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HomeMy WebLinkAbout053 - 05/21/1996 - AUTHORIZING THE ISSUANCE OF GENERAL OBLIGATION REFUNDING BOND, SERIES 1996 IN THE PRINCIPAL AMOUNT O ORDINANCE NO. 53 , 1996 AN ORDINANCE AUTHORIZING THE ISSUANCE OF A CITY OF FORT COLLINS, COLORADO, GENERAL OBLIGATION REFUNDING BOND, SERIES 1996, DATED JUNE 1, 1996, IN THE PRINCIPAL AMOUNT OF $2 , 180, 000, FOR THE PURPOSE OF REFUNDING AND PROVIDING FOR THE PAYMENT OF AND REFINANCING AT A LOWER INTEREST RATE CERTAIN OUTSTANDING SPECIAL ASSESSMENT REFUNDING AND IMPROVEMENT BONDS OF THE CITY; AND PROVIDING FOR THE LEVY OF AD VALOREM TAXES TO PAY THE PRINCIPAL OF AND INTEREST ON THE BOND. WHEREAS, pursuant to Ordinance No. 17, 1989 (the "Prior Bond Ordinance") , the City has heretofore issued and sold its 1989 Consolidated Special Improvement District, Special Assessment Refunding and Improvement Bonds, dated March 1, 1989 , in the aggregate principal amount of $13 , 140, 000 (the "Prior Bonds") ; and WHEREAS, there is outstanding of the Prior Bonds the aggregate principal amount of $2, 180, 000, maturing on August 1, 2001, having the following bond numbers, being in the following aggregate principal amounts and bearing interest at the following per annum interest rates: Bond Numbers Principal Amounts Interest Rates R-2193 to R-2358 $830, 000 8. 55%, R-2359 to R-2498 700, 000 8.70 R-2499 to R-2628 650, 000 8.75 and WHEREAS, the Prior Bonds are subject to redemption prior to their maturity date, in regular numerical order, from proceeds of refunding bonds deposited in the City of Fort Collins, Colorado, 1989 Consolidated Special Improvement District, Special Assessment Refunding and Improvement Bonds, Bond Fund (the "Prior Bond Fund") , at any time on or after August 1, 1994 , at a price equal to the principal amount of each Prior Bond so redeemed plus accrued interest thereon to the redemption date, with no premium; and WHEREAS, pursuant to Ordinance No. 81, 1988, and Ordinance No. 34 , 1990, the City has appropriated moneys from its general fund for the payment of interest on the Prior Bonds as the same became due with the intention and expectation that such moneys would eventually be restored to the general fund; and WHEREAS, at least three-fourths (3/4) of the Prior Bonds have been paid and cancelled, and without the aforementioned 29 appropriations the remaining assessments pledged for the payment of the Prior Bonds would not have been, and are not now being, paid in time to redeem the final Prior Bonds, and there would not have been, and are not now, sufficient moneys in the City's special Surplus and Deficiency Fund (the "Surplus and Deficiency Fund") to do so; and WHEREAS, pursuant to Art. V, Section 19. 5 of the Charter of the City (the "Charter") , the Prior Bond Ordinance provides that whenever three-fourths (3/4) of the Prior Bonds have been paid and cancelled, and for any reason the remaining assessments are not paid in time to redeem the remaining Prior Bonds and to pay the interest thereon, and there are not sufficient moneys in the Surplus and Deficiency Fund to do so, then the City shall pay the remaining Prior Bonds when due, levy additional ad valorem taxes therefor and reimburse itself by collecting the unpaid assessments due; and WHEREAS, the City wishes to refund and provide for the payment of and refinance the Prior Bonds at a lower interest rate; and WHEREAS, pursuant to art. XI, §6 and art. XX, §6 of the Colorado Constitution and Art. V, Sections 19.2 and 19.4 of the Charter, the Council of the City (the "Council") may authorize without an election the issuance of refunding securities for the purpose of refunding and providing for the payment of outstanding securities or other obligations of the City as the same mature, or in advance of maturity by means of an escrow or otherwise; and WHEREAS, pursuant to art. X, § 20 (4) (b) of the Colorado Constitution, such refunding securities may be issued without voter approval for the purpose of refinancing the Prior Bonds at a lower interest rate; and WHEREAS, the Council desires to authorize the issuance of a City of Fort Collins, Colorado, General Obligation Refunding Bond, Series 1996, dated June 1, 1996, in the principal amount of $2 , 180, 000 (the "Bond") ; and WHEREAS, a proposal for the purchase of the Bond on terms favorable to the City has been received from USL Capital Corporation (the "Purchaser") through ABN AMRO Securities (USA) Inc. (the "Placement Agent") , and the Financial Officer of the City has recommended that said proposal be accepted by the Council; and WHEREAS, there have been filed with the City Clerk the forms of a commitment, dated May 15, 1996 (the "Commitment") , from the Placement Agent to the City, an Escrow Agreement, dated as of June 1, 1996 (the "Escrow Agreement") , between the City and 30 Colorado National Bank (the "Escrow Bank") and an investment letter, dated June 6, 1996 (the "Investment Letter") , to be signed by the Purchaser. BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT COLLINS, COLORADO, AS FOLLOWS: 1. Award of Contract; Execution of Commitment; Approval of Investment Letter. The contract for the purchase of the Bond is hereby awarded to the Purchaser at a price equal to 100% of the principal amount of the Bond and upon the terms set forth in this ordinance (this "Ordinance") . The Placement Agent shall receive the fee specified in the Commitment. The City Manager is hereby authorized to execute the Commitment on behalf of the City. The Council hereby approves the form of the Investment Letter. 