
Bonds, Series 1992, dated March 15, 1992, in the original aggregate principal amount of
$11,380,000 and the City's Outstanding Downtown Development Authority Tax Increment
Revenue Refunding Bonds, Series 2001, dated April 1, 2001, in the original aggregate principal
amount of$3,640,000.
N. Surety Bonds. Each official or other person having custody of any Pledged
Revenues, or responsible for their handling, shall be fully bonded at all times, which bond shall
be conditioned upon the proper application of said moneys.
O. Arbitrage. The City shall make no investment or other use of the proceeds of
the Bonds at any time during the term thereof which, if such investment or other use had been
reasonably expected on the date the Bonds are issued, would have caused the Bonds to be
arbitrage bonds within the meaning of the Tax Code and the regulations thereunder and shall
comply with all the requirements of the Tax Code and said regulations throughout the term of
the Bonds.
P. Reserved.
Q. Annual Financial Reports: Event Reports. The City shall deliver to each
NRMSIR and the SID, if any, within two hundred forty (240) days after the end of each Fiscal
Year a copy of the City's annual financial statements prepared in accordance with generally
accepted accounting principles applicable to governmental entities and audited by independent
certified public accountants, including a calculation of the Pledged Revenues and Combined
Average Annual Debt Service Requirements for the Bonds and all other Parity Securities
Outstanding for said Fiscal Year, and, to the extent not contained in the City's annual financial
statements, an update of the financial information and operating data in the final official
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statement of the type contained under the sections entitled "SALES AND USE TAXES —
General" pertaining to Retail Sales and Use Tax Revenues and Sales and Use Tax Receipts by
Category; "SALES AND USE TAXES — Debt Service Coverage;" "SALES AND USE TAXES
— Operating History of the Sales and Use Tax Fund;" the amounts and percentage increases
(decreases) in sales and use tax collections contained in "SALES AND USE TAXES —
Management's Comments Concerning Material Trends in the Sales and Use Tax Fund;" and
"FINANCIAL INFORMATION CONCERNING THE CITY — Other City Obligations Secured
by Sales and Use Tax Revenues."
In a timely manner, the City shall deliver to the MSRB and the SID, if any, notice
of any of the following events with respect to the Bonds, if material:
(1) Principal and interest payment delinquencies;
(2) Non-payment related defaults;
(3) Unscheduled draws on any debt service reserve reflecting financial
difficulties;
(4) Unscheduled draws on any credit enhancement reflecting financial
difficulties;
(5) Substitution of any credit or liquidity provider, or its failure to
perform;
(6) Adverse tax opinions or events affecting the tax-exempt status of the
Bonds;
(7) Modifications to rights of Beneficial Owners of the Bonds;
(8) Bond calls;
(9) Defeasances;
(10) Release, substitution or sale of property securing repayment of the
Bonds; or
(11) Rating changes.
In a timely manner, the City shall give to the MSRB and to the SID, if any, notice
of any failure by the City to provide any information required pursuant hereto within the time
limit specified herein.
All information required by this Section 8Q to be given as provided herein shall
be given by the Financial Officer of the City or his designee. Any information given in any
manner by any other officer of the City not authorized or given pursuant hereto may not be relied
upon by any Beneficial Owner of Bonds or any other Person.
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The City agrees that the provisions of this Section 8Q shall be for the benefit of
the Beneficial Owners of the Bonds and shall be enforceable by any Beneficial Owner in an
action for specific performance against the City. No money damages or attorneys' fees shall be
recoverable against the City for breach of any covenant contained in this Section 8Q.
This Section 8Q may be amended to the extent required or permitted by SEC Rule
15c2-12, provided that any such amendment either does not, in the determination of the City
(which may be based on an opinion of counsel), materially impair the interests of the Beneficial
Owners of the Bonds or is approved by the Beneficial Owners of a majority in aggregate
principal amount of the Bonds.
This Section 8Q shall be in effect from the date of delivery of the Bonds until the
earlier of(a) the date all Debt Service Requirements of the Bonds have been legally defeased;
(b) the date that the City no longer constitutes an "obligated person" within the meaning of SEC
Rule 15c2-12; or (c) the date on which those portions of SEC Rule 15c2-12 that require this
Section 8Q are held to be invalid by a court of competent jurisdiction in a non-appealable action,
have been repealed retroactively or otherwise do not apply to the Bonds.
