HomeMy WebLinkAbout098 - 07/15/1986 - AUTHORIZING THE ISSUANCE OF SEWER REVENUE REFUNDING BONDS, SERIES 1986, IN THE AMOUNT OF $36,950,000 ORDINANCE NO. 98, 1986
AN ORDINANCE AUTHORIZING THE ISSUANCE OF CITY OF FORT
COLLINS, COLORADO, SEWER REVENUE REFUNDING BONDS,
SERIES 1986, DATED AUGUST 1, 1986, IN THE AGGREGATE
PRINCIPAL AMOUNT OF $36, 950, 000.
BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT
COLLINS, COLORADO, THAT:
Section 1 . Definitions and Construction.
A. Definitions. In this Ordinance the following
terms have the following respective meanings unless the context
hereof clearly requires otherwise:
( 1) Act: part 1 of article 56 of title 11,
Colorado Revised Statutes, as amended.
(2 ) Additional Parity Bonds : any Parity
Securities issued after the issuance of the Bonds.
(3 ) Average Annual Debt Service Requirements:
the aggregate of all Debt Service Requirements (excluding
any redemption premiums) due on the Bonds or any other given
issue of Parity Securities for all Bond Years beginning with
the Bond Year in which Debt Service Requirements of the
Bonds or such Parity Securities are first payable and ending
with the Bond Year in which the last of the Debt Service
Requirements are payable divided by the number of such
years.
(4) Bonds: the City of Fort Collins, Colorado,
Sewer Revenue Refunding Bonds, Series 1986, dated August 1,
1986, in the aggregate principal amount of $36,950,000.
(5) Bond Insurance Policy: the Municipal Bond
New Issue Insurance Policy issued by the Bond Insurer
guaranteeing the payment of the principal of and interest on
the Bonds.
(6) Bond Insurer: Financial Guaranty Insurance
Company, a New York stock insurance company, or its
successors .
(7) Bond Year: the twelve ( 12) months commencing
on the second day of December of any calendar year and
ending on the first day of December of the next succeeding
calendar year.
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(8) Charter: the Home Rule Charter of the City
as amended.
(9) City: the City of Fort Collins, Colorado.
( 10) Combined Average Annual Debt Service
Requirements: the sum of the Average Annual Debt Service
Requirements for all issues of Parity Securities for which
the computation is being made.
( 11 ) Commercial Bank: a state or national bank or
trust company which is a member of the Federal Deposit
Insurance Corporation and of the Federal Reserve System,
which has a capital and surplus of $1,000,000 or more, and
which is located within the United States of America.
( 12 ) Comparable Bond Year: in connection with any
Fiscal Year, the Bond Year which ends in such Fiscal Year.
For example, for the Fiscal Year commencing on January 1 ,
1986, the Comparable Bond Year for the Bonds commences on
December 2, 1985, and ends on December 1 , 1986.
(13 ) Consulting Engineer: an independent
consulting engineer or engineering firm or corporation
having skill, knowledge and experience in analyzing the
operations of municipal sanitary sewer systems .
( 14) Council : the governing body of the City.
( 15) Debt Service Requirements: the principal of,
interest on, and any premium due in connection with the
redemption of the Bonds, any Additional Parity Bonds, any
Parity Securities or any other securities payable from the
Net Pledged Revenues.
( 16) Debt Service Reserve Fund: the special fund
created by and designated in Ordinance No. 9, 1975, of the
City as the City of Fort Collins Sewer Refunding Revenue
Bonds Reserve Fund" and referred to in Section 5F hereof.
( 17) Escrow Agreement: the Escrow Agreement,
dated as of August 1, 1986, between the City and the Escrow
Bank.
( 18) Escrow Fund: the special fund created by and
designated in $ection 5A hereof as the "City of Fort
Collins, Colorado, Sewer Revenue Refunding Bonds, Series
1986, Escrow Fund. "
( 19) Escrow Bank: First Interstate Bank of Fort
Collins, N.A. , Fort Collins, Colorado, or its successors.
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(20) Event of Default: one of the events
described in Section 10A hereof.
(21) Federal Securities: bills, certificates of
indebtedness, notes, or bonds which are direct obligations
of the United States of America or, if the Bond Insurer
agrees in writing, are obligations the principal and
interest of which are unconditionally guaranteed by the
United States of America.
(22) Fiscal Year: the twelve ( 12 ) months
commencing on the first day of January of any calendar year
and ending on the last day of December of such calendar year
or such other twelve ( 12 ) month period as may from time to
time be designated by the Council as the Fiscal Year of the
City.
(23 ) Improvement: any addition, extension,
enlargement, betterment, replacement or improvement or any
combination thereof, of facilities, other property, any
project, or any interest therein, but not including
reconstruction, replacement, repair or other renewal of
existing facilities that does not increase the capacity of
the Sewerage Facilities or improve the treatment technology.
(24) Income: all income from rates, fees, tolls,
and charges and tap fees and plant investment fees, or any
combination thereof, for the services furnished by, or the
direct or indirect connection with, or the use of the
Sewerage Facilities, including, without limiting the
generality of the foregoing, minimum charges, charges for
the availability of service, disconnection fees,
reconnection fees, and reasonable penalties for any
delinquencies, all supplemental user fees payable pursuant
to any contract between the City and any user of any
Sewerage Facilities, and all income or other gain, if any,
from any investment of Net Pledged Revenues and of the
proceeds of securities payable from Net Pledged Revenues
(except income or other gain from any investment of moneys
held in the Escrow Fund or any other similar fund or
account) , but not including sewer trunk line assessments and
sewer main line assessments.
(25) Interest Payment Date: a date designated by
ordinance for the payment of interest on the Bonds or any
other designated securities.
(26) Net Pledged Revenues: all Income remaining
after the deduction of Operation and Maintenance Expenses.
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(27 ) Operation and Maintenance Expenses: such
reasonable and necessary current expenses of the City, paid
or accrued, of operating, maintaining and repairing the
Sewerage Facilities as may be determined by the Council ,
including, except as limited by contract or otherwise
limited by law, without limiting the generality of the
foregoing:
( a) Engineering, auditing, legal and other
overhead expenses of the City directly related and
reasonably allocable to the administration, operation
and maintenance of the Sewerage Facilities;
(b) Insurance and surety bond premiums
appertaining to the Sewerage Facilities;
(c ) The reasonable charges of any paying
agent, registrar, transfer agent, depository or escrow
bank appertaining to the Sewerage Facilities or any
bonds or other securities issued therefor;
(d) Annual payments to pension, retirement,
health and hospitalization funds appertaining to the
Sewerage Facilities ;
(e) Any taxes, assessments, franchise fees
or other charges or payments in lieu of the foregoing;
( f) Ordinary and current rentals of
equipment or other property;
(g) Contractual services, professional
services, salaries, administrative expenses, and costs
of labor appertaining to the Sewerage Facilities and
the cost of materials and supplies used for current
operation of the Sewerage Facilities;
(h) The costs incurred in the collection of
all or any part of the Net Pledged Revenues;
(i ) Any costs of utility services furnished
to the Sewerage Facilities by the City or otherwise.