2 . Authorization and Description. For the purposes of refunding and providing for the payment of and refinancing the Prior Bonds at a lower interest rate, the City shall issue the Bond pursuant to art. XI, §6, art. XX, §6 and art. X, §20 (4) (b) of the Colorado Constitution and Art. V, Sections 19.2 and 19 . 4 of the Charter. The Bond shall be issued in fully registered form, shall initially be in the denomination of $2, 180, 000 and shall initially be registered in the name of the Purchaser. Pursuant to the recommendations of the Committee on Uniform Security Identification Procedures, a CUSIP number may be printed on the Bond. The Bond shall mature on June 1, 2001, and shall bear interest on the unpaid principal balance thereof from June 1, 1996, or the interest payment date to which interest has been paid next preceding its date, whichever is later, to its maturity date, at the rate of 5. 90% per annum. Said interest shall be payable on December 1, 1996, and semiannually thereafter on the first day of June and the first day December of each year. If upon presentation at maturity or if on any mandatory prepayment date the principal of the Bond, or any part thereof, is not paid as provided herein, interest shall continue thereon at the same interest rate per annum until the principal, or any part thereof then due, is paid in full. 3 . Net Effective Interest Rates. The maximum net effective interest rate for the Bond, i.e. , the weighted average interest rate for the Prior Bonds, is 8 . 6600702% per annum. The net effective interest rate for the Bond is 5.90% per annum. 31 4 . Nature of Obligation. The Bond shall be a general obligation of the City and shall be payable from general ad valorem taxes as provided herein. 5. Payment of Principal, Interest and Premium. The principal of, interest on and any premium due in connection with the prepayment of the Bond shall be payable in lawful money of the United States of America to the registered owner of the Bond by the Financial Officer of the City, as paying agent (the "Paying Agent") . The principal and the final installment of interest shall be payable to the registered owner of the Bond upon presentation and surrender thereof at maturity or upon prepayment in whole by check or draft mailed to the registered owner at the address appearing on the registration books of the City maintained by the Financial Officer of the City, as registrar (the "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 shall be payable to the registered owner of the 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 or wire transfer directed to the registered owner as aforesaid. Any interest not paid when due and any interest accruing after maturity shall be payable to the registered owner of the Bond 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 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 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 registered owner of the Bond 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 the Bond upon presentation and surrender thereof upon prepayment in whole or without presentation and surrender thereof upon prepayment in part 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 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 32 the Paying Agent or Registrar is authorized or required by law to remain closed. 6. Prepayment. The Bond shall be subject to optional prepayment prior to its maturity date, in whole or in part in any multiple of $5, 000, on December 1, 1997, or any interest payment date thereafter, upon payment of the prepaid principal of the Bond plus accrued interest thereon to the prepayment date plus a premium expressed as a percentage of the prepaid principal, depending upon the prepayment date, as follows: Prepayment Dates Premiums December 1, 1997 , and June 1, 1998 1.5% December 1, 1998, and June 1, 1999 1. 0 December 1, 1999, and June 1, 2000 0.5 December 1, 2000 None The date and amount of any optional prepayment in part shall be noted on the Bond. The Bond shall also be subject to mandatory prepayment prior to its maturity date on June 1 in the following years in the following principal amounts upon payment of said principal amount plus accrued interest thereon to the prepayment date: Years Principal Amounts 1998 $500, 000 1999 530, 000 2000 560, 000 2001 590, 000 If the Bond has been exchanged for other Bonds of authorized denominations and the City desires or is required to prepay the Bonds in part, the City shall select the Bond or Bonds to be prepaid by lot, treating each Bond issued in a denomination that is an integral multiple of $5, 000 as representing a corresponding number of separate Bonds in the denomination of $5, 000 each. Unless waived by the registered owner of the Bond, notice of optional prepayment 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 prepayment date, to the registered owner of the Bond determined as of the close of business on the date preceding the mailing of such notice at the address appearing on the registration books of the City. Such 33 notice shall specify the date fixed for prepayment and the principal amount thereof and shall further state that on the prepayment date there will be due and payable upon the Bond the prepaid principal thereof plus accrued interest thereon to the prepayment date plus any premium due and that from and after such date interest on the principal amount prepaid will cease to accrue. 