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HomeMy WebLinkAbout070 - 04/18/1989 - AUTHORIZING THE ISSUANCE OF GENERAL OBLIGATION WATER BONDS, SERIES 1989, DATED APRIL 15, 1989, FOR T w ORDINANCE NO. 70, 1989 AN ORDINANCE AUTHORIZING THE ISSUANCE OF CITY OF FORT COLLINS, COLORADO, GENERAL OBLIGATION WATER BONDS, SERIES 1989, DATED APRIL 15, 1989, IN THE AGGREGATE PRINCIPAL AMOUNT OF $11, 715,000, FOR THE PURPOSE OF ACQUIRING WATER RIGHTS AND CONSTRUCTING AND INSTALLING IMPROVEMENTS TO THE WATER SYSTEM; AND PROVIDING FOR THE LEVY OF AD VALOREM TAXES AND PLEDGING THE NET REVENUES DERIVED FROM THE OPERATION OF THE WATER SYSTEM TO PAY THE PRINCIPAL OF AND INTEREST ON THE BONDS. WHEREAS, the City of Fort Collins, Colorado (the City) , has need for and desires to acquire water rights (the Water Rights) and construct and install improvements (the Improvements) to the existing water system (the Water System) of the City in order to supply water to the City and the inhabitants thereof; and WHEREAS, pursuant to Colorado Constitution art. XI , §6 and art. XX, §6 and Art. V, Section 20.2 of the Charter of the City, the Council (the Council) of the City has determined, and does hereby determine, to issue City of Fort Collins, Colorado, General Obligation Water Bonds, Series 1989, dated April 15, 1989, in the aggregate principal amount of $11 , 715, 000 (the Bonds) for the purpose of acquiring the Water Rights and constructing and installing the Improvements to the Water System; and WHEREAS, a proposal for the purchase of the Bonds on terms favorable to the City has been received from a syndicate managed by Kirchner Moore & Company, Denver, Colorado (the Purchaser) , which the Council has determined to accept; and WHEREAS, there has been filed with the City Clerk a form of Bond Purchase Agreement, dated April 12 , 1989 (the Bond Purchase Agreement) , between the City and the Purchaser. BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT COLLINS, COLORADO, AS FOLLOWS: 1 . Award of Contract; Execution of Bond Purchase Agreement. The contract for the purchase of the Bonds is hereby awarded to the Purchaser at the price specified in the Bond Purchase Agreement and upon the terms set forth in this ordinance (this Ordinance) . The City Manager is hereby authorized and directed to execute the Bond Purchase Agreement on behalf of the City. 2 . Authorization and Description. For the purpose of acquiring the Water Rights and constructing and installing the BD7916 28 04/12/89 Improvements to the Water System, the City shall issue the Bonds pursuant to Colorado Constitution art. XI , §6 and art. XX, §6 and Art. V, Section 20. 2 of the Charter of the City. The Bonds shall be issued in fully registered form in denominations of $5,000 or any integral multiple thereof, provided that no Bond shall be issued in any denomination larger than the aggregate principal amount maturing on the maturity date thereof and that no Bond shall be made payable on more than one maturity date. 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 15, 1989, 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 Per Annum Years Amounts Interest Rates 1991 $ 150, 000 6 . 800% 1992 150, 000 6. 800 1993 175, 000 6. 850 1994 200, 000 6.900 1995 225,000 6 . 900 1996 250,000 6 . 950 1997 275,000 7 . 000 1998 305,000 7 . 000 1999 385,000 7 .000 2000 455, 000 7 . 100 2001 545, 000 7. 150 2002 625, 000 7.200 2003 540, 000 7 .250 2007 3 , 605, 000 7 . 300 2009 3,830,000 7 . 375 Said interest shall be payable on December 1, 1989, and semiannually thereafter on the 1st day of June and the 1st 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 thereof is paid in full . BD7916 29 04/12/89 3 . Net Effective Interest Rate . The maximum net effective interest rate for the Bonds shall be 15% per annum. The actual net effective interest rate for the Bonds is 7 . 361% per annum. 4. Nature of Obligation. The Bonds shall be general obligations of the City and shall be payable from general ad valorem taxes and water revenues as provided herein. 5 . Payment of Principal, Interest and Premium. The principal of, interest on, and any premium due in connection with the redemption of the Bonds shall be payable in lawful money of the United States of America to the registered owners of the Bonds by The Colorado National Bank of Denver, Denver, Colorado, or its successors, as paying agent (the Paying Agent) . The principal and the final installment of interest shall be payable to the registered owner of each Bond upon presentation and surrender thereof at maturity or upon prior redemption by check or draft mailed to the registered owner at the address appearing on the registration books of the City maintained by The Colorado National Bank of Denver, Denver, Colorado, or its successors, as registrar (the Registrar) . Except as hereinbefore and hereinafter provided, the interest shall be payable to the registered owner of each Bond determined as of the close of business on the fifteenth day of the calendar month next preceding the interest payment date (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 mailed to such registered owner as aforesaid. Any interest not paid when due and any interest accruing after maturity shall be payable to the registered owner of each Bond entitled to receive such interest determined as of the close of business on a date fixed by the Paying Agent for such purpose (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 mailed to such registered 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 ten ( 10) 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 shall be payable to the registered owner of each Bond redeemed upon presentation and surrender thereof upon prior redemption by check or draft mailed to such registered owner as aforesaid. Payments of principal, final interest and premium, if any, on the Bonds shall be mailed by the Paying Agent on the later of the maturity date or redemption date of the Bonds or the date on BD7916 30 04/12/89 which the Bonds are presented and surrendered for payment. Payments of all other interest on the Bonds shall be mailed by the Paying Agent on the interest payment date. 