"Operation and Maintenance Expenses" does not include:
(a) Any allowance for depreciation;
(b) Any costs of reconstruction,
Improvement, extensions, or betterments;
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(c) Any accumulation of reserves for capital
replacements ;
(d) Any reserves for operation, maintenance,
or repair of the Sewerage Facilities;
(e) Any allowance for the redemption of any
bonds or other securities or the payment of any
interest thereon;
( f) Any liabilities incurred in the
acquisition of any properties comprising the Sewerage
Facilities;
(g) Any other ground of legal liability not
based on contract.
(28) Operation and Maintenance Fund: the special
fund created by and designated as such in Ordinance No. 101,
1982, and referred to in Section 5D hereof.
(29) Ordinance: this Ordinance No. 98, 1986, of
the City.
(30) Outstanding: as of any particular date, all
the Bonds, Additional Parity Bonds, Parity Securities or any
such other securities payable in whole or in part from the
Net Pledged Revenues which have been authorized, executed
and delivered except the following:
(a) Any Bond, Additional Parity Bond, Parity
Security or other security cancelled by the City, by
the Paying Agent or otherwise on behalf of the City on
or before such date;
(b) Any Bond, Additional Parity Bond, Parity
Security or other security held by or on behalf of the
City;
(c) Any Bond, Additional Parity Bond, Parity
Security or other security of the City for the payment
or the redemption of which moneys or Federal Securities
sufficient ( including the known minimum yield available
for such purpose from Federal Securities in which such
amount wholly or in part may be initially invested) to
pay all of the Debt Service Requirements of such Bond,
Additional Parity Bond, Parity Security or other
security to maturity date or specified Redemption Date
thereof shall have theretofore been deposited in escrow
or in trust with a Trust Bank for that purpose; and
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(d) Any lost, destroyed, or wrongfully taken
Bond, Additional Parity Bond, Parity Security or other
security of the City in lieu of or in substitution for
which another bond or other security shall have been
executed and delivered.
(31) Owner: the holder of any bearer instrument
or registered owner of any registered instrument.
(32 ) Parity Securities : bonds, warrants, notes,
securities, leases or other contracts evidencing borrowings
and payable from the Net Pledged Revenues equally or on a
parity with the Bonds.
(33 ) Paying Agent: the Finance Director of the
City or his successors.
(34) Permitted Investments: except to the extent
limited by law, any of the following obligations:
(a) Direct obligations of the United States
of America and securities fully and unconditionally
guaranteed as to the timely payment of principal and
interest by the United States of America;
(b) Direct obligations and fully guaranteed
certificates of beneficial interest of the
Export-Import Bank - of the United States; senior debt
obligations of the Federal Home Loan Banks; debentures
of the Federal Housing Administration; guaranteed
mortgage-backed bonds and guaranteed pass-through
obligations of the Government National Mortgage
Corporation; guaranteed Title XI financing of the U. S.
Maritime Administration; mortgage-backed securities and
senior debt obligations of the Federal Home Loan
Mortgage Corporation;
(c ) Repurchase agreements collateralized by
securities described in (a) or (b) above with any
registered broker/dealer subject to the jurisdiction of
the Securities Investors' Protection Corporation or any
Commercial Bank, if such broker/dealer or Commercial
Bank has an uninsured, unsecured and unguaranteed
obligation rated "Prime-l" or "Aa-3" or better by
Moody' s Investors Service, Inc . and "A-1" or "AA-" or
better by Standard & Poor' s Corporation, provided:
1 . a specific written agreement governs
the transaction;
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2 . the securities are held, free of any
lien, by the City or an independent third party
acting solely as agent for the City, and such
third party is a Federal Reserve Bank, a bank
which is a member of the Federal Deposit Insurance
Corporation and which has combined capital,
surplus and undivided profits of not less than
$25,000, 000, or a bank approved in writing for
such purpose by the Bond Insurer, and the City
shall have received written confirmation from said
third party that it holds said securities, free of
any lien, as agent for the City;
3 . a perfected first security interest
under the Uniform Commercial Code or the book
entry procedures described in 31 C. F.R. 306. 1 et
sea• or 31 C. F.R. 350. 0 et seg. in such securities
is created for the benefit of the City;
4. the repurchase agreement has a term
to maturity of thirty days or less, or the City
will value the collateral securities no less
frequently than monthly and will liquidate the
collateral securities if any deficiency in the
required collateral percentage is not restored
within two (2 ) business days of such valuation
and;
5 . the fair market value of the
securities in relation to the amount of the
repurchase obligation, including principal and
interest, is equal to at least 100%.
(d) Certificates of deposit in "eligible
public depositories, as defined by Colorado statutes,
which are insured by FDIC or FSLIC or collateralized in
the manner provided by Colorado statutes.
(35) Person: any individual , firm, partnership,
corporation, company, association, joint stock association
or body politic or any trustee, receiver, assignee or
similar representative thereof.
(36) Principal and Interest Fund: the special
fund created by and designated in Ordinance No. 9, 1975, of
the City as the "City of Fort Collins Sewer Refunding
Revenue Bonds, Series 1975, Bond Fund" and referred to in
Section 5E hereof.
(37) Prior Bonds: the City of Fort Collins,
Colorado, Sewer Revenue Refunding and Improvement Bonds,
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Series 1985, dated November 1 , 1985, in the original
aggregate principal amount of $30, 715,000.
(38) Purchaser: Dillon, Read & Co. Inc . , Dallas,
Texas, and its associates, if any.
(39) Redemption Date: the date fixed for the
redemption prior to maturity of any Bonds or other
designated securities payable from the Net Pledged Revenues
in any notice of prior redemption given by or on behalf of
the City.
(40) Registrar: the City Clerk or her successors .
(41) Regular Record Date: the fifteenth day of
the calendar month next preceding an Interest Payment Date
for the Bonds.
(42 ) Security or securities: any bond issued by
the City or any other evidence of the advancement of money
to the City.
(43 ) Special Record Date: the date fixed by the
Paying Agent for the determination of ownership of Bonds for
the purpose of paying interest not paid when due or interest
accruing after maturity.
(44) Sewer Depreciation and Capital Improvements
Fund: the special fund created by and designated as such in
the Charter and referred to in Section 5I hereof.
(45) Sewer Fund: the special fund created by and
designated as such in Ordinance No. 67 , 1974, of the City
and referred to in Section 5C hereof.
(46) Sewerage Facilities: any one or more of the
various devices used in the collection, treatment, or
disposition of sewage and industrial wastes of a liquid
nature, including, without limitation, all inlets;
collection, drainage, or disposal lines; intercepting
sewers; sewage disposal plants; outfall sewers; sewage
lagoons; all pumping, power, and other equipment and
appurtenances; all extensions, Improvements, remodeling,
additions and alterations thereof; any and all rights or
interests for such sewerage facilities; and all other
necessary, incidental, or appurtenant properties, equipment,
and facilities relating to the foregoing.
(47) State: the State of Colorado.
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(48) Subordinate Bonds or Subordinate Securities:
bonds or securities payable from the Net Pledged Revenues
having a lien thereon subordinate or junior to the lien
thereon of the Bonds.
(49) Superior Bonds or Superior Securities: bonds
or securities payable from the Net Pledged Revenues having a
lien thereon superior or senior to the lien thereon of the
Bonds.
(50) Transfer Agent: the City Clerk or her
successors .
(51 ) Trust Bank: a Commercial Bank which is
authorized to exercise and is exercising trust powers.
B. Construction. This Ordinance, except where the
context by clear implication herein otherwise requires, shall be
construed as follows:
( 1 ) Words in the singular include the plural, and
words in the plural include the singular.