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 prepayment proceedings with respect to any other Bond. 7. Execution. The Bond shall be executed by and on behalf of the City with the manual signature of the Mayor, shall bear a manual impression of the seal of the City, shall be attested with the manual signature of the City Clerk and shall be countersigned with the manual signature of the Financial Officer of the City. Should any officer whose manual signature appears on the Bond cease to be such officer before issuance and delivery of the Bond, such manual signature shall nevertheless be valid and sufficient for all purposes. 8. Registration, Transfer and Exchange. Upon its execution and prior to its delivery the Bond shall be registered for the purpose of payment of principal, interest and premium with the Registrar. To the extent that a typewritten Bond, rather than a printed Bond, is 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. The Bond shall be transferable only upon the registration books of the City by the Financial Officer of the City, 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 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 the Bond during the fifteen (15) days prior to the mailing of any notice of optional prepayment or to transfer ownership of the Bond on or after the date of such mailing. The registered owner of the Bond may also exchange the Bond for other Bonds in principal amounts that are integral multiples of $5, 000 not less than $100, 000. Transfers and exchanges shall be made 34 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 the Bond. No transfer of the 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 surrendered. Such Bonds shall be dated as of their date of execution. New Bonds delivered upon any transfer or exchange shall be valid obligations of the City, evidencing the same debt as the Bond 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 Bond surrendered. The City may deem and treat the person or entity in whose name the 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 prepayment of the Bond and for all other purposes, and all such payments so made to such person or entity or upon his, her or its order shall be valid and effective to satisfy and discharge the liability of the City upon the 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. Replacement of Bonds. If the 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. 10. Form of Bond. The Bond shall be in substantially the following form: 35 [Form of Bond] (Text of Face) UNITED STATES OF AMERICA STATE OF COLORADO COUNTY OF LARIMER CITY OF FORT COLLINS GENERAL OBLIGATION REFUNDING BOND SERIES 1996 No. R- $ Interest Maturity Original Rate Date Date CUSIP 5. 90% June 1, 2001 June 1, 1996 REGISTERED OWNER: PRINCIPAL SUM: Thousand Dollars 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 on the unpaid principal balance thereof 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, 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, 1996, or the first such date after the date hereof, whichever is later, in the manner provided herein. If upon presentation at maturity or if on any mandatory prepayment date payment of the Principal Sum, or any part thereof, is not made as provided herein, interest thereon continues at the Interest Rate until the Principal Sum, or such part thereof then due, is paid in full. REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS BOND SET FORTH ON THE REVERSE HEREOF. 36 The full faith and credit of the City is hereby pledged for the punctual payment of the principal of and interest on this Bond. IN WITNESS WHEREOF, the City has caused this Bond to be executed in its name and on its behalf with the manual signature of the Mayor of the City, to be sealed with a manual impression of the seal of the City, to be attested with the manual signature of the City Clerk of the City and to be countersigned with the manual signature of the Financial Officer of the City. CITY OF FORT COLLINS, COLORADO (CITY) By: (Manual Signature) (SEAL) Mayor ATTEST: (Manual Signature) City Clerk Countersigned: (Manual Signature) Financial Officer Dated: 37 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 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. 38 (Text of Reverse) This Bond is - subject to optional prepayment prior to its maturity date, in whole or in part in any multiple of $5, 000, on December 1, 1997, or any interest payment date thereafter, upon payment of the prepaid principal of this Bond plus accrued interest thereon to the prepayment date plus a premium expressed as a percentage of the prepaid principal, depending upon the prepayment date, as follows: Prepayment Dates Premiums December 1, 1997, and June 1, 1998 1.5% December 1, 1998, and June 1, 1999 1. 