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HomeMy WebLinkAbout058 - 04/29/1980 - AUTHORIZING THE CITY TO CREATE AN ESCROW ACCOUNT FOR THE PAYMENT OF THE PRESENTLY OUTSTANDING SALES ORDINANCE NO 58 , 1980 AN OPDINANCE AUTHORIZING THE CITY OF FORT COLLINS, COLORADO, 10 CREATE AN ESCROW ACCOUNT FOR THE PAYPEiIT OF THE PRESENTLY OUTSTANDING SALES TAX REVENUE BOM, DATED APRIL 15, 1977, OF THE CITY , PROVIDING OThER COVENANTS AND DETAILS IN CONNECTION THEPEWITH, AND DECLARING AN EMERGENCY 11HEREAS, pursuant to Chapter 104 of the City of Fort Collins City Code, the City has levied and imposed a municipal retail sales ano use tax of 251', as defined and limited in saio Ordinance, and WHEREAS, Article V, Part II, Section 20 4 provides that the City may issue revenue bonds payable in whole or in part from the available proceeds of tyre City sales and use tax as follows "Section 20 4 Pevenue Securities The City, by Council action and without an elec- tion, may issue securities made payable solely from revenue derived from the operation of the project or capital improvement acquired with the securities ' proceeds, or from other projects or improvements, or from the proceeds of any sales tax, use tax or other excise tax, or solelv frog any source or sources or any combination thereof other than ad valorem taxes of the City", and LHEREAS, the City has previously authorized and issued its Sales Tax Revenue Bond, dated April 15, 1977 (hereinafter sometimes referred to as the "1977 Bond"), in the principal ariount of S27,000 for the purpose of acquiring certain real property for City purposes, said Bond to be payable solely from the proceeds of the sales tax of the City of Fort Collins imposed by Chapter 10a of the City Code, of 4hicn amount there now remains outstandinc the amount of $27,000, consisting of ore bond in the denomina- tion of $0,000 bearing interest at the rate of 6 213V per annum, payable quarterly on January 15, April 15, July 15, and October 15 each year, rrieturino on April 15, 1987, and which Bond is not callable prior to its maturity date, and WHEPEAS, the City Council has oetermired to authorize the issuance of Sales and Use Tax Revenue Bonds in the principal amount of $1 ,035,000 for the purpose of installing street improvcnen's within the City as provided by Article V, Part II, Section 20 d , both the principal of and interest on said bonds to be pavable solely froi the proceeds of tnc 2" municipal retail sales and use tax, and 4rHEPEAS, the 1977 Bond is payable from the City of port Collins 1% -2- sales and use tax which -as placed into the Special Capital Improvements Fund pursuant to Section 6 of Ordinance No 99, 1972 , which Fund was abolished on March 31, 1980, but which Fund contains sufficient sales and use tax revenues to pay the principal of and interest on the 1977 Bona, and WHEREAS, Ordinance No 33, 1977, which authorized the 1977 Bond, covenants to pay said 1977 Bond from the proceeds of the sales tax of the City of Fort Collins as imposed by Chapter 104 of the City Code, and the City desires to remove such a covenant and allow the City to issue the $1,035,000 of Sales and Use Tax Revenue Bonds without being on a parity with the 1977 Bond, and WHEREAS, the City has determined to establish an escrow account for the purpose of paying the principal of and interest on the 1977 Bond, which action would eliminate the beforementioned covenant and woula defease the 1977 Bond issue, and WHEREAS, prior to the issuance of said $1,035,000 of bonds for the beforementioned purposes, the City must establish said escrow account, and WHEREAS, the City of Fort Collins shall cause to be placed in a special fund and trust account, to be established and herein authorized, for the purpose only of paying certain authorized expenses related to the creation of the escrow agreement and for the payment of the principal of and interest on said 1977 Bond, all as is more particularly hereinafter set forth BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT COLLINS Section 1 That the City of Fort Collins hereby determines to place $27,000 of legally available funds derived frorr the revenues of the City of Fort Collins Sales and Use Tax imposed pursuant to Chapter 104 of the City Code into an escrow account to provide for the payment of the principal of ano interest on said 1977 Bond Section 2 That said funds shall be deposited by the City in a special fund and separate trust account for the purpose of paying the 1977 Bond The trust account shall be designated as the "City of Fort Collins Sales Tax Pevenue Bond Escrow Account, 1980 (hereinafter sometimes referred to as the "Escrow Account" ) , to be established and maintained at First National Bank in Fort Collins, Colorado, a corrmercial bank duly organized and existinq under the laws of the United States of America, being a memb-t of the Federal Deposit Insurance Corporation, havinq full and comple`_- trust pourers (hereinafter sometimes referred to as the "Bank") The total amount to be deposited to the Escrow Account shall be the amount of 527,000 -3- Such amount, wnen invested by the Bank, will be at all times at least sufficient to pay any expenses set forth in the Escrori Aqreement and the interest on and principal of the 1977 Bond to be paid in accordance with the followinq schedule The 1977 Bond shall be paid and retired on its maturity date of April 15, 1987 according to its original terms The interest on said 1977 Bond shall be paid quarterly each year, on the proper interest payment dates according to its original terms, until said bond matures Section 3 The Bank shall invest the funds on deposit in the Escrow Account in non-callable direct obligations of, or obligations which the principal of and interest or are unconditionally guaranteed by, the bnited States of America ONLY, or