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 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 Paying Agent or Registrar is authorized or required by law to remain closed. 6. Redemption. Bonds maturing in the years 1991 through 1999 shall not be subject to optional redemption prior to their respective maturity dates. Bonds maturing in the year 2000 and thereafter shall be subject to optional redemption prior to their respective maturity dates, in whole or in part in inverse order of maturity and by lot within a maturity, on December 1, 1999, and on any interest payment date thereafter at a price equal to the principal amount of each Bond so redeemed plus accrued interest thereon to the redemption date. Bonds maturing in the year 2007 shall also be subject to mandatory sinking fund redemption prior to their maturity date, by lot, on the dates specified below at a price equal to the principal amount of each Bond so redeemed plus accrued interest thereon to the redemption date. Such Bonds shall be redeemed on December 1 in the following years in the following aggregate principal amounts: Years Principal Amounts 2004 $ 585, 000 2005 630,000 " 2006 670,000 2007 1, 720,000 Bonds maturing in the year 2009 shall also be subject to mandatory sinking fund redemption prior to their maturity date, by lot, on the dates specified below at a price equal to the principal amount of each Bond so redeemed plus accrued interest thereon to the redemption date. Such Bonds shall be redeemed on December 1 in the following years in the following aggregate principal amounts: Years Principal Amounts 2008 $ 1,850, 000 2009 1,980, 000 BD7916 31 04/12/89 Bonds which are redeemable prior to their respective maturity dates may be redeemed in part if issued in denominations which are integral multiples of $5, 000. Such Bonds shall be treated as representing a corresponding number of separate Bonds in the denomination of $5, 000 each. Any such Bond to be redeemed in part shall be surrendered for partial redemption in the manner hereinafter provided for transfers of ownership. Upon payment of the redemption price of any such Bond redeemed in part the registered owner thereof shall receive a new Bond or Bonds of authorized denominations in aggregate principal amount equal to the unredeemed portion of the Bond surrendered. Unless waived by the registered owners of any Bonds to be redeemed, notice of redemption shall be given by the Paying Agent in the name of the City by sending a copy thereof by certified or registered first-class postage prepaid mail, not less than thirty (30) nor more than sixty (60) days prior to the redemption date, to the registered owner of each of the Bonds being redeemed determined as of the close of business on the date preceding the first mailing of such notice at the address appearing on the registration books of the City. Such notice shall specify the number or numbers of the Bonds to be redeemed, whether in whole or in part, the principal amounts thereof and the date fixed for redemption and shall further state that on the redemption date there will be due and payable upon each Bond or part thereof so to be redeemed the principal amount or part thereof plus accrued interest thereon to the redemption date plus any premium due and that from and after such date interest will cease to accrue. In addition, the Paying Agent is hereby authorized to give such other or further notice as may be required by law and to comply with any operational procedures and requirements of The Depository Trust Company relating to redemption of Bonds and notice thereof. Failure to mail any notice as aforesaid or any defect in any notice so mailed with respect to any Bond shall not affect the validity of the redemption proceedings with respect to any other Bond. Any Bonds redeemed prior to their respective maturity dates by call for prior redemption or otherwise shall not be reissued and shall be cancelled the same as Bonds paid at or after maturity. 7. Execution and Authentication. The Bonds shall be executed by and on behalf of the City with the facsimile signature of the Mayor, shall bear a facsimile of the seal of the City, shall be attested with the facsimile signature of the City Clerk, shall be countersigned with the facsimile signature of the Finance Director of the City, and shall be authenticated with the manual signature of a duly authorized signatory of the Registrar. Should any officer whose facsimile signature appears on the Bonds cease to be such officer before issuance and delivery of any Bond, such facsimile signature shall nevertheless be valid and sufficient for all purposes. No Bond shall be valid or become BD7916 32 04/12/89 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. The certificate of authentication on any Bond shall be deemed to have been duly executed by the Registrar if signed by an authorized signatory thereof, but it shall not be necessary that the same signatory sign the certificate of authentication on all of the Bonds. 