0 December 1, 1999, and June 1, 2000 0.5 December 1, 2000 None The date and amount of any optional prepayment in part is to be noted hereon. This Bond is also subject to mandatory prepayment prior to its maturity date on June 1 in the following years in the following principal amounts upon payment of said principal amount plus accrued interest thereon to the prepayment date: Years Principal Amounts 1998 $500, 000 1999 530, 000 2000 560, 000 2001 590, 000 If Bonds of this issue other than this Bond are outstanding and the City desires or is required to prepay the Bonds in part, the City is to select the Bond or Bonds to be prepaid by lot, treating each Bond issued in a denomination that is an integral multiple of $5, 000 as representing a corresponding number of separate Bonds in the denomination of $5, 000 each. unless waived by the Registered Owner, notice of optional prepayment 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 more than sixty (60) days prior to the prepayment date, to the Registered Owner determined as of the close of business on the day preceding the mailing of such notice at the address appearing on the registration books of the City. Such notice is to specify the date fixed for prepayment and the principal amount thereof and is further to state that on the prepayment date there will be due and 39 payable upon this Bond the prepaid principal hereof plus accrued interest thereon to the prepayment date plus any premium due and that from and after such date interest on the principal amount prepaid will cease to accrue. 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 prepayment proceedings with respect to any other Bond. The principal of, interest on and any premium due in connection with the prepayment of this Bond are payable to the Registered Owner by the Financial Officer of the City, 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 prepayment in whole by check or draft mailed to the Registered Owner at the address appearing on the registration books of the City maintained by the Financial Officer of the City, 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 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 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 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 prepayment in whole or without presentation and surrender of this Bond upon prepayment in part 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, 40 legal holiday or other day on which the office of the paying agent or registrar is authorized or required by law to remain closed. This Bond is issued by the City for the purpose of refunding and providing for the payment of and refinancing at a lower interest rate certain outstanding special assessment refunding and improvement bonds of the City pursuant to, by virtue of, and in full conformity with the Constitution of the State of Colorado and the Charter of the City and pursuant to an ordinance of the City duly adopted prior to the issuance of this Bond. It is 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 general (ad valorem) taxes on all the taxable property within the City in amounts sufficient to pay the principal of and interest on this Bond as the same become due. 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 Financial Officer of the City, 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 mailing of any notice of prepayment or to transfer ownership of this Bond on or after the date of such mailing. The Registered Owner may also exchange this Bond for other Bonds in principal amounts that are integral multiples of $5, 000 not less than $100, 000. 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 41 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 surrendered. Such Bonds are to be dated as of their date of execution. 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 prepayment 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. 42 (Notations) OPTIONAL PREPAYMENTS IN PART Dates Amounts 43 (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) this Bond and does hereby irrevocably constitute and appoint , I , 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] 44 11. Disposition of Bond and Proceeds. The Bond, when executed and registered as provided herein, shall be delivered by the City to the Purchaser upon receipt of full payment therefor as provided herein. Interest accrued on the Bond from the date thereof to the delivery date thereof shall be applied to the payment of interest first due on the Bond. The original proceeds of the Bond, 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 arbitrage covenant made in Section 17 hereof. Neither the Purchaser nor any subsequent owner of the Bond shall be in any way responsible for the application of the proceeds of the Bond by the City or any of its officers. 