legal investments that meet the definition of "federal securities" pursuant to Section 11-56-103(2) C R S 1973, as amended (hereinafter referred to as "acquired obligations") , and shall fully secure any cash balance in said Account in the manner required by law for other trust funds If, for any reason, at any time, the funds on hand in such Escrow Account shall be insufficient to meet such payments, as the same shall be about to become due and payable, the City shall forthwith deposit in sucn Escrow Account such additional legally available funds as may be required fully to meet the amount so about to become due and payable Said deposit shall be made from any monies available from the sales and use tax imposed by Chapter 104 of the City Code and available for such purposes In the event tnere are not sufficient monies available, the additional amount required shall be advanced from any legally available fund or funds of the City and said advance shall thereafter be reimbursed to said fund or funds from the first monies available from said sales and use tax Section 4 The Bank shall, from time to time, redeem at maturity all or the appropriate portion of the acquired obligations in said Escrow Account, in sufficient amounts so that the proceeds therefrom and tie irterest thereon as the same accrues, will be sufficient to meet the interest requirements on the 1977 Bond as such interest accrues, to pay said 1977 Bond at its maturity, and to pay any expenses payable front the Escrow according to the schedule hereinabove set forth Section 5 The Mayor, City Clerk and Director of Finance of the City of Fort Collins, Colorado, shall , and they are hereby authorized and directed to take all necessary or appropriate action toward the execution of a proper Escrow Aqreement with the Bank concerning the deposits in, investments of and disbursements from said Escrow Account, and such other acreements as may be necessary or desirable to effectuate the provisions of this Ordinance and cerrply with the requirernenis of law The �>ubstZ'nti311Y final form of the Escrow Aqreement is attached as Exhibit "A" and incorpo- rated herein by specific reference -4- Section 6 Notice of the Escrow Account for the 1977 Bond shall be given at or about the time of the final execution of said escro4 by mailing such Notice by registered, first class, postaqe prepaid Unites States mail , to the holder of said 1977 Bond Section 7 The City Council having been fully informed of and having considered all the pertinent facts and circumstances, does hereby determine and declare A That the funds and in�estrents to be placed in said Escrow Account pursuant to this Ordinance, together with the interest to be derived from such investments, are in an amount vhich at all times shall be sufficient to pay the 1977 Bond as it becomes due as to principal , interest, any expenses set forth in the Escrow Agreement, and any charges of the escro�� anent payable therefrom, and that the computations made in determining such sufficiency have been verified by a Certified Public Accountant B That the 1977 Bond herein authorized to be paid by said Escrow Account has not heretofore been refunded, paid, cancelled or otherwise been discharged, nor shall any of said 1977 Bond hereafter be refunded, paid, cancelled or otherwise discharged, except as herein authorized ano proviced, prior to the date of the execution of said escrow agreement C That the officers and members of the City Council are hereby authorized and directed to tale all other ections necessary or appro- priate to effectuate the provisions of this Ordinance, including, but not beinq limited to, the execution of such certificates and affi- davits as may reasonably be required Section 8 All costs aria expenses ircurred in connection with the Escrow Account, herein authorized, shall be paid exclusively from the net income and revenue of the sales and use tax imposed by Chapter 104 of the Citv Code, and in no event shall any of sUch costs or expenses, or the principal of or interest on said Bond be paid out of or charged to ad valorem taxes of the City Section 9 That should any one or more sections or parts of this Ordinance be adjudged unenforceable or invalid, such judgment shall not affect, impair or invalidate the remaining provisions of this Ordinance, it being the intention that the various provisions hereof are severable Section 10 All ordinances or parts thereof in conflict with this Ordinance are hereby repealed Section 11 After said escrow agreement is funded, executed and in eftect, this Ord nance shall be and remain irrepealable until said 197/ -5- Bond and the interest thereon shall have been fully paid, sati-fied and discharged Section 12 That by reason of the fact treat the City must create the escrow established by this Ordinance before the City can issue its Sales and Use Tax Revenue Bonds, dated May 1 , 1980, in the principal amount of $1 ,035,000, which Bond Ordinance has been introduced and passed on first reading by the City Council , the Council hereby determines and declares that an emergency exists, that this Ordinance is necessary for the actual preservation of the public peace, health, safety or property and that tris Ordinance should be finally passed and adopted and enacted at the meeting at which it was first reap and that the Ordinance shall take effect upon passage and shall be published within five days thereof, pursuant to Article II, Section 6 of the City Charter Section 13 This Ordinance, as adopted by the City Council, shall be numbered and recorded, and the adoption and publication shall be authenti- cated by the signatures of the Mayor and City Clerk, and by the certificate of the publisher, respectively INTRODUCED AND PASSED AS AN EMERGENCY ORDINANCE THIS 29th day of April , 1980 Mayor (SEAL) ATTES • sty Clerk -6-