8. 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 with the Registrar. Thereafter, the Bonds shall be transferable only upon the registration books of the City by The Colorado National Bank of Denver, Denver, Colorado, or its successors, as transfer agent (the Transfer Agent) , at the request of the registered owner thereof or his, her or its duly authorized attorney-in-fact or legal representative. The Registrar or Transfer Agent shall accept a Bond for registration or transfer only if the registered owner is to be an individual, a corporation, a partnership, or a trust. A Bond may be transferred upon surrender thereof 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 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 registered 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 at the expense of the transferor, and the Transfer Agent may also 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 any Bond shall be effective until entered on the registration books of the City. In the case of every transfer or exchange, the Transfer Agent shall 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 shall be dated as of their date of authentication. New Bonds delivered upon any transfer or exchange shall be valid obligations of the BD7916 33 04/12/89 City, evidencing the same debt 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 principal of, interest on, and any premium due in connection with the redemption 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. 9 . Resignation of Agents . If the Paying Agent, Registrar or Transfer Agent shall resign, or if the City shall reasonably determine that the Paying Agent, Registrar or Transfer Agent has become incapable of fulfilling its duties hereunder, the City may, upon notice mailed to the registered owners of the Bonds at the addresses shown on the registration books of the City, appoint a successor paying agent, registrar or transfer agent. Every such successor paying agent, registrar or transfer agent shall be a bank or trust company located in the State of Colorado having a capital and surplus of not less than $5, 000, 000. It shall not be required that the same institution serve as paying agent, registrar and transfer agent, but the City shall have the right to have the same institution serve as paying agent, registrar and transfer agent. 10. Replacement of Bonds. I£ 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 Section 8-41 of the City Code. 11 . Form of Bonds. The Bonds shall be in substantially the following form: BD7916 34 04/12/89 [ Form of Bond] (Text of Face) UNITED STATES OF AMERICA STATE OF COLORADO COUNTY OF LARIMER CITY OF FORT COLLINS GENERAL OBLIGATION WATER BOND SERIES 1989 No. R- $ Interest Maturity Original Rate Date Date CUSIP December 1, _ April 15, 1989 REGISTERED OWNER: PRINCIPAL SUM: The City of Fort Collins, in the County of Larimer and State of Colorado, for value received, hereby acknowledges itself indebted and promises to pay to the Registered Owner ( specified above) , or registered assigns, 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 lst day of June and the 1st day of December of each year, commencing on December 1, 1989, 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 thereon continues at the Interest Rate until the Principal Sum is paid in full . Bonds of this issue maturing in the years 1991 through 1999 are not subject to optional redemption prior to their BD7916 35 04/12/89 respective maturity dates. Bonds of this issue maturing in the year 2000 and thereafter are subject to optional redemption prior to their respective maturity dates, in whole or in part in inverse order of maturity and by lot within a maturity, on December 1 , 1999, and on any interest payment date thereafter at a price equal to the principal amount of each Bond so redeemed plus accrued interest thereon to the redemption date. Bonds of this issue maturing in the year 2007 are also subject to mandatory sinking fund redemption prior to their maturity date, by lot, on the dates specified below at a price equal to the principal amount of each Bond so redeemed plus accrued interest thereon to the redemption date. Such Bonds are to be redeemed on December 1 in the following years in the following aggregate principal amounts: Years Principal Amounts 2004 $ 585,000 2005 630,000 2006 670, 000 2007 1 , 720, 000 Bonds of this issue maturing in the year 2009 are also subject to mandatory sinking fund redemption prior to their maturity date, by lot, on the dates specified below at a price equal to the principal amount of each Bond so redeemed plus accrued interest thereon to the redemption date. Such Bonds are to be redeemed on December 1 in the following years in the following aggregate principal amounts: Years Principal Amounts 2008 $ 1,850, 000 2009 1,980,000 Bonds of this issue which are redeemable prior to their respective maturity dates may be redeemed in part if issued in denominations which are integral multiples of $5,000. In such case the Bond is to be surrendered in the manner provided for transfers of ownership. Upon payment of the redemption price the Registered Owner is to receive a new Bond or Bonds of authorized denominations in aggregate principal amount equal to the unredeemed portion