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HomeMy WebLinkAbout091 - 07/19/1988 - AUTHORIZING THE EXECUTION OF A LOAN AGREEMENT WITH THE COLORADO WATER CONSERVATION BOARD ORDINANCE NO. 91, 1988 OF THE COUNCIL OF THE CITY OF FORT COLLINS AUTHORIZING THE EXECUTION OF A LOAN AGREEMENT WITH THE COLORADO WATER CONSERVATION BOARD WHEREAS, the City of Fort Collins, Colorado (the City) , has heretofore entered into a Contract Between the United States of America and the City of Fort Collins for the Construction of a Small Reclamation Project (No. 8-07-70-W0270) , dated April 21, 1978 (the Contract) , pursuant to the Small Reclamation Projects Act (Public Law 84-984) , obligating the City to pay the principal sum of $7,355,000 with interest on a portion thereof (determined in accordance with a formula) at the rate of 6. 125% per annum; and WHEREAS, the principal balance payable under the Contract is currently $4,598,000; and WHEREAS, the United State Department of the Interior has offered the City the opportunity to prepay its obligations under the Contract pursuant to Section 5301 of the Budget Reconciliation Act of 1987 at a substantial discount; and WHEREAS, the Council of the City (the Council ) has heretofore by Resolution 88-92 (the Resolution) authorized the City to participate in the prepayment program; and WHEREAS, on June 9, 1988, the city transmitted to the United States Department of Interior, Bureau of Reclamation, a letter expressing its intent to purchase the loan represented by the Contract from financing other than tax-exempt financing on or before August 17, 1988, and a copy of the Resolution; and WHEREAS, the Colorado General Assembly has authorized the Colorado Water Conservation Board (the Board) to loan moneys to the City to enable the City, if it chooses to do so, to purchase the loan represented by the Contract pursuant to Section 2 of Senate Bill No. 30 as enacted and signed into law on May 23, 1988 (the Act) ; and WHEREAS, the City has obtained a commitment from the Board for such a loan at the rate of 5.00% per annum, secured by the full faith and credit of the City and/or the net revenues of the City's water system, as the Board and the City may hereafter agree; and WHEREAS, the City has heretofore issued and sold its General Obligation Water Bonds, Series 1977, dated October 1, 1977, in the original aggregate principal amount of $5,000,000, and its General Obligation Water Refunding and Improvement Bonds, Series 1986, dated August 1, 1986, in the original aggregate principal amount of $33,030,000 (collectively, the Bonds) , pursuant to Ordinance No. 109, 1977, and Ordinance No. 100, 1986 (collectively, the Bond Ordinances) , respectively; and WHEREAS, the City is authorized by Council action and without an election to enter into loan agreements constituting general or special obligations of the City for water purposes pursuant to Colorado Constitution art. XI, sec 6, Colorado Constitution art. II, sec. 6, and City Charter Art. V, Sections 20.2 and 20.3; and WHEREAS, the Bond Ordinances reserve the right of the City to secure, without restriction, any obligations payable from the net revenues of the City's water system equally and ratably with the Bonds; and WHEREAS, there has been filed with the City Clerk a form of loan agreement (the Loan Agreement) to be executed by the Board and the City; and WHEREAS, the Council desires to authorize the appropriate officers of the City to execute the Loan Agreement. BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT COLLINS, COLORADO, AS FOLLOWS: Section 1 . Approval of Loan Agreement; Execution; Changes. The form of the Loan Agreement is hereby approved. The Mayor and the City Clerk are hereby authorized and directed to execute the Loan Agreement and affix the seal of the City thereto. The Loan Agreement is to be executed in substantially the form hereinabove approved, provided that such form may be completed, corrected or revised as deemed necessary or convenient by the parties or their respective counsel . The Loan Agreement shall evidence a general or special obligation of the City to pay a principal sum sufficient to enable the City to purchase the loan represented by the Contract and to pay all costs incidental thereto but in no event more than $3,000,000 bearing interest at the rate of 5.00% per annum, maturing in not more than 40 years, and having such other terms as may be authorized by the Act. Section 2. Disposition of Proceeds. The proceeds received by the City under the Loan Agreement shall be applied by the City to purchase the loan represented by the Contract and pay all costs incidental thereto or to reimburse the City for funds previously advanced for said purpose. Section 3. General Obligation Covenants. If the Loan Agreement is secured by the full faith and credit of the City and by a pledge of the net revenues of the City's water system, the following provisions shall apply: The principal and interest to become due under the Loan Agreement in the years 1988 and 1989 shall be advanced from any revenues or funds of the City lawfully available therefor. For the purpose of reimbursing any such advance and also for the purpose of paying the principal and interest as the same become due, the Council shall annually fix and certify a rate of levy for ad valorem taxes to the Board of County Commissioners of Larimer County, Colorado, which, when levied on all of the taxable property in the City in each of the years immediately prior to the years in which such principal and interest become due, will raise ad valorem taxes sufficient to make such reimbursement and to pay such principal and interest as the same become due. In the event any of said levies shall fail to produce an amount sufficient to pay the principal and interest becoming due in the next succeeding year, the deficit shall be made up in the next levy, and taxes shall be levied until the principal and interest shall be paid in full . In addition, the City hereby irrevocably pledges to pay the principal and interest to become due under the Loan Agreement from the net revenues of the City's water system. The City hereby reserves the right to secure, without restriction, any obligations payable from the net