Section 9. Defeasance.
When all Debt Service Requirements of the Bonds have duly been paid, the pledge
and lien and all obligations hereunder shall thereby be discharged and the Bonds shall no longer
be deemed to be outstanding within the meaning of this Ordinance. There shall be deemed to be
such due payment when the City has placed in escrow or in trust with a Trust Bank located
within or without the State, moneys or Federal Securities in an amount sufficient (including the
known minimum yield available for such purpose from Federal Securities in which such amount
wholly or in part may be initially invested) to meet all Debt Service Requirements of the Bonds,
as the same become due to their respective Maturity Dates or to any Redemption Date as of
which the City shall have exercised or shall have obligated itself to exercise its option to redeem
Bonds prior to their respective Maturity Dafes. The Federal Securities shall be non-callable and
non-prepayable and shall become due prior to the respective times at which the proceeds thereof
shall be needed, in accordance with a schedule established and agreed upon between the City and
such Trust Bank at the time of the creation of the escrow or trust, or the Federal Securities shall
be subject to redemption at the option of the Owner thereof to assure such availability as so
needed to meet such schedule.
Nothing herein shall be construed to prohibit a partial defeasance of the
outstanding Bonds in accordance with the provisions of this Section 9.
Section 10. Default Provisions and Remedies of Bond Owners.
A. Events of Default. Each of the following events is hereby declared to be an
Event of Default by the City:
(1) Nonpayment of Principal or Premium. Payment of the principal of any
of the Bonds or any premium due in connection with the redemption thereof is not made
when the same becomes due and payable, either at maturity or upon prior redemption, or
otherwise;
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(2) Nonpayment of Interest. Payment of any installment of interest on any
of the Bonds is not made when the same becomes due and payable;
(3) Incapacity to Perform. The City for any reason becomes incapable of
fulfilling its obligations hereunder;
(4) Nonperformance of Duties. The City shall have failed to carry out and
to perform (or in good faith to begin the performance of) all acts and things lawfully
required to be carried out to be performed by it under any contract relating to the Bonds
or the Pledged Revenues, or to all or any combination thereof, or otherwise including,
without limitation, this Ordinance, and such failure shall continue for sixty (60) days
after receipt of notice from the Owners of ten percent (10%) in aggregate principal
amount of the Bonds then outstanding;
(5) Appointment of Receiver. An order or decree is entered by a court of
competent jurisdiction, with the consent or acquiescence of the City, appointing a
receiver or receivers for the Pledged Revenues and any other moneys subject to the lien
to secure the payment of the Bonds, or if any order or decree, having been entered
without the consent or acquiescence of the City, is not vacated or discharged or stayed on
appeal within sixty (60) days after entry;
(6) Default of Any Provision. The City makes any default in the due and
punctual performance of any other of the representations, covenants, conditions,
agreements and other provisions contained in the Bonds or in this Ordinance on its part to
be performed, and such default continues for sixty (60) days after written notice,
specifying such default and requiring the same to be remedied, is given to the City by the
Owners of ten percent (10%) in aggregate principal amount of the Bonds then
Outstanding.
B. Remedies for Defaults. Upon the happening and continuance of any of the
Event of Default, the Owner or Owners of not less than ten percent (10%) in aggregate principal
amount of the Bonds then Outstanding, including, without limitation, a trustee or trustees thereof.