of the Bond surrendered. Unless waived by the registered owners of any Bonds to be redeemed, notice of redemption of any Bonds of this issue is to be given by the paying agent in the name of the City by sending a copy of such notice by certified or registered first-class postage prepaid mail, not less than thirty (30) nor BD7916 36 04/12/89 more than sixty (60) days prior to the redemption date, to the registered owner of each of the Bonds being redeemed determined as of the close of business on the day preceding the first mailing of such notice at the address appearing on the registration books of the City. Such notice is to specify the number or numbers of the Bonds to be redeemed, whether in whole or in part, the principal amounts thereof and the date fixed for redemption and is further to state that on the redemption date there will be due and payable upon each Bond or part thereof so to be redeemed the principal amount or part thereof plus accrued interest thereon to the redemption date plus any premium due and that from and after such date interest will cease to accrue. In addition, the paying agent is authorized to give such other or further notice as may be required by law and to comply with any operational procedures and requirements of The Depository Trust Company relating to redemption of Bonds and notice thereof. Failure to mail any notice as aforesaid or any defect in any notice so mailed with respect to any Bond does not affect the validity of the redemption proceedings with respect to any other Bond. REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS BOND SET FORTH ON THE REVERSE HEREOF. The full faith and credit of the City of Fort Collins, in the County of Larimer and State of Colorado, is hereby pledged for the punctual payment of the principal of and interest on this Bond. IN WITNESS WHEREOF, the City of Fort Collins, Colorado, has caused this Bond to be executed in its name and on its behalf with the facsimile signature of the Mayor of the City, to be sealed with a facsimile of the seal of the City, to be attested with the facsimile signature of the City Clerk of the City, and BD7916 37 04/12/89 to be countersigned with the facsimile signature of the Finance Director of the City. CITY OF FORT COLLINS, COLORADO (FACSIMILE) By: (Facsimile Signature) ( SEAL ) Mayor ATTEST: (Facsimile Signature) City Clerk Countersigned: (Facsimile Signature) Finance Director 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 , 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 COLORADO NATIONAL BANK OF DENVER as registrar By: (Manual Signature) Authorized Signatory Date: BD7916 38 04/12/89 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 by the entireties JT TEN - as joint tenants with the right of survivorship and not as tenants in common UNIF GIFT MIN ACT - Custodian (Gust) (Minor) under Uniform Gifts to Minors Act (State) Additional abbreviations may also be used though not on the above list. BD7916 39 04/12/89 (Text of Reverse) 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 Colorado National Bank of Denver, 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 mailed to the Registered Owner at the address appearing on the registration books of the City maintained by The Colorado National Bank of Denver, Denver, Colorado, or its successors, as registrar. Except as hereinbefore or hereinafter provided, the interest is payable to the Registered Owner determined as of the close of business on the regular record date, which is to be 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 mailed 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 mailed 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 ten ( 10) 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 mailed to the Registered Owner as aforesaid. Payments of principal, final interest and premium, if any, on this Bond are to be mailed by the paying agent on the later of the maturity date or redemption date of this Bond or the date on which this Bond is presented and surrendered for payment. Payments of all other interest on this Bond are to be mailed by the paying agent on the interest payment date. 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 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 paying agent or registrar is authorized or required by law to remain closed. BD7916 40 04/12/89 This Bond is issued by the City of Fort Collins, Colorado, for the purpose of acquiring water rights and constructing and installing improvements to the existing water system of the City pursuant to, by virtue of, and in full conformity with the Constitution of the State of Colorado, the Charter of the City, and all other laws of the State of Colorado thereunto enabling, and pursuant to an ordnance of the City duly adopted prior to the issuance of this Bond. It is further hereby recited, certified and warranted that the total indebtedness of the City, including that of this Bond, does not exceed any constitutional, charter or statutory limitation of the State of Colorado or of the City; that provision has been made for the levy and collection of a direct annual tax on all the taxable property within the City and that the net revenues derived from the operation of the water system of the City have been pledged in amounts sufficient to pay the principal of and interest on this Bond as the same become due ; and that this Bond constitutes a first lien (but not necessarily an exclusive first lien) on said net revenues. Reference