(2 ) Words in the masculine gender include the
feminine and the neuter, and when the sense so indicates
words of the neuter gender refer to any gender.
(3 ) Articles, sections, subsections, paragraphs
and subparagraphs mentioned by number, letter, or otherwise,
correspond to the respective articles, sections,
subsections, paragraphs and subparagraphs of this Ordinance
so numbered or otherwise so designated.
(4) The titles and headlines applied to articles,
sections and subsections of this Ordinance are inserted only
as a matter of convenience and ease in reference and in no
way define or limit the scope or intent of any provisions of
this Ordinance.
(5) Any inconsistency between the provisions of
this Ordinance and those of the Act is intended by the
Council . To the extent of any such inconsistency the
provisions of this Ordinance shall be deemed made pursuant
to the Charter and shall supersede to the extent permitted
by law the conflicting provisions of the Act.
Section 2 . Recitals.
A. Prior Bonds.
The City has heretofore issued and sold the Prior
Bonds. There is Outstanding of the Prior Bonds the aggregate
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principal amount of $30, 715, 000, maturing on December 1 in the
following years in the following aggregate principal amounts and
bearing interest at the following per annum interest rates:
Principal Per Annum
Years Amounts Interest Rates
1986 $ 325, 000 5 . 500%
1987 520, 000 6. 000
1988 885,000 6. 500
1989 940,000 6. 750
1990 960,000 7 .000
1991 710, 000 7 . 250
1992 740, 000 7 . 500
1993 790, 000 7 . 750
1994 825 , 000 8. 000
1995 875, 000 8.200
1996 1 , 000,000 8. 400
1997 1,000, 000 8. 600
1998 1,000,000 8. 700
1999 1,030,000 8. 800
2005 8, 660,000 9.200
2010 10, 455, 000 9 . 375
The Prior Bonds maturing in the years 1986 through 1995 are not
subject to optional redemption prior to their respective maturity
dates. The Prior Bonds maturing in the year 1996 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 , 1995, and on any
Interest Payment Date thereafter at a price equal to the
principal amount of each Prior Bond so redeemed plus accrued
interest thereon to the Redemption Date .
The City wishes to refund, pay and discharge the Prior
Bonds in order to reduce the net effective interest rate; reduce
the total interest payable; reduce the total principal and
interest payable in any particular year or years, or effect other
economies; modify or eliminate restrictive contractual
limitations; or any combination of the foregoing.
B. Authority. Pursuant to art. XX, sec. 6 of the
Colorado Constitution, Art. V, Sections 20. 3 and 20. 4 of the
Charter, and the Act, the City is authorized by Council action
and without an election to issue the Bonds for the purpose of
refunding, paying and .discharging the Prior Bonds.
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Section 3 . The Bonds.
A. Authorization. The Bonds, payable as to all Debt
Service Requirements solely out of Net Pledged Revenues, are
hereby authorized to be issued, the proceeds of the Bonds to be
used solely to refund, pay and discharge the Prior Bonds.
B. Bond Details.
( 1) Generally. 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 of such Bond
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 August 1, 1986, 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
1986 $ 845,000 4.000%
1987 740,000 4. 600
1988 1, 115, 000 5. 100
1989 1, 165,000 5 . 500
1990 1, 185,000 5 .800
1991 935, 000 6. 150
1992 975, 000 6. 350
1993 1, 030,000 6. 550
1994 1,070, 000 6. 750
1995 1, 125 ,000 7 .000
1996 1, 260,000 7 . 150
1997 1,265,000 7 . 300
1998 1,275,000 7 .400
1999 1, 305,000 7 . 450
2000 1 , 500, 000 7 .500
2004 6. 875,000 7 . 625
2010 13 ,285,000 6. 500
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Said interest shall be payable on December 1 , 1986, 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 is paid in full .
The Debt Service Requirements of the Bonds shall
be payable in lawful money of the United States of America
to the registered Owners of the Bonds by 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. 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 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 at the address appearing on
the registration books of the City maintained by the
Registrar. 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 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 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 Purchaser and 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.
(2 ) Redemption. Bonds maturing in the years 1986
through 1996 shall not be subject to optional redemption
prior to their respective maturity dates. Bonds maturing in
the year 1997 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 , 1996, 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 plus a premium expressed as a
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percentage of the principal amount of each Bond so redeemed,
depending on the Redemption Date, as follows:
Redemption Date Premium
December 1, 1996 and June 1 , 1997 2 . 0%
December 1 , 1997 and June 1, 1998 1 . 0
December 1 , 1998 and Thereafter None
Bonds maturing in the year 2004 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
2001 $1, 590, 000
2002 1, 710, 000
2003 1, 720,000
2004 1 , 855,000
Bonds maturing in the year 2010 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
2005 $2 ,005, 000
2006 2, 140,000
2007 2, 275,000
2008 2 , 435,000
2009 2 , 595,000
2010 1, 835,000
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
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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.
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, at
least thirty (30) days prior to the Redemption Date, to the
Purchaser and 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 shall specify the number or numbers of the Bonds
to be redeemed, whether in whole or in part, 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 . Bonds called for optional
redemption as provided herein shall be redeemable only to
the extent of moneys on deposit with the Paying Agent and
legally available for redemption of Bonds on the date of
such notice . 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.
(3 ) Interest Rates. The maximum net effective
interest rate authorized for the Bonds is 15% per annum, and
the actual net effective interest rate for the Bonds is
7 .267671% per annum.
(4) Execution. 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, and shall be countersigned with the manual signature
of the Finance Director or Acting Finance Director of the
City. Should any officer whose facsimile or manual
signature appears on the Bonds cease to be such officer
before delivery of the Bonds to the Purchaser, such
facsimile or manual signature shall nevertheless be valid
and sufficient for all purposes.
(5) Registration Transfer and Exchange. Upon
their execution and prior to their delivery the Bonds shall
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be registered for the purpose of payment of principal and
interest by the Registrar. Thereafter, the Bonds shall be
transferable only upon the registration books of the City by
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
without charge, except that the Transfer Agent may require
payment of a sum sufficient to defray any tax or other
governmental charge that may hereafter be imposed in
connection with any transfer or exchange of Bonds. No
transfer of 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 execution by the Finance Director
or Acting Finance Director of the City. New Bonds delivered
upon any transfer or exchange shall be valid obligations of
the City, evidencing the same obligations 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
D4426 77 07/28/86
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. Upon the occurrence
of an Event of Default which would require payment by the
Bond Insurer under the Bond Insurance Policy, the Bond
Insurer and its designated agents shall be afforded access
to the registration books of the City.
(6) 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 his or
her duties hereunder, the City may, upon notice mailed to
each registered Owner of Bonds at •the addresses last 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 Commercial Bank. It shall not be required that the same
institution serve as paying agent, registrar, and transfer
agent hereunder, but the City shall have the right to have
the same institution serve as paying agent, registrar and
transfer agent hereunder.
(7) Replacement of Bonds . If any Bond shall have
been lost, destroyed or wrongfully taken, the City shall
provide for the replacement thereof in the manner set forth
and upon receipt of the evidence, indemnity bond and
reimbursement for expenses provided in Ordinance No. 80,
1984.