12 . Escrow Fund. A special fund is hereby created as a part of the Prior Bond Fund and designated as the City of Fort Collins, Colorado, General obligation Refunding Bond, Series 1996, Escrow Fund (the "Escrow Fund") . The original proceeds of the Bond, exclusive of accrued interest, together with other funds of the City, shall be deposited in the Escrow Fund as provided in the Escrow Agreement. The City shall purchase the 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 which the moneys in the Escrow Fund are to be invested and fund the required cash balance as provided in the Escrow Agreement. The Escrow Fund shall be maintained in an amount at the time of the deposit therein, and at all times subsequently, at least sufficient, together with the known minimum yield to be derived from the investment of the deposits therein or any part thereof in Federal Securities, to pay the principal of and interest on the Prior Bonds as the same become due. Moneys shall be withdrawn by the Escrow Bank from the Escrow Fund in sufficient amounts and at times to permit the payment of said amounts. Any moneys remaining in the Escrow Fund after provision has been made for the payment of said amounts shall be applied to any lawful purposes of the City as the Council may hereafter determine. If for any reason the amount in the Escrow Fund shall at any time be insufficient for the purposes hereinbefore set forth, the City shall forthwith from the first moneys available therefor deposit therein such additional moneys as shall be necessary to permit the payment in full of said amounts. 13 . Redemption of Prior Bonds: Notice of Refunding and Redemption of Prior Bonds. The City hereby exercises its option to redeem the Prior Bonds, prior to their maturity date, on July 15, 1996, at a price equal to the principal amount of each Prior Bond 45 so redeemed plus accrued interest thereon to the redemption date, with no premium. The Escrow Bank, as paying agent for the Prior Bonds, is hereby authorized and directed to give no later than June 14 , 1996, 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 George K. Baum & Company, 717 17th Street, Denver, Colorado 80202 and Everen Securities, Inc. , 77 West Wacker Drive, 25th Floor, Chicago, Illinois 60601 and to the registered owners of each of the Prior Bonds. The notice of refunding and redemption of the Prior Bonds shall be in substantially the following form: 46 [Form of Notice] NOTICE OF REFUNDING AND REDEMPTION OF CITY OF FORT COLLINS, COLORADO 1989 CONSOLIDATED SPECIAL IMPROVEMENT DISTRICT REFUNDING AND IMPROVEMENT BONDS DATED MARCH 1, 1989 - $13 , 140, 600 NOTICE IS HEREBY GIVEN to the registered owners of all outstanding City of Fort Collins, Colorado, 1989 Consolidated Special Improvement District, Special Assessment Refunding and Improvement Bonds, dated March 1, 1989, in the original aggregate principal amount of $13 , 140, 000 (the "Prior Bonds") that the City of Fort Collins, Colorado (the "City") , has issued a General Obligation Refunding Bond, Series 1996, dated June 1, 1996, in the principal amount of $2 , 180, 000, and deposited the proceeds thereof and other funds of the City in escrow with Colorado National Bank, Denver, Colorado, which proceeds have been invested in bills, certificates of indebtedness, notes or bonds 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 and interest on the Prior Bonds as the same become due. Accordingly to a report pertaining to such escrow prepared by a firm of certified public accountants licensed to practice in Colorado, the escrow, including the known minimum yield from such investments, is fully sufficient at the time of the deposit and at all times subsequently, to pay the principal of and interest on the Prior Bonds as the same become due. NOTICE IS FURTHER HEREBY GIVEN that the City has exercised its option to redeem in whole the Prior Bonds numbered R-2193 to R-2628, prior to their maturity date, on July 15, 1996, at a price equal to the principal amount of each Prior Bond so redeemed plus accrued interest thereon to the redemption date, with no premium. On the redemption date there will become and will be due and payable upon each Prior Bond so to be redeemed the principal amount thereof plus accrued interest thereon to the redemption 47 date, 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. GIVEN BY ORDER OF THE CITY COUNCIL this day of June, 1996. COLORADO NATIONAL BANK as paying agent for the Prior Bonds Authorized Officer [End of Form of Notice] 48 14 . Pledge of Ad Valorem Taxes. If required, the principal and interest to become due on the Bond in 1996 shall be advanced from any 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 year so long as the Bond remains outstanding, 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 Bond 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 Bond shall be paid in full. 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, 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 for the purpose of providing funds for the payment of the principal of and interest on the Bond as the same become due on the Bond until the Bond, both principal and interest, shall be fully paid or discharged. Nothing herein shall be so construed as to prevent the City from committing and applying any other funds which are legally available for the purpose of payment of the principal of or interest on the Bond, and upon the application of any other such funds as aforesaid the ad valorem tax mill levy or levies may thereupon be diminished to the extent the requirements for such Bond principal and interest payments for the particular year are thereby diminished. 15. Debt Service Fund. Interest accrued on the Bond from the date thereof to the delivery date thereof and all ad valorem taxes pledged to the payment thereof, when collected, shall be deposited in the Debt Service Fund of the City (the "Debt Service Fund") . From any moneys on deposit in the Debt Service Fund, the City shall pay each installment of principal and interest then due on the Bond until the Bond, both principal and interest, shall be fully paid or discharged. 