or, may proceed against the City and its agents, officers and employees to protect and to enforce
the rights of any Owner of Bonds under this Ordinance by mandatory injunction or by other suit,
action, or special proceedings in equity or at law, in any court of competent jurisdiction, either
for the appointment of a receiver or an operating trustee or for the specific performance of any
covenant or agreement contained herein or for any proper legal or equitable remedy as such
Owner or Owners may deem most effectual to protect and to enforce the aforesaid rights, or
thereby to enjoin any act or thing which may be unlawful or in violation of any right of any
Owner of any Bond, or to require the City to act as if it were the trustee of an expressed trust, or
any combination of such remedies, or as otherwise may be-authorized by any statute or other
provision of law. All such proceedings at law or in equity shall be instituted, had and maintained
for the equal benefit of all Owners of the Bonds, and any Panty Securities then outstanding. Any
receiver or operating trustee appointed in any proceedings to protect the rights of such Owners
hereunder, the consent to any such appointment being hereby expressly granted by the City, may
collect, receive and apply all Pledged Revenues arising after the appointment of such receiver or
operating trustee in the same manner as the City itself might do. Notwithstanding the foregoing
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or any other applicable provisions of law, no Event of Default shall result in acceleration of any
obligation of the City represented by the Bonds.
C. Rights and Privileges Cumulative. The failure of any Owner of any
outstanding Bond to proceed in any manner herein provided shall not relieve the City, or any of
its officers, agents or employees of any liability for failure to perform or carry out any duty,
obligation or other commitment. Each right or privilege of any such Owner or any trustee thereof
is in addition and is cumulative to any other right or privilege, and the exercise of any right or
privilege by or on behalf of any Owner shall not be deemed a waiver of any other right or
privilege thereof. Each Owner of any Bond shall be entitled to all of the privileges, rights, and
remedies provided or permitted in this Ordinance and as otherwise provided or permitted by law
or in equity or by statute, except as provided in Section 12A and Section 12B hereof, and subject
to the applicable provisions concerning the Pledged Revenues and the proceeds of the Bonds.
Nothing herein affects or impairs the right of any Owner of any Bond to enforce the payment of
the Debt Service Requirements due in connection with his, her or its Bond or the obligation of
the City to pay the Debt Service Requirements of each Bond to the Owner thereof at the time and
the place expressed in such Bond.
D. Duties Upon Defaults. Upon the happening of any of the Events of Default as
provided in Section 10A hereof, the City, in addition, shall do and perform all proper acts on
behalf of and for the Owners of the outstanding Bonds to protect and to preserve the security
created for the payment of their Bonds and to insure the payment of the Debt Service
Requirements of the Bonds promptly as the same become due. During any period of default, so
long as any of the Bonds, as to any Debt Service Requirements, are Outstanding, except to the
extent it may be unlawful to do so, all Pledged Revenues shall be paid into the Principal and
Interest Account, or, in the event of securities hereafter or heretofore issued and outstanding
during such period of time on a parity with the Bonds, shall be applied as provided in Section 5C
hereof for all Parity Securities, including the Bonds, on an equitable and prorated basis, and used
for the purposes therein provided. If the City fails or refuses to proceed as in this Section IOD
provided, the Owner or Owners of not less than ten percent (10%) in principal amount of the
Bonds then outstanding, after demand in writing, may proceed to protect and to enforce the
rights of the Owners of the Bonds as hereinabove provided; and to that end any such Owners of
outstanding Bonds shall be subrogated to all rights of the City under any agreement or contract
involving the Pledged Revenues entered into prior to the effective date of this Ordinance or
thereafter while any of the Bonds are outstanding. Nothing herein requires the City to proceed as
provided herein if it determines in good faith and without any abuse of its discretion that such
action is likely materially and prejudicially to affect the Owners of the outstanding Bonds and
any outstanding Parity Securities.