(8) Recitals in Bonds. Each Bond shall recite in
substance that the Bond is a special and limited obligation
of the City payable solely out of and secured by an
irrevocable pledge of and first lien (but not necessarily
exclusive first lien) upon the Net Pledged Revenues, that
the Bond does not constitute a debt or an indebtedness of
the City within the meaning of any constitutional, Charter
or statutory provision or limitation, that the Bond is not
payable in whole or in part from the proceeds of general
property taxes, and that the full faith and credit of the
City is not pledged for the payment of the principal of or
interest on the Bond. Each Bond shall further recite that
it is issued under the authority of the State Constitution,
the Charter, the Act, and this Ordinance. The Act provides
that such recital conclusively imparts full compliance with
all of the provisions of the Act and that the Bonds
containing such recital are incontestable for any cause
whatsoever after their delivery for value.
(9) Form of Bonds. The Bonds shall be in
substantially the following form:
D4426 78 07/28/86
[ Form of Bond]
(Text of Face)
UNITED STATES OF AMERICA
STATE OF COLORADO COUNTY OF LARIMER
CITY OF FORT COLLINS
SEWER REVENUE REFUNDING BOND
SERIES 1986
No. R- $
Interest Maturity Original
Rate Date Date CUSIP
December 1, August 1 , 1986
REGISTERED OWNER:
PRINCIPAL SUM:
The City of Fort Collins, in the County of Larimer and
State of Colorado, for value received, hereby promises to pay to
the Registered Owner ( specified above) , or registered assigns,
solely from the special funds provided therefor, as hereinafter
set forth, the Principal Sum ( specified above) , in lawful money
of the United States of America, on the Maturity Date ( specified
above) , with interest thereon from August 1 , 1986, 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 1st day of
June and the 1st day of December of each year, commencing on
December 1, 1986, or the first such date after the date hereof,
whichever is later, -in the manner provided herein. If upon
presentation at maturity payment of the Principal Sum is not made
as provided herein, interest continues at the Interest Rate until
the Principal Sum is paid in full .
D4426 79 07/25/86
Bonds of this issue maturing in the years 1986 through
1996 are not subject to optional redemption prior to their
respective maturity dates . Bonds of this issue maturing in the
year 1997 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, 1996, 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 plus a
premium expressed as a percentage of the principal amount of each
Bond so redeemed, depending on the redemption date, as follows:
Redemption Date Premium
December 1, 1996 and June 1 , 1997 2 .0%
December 1, 1997 and June 1 , 1998 1 . 0
December 1, 1998 and Thereafter None
Bonds of this issue maturing in the year 2004 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
2001 $1, 590,000
2002 1 , 710,000
2003 1, 720,000
2004 1, 855,000
Bonds of this issue maturing in the year 2010 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:
D4426 80 07/25/86
Years Principal Amounts
2005 $2 ,005,000
2006 2 , 140,000
2007 2 ,275, 000
2008 2 , 435,000
2009 2, 595, 000
2010 1 , 835,000
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.
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 , at least thirty (30) days prior to the
redemption date, to Dillon, Read & Co. Inc. , Dallas, Texas, and
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, 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. Bonds called for optional
redemption as provided herein are redeemable only to the extent
of moneys on deposit with the paying agent and legally available
for redemption of Bonds on the date of such notice. 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.
This Bond is a special and limited obligation of the
City payable solely out of and secured by an irrevocable pledge
of and first lien (but not necessarily exclusive first lien) upon
the Net Pledged Revenues, as more specifically provided in the
Ordinance. This Bond does not constitute a debt or an
indebtedness of the City within the meaning of any
constitutional, charter or statutory provision or limitation.
D4426 81 07/25/86
This Bond is not payable in whole or in part from the proceeds of
general property taxes, and the full faith and credit of the City
is not pledged for the payment of the principal of or 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 the facsimile seal of the City, to be attested with
the facsimile signature of the City Clerk of the City, and to be
countersigned with the manual signature of the Finance Director
or Acting Finance Director of the City.
CITY OF FORT COLLINS, COLORADO
(FACSIMILE) By: (Facsimile Signature)
( SEAL ) Mayor
ATTEST:
(Facsimile Signature)
City Clerk Countersigned:
(Manual Signature)
Finance Director or Acting
Finance Director
DATED:
D4426 82 07/25/86
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
(Cust) (Minor)
under Uniform Gifts to Minors Act
(State)
Additional abbreviations may also be used
though not on the above list.
D4426 83 07/25/86
(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 Finance Director of the City, or his
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. Except as hereinbefore and hereinafter provided, the
interest is payable to the Registered Owner determined as of the
close of business on the regular record date, which is the
fifteenth day of the calendar month next preceding the interest
payment date, irrespective of any transfer of ownership hereof
subsequent to the regular record date and prior to such interest
payment date, by check or draft mailed to the Registered Owner at
the address appearing on the registration books of the City
maintained by the City Clerk, or her successors, as registrar.
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 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 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 Dillon, Read & Co . Inc . , Dallas, Texas, and 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.
Payment of the principal of, interest on, and any
premium due in connection with the redemption of this Bond is to
be made solely from, and as security for such payment there are
irrevocably (but not necessarily exclusively) pledged, pursuant
to the ordinance authorizing the issuance of this Bond (the
Ordinance) , two special funds thereby identified as the Principal
and Interest Fund and the Debt Service Reserve Fund, into which
funds the City has covenanted in the Ordinance to pay from
certain revenues derived from the operation and use of and
otherwise pertaining to the Sewerage Facilities of the City (the
Income) , after provision is made only for the payment of all
necessary and reasonable current expenses of operating,
maintaining and repairing the Sewerage Facilities (such remaining
revenues being the Net Pledged Revenues) , sums sufficient to pay
when due the principal of, interest on, and any premium due in
connection with the redemption of the Bonds and any parity
D4426 84 07/25/86
securities payable from such revenues, and to accumulate and
maintain a specified reserve for such purposes . In addition, the
City may at its option augment such funds with any other moneys
of the City legally available for expenditure for the purposes
thereof as provided in the Ordinance.
It is hereby recited, certified and warranted that for
the payment of the principal of, interest on, and any premium due
in connection with the redemption of this Bond the City has
created and will maintain said special funds and will deposit the
Net Pledged Revenues therein and out of said special funds, as an
irrevocable charge thereon, will pay the principal of, interest
on, and any premium due in connection with the redemption of this
Bond in the manner provided by the Ordinance.
The Bonds of this issue are equitably and ratably
secured by a lien on the Net Pledged Revenues, and such Bonds
constitute an irrevocable and first lien (but not necessarily an
exclusive first lien) upon the Net Pledged Revenues. Bonds and
other types of securities, in addition to the Bonds of this
issue, subject to expressed conditions, may be issued and made
payable from the Net Pledged Revenues having a lien thereon
subordinate and junior to the lien of the Bonds of this issue or,
subject to additional expressed conditions, having a lien thereon
on a parity with the lien of such Bonds in accordance with the
provisions of the Ordinance .
The City covenants and agrees with the Registered Owner
that it will keep and will perform all of the covenants of this
Bond and of the Ordinance .
This Bond is one of a series authorized and issued for
the purpose of refunding, paying and discharging certain valid
outstanding sewer revenue refunding bonds of the City under the
authority of and in full conformity with the Constitution of the
State of Colorado, the City Charter, part 1 of article 56 of
title 11, Colorado Revised Statutes, as amended, and all other
laws of the State of Colorado thereunto enabling and pursuant to
the Ordinance duly adopted prior to the issuance of this Bond.