is hereby made to the ordinance of the City authorizing the issuance of this Bond, and to any and all modifications thereof and amendments thereto, for a description of the provisions, terms and conditions upon which this Bond is issued and secured, including, without limitation, definition of terms used herein, the nature and extent of the security for this Bond, provisions with respect to the application of the proceeds of this Bond, the rights, duties and obligations of the City and the members of its Council , and the rights of the Registered Owner. This Bond is transferable only upon the registration books of the City by The Colorado National Bank of Denver, 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 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 BD7916 41 04/12/89 denominations. Transfers and exchanges are to be made at the expense of the transferor, and the transfer agent may also 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 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 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 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. BD7916 42 04/12/89 (Assignment) 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) the attached Bond and does hereby irrevocably constitute and appoint or its successors, to transfer said Bond on the books kept for registration thereof. Dated: Signature guaranteed: (Bank, Trust Company or Firm) NOTICE: The signature to this assignment must correspond with the name of the Registered Owner as it appears upon the face of the attached Bond in every particular without alteration or enlargement or any change whatever. [End of Form of Bond) BD7916 43 04/12/89 12 . Disposition of Bonds and Proceeds . The Bonds, when executed and authenticated as provided herein, shall be delivered by the City to the Purchaser upon receipt of full payment therefor in accordance with the Bond Purchase Agreement. Interest accrued on the Bonds from the date thereof to the delivery date thereof shall be applied to the payment of interest first due on the Bonds. The original proceeds of the Bonds, exclusive of accrued interest, shall be used for the purposes stated herein and for no other purposes, provided, however, that any portion of the Bond proceeds may be temporarily invested pending such use, with such temporary investment to be made consistent with the covenant made in Section 17 hereof. Neither the Purchaser nor any subsequent owner of the Bonds shall be in any way responsible for the application of the proceeds of the Bonds by the City or any of its officers. 13 . Water Fund. The original proceeds of the Bonds shall be deposited in the Water Fund of the City (the Water Fund) . Except as provided in Section 12 hereof, Bond proceeds so deposited shall be withdrawn and expended for the purpose of acquiring the Water Rights and constructing and installing the Improvements to the Water System. Any Bond proceeds remaining in the Water Fund after acquisition of the Water Rights and completion of the Improvements to the Water System shall be applied to any lawful purposes of the City as the Council may hereafter determine. 14. Pledge of Ad Valorem Taxes and Water Revenues. If required, the interest to become due on the Bonds in 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 of and interest on the Bonds as the same become due and payable, 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 taxes, when levied on all of the taxable property in the City, in each of the years 1989 to 2008, inclusive, will raise ad valorem tax revenues sufficient to make such reimbursement and to pay such Bond 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 of and interest on the Bonds 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 of and interest on the Bonds shall be paid in full . In addition to the provision for tax levies for the payment of the Bonds, the City hereby irrevocably pledges to pay the principal of and the interest on the Bonds from the net revenues of the Water System. The City hereby reserves the right BD7916 44 04/12/89 to secure, without restriction, any water bonds, water refunding bonds and leases and contracts relating to the Water System hereafter issued or entered into by the City equally and ratably with the Bonds. The City also hereby commits itself to fix and annually to maintain rates, fees, tolls, and charges for water and services furnished by the Water System which, together with other moneys legally available therefor, will be sufficient to pay operation and maintenance expenses of the Water System and the principal of and interest on all bonds and other obligations of the City r:=_rtaining to the Water System, as they respectively become due, and for the other payments required by Art. XII , Section 6 of the Charter of the City. The term "net revenues" as used herein refers to the gross revenues of the Water System after the payment of operation and maintenance expenses . The term "operation and maintenance expenses" as used herein means all current reasonable and necessary expenses of operating, maintaining and repairing the Water System, but does not include any allowance for depreciation or capital replacements and improvements. The term "Water System" as used herein includes 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 thereto which may hereafter be acquired, constructed or installed by the City. It shall be the duty of the Council annuaiiy 