E. Evidence of Security Owners. Any request, consent or other instrument which
this Ordinance may require or may permit to be signed and to be executed by the Owner of any
Bonds or other securities may be in one instrument or more than one instrument of similar tenor
and shall be signed or may be executed by each Owner in person or by his attorney appointed in
writing. Proof of the execution of any such instrument or of any instrument appointing any such
attorney, or the ownership by any Person of the securities, shall be sufficient;for any purpose of
this Ordinance (except as otherwise herein expressly provided) if made in the following manner:
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(1) Proof of Execution. The fact and the date of the execution by any
Owner of any Bonds or other securities or his attorney of such instrument may be proved
by the certificate, which need not be acknowledged or verified, of any officer of a bank
or trust company satisfactory to the City Clerk or of any notary public or other officer
authorized to take acknowledgments of deeds to be recorded in the state in which he or
she purports to act that the individual signing such request or other instrument
acknowledged to him or her the execution, duly sworn to before such notary public or
other officer; the authority of the individual or individuals executing any such instrument
on behalf of a corporate Owner of any securities may be established without further proof
if such instrument is signed by an individual purporting to be the president or vice-
president of such corporation with the corporate seal affixed and attested by an individual
purporting to be its secretary or an assistant secretary; and the authority of any person or
Persons executing any such instrument in any fiduciary or representative capacity may be
established without further proof if such instrument is signed by a Person or.Persons
purporting to act in such fiduciary or representative capacity; and
(2) Proof of Ownership. The amount of Bonds owned by any Person
executing any instrument as an Owner of Bonds, and the numbers, dates and other
identification thereof, together with the dates of his ownership of the Bonds, shall be
determined from the registration books of the City. The amount of other securities, if
applicable, owned by any Person executing any instrument as an Owner of such
securities, and the numbers, dates and other identification thereof, together with the dates
of his ownership, if in bearer form, may be proved by a certificate which need not be
acknowledged or verified, in form satisfactory to the City Clerk, executed by a member
of a financial firm or by an officer of a bank or trust company, insurance company or
financial corporation or other depository satisfactory to the City Clerk, or by any notary
public or other officer authorized to take acknowledgments of deeds to be recorded in the
state in which he or she purports to act, showing at the date therein mentioned that such
Person exhibited to such member, officer, notary public or other officer so authorized to
take acknowledgments of deeds or had on deposit with such depository the securities
described in such certificate or if in registered form shall be determined from the related
registration books; but the City Clerk may nevertheless in his or her discretion require
further or other proof in cases where he or she deems the same advisable.
F. Warranty Upon Issuance of Bonds. Any of the Bonds as herein provided,
when duly executed and registered for the purposes provided for in this Ordinance, shall
constitute a warranty by and on behalf of the City for the benefit of each and every future Owner
of any of the Bonds that the Bonds have been issued for a valuable consideration in full
conformity with law.
G. Reserved.
H. Immunities of Purchaser. The Purchaser is under no obligation to any Owner
of the Bonds for any action that they may not take or in respect of anything that it may or may
not do by reason of any information contained in any reports or other documents received by
them under the provisions of this Ordinance. The immunities and exemption from liability of the
Purchaser hereunder extend to its officers, directors, successors, assigns, employees and agents.
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Section 11. Amendment of Ordinance.
A. Amendment of Ordinance Not Requiring Consent of Bond Owners. The City
may, without the consent of, or notice to, the Owners of the Bonds, adopt such ordinances
supplemental hereto (which amendments shall thereafter form a part hereof) for any one or more
or all of the following purposes:
(1) To cure or correct any formal defect, ambiguity or inconsistent
provision contained in this Ordinance;
(2) To appoint successors to the Paying Agent, Registrar, Transfer Agent
or Escrow Bank as provided in Section 3B(6) hereof;
(3) To designate a trustee for the Owners of the Bonds; to transfer custody
and control of the Pledged Revenues to such trustee, and to provide for the rights and
obligations of such trustee;
(4) To add to the covenants and agreements of the City or the limitations
and restrictions on the City set forth herein;
(5) To pledge additional revenues, properties or collateral to the payment
of the Bonds;
(6) To cause this Ordinance to comply with the Trust Indenture Act of
1939, as amended from time to time; or
(7) To effect any such other changes hereto which do not in the opinion of
nationally recognized bond counsel materially adversely affect the interests of the
Owners of the Bonds.
Whenever the Council proposes to supplement or amend this Ordinance under the
provisions of this Section I IA, it shall give notice of the proposed supplement or amendment
and provide a copy thereof to Moody's and Standard & Poor's at least fifteen (15) days prior to
its adoption and execution.