The foregoing recital conclusively imparts full compliance with
all of the provisions and limitations of the above-cited statute,
and said statute provides that this Bond is incontestable for any
cause whatsoever after its delivery for value.
Reference is hereby made to the Ordinance, and to any
and all modifications and amendments thereof, for a description
of the provisions, terms and conditions upon which the Bonds of
this issue are issued and secured, including, without limitation,
the nature and extent of the security for the Bonds, provisions
with respect to the custody and application of the proceeds of
the Bonds, the collection and disposition of the revenues and
D4426 85 07/25/86
moneys charged with and pledged to the payment of the principal
of, interest on, and any premium due in connection with the
redemption of the Bonds, the terms and conditions on which the
Bonds are issued, a description of the special funds referred to
above and the nature and extent of the security and pledge
afforded thereby for the payment of the principal of, interest
on, and any premium due in connection with the redemption of the
Bonds, and the manner of enforcement of said pledge, as well as
the rights, duties, immunities and obligations of the City and
the members of its Council and also the rights and remedies of
the registered owners of the Bonds.
To the extent and in the respects permitted by the
Ordinance, the provisions of the Ordinance, or any instrument
amendatory thereof or supplemental thereto, may be modified or
amended by action of the City taken in the manner and subject to
the conditions and exceptions provided in the Ordinance . The
pledge of revenues and other obligations of the City under the
Ordinance may be discharged at or prior to the maturity or prior
redemption of the Bonds upon the making of provision for the
payment of the Bonds on the terms and conditions set forth in the
Ordinance.
It is hereby recited, certified and warranted that all
the requirements of law have been fully complied with by the
proper officers of the City in the issuance of this Bond; that it
is issued pursuant to and in strict conformity with the
Constitution and all other laws of the State of Colorado,
including the City Charter, and with the Ordinance; that this
Bond does not contravene any constitutional or statutory
provision or limitation of the State of Colorado or any
limitation of the City Charter; and that this Bond is issued
under the authority of the Ordinance.
This Bond is transferable only upon the registration
books of the City by the City Clerk, or her 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
D4426 86 07/25/86
Owner may also exchange this Bond for another Bond or Bonds of
authorized denominations. Transfers and exchanges are to be made
without charge, except that the transfer agent may require
payment of a sum sufficient to defray any tax or other
governmental charge that may hereafter be imposed in connection
with any transfer or exchange of Bonds. No transfer of this Bond
is to be effective until entered on the registration books of the
City. In the case of every transfer or exchange, the 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 rate as the
Bond or Bonds surrendered. Such Bond or Bonds are to be dated as
of their date of execution by the Finance Director or Acting
Finance Director of the City. 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.
D4426 87 07/25/86
STATEMENT OF INSURANCE
Financial Guaranty Insurance Company ( "Financial
Guaranty" ) has issued a policy containing the following
provisions with respect to the City of Fort Collins, Colorado,
Sewer Revenue Refunding Bonds, Series 1986 (the "Bonds" ) , such
policy being on file at the principal office of the paying agent
for the Bonds (the "Paying Agent" ) :
Financial Guaranty hereby unconditionally and
irrevocably agrees to pay for disbursement to the Bondholders
that portion of the principal of and interest on the Bonds which
is then due for payment and which the issuer of the Bonds (the
" Issuer" ) shall have failed to provide . Due for payment means,
with respect to the principal, the stated maturity date thereof,
or the date on which the same shall have been duly called for
mandatory sinking fund redemption, but not any earlier date on
which the payment of principal of the Bonds is due by reason of
acceleration, and with respect to interest, the stated date for
payment of such interest.
Upon receipt of telephonic or telegraphic notice,
subsequently confirmed in writing, or written notice by
registered or certified mail , from a Bondholder or the Paying
Agent to Financial Guaranty that the required payment of
principal or interest has not been made by the Issuer to the
Paying Agent, Financial Guaranty on the due date of such payment
or within one business day after receipt of notice of such
nonpayment, whichever is later, will make a deposit of funds, in
an account with Citibank, N.A. , or its successor as its agent
(the "Insurer' s Fiscal Agent" ) , sufficient to make the portion of
such payment not paid by the Issuer. Upon presentation to the
Fiscal Agent of evidence satisfactory to it of the Bondholder' s
right to receive such payment and any appropriate instruments of
assignment required to vest all of such Bondholder' s right to
such payment in Financial Guaranty, the Fiscal Agent will
disburse such amount to the Bondholder.
As used herein the term "Bondholder" means the person
other than the Issuer who at the time of nonpayment of a Bond is
entitled under the terms of such Bond to payment thereof.
The policy is non-cancellable for any reason.
FINANCIAL GUARANTY INSURANCE COMPANY
D4426 88 07/25/86
(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]
D4426 89 07/25/86
C. Bonds Equally Secured. The covenants and
agreements herein set forth to be performed on behalf of the City
shall be for the equal benefit, protection and security of the
Owners of any and all of the Bonds, all of which, regardless of
the time or times of their maturity, shall be of equal rank
without preference, priority or distinction of any of the Bonds
over any other thereof, except as otherwise expressly provided in
or pursuant to this Ordinance.
D. Special Obligations. All of the Bonds, as to all
Debt Service Requirements thereof, shall be payable solely out of
the Net Pledged Revenues. The Owners of the Bonds may not look
to the general fund or any other fund of the City for the payment
of the Debt Service Requirements thereof, except the special
funds pledged therefor. The Bonds shall not constitute a debt or
indebtedness of the City within the meaning of any
constitutional, charter or statutory provision or limitation, and
the Bonds shall not be considered or held to be general
obligations of the City but shall constitute special and limited
obligations of the City. The Bonds are not payable in whole or
in part from the proceeds of general property taxes, and the full
faith and credit of the City is not pledged for payment of the
Bonds.
Section 4. Sale of Bonds .
A. Purchaser' s Proposal . The Purchaser has submitted
a proposal for the purchase of the Bonds, together with the
disclosures and information required by the Act, at a price equal
to $34, 750, 701 . 60 plus accrued interest thereon from the date
thereof to the delivery date thereof, and the Finance Director of
the City has recommended that said proposal be accepted by the
Council .
B. Award of Contract. The contract for the purchase
of the Bonds is hereby awarded to the Purchaser at the price
specified in the Purchaser' s proposal and upon the terms set
forth in this Ordinance. The Finance Director of the City is
hereby authorized to execute the contract of purchase on behalf
of the City.
Section S. Disposition of Bond Proceeds and Income;
Funds and Accounts Adopted or Created by Ordinance; Security for
Bonds . The proceeds of the Bonds and the Income shall be
deposited by the City in the funds described in this Section 5,
to be accounted for in the manner and priority set forth in this
Section 5 .
Neither the Purchaser nor any subsequent Owner of any
Bonds shall be in any manner responsible for the application or
disposal by the City or by any of its officers, agents and
D4426 90 07/25/86
employees of the moneys derived from the sale of the Bonds or of
any other moneys designated in this Section 5 .