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 Water System and the payment of the principal of and interest on the Bonds as the same become due. 15 . Use of Water Fund. Interest accrued on the Bonds from the date thereof to the delivery date thereof and all ad valorem taxes and water revenues, when collected, shall be deposited in the Water Fund. From any moneys on deposit in the Water Fund or, if required, from any other unrestricted fund of the City, the City shall pay each maturing installment of principal and interest on the Bonds and any other obligations issued and made payable from the Water Fund until the Bonds, both principal and interest, shall be fully paid, satisfied and discharged. Nothing herein contained shall be so construed as to prevent the City from committing and applying any other funds or revenues that may now or hereafter be in the possession of the BD7916 45 04/12/89 City and legally available for the purpose of payment of the principal of and interest on the Bonds. The Water Fund shall be maintained as a sinking fund for the mandatory redemption of Bonds maturing in the years 2007 and 2009 . Any mandatory sinking fund redemption shall be treated as a maturing installment of principal for purposes of this Section 15 . 16. Excess Investment Earnings Fund. There is hereby created the City of Fort Collins, Colorado, General Obligation Water Bonds, Series 1989, Excess Investment Earnings Fund (the Excess Investment Earnings Fund) , into which the Finance Director shall transfer, and from which the Finance Director shall pay, the amount of required arbitrage rebate, if any, due to the United States government under Sections 103 and 148(f) (2 ) of the Internal Revenue Code of 1986, as amended (the Tax Code) , and regulations promulgated thereunder. The Finance Director shall determine such amounts in the manner required by the Tax Code and related regulations. Transfer of the required arbitrage rebate amounts shall be made from the Water Fund, provided, however, that required arbitrage rebate payments shall be made to the United States government from legally available funds regardless of whether there are any funds described herein which are available for such purpose. All amounts in the Excess Investment Earnings Fund, including income earned from the investment of moneys therein, shall be held by the Finance Director free and clear of any lien created by this Ordinance, and the Finance Director shall pay required arbitrage rebate amounts over to the United States government from time to time as the Finance Director shall determine, provided that the Finance Director shall so pay over to the United States of America ( a) not less frequently than once each five years after the date of issuance of the Bonds, an amount equal to 90% of the required arbitrage rebate amount earned during such period (and not theretofore paid to the United States government) and (b) not later than sixty (60) days after the redemption of the last Bond, 100% of the required arbitrage rebate amount. 17 . Tax Matters. The City shall make no investment or other use of the proceeds of the Bonds at any time during the term thereof which will cause the interest on the Bonds to be includible in gross income under the Tax Code and the regulations promulgated thereunder and shall comply with all other covenants and certifications relating to the Tax Code made by it in connection with the issuance of the Bonds. The foregoing covenant shall remain in effect notwithstanding the payment in full or defeasance of the Bonds until the date on which all obligations of the City in fulfilling the above covenant under the Tax Code have been met. BD7916 46 04/12/89 18. Covenants. The City covenants that so long as any of the Bonds remain outstanding and unpaid: (a) It will continue to operate and manage the Water System in an efficient and economical manner and keep and maintain separate accounts of the receipts and disbursements thereof in such manner that the revenues thereof may at all times be readily and accurately determined. (b) It will not sell or alienate any of the property constituting all or any part of the Water System in any manner or to any extent as might reduce the security provided for the payment of the Bonds, but the City may sell any portion of such property which shall have been replaced by other similar property of at least equal value or which shall cease to be necessary for the efficient operation of the Water System. (c) The rates, fees, tolls and charges for all services rendered by the Water System to the City and to its inhabitants and to all consumers within or without the boundaries of the City shall be reasonable and just, taking into account and consideration the cost and value of the Water System and the proper and necessary allowance for the depreciation thereof and the amounts necessary for the retirement of all bonds and other securities or obligations payable from the revenues of the Water System and the interest thereon. (d) There shall be charged against all purchasers of service such rates, fees, tolls, and charges as shall be adequate to meet the requirements of this Ordinance. (e) The City shall cause all rates, fees, tolls and charges appertaining to the Water System to be collected as soon as reasonable, shall prescribe and enforce rules and regulations for the payment thereof and for the connection with and the disconnection from properties of the Water System, and shall provide methods of collection