B. Amendment of Ordinance Requiring Consent of Bond Owners. Exclusive of
the amendatory ordinances covered by Section I IA hereof, this Ordinance may be amended or
modified by ordinances or other instruments duly adopted by the Council, without receipt by it
of any additional consideration but with the written consent of the Owners of sixty-six percent
(66%) in aggregate principal amount of the Bonds outstanding at the time of the adoption of
such amendatory ordinance, provided that no such amendatory ordinance shall permit:
(1) Changing Payment. A change in the maturity or in the terms of
redemption of the principal of any outstanding Bond or any installment of interest
thereon; or
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(2) Reducing Return. A reduction in the principal amount of any Bond,
the rate of interest thereon, or any premium payable in connection with the redemption
thereof, without the consent of the Owner of the Bond; or
(3) Prior Lien. The creation of a lien upon or a pledge of revenues ranking
prior to the lien or to the pledge created by this Ordinance; or
(4) Modif3dng Amendment Terms. A reduction of the principal amount or
percentages of Bonds, or any modification otherwise affecting the description of Bonds,
otherwise changing the consent of the Owners of Bonds, which may be required herein
for any amendment hereto; or
(5) Priorities Among Bonds or Parity Securities. The establishment of
priorities as among Bonds issued and Outstanding under the provisions of this Ordinance
or as among Bonds and other Parity Securities; or
(6) Partial Modification. Any modifications otherwise materially and
prejudicially affecting the rights or privileges of the Owners of less than all of the Bonds
then outstanding.
Whenever the Council proposes to supplement or amend this Ordinance under the
provisions of this Section 1 I B, it shall give notice of the proposed supplement or amendment by
mailing such notice to all Owners of Bonds at the addresses appearing on the registration books
of the City. Such notice shall briefly set forth the nature of the proposed amendment and shall
state that a copy of the proposed amendatory ordinance or other instrument is on file in the office
of the City Clerk for public inspection. It shall also give notice of the proposed supplement or
amendment and provide a copy thereof to Moody's and Standard & Poor's at least fifteen (15)
days prior to its adoption and execution.
C. Time for and Consent to Amendment. Whenever at any time within one (1)
year from the date of the completion of the notice required to be given by Section 1113 hereof
there shall be filed in the office of the City Clerk an instrument or instruments executed by the
Owners of at least sixty-six percent (66%) in aggregate principal amount of the Bonds then
Outstanding, which instrument or instruments shall refer to the proposed amendatory ordinance
or other instrument described in such notice and shall specifically consent to and approve the
adoption of such ordinance or other instrument, thereupon, but not otherwise, the Council may
adopt such amendatory ordinance or instrument and such ordinance or instrument shall become
effective. If the Owners of at least sixty-six percent (66%) in aggregate principal amount of the
Bonds then Outstanding, at the time of the adoption of such amendatory ordinance or instrument,
or the predecessors in title of such Owners, no Owner of any Bond, whether or not such Owner
shall have consented to or shall have revoked any consent as herein provided, shall have any
right or interest to object to the adoption of such amendatory ordinance or other instrument or to
object to any of the terms or provisions therein contained or to the operation thereof or to enjoin
or restrain the City from taking any action pursuant to the provisions thereof. Any consent given
by the Owner of a Bond pursuant to the provisions thereof shall be irrevocable for a period of six
(6) months from the date of the completion of the notice above provided for and shall be
conclusive and binding upon all future Owners of the same Bond during such period. Such
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consent may be revoked at any time after six (6) months from the completion of such notice, by
the Owner who gave such consent or by a successor in title, by filing notice of such revocation
with the City Clerk, but such revocation shall not be effective if the Owners of sixty-six percent
(66%) in aggregate principal amount of the Bonds Outstanding as herein provided, prior to the
attempted revocation, shall have consented to and approved the amendatory instrument referred
to in such revocation.
D. Unanimous Consent. Notwithstanding anything in the foregoing provisions
contained, the terms and the provisions of this Ordinance, or of any ordinance or instrument
amendatory thereof, and the rights and the obligations of the City and of the Owners of the
Bonds may be modified or amended in any respect (except as would adversely affect the rights
of the Owners of any Parity Securities) upon the adoption by the City and upon the filing with
the City Clerk of an instrument to that effect and with the consent of the Owners of all the then
Outstanding Bonds, such consent to be given in the manner provided in Section 11C hereof; and
no notice to Owners of Bonds shall be required as provided in Section I I hereof, nor shall the
time of consent be limited except as may be provided in such consent.