The Net Pledged Revenues and all moneys and securities
paid or to be paid to or held or to be held in any fund hereunder
(except the Escrow Fund) are hereby pledged to secure the payment
of the Debt Service Requirements of the Bonds and any other
Parity Securities . This pledge shall be valid and binding from
and after the date of the first delivery of the Bonds, and the
moneys, as received by the City and hereby pledged, shall
immediately be subject to the lien of this pledge without any
physical delivery thereof, any filing, or further act. The lien
of this pledge and the obligation to perform the contractual
provisions hereby made shall have priority over any or all other
obligations and liabilities of the City (except as herein
otherwise expressly provided) , and the lien of this pledge shall
be valid and binding as against all parties having claims of any
kind in tort, contract or otherwise against the City (except as
herein otherwise expressly provided) , irrespective of whether
such parties have notice thereof.
A. Escrow Fund. The City shall deposit in a separate
special fund hereby created and designated as the "City of Fort
Collins, Colorado, Sewer Revenue Refunding Bonds, Series 1986,
Escrow Fund, " forthwith upon receipt of the proceeds of the
Bonds, proceeds of the Bonds in the approximate amount of
$34, 066, 100.92 to be used only as provided in this Section 5A.
The City shall apply said sum to the purchase of the Federal
Securities in which the moneys in the Escrow Fund are to be
invested and to the funding of any required cash balance as
provided in the Escrow Agreement and in accordance with the
proposal submitted by the Purchaser. 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 at maturity or upon prior redemption. Moneys shall be
withdrawn by the Escrow Bank from the Escrow Fund in sufficient
amounts and at times to permit the payment of the principal of
and interest on the Prior Bonds at each payment date. Any moneys
remaining in the Escrow Fund after provision has been made for
the payment of the Prior Bonds may be applied to any lawful
purpose of the City. If for any reason the amount in the Escrow
Fund shall at any time be insufficient for the purposes
hereinbefore set forth, the City shall forthwith from the first
Net Pledged Revenues available therefor deposit therein such
additional moneys as shall be necessary to permit the payment in
full of the principal of and interest on the Prior Bonds as
herein provided.
D4426 91 07/25/86
B. Redemption of Prior Bonds. The City hereby
exercises its option to redeem the Prior Bonds maturing in the
year 1996 and thereafter, prior to their respective maturity
dates, on December 1, 1995, at a price equal to the principal
amount of each Prior Bond so redeemed plus accrued interest
thereon to the Redemption Date.
The Finance Director or Acting Finance Director of the
City is hereby authorized and directed to give forthwith and
again no later than October 31, 1995, irrevocable 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 thereof by certified or registered, first-class,
postage prepaid mail to Dillon, Read & Co . , Inc . , Dallas, Texas,
and to the registered Owners of each of the Prior Bonds
determined as of the close of business on the day preceding the
first mailing of such notice at the addresses appearing on the
registration books of the City. The notice of refunding and
redemption of the Prior Bonds shall be in substantially the
following form:
D4426 92 07/25/86
[ Form of Notice]
NOTICE OF REFUNDING AND REDEMPTION
OF
CITY OF FORT COLLINS, COLORADO
SEWER REVENUE REFUNDING AND IMPROVEMENT BONDS
SERIES 1985
DATED NOVEMBER 1, 1985 - $30, 715,000
NOTICE IS HEREBY GIVEN to the registered owners of all
outstanding City of Fort Collins, Colorado, Sewer Revenue
Refunding and Improvement Bonds, Series 1985, dated November 1,
1985, in the original aggregate principal amount of $30, 715,000
(the Prior Bonds) , that the City of Fort Collins, Colorado (the
City) , has issued Sewer Revenue Refunding Bonds, Series 1986,
dated August 1, 1986, in the aggregate principal amount of
$36, 950,000, and deposited a portion of the proceeds thereof in
escrow with First Interstate Bank of Fort Collins, N.A. , Fort
Collins, 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 at maturity or upon prior
redemption.
According 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 such payments become due at
maturity or upon prior redemption.
NOTICE IS FURTHER HEREBY GIVEN that the City has
exercised its option to redeem the Prior Bonds numbered
through _, maturing in the year 1996 and thereafter, prior to
their respective maturity dates, on December 1 , 1995, at a price
equal to the principal amount of each Prior Bond so redeemed plus
accrued interest thereon to the redemption date.
On the redemption date there will become due and
payable at the office of the Finance Director of the City, in
Fort Collins, Coloradp, the principal amount of each Prior Bond
so redeemed plus accrued interest thereon to the redemption 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.
D4426 93 07/25/86
GIVEN BY ORDER OF THE CITY COUNCIL this day of
19_
CITY OF FORT COLLINS, COLORADO
Finance Director or Acting
Finance Director
[End of Form of Notice]
D4426 94 07/25/86
C. Sewer Fund. Except as otherwise provided herein,
the entire Income, upon receipt thereof from time to time by the
City, shall be set aside and credited immediately to the Sewer
Fund. In addition, the City may at its option credit to the
Sewer Fund any other moneys of the City legally available for
expenditure for the purposes of the Sewer Fund as provided
herein.
The Sewer Fund shall be administered and the moneys on
deposit therein shall be deposited and applied in the following
order of priority:
( 1) First, to the Operation and Maintenance Fund
to pay Operation and Maintenance Expenses in the manner set
forth in Section 5D hereof;
(2 ) Second, to the Principal and Interest Fund to
pay the Debt Service Requirements of the Bonds, any
Additional Parity Bonds and any other Parity Securities then
Outstanding in the manner set forth in Section 5E hereof;
(3) Third, to the Debt Service Reserve Fund, in
the manner set forth in Section 5F hereof;
(4) Fourth, to the payment of the Debt Service
Requirements of Subordinate Bonds or other Subordinate
Securities in accordance with Section 5H hereof;
(5) Fifth, to the Sewer Depreciation and Capital
Improvements Fund, in the manner set forth in Section 51
hereof; and
( 6) Sixth, to be used in accordance with
Section 5J hereof.
D. Operation and Maintenance Fund. As a first charge
on the Sewer Fund there shall be credited from time to time to
the Operation and Maintenance Fund, moneys sufficient to pay the
Operation and Maintenance Expenses of the Sewerage Facilities as
they become due and payable, and thereupon the Operation and
Maintenance Expenses shall be promptly paid.
Any surplus remaining in the Operation and Maintenance
Fund and not needed for Operation and Maintenance Expenses shall
be transferred to the Sewer Fund and used for the purposes
thereof.
E. Principal and Interest Fund. The City shall
deposit in the Principal and Interest Fund, forthwith upon
receipt of the proceeds of the Bonds, interest accrued thereon
from their date of issue to the date of delivery thereof to the
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Purchaser, to apply to the payment of interest first due on the
Bonds .
The City shall deposit in the Principal and Interest
Fund from the Net Pledged Revenues on the date of issuance of the
Bonds twice the following amounts and on or before the last day
of each month beginning in August, 1986, the following amounts:
( 1 ) Interest Payments. One-sixth ( 1/6) of the
aggregate amount of the next installment of interest due in
the then-current Bond Year plus any other amounts due for
interest on the Bonds, any Additional Parity Bonds and any
other Parity Securities then Outstanding. There shall be
credited against the obligation of the City to make such
payments the amount of any accrued interest deposited in the
Principal and Interest Fund and not theretofore credited.
(2 ) Principal Payments. One-twelfth ( 1/12) of
the aggregate amount of the next installment of principal
due in the then-current Bond Year plus any other amounts due
for principal of the Bonds, any Additional Parity Bonds and
any other Parity Securities then Outstanding.
Such interest and principal shall be promptly paid when
due.