and penalties, including but not limited to denial of service for non-payment of such rates, fees, tolls and charges to the end that net revenues of the Water System shall be adequate to meet the requirements hereof. (f) At regular periods each year it will render bills for water services furnished. Until paid, all water rates, fees, tolls and charges shall constitute a BD7916 47 04/12/89 lien on the property served, and the City shall take whatever action is legally permissible promptly to enforce and collect delinquent water rates, fees, tolls and charges and to preserve and enforce said liens. (g) At least once each year it will furnish the Purchaser with a complete statement of the receipts and disbursements of and for the Water System for the fiscal year immediately preceding such statement. (h) It will carry workmen' s compensation, public liability and other forms of insurance on insurable Water System property in such amounts as is customarily carried on prudently operated systems of like character. 19 . Appropriation of Sums. The sums hereinbefore provided to pay the principal of and interest on the Bonds, when due, are hereby appropriated for that purpose, and said amounts for each year shall be included in the annual budget and the appropriations ordinance, resolution, or measures to be adopted or passed by the Council in each year while any of the Bonds remain outstanding and unpaid. 20. Defeasance. When all of the principal of, the interest on, and any premium due in connection with the redemption of the Bonds have been duly paid, all obligations hereunder shall thereby be discharged and the Bonds 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 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 of, interest on, and any premium due in connection with the redemption of the Bonds. The Federal Securities 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. Nothing herein shall be construed to prohibit a partial defeasance of the Bonds in accordance with the provisions hereof. 21. Rights and Immunities. Except as herein otherwise expressly provided, nothing herein expressed or implied is BD7916 48 04/12/89 intended or shall be construed to confer upon or to give to any person, other than the City and the registered 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 registered owner of the Bonds. No recourse shall be had for the payment of the principal of, interest on, or any premium due in connection with the redemption of the Bonds 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 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, charter, 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. 22 . 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 issuance and delivery of the Bonds is hereby ratified, approved and confirmed. 23 . F n acsimile Signatures. 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 Finance Director 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. 24. 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, including without limiting the generality of the foregoing: a. The printing of the 3onds, including the printing upon each of such Bonds of a copy of the approving legal opinion of Ballard, Spahr, Andrews & Ingersoll, bond counsel , duly certified by the Registrar, and, if necessary or desirable pending delivery of printed Bonds, the preparation of one or more temporary typewritten Bonds in an aggregate principal amount equal to that of the Bonds, otherwise BD7916 49 04/12/89 in substantially the same form and bearing the same terms, to be delivered to the Purchaser and thereafter to be exchanged by the Purchaser for printed Bonds when the same are received by the City; b. The preparation of preliminary and final official statements for the use of prospective purchasers of the Bonds, including the Purchaser and its associates, if any; C . The execution of such certificates as may reasonably be required by the Purchaser relating to the signing of the Bonds; the tenure and identity of the City officials; the assessed valuation and indebtedness of the City; if in accordance with the facts the absence of litigation, pending or threatened, affecting the validity of the Bonds; the tax treatment of interest on the Bonds under federal and State of Colorado income tax laws, and receipt of the Bond purchase price and of the Bonds; d. The making of various statements, recitals, certifications and warranties provided in the form of Bond set forth in this Ordinance; and e. The payment of the interest on the Bonds as the same shall become due and the principal of the Bonds at maturity or upon prior redemption without further warrant or order . 25 . Ordinance Irrepealable. This Ordinance is, and shall constitute, a legislative measure of the City, and after the Bonds are issued and outstanding, this Ordinance shall constitute a contract between the City and the registered owners of the Bonds, and shall be and remain irrepealable until the principal of and interest on the Bonds shall have been fully paid, satisfied and discharged. 26. Repealer. All acts, orders, resolutions, ordinances, 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. 27 . 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. BD7916 50 04/12/89 READ, AMENDED, FINALLY PASSED AS AMENDED ON SECOND READING, AND ORDERED PUBLISHED ONCE BY NUMBER AND TITLE ONLY this 18th day of April, 1989 . CITY OF FORT COLLINS. COLORADO- (CITY) By: (SEAL) Mayor ATTEST: City— Clerk BD7916 51 04/12/89