E. Exclusion of Bonds. At the time of any consent or of other action taken
hereunder the Registrar shall furnish to the City Clerk a certificate, upon which the City Clerk
may rely, describing all Bonds to be excluded for the purpose of consent or of other action or of
any calculation of Outstanding Bonds provided for hereunder, and, with respect to such excluded
Bonds, the City shall not be entitled or required with respect to such Bonds to give or obtain any
consent or to take any other action provided for hereunder.
F. Notation on Bonds. Any of the Bonds delivered after the effective date of any
action taken as provided in Section I 1 B hereof, or Bonds Outstanding at the effective date of
such action, may bear a notation thereon by endorsement or otherwise in form approved by the
Council as to such action; and if any such.Bonds so delivered after such date does not bear such
notation, then upon demand of the Owner of any Bond Outstanding at such effective date and
upon presentation of his Bond for such purpose at the principal office of the City, suitable
notation shall be made on such Bond by the City Clerk as to any such action. If the Council so
determines, new Bonds so modified as in the opinion of the Council to conform to such action
shall be prepared, executed and delivered; and upon demand of the Owner of any Bond then
outstanding, shall be exchanged without cost to such Owner for Bonds then outstanding upon
surrender of such Outstanding Bonds.
G. Proof of Instruments and Bonds. The fact and date of execution of any
instrument under the provisions of this Section 11, the amount and number of the Bonds owned
by any Person executing such instrument, and the date of his registering the same may be proved
as provided by Section l0E hereof.
Section 12. Miscellaneous.
A. Character of Agreement. None of the covenants, agreements, representations,
or warranties contained herein or in the Bonds shall ever impose or shall be construed as
imposing any liability, obligation, or charge against the City (except for the special funds
45
pledged thereof or) or against the general credit of the City payable out of general funds or out of
any funds derived from general property taxes.
B. No Pledge of Property. The payment of the Bonds is not secured by an
encumbrance, mortgage or other pledge of property of the City except for the Pledged Revenues.
No property of the City, subject to such exception with respect to the Pledged Revenues, pledged
for the payment of the Bonds, shall be liable to be forfeited or taken in payment of the Bonds.
C. Statute of Limitations. No action or suit based upon any Bond or other
obligation of the City shall be commenced after it is barred by any statute of limitations
pertaining thereto. Any trust or fiduciary relationship between the City and the Owner of any
Bond or the obligee regarding any such obligation shall be conclusively presumed to have been
repudiated on the maturity date or other due date thereof unless the Bond is presented for
payment or demand for payment of such other obligation is otherwise made before the expiration
of the applicable limitation period. Any moneys from whatever source derived remaining in any
fund or account reserved, pledged or otherwise held for the payment of any such obligation,
action or suit, the collection of which has been barred, shall revert to the Sales and Use Tax
Fund, unless the Council shall otherwise provide by ordinance. Nothing herein prevents the
payment of any such Bond or other obligation after an action or suit for its collection has been
barred if the Council deems it in the best interests of the City or the public so to do and orders
such payment to be made.
D. Delegated Duties. The officers of the City are hereby authorized and directed
to enter into such agreements and take all action necessary or appropriate to effectuate the
provisions of this Ordinance and to comply with the requirements of law, including, without
limitation:
(1) Printing. The printing of the Bonds, including the printing upon each
such. Bond of a copy of the approving legal. opinion of Ballard Spahr Andrews &
Ingersoll, LLP, bond counsel, duly certified by the Registrar, and, if necessary or
desirable, the preparation of typewritten Bonds as provided herein;
(2) Execution. Authentication. Registration and Delivery. The execution,
authentication and registration of the Bonds and the delivery of the Bonds to the
Purchaser pursuant to the provisions of this Ordinance;
(3) Information. The assembly and dissemination of financial and other
information concerning the City and the Bonds;
(4) Official Statement. The preparation of a final official statement in
substantially the same form as the Preliminary Official Statement for the use of
prospective buyers of the Bonds, including, without limitation, the Purchaser; and
(5) Documents and Certificates. The execution of the Escrow Agreement,
the Guaranty Agreement and such certificates as may be reasonably required by the
Purchaser, relating, inter alia, to:
(a) The signing of the Bonds;
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(b) The tenure and identity of the officials of the City;
(c) If in accordance with fact, the absence of litigation, pending or
threatened, affecting the validity of the Bonds;
(d) The tax treatment of interest on the Bonds under federal and
State income tax laws;
(e) The delivery of the Bonds and the receipt of the Bond purchase
price;
(f) The accuracy and completeness of information provided in the
official statement prepared for prospective buyers of the Bonds.