The moneys credited to the Principal and Interest Fund
shall be used to pay the Debt Service Requirements of the Bonds,
any Additional Parity Bonds and any other Parity Securities then
Outstanding, as such Debt Service Requirements become due, except
as otherwise provided in this Ordinance. The Principal and
Interest Fund shall be maintained as a sinking fund for the
mandatory redemption of Bonds maturing in the years 2004 and
2010. Any mandatory sinking fund redemption shall be treated as
an installment of principal for purposes of this Section 5E.
Nothing herein shall be construed so as to prevent the
City from creating separate accounts within the Principal and
Interest Fund for the Bonds and any Additional Parity Bonds and
accounting separately for any deposits made thereto on account of
the Bonds and any Additional Parity Bonds or from creating
separate principal and interest funds for Additional Parity
Bonds, if such action is deemed by the City to be necessary or
desirable in order to comply with any statute or regulation
governing the exemption from federal income taxes of interest on
any such Additional Parity Bonds, provided that any such separate
accounts shall have claims to the Net Pledged Revenues equal to
and on a parity with those of the other such accounts and any
such separate principal and interest fund shall have a claim to
the Net Pledged Revenues equal to and on a parity with that of
the Principal and Interest Fund.
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F. Debt Service Reserve Fund. The City shall deposit
in the Debt Service Reserve Fund, from moneys held in the Debt
Service Reserve Fund for the Prior Bonds, on the date of issuance
of the Bonds, a sum at least equal to twenty percent (20%) of the
Average Annual Debt Service Requirements of the Bonds. Subject
to the payments required by Sections 5D and 5E hereof, except as
provided in Section 5G hereof, from and to the extent of any
moneys remaining in the Sewer Fund, there shall be credited as
hereinafter provided and from time to time thereafter to the Debt
Service Reserve Fund moneys sufficient to accumulate in and
maintain the Debt Service Reserve Fund at an amount at least
equal to the Combined Average Annual Debt Service Requirements of
all Outstanding Bonds, Additional Parity Bonds and other Parity
Securities for which the Debt Service Reserve Fund is maintained.
Said amount shall be maintained as a continuing reserve for the
payment of the Debt Service Requirements of the Bonds, any
Additional Parity Bonds and any other Parity Securities for which
the Debt Service Reserve Fund is maintained. The amount, if any,
by which the Average Annual Debt Service Requirements of the
Bonds exceed the sum held in the Debt Service Reserve Fund on the
date of issuance of the Bonds shall be accumulated by depositing
such difference to the Debt Service Reserve Fund in forty-eight
(48) approximately equal monthly installments commencing on the
first day of the month next succeeding the date of issuance of
the Bonds and payable on the first day of each month thereafter
until the required accumulation has been made in full. For
purposes of this Section 5F, when computing the Average Annual
Debt Service Requirements for any issue of securities bearing
interest at a variable, adjustable, convertible, or other similar
rate which is not fixed for the entire term thereof it shall be
assumed that any such securities Outstanding at the time of the
computation will bear interest during any period, if the interest
rate for such period has not been determined, at the lesser of
11% per annum or the maximum rate, in the opinion of nationally
recognized bond counsel , consistent with maintaining the
exemption of interest on the Bonds from federal income taxes, or
if the interest rate for such period has been determined and is
not subject to variation, adjustment or conversion prior to the
expiration of such period, at the fixed rate so determined. It
shall further be assumed that any such securities which may be
tendered prior to maturity for purchase at the option of the
Owner thereof will mature on their stated maturity or mandatory
redemption dates. No payment need be made into the Debt Service
Reserve Fund so long as the moneys therein shall equal not less
than said amount. In the event that the amount of the Debt
Service Reserve Fund falls below the minimum amount required to
be maintained therein; the City shall credit to the Debt Service
Reserve Fund that sum of money needed to accumulate or
reaccumulate the amount therein so that at all times the amount
of the Debt Service Reserve Fund equals said minimum amount. The
moneys in the Debt Service Reserve Fund shall be set aside,
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accumulated, and, if necessary, reaccumulated as provided herein,
from time to time, and maintained as a continuing reserve to be
used, except as hereinafter provided in this Section 5F and in
Sections 5G and 9 hereof, only to prevent deficiencies in the
Principal and Interest Fund resulting from failure to deposit
therein sufficient sums to pay such Debt Service Requirements of
the Bonds, any Additional Parity Bonds and any other Parity
Securities for which the Debt Service Reserve Fund is maintained
as the same become due.
If at any time the City shall for any reason fail to
pay into the Principal and Interest Fund the full amount above
stipulated, then an amount shall be paid into the Principal and
Interest Fund at such time from the Debt Service Reserve Fund
equal to the difference between that paid from the Net Pledged
Revenues in the Sewer Fund and the full amount so stipulated.
The money so used shall be replaced to the Debt Service Reserve
Fund from the first moneys credited to the Sewer Fund thereafter
received and not required to be otherwise applied by Sections 5D
and 5E hereof. If Additional Parity Bonds are Outstanding and a
separate reserve fund or account is maintained therefor, then the
moneys replaced in the Debt Service Reserve Fund and such
separate reserve fund or account shall be replaced on a pro rata
basis, as moneys become available therefor.
If at any time the City shall for any reason fail to
pay into the Debt Service Reserve Fund the full amount stipulated
herein from the moneys credited to the Sewer Fund, the difference
between the amount paid and the amount so stipulated shall in a
like manner be paid therein from the first moneys credited to the
Sewer Fund thereafter received and not required to be applied
otherwise by Sections 5D and 5E hereof.
Nothing in this Ordinance shall be construed as
limiting the right of the City to substitute for the cash deposit
required to be maintained hereunder a letter of credit, surety
bond, insurance policy, agreement guaranteeing payment, or other
undertaking by a financial institution to ensure that cash in the
amount otherwise required to be maintained hereunder will be
available to the City as needed, provided that any such
substitution shall first be approved in writing by the Bond
Insurer and shall be submitted to Moody' s Investors Service, Inc .
and Standard & Poor' s Corporation and shall not cause the
then-current ratings of the Bonds to be adversely affected.
G. Termination of Deposits. No payment need be made
into the Principal and Interest Fund or the Debt Service Reserve
Fund if the amount in the Principal and Interest Fund and the
amount in the Debt Service Reserve Fund total a sum at least
equal to the entire amount of the Outstanding Bonds and any
Outstanding Additional Parity Bonds and Parity Securities, as to
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all Debt Service Requirements, to their respective maturity dates
or to any Redemption Dates on which the City shall have exercised
or shall have obligated itself to exercise its option to redeem,
prior to their respective maturity dates, any Bonds, any
Additional Parity Bonds and any other Parity Securities then
Outstanding and thereafter maturing (provided that, solely for
the purpose of this Section 5G, there shall be deemed to be a
credit to the Debt Service Reserve Fund moneys, Federal
Securities and bank deposits, or any combination thereof,
accounted for in any other fund or account of the City and
restricted solely for the purpose of paying the Debt Service
Requirements of the Bonds, any Additional Parity Bonds or any
other Parity Securities) , in which case moneys in the Principal
and Interest Fund and the Debt Service Reserve Fund in an amount,
except for any known interest or other gain to accrue from any
investment or deposit of moneys pursuant to Section 6B hereof
from the time of any such investment or deposit to the time or
respective times the proceeds of any such investment or deposit
shall be needed for such payment, at least equal to such Debt
Service Requirements, shall be used together with any such gain
from such investments and deposits solely to pay such Debt
Service Requirements as the same become due; and any moneys in
excess thereof in the Principal and Interest Fund and the Debt
Service Reserve Fund and any other moneys derived from the Income
or otherwise pertaining to the Sewerage Facilities may be used in
any lawful manner determined by the City.