16. Excess Investment Earnings Account. There is hereby created within the Debt Service Fund the City of Fort Collins, Colorado, General Obligation Refunding Bond, Series 1996, Excess 49 Investment Earnings Account (the "Excess Investment Earnings Account") , into which the Financial Officer shall transfer, and from which the Financial Officer 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 Financial Officer 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 Debt Service Fund, provided, however, that required arbitrage rebate payments shall be made to the United States government from any legally available funds if there are no moneys in the Debt Service Fund available for such purpose. All amounts in the Excess Investment Earnings Account, including income earned from the investment of moneys therein, shall be held by the Financial Officer free and clear of any lien created by this Ordinance, and the Financial Officer shall pay required arbitrage rebate amounts over to the United States government from time to time as the Financial Officer shall determine, provided that the Financial Officer 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 Bond, 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 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 Bond at any time during the term thereof that will cause the interest on the Bond 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 Bond. In addition, the City shall make no use of the proceeds of the Bond at any time during the term thereof that would cause the Bond to be a private activity bond within the meaning of the Tax Code and the regulations thereunder. The foregoing covenants shall remain in effect notwithstanding the payment in full or defeasance of the Bond until the date on which all obligations of the City in fulfilling the above covenants under the Tax Code have been met. 18 . Appropriation of Sums. The sums required to pay the costs of issuing the Bond and to make the required deposit to the Escrow Fund are hereby appropriated for those purposes. The sums hereinbefore provided to pay the principal of and interest on the Bond, 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 50 or passed by the Council in each year while the Bond remains outstanding and unpaid. 19 . Defeasance. When all of the principal of and interest on the Bond have been duly paid, all obligations hereunder shall thereby be discharged and the Bond 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 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 and interest on the Bond. 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. 20. 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 registered owner of the Bond, 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 Bond. No recourse shall be had for the payment of the principal of or interest on the Bond 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 Bond and as a part of the consideration of its issuance specially waived and released. 21. 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 Bond is hereby ratified, approved and confirmed. 22 . 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 51 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 Bond, including the printing upon the Bond of a copy of the approving legal opinion of Ballard Spahr Andrews & Ingersoll, bond counsel, and, if necessary or desirable, the preparation of a typewritten Bond as provided herein; b. The execution of the Escrow Agreement and such certificates as may reasonably be required by the Purchaser or the Placement Agent relating to the signing of the Bond; 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 Bond; the tax treatment of interest on the Bond under federal and State of Colorado income tax laws; and delivery of the Bond and receipt of the Bond purchase price; C. The making of various statements, recitals, certifications and warranties provided in the form of Bond set forth in this Ordinance; and d. The payment of the interest on the Bond as the same shall become due and the principal of the Bond at maturity or upon prepayment without further warrant or order. 23 . Ordinance Irrepealable. This Ordinance is, and shall constitute, a legislative measure of the City, and after the Bond is issued and outstanding, this Ordinance shall constitute a contract between the City and the registered owner of the Bond, and shall be and remain irrepealable until the principal of and interest on the Bond shall have been fully paid, satisfied or discharged. 24 . 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. 25. 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. 52 26. Inconsistent Provisions Superseded. Any inconsistency between the provisions of this Ordinance and those of any statute of the State of Colorado is intended by the Council. To the extent of any such inconsistency the 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 said statutes. READ, AMENDED, FINALLY PASSED ON SECOND READING AS AMENDED AND ORDERED PUBLISHED ONCE BY NUMBER AND TITLE ONLY this 21st day of May, 1996. CITY OF FORT COLLINS, COLO$AD0 By: - i✓C�t' (CITY) t ayor (SEAL) ATTEST: � City Cle 53