E: Successors. Whenever herein the City is named or is referred to, such
provision shall be deemed to include any successors of the City, whether so expressed or not. All
of the covenants, stipulations, obligations and agreements by or on behalf of and other
provisions for the benefit of the City contained herein shall bind and inure to the benefit of any
officer, board, district, commission, authority, agency, instrumentality or other Person or Persons
to whom or to which there shall be transferred by or in accordance with law any right, power or
duty of the City or of its respective successors, if any, the possession of which is necessary or
appropriate in order to comply with any such covenants, stipulations, obligations, agreements or
other provisions hereof.
F. Rights and Immunities. Except as herein otherwise expressly provided,
nothing herein expressed or implied is intended or shall be construed to confer upon or to give to
any Person, other than the City and the Owners from time to time of the Bonds, any right,
remedy or claim under or by reason hereof or any covenant, condition or stipulation hereof. All
the covenants, stipulations, promises and agreements herein contained by and on behalf of the
City shall be for the sole and exclusive benefit of the City and any Owner of any of the Bonds.
No recourse shall be had for the payment of the Debt Service Requirements of the
Bonds or for any claim based thereon or otherwise upon this Ordinance authorizing their
issuance or any other ordinance or instrument pertaining thereto, against any individual member
of the Council, or any officer or other agent of the City, past, present or future, either directly or
indirectly through the City, or otherwise, whether by virtue of any constitution, statute or rule of
law or by the enforcement of any penalty or otherwise, all such liability, if any, being by the
acceptance of the Bonds and as a part of the consideration of their issuance specially waived and
released.
G. Reserved.
H. Facsimile Sianatures. Pursuant to the Uniform Facsimile Signature of Public
Officials Act, part 1 of article 55 of title 11, Colorado Revised Statutes, as amended, the Mayor,
the City Clerk and the Financial Officer shall forthwith, and in any event prior to the time the
Bonds are delivered to the Purchaser, file with the Colorado Secretary of:State their manual
signatures certified by them under oath.
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1. Ordinance Irrepealable. This Ordinance is, and shall constitute, a legislative
measure of the City and after any of the Bonds are issued, this Ordinance shall constitute an
irrevocable contract between the City and the Owner or Owners of the Bonds; and this
Ordinance, subject to the provisions of Sections 9 and I 1 hereof, if any Bonds are in fact issued,
shall be and shall remain irrepealable until the Bonds, as to all Debt Service Requirements, shall
be fully paid, cancelled or discharged, as herein provided.
J. Statutory Limitations Met. The Council hereby determines that the provisions
and limitations of the Act and any other applicable law imposed on the issuance of the Bonds
have been met.
K. Ratification. All action not inconsistent with the provisions of this Ordinance
heretofore taken by the City or its officers, and otherwise by the City directed toward the sale
and delivery of the Bonds for that purpose, be, and the same hereby is, ratified, approved and
confirmed.
L. Repealer. All ordinances, resolutions, bylaws, orders, and other instruments,
or parts thereof, inconsistent herewith are hereby repealed to the extent only of such
inconsistency. This repealer shall not be construed to revive any ordinance, resolution, bylaw,
order, or other instrument, or part thereof, heretofore repealed.
M. Severability. If any section, subsection, paragraph, clause or other provision
of this Ordinance shall for any reason be held to be invalid or unenforceable, the invalidity or
unenforceability thereof shall not affect any of the remaining sections, subsections, paragraphs,
clauses or provisions of this Ordinance.
INTRODUCED, READ, APPROVED ON FIRST READING, AND ORDERED
PUBLISHED BY NUMBER AND TITLE ONLY this 18th.day of March, 2003.
CITY OF FORT COLLINS, COLORADO
By:
Mayor
(CITY)
(SEAL)
ATTEST:
City Clerk
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