revenues of the City's water system hereafter issued equally and ratably with the Bonds and the Loan Agreement. The City also hereby commits itself to fix and annually to maintain rates, fees, tolls, and charges for water and services furnished by the City's water system which, together with other moneys legally available therefor, will be sufficient to pay operation and maintenance expenses of the City's water system, the principal of and interest on all bonds and other obligation s of the City pertaining to the City's water system as the same become due, and the other payments required by Art. XII, Section 6 of the City Charter. "Net revenues" as used herein means the gross revenues of the City's water system (excluding any supplemental user fees) after the payment of operation and maintenance expenses. "Operation and maintenance expenses" as used herein means all current reasonable and necessary expenses of operating, maintaining and repairing the City's water system, but does not include any allowance for depreciation or capital replacements and improvements. "The City's water system" as used herein means not only the property comprising the water system of the City at the present time, but all additions and betterments thereto and improvements and extensions thereof which may hereafter be acquired, constructed or installed by the City. It shall be the duty of the Council annually at the time and in the manner provided by law, if such action shall be necessary to effectuate the provisions of this Ordinance, to ratify and carry out the provisions hereof with reference to the levy and collection of the ad valorem taxes and the imposition, administration, enforcement and collection of the water rates, fees, tolls and charges, all as herein specified, and to require the officers of the City to levy, extend and collect said ad valorem taxes in the manner provided by law and to impose, administer, enforce and collect said water rates, fees, tolls and charges for the purpose of providing funds for the payment of the operation and maintenance expenses of the City's water system, the payment of the principal and interest due on the Bonds and the Loan Agreement as the same become due, and the other payments described herein. Section 4. Soecial Obligation Covenants. If the Loan Agreement is secured only by a pledge on the net revenues of the City's water system, the covenants in Section 3 of this Ordinance relating to net revenues of the City's water system shall apply, but those relating to ad valorem taxes shall not apply. Section 5. Appropriation of Sums. The sums hereinbefore provided to pay the principal and interest due under the Loan Agreement are hereby appropriated for that purpose, and said amounts for each year shall be included in the annual budget and the appropriation ordinance, resolution, or measures to be adopted or passed by the Council in each year while the Loan Agreement remains outstanding. Section 6. Defeasance. When all of the principal and interest due under the Loan Agreement has been duly paid, all obligations hereunder shall thereby be discharged, and the Loan Agreement shall no longer be deemed to be outstanding. 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 of Colorado 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 (Federal Securities) in an amount sufficient (including the known minimum yield available for such purpose from Federal Securities in which such amount may wholly or in part be initially invested) to pay all principal and interest due under the Loan Agreement. The Federal Securities shall be non-callable 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 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. Section 7. Information Reporting. No officer of the City shall file Internal Revenue Service Form 8038-G or any similar form required to establish the exclusion of interest due under the Loan Agreement from gross income for federal income tax purposes, the intention being that such interest be includable therein. Section 8. 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 Board, any right, remedy or claim under or by reason hereof. All the covenants, conditions, 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 the Board. No recourse shall be had for the payment of the principal or interest due under the Loan Agreement or for any claim based thereon or otherwise upon this Ordinance, or any other instrument pertaining hereto, against any individual member of the Council or any other agent of the City, past, present or future, either directly or indirectly through the City, or otherwise, whether by virtue of any constitution, charter, statute or rule of law, or by the enforcement of any penalty or otherwise. Section 9. 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 execution of the Loan Agreement is hereby ratified, approved and confirmed. Section 10. Authorized Action. 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. Section 11 . Ordinance Irreoealable. This Ordinance is, and shall constitute, a legislative measure of the City, and after the Loan Agreement is executed, this Ordinance shall constitute a contract between the City and the Board and shall be and remain irrepealable until the principal and interest due under the Loan Agreement shall have been fully paid, satisfied and discharged. Section 12. Realer. All acts, order, resolutions, ordinance, or parts thereof taken by the City in conflict with this Ordinance are hereby repealed, except that this repealer shall not be construed so as to revive any act, order, resolution, ordinance, or part thereof heretofore repealed. Section 13. Severability. If any paragraph, clause or provision of this Ordinance is judicially adjudged invalid or unenforceable, such judgment shall not affect, impair or invalidate the remaining paragraphs, clauses or provisions hereof, the intention being that the various paragraphs, clauses or provisions hereof are severable. Introduced, considered favorably on first reading, and ordered published this 5th day of July, A.D. 1988, and to be presented for final passage on the 19th day of July, A.D. 1988. May � TEST: City Clerk Passed and adopted on final reading thi i uly, A.D. 1988. Ma ATTEST: City Clerk