H. Payment of additional Subordinate Securities.
After there has been deposited to the Principal and Interest Fund
an amount sufficient to pay all the Debt Service Requirements due
or to become due during the current Bond Year on all Bonds,
Additional Parity Bonds and other Parity Securities then
Outstanding and after the accumulations to and replenishments of
the Debt Service Reserve Fund to be made in the current Bond Year
have been made, any moneys remaining in the Sewer Fund in any
Bond Year may be used by the City for the payment of Debt Service
Requirements of Subordinate Securities payable from the Net
Pledged Revenues and authorized to be issued in accordance with
this Ordinance, including reasonable reserves for such
Subordinate Securities; but the lien of such Subordinate
Securities on the Net Pledged Revenues and the pledge thereof for
the payment of such Subordinate Securities shall be subordinate
to the lien and pledge of the Bonds, any Additional Parity Bonds
and any other Parity Securities as herein provided.
I . Sewer Depreciation and Capital Improvements Fund.
Subject to the payments required by Sections 5D through 5H
hereof, there shall be deposited in the Sewer Depreciation and
Capital Improvements Fund any moneys remaining in the Sewer Fund
at the end of each Bond Year. The moneys in the Sewer
Depreciation and Capital Improvements Fund shall be set aside,
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accumulated, and, if necessary, reaccumulated from time to time,
and maintained for the purpose of paying the costs of required
renewals, replacements, extraordinary repairs, extensions,
Improvements, enlargements, and betterments to the Sewerage
Facilities. Moneys in excess of those required to be maintained
in the Sewer Depreciation and Capital Improvements Fund may be
withdrawn therefrom and transferred to the Sewer Fund and
distributed in the manner provided in Section 5J hereof.
J. Use of Remaining Revenues. After the payments
required to be made by Sections 5A through 5I hereof are made, at
the end of any Bond Year, or whenever in any Bond Year there
shall have been credited to the Principal and Interest Fund, the
Debt Service Reserve Fund, and the Sewer Depreciation and Capital
Improvements Fund all amounts required to be deposited in those
special funds during said Bond Year, as herein provided, any
remaining moneys credited to the Sewer Fund may be used for any
one or any combination of lawful purposes as the City may from
time to time determine .
K. Budget and Appropriation of Sums. The sums
provided to make the payments specified in this Section 5 are
hereby appropriated for said purposes, and said amounts for each
year shall be included in the annual budget and the appropriation
ordinance or measures to be adopted or passed by the Council in
each year respectively while any of the Bonds, either as to
principal or interest, are Outstanding and unpaid. No provisions
of any constitution, charter, statute, ordinance, resolution, or
other order or measure enacted after the issuance of the Bonds
shall in any manner be construed as limiting or impairing the
obligation of the City to keep and perform the covenants
contained in this Ordinance so long as any of the Bonds remain
Outstanding and unpaid. Nothing herein shall prohibit the
Council from appropriating other funds of the City legally
available for this purpose to the Sewer Fund for the purposes
thereof.
Section 6. General Administration of Funds.
A. Places and Times of Deposits. Each of the special
funds created or adopted in Section 5 hereof shall be maintained
in a Commercial Bank kept separate and apart from all other
accounts or funds of the City as trust accounts solely for the
purposes herein designated therefor. For purposes of investment
of moneys, nothing herein prevents the commingling of moneys
accounted for in any two or more such accounts or funds
pertaining to the Income. Such accounts or funds shall be
continuously secured to the fullest extent required or permitted
by the laws of the State for the securing of public funds and
shall be irrevocable and not withdrawable by anyone for any
purpose other than the respective designated purposes of such
D4426 100 07/25/86
accounts or funds. Each periodic payment shall be credited to
the proper account or fund not later than the date therefor
herein designated, except that when any such date shall be a
Saturday, a Sunday or a legal holiday, then such payment shall be
made on or before the next preceding business day.
B. Investment of Funds. Any moneys in any fund
established in Section 5 hereof may be invested, reinvested or
deposited only in Permitted Investments. Securities or
obligations purchased as such an investment shall either be
subject to redemption at any time at face value by the Owner
thereof at the option of such Owner or shall mature at such time
or times as shall most nearly coincide with the expected need for
moneys from the fund in question. Securities or obligations so
purchased as an investment of moneys in any such fund shall be
deemed at all times to be a part of the applicable fund; provided
that with the exception of the Escrow Fund and the Debt Service
Reserve Fund the interest accruing on such investments and any
profit realized therefrom shall be credited to the Sewer Fund,
and any loss resulting from such investments shall be charged to
the particular fund in question. Interest and profit realized
from investments in the Debt Service Reserve Fund shall be
credited to the Debt Service Reserve Fund, provided that, so long
as the amount in the Debt Service Reserve Fund equals at least
the minimum amount specified in Section 5F hereof, such interest
and profit may be transferred to the Principal and Interest Fund
and distributed in the same manner as other moneys in the
Principal and Interest Fund. Any loss resulting from such
investments in the Debt Service Reserve Fund shall be charged to
the Debt Service Reserve Fund. Investments in the Debt Service
Reserve Fund shall be valued by the Finance Director as
frequently as deemed necessary by the Bond Insurer, but not less
often than quarterly, at the market value thereof. If on any
valuation date the market value of investments in the Debt
Service Reserve Fund is less than the amount required by Section
5F hereof to be maintained therein due to market fluctuations,
the deficiency shall be remedied no later than the next quarterly
valuation date. The City shall present for redemption or sale on
the prevailing market any securities or obligations so purchased
as an investment of moneys in a given fund whenever it shall be
necessary to do so in order to provide moneys to meet any
required payment or transfer from such fund. The City shall not
invest any moneys accounted for hereunder if any such investment
would contravene the covenant concerning arbitrage in Section 8U
hereof.
C. No Liability for Losses Incurred in Performing
Terms of Ordinance. Neither the City nor any officer of the City
shall be liable or responsible for any loss resulting from any
investment or reinvestment made in accordance with this
Ordinance.
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D. Character of Funds . The moneys in any fund herein
authorized shall consist of lawful money of the United States of
America or Permitted Investments or both such money and Permitted
Investments. Moneys deposited in a demand or time deposit
account in a Commercial Bank, appropriately secured according to
the laws of the State, shall be deemed lawful money of the United
States of America.
E. Accelerated Payments Optional . Nothing contained
herein prevents the accumulation in any fund herein designated of
any monetary requirements at a faster rate than the rate or
minimum rate, as the case may be, provided therefor, but no
payment shall be so accelerated if such acceleration shall cause
a default in the payment of any obligation of the City pertaining
to the Income.
Section 7 . Priorities• Liens• Issuance of Additional
Bonds.
A. First Lien on Net Pledged Revenues; Equality of
Bonds. Except as expressly provided in this Ordinance with
respect to Additional Parity Bonds, Parity Securities and
Subordinate Securities, the Net Pledged Revenues shall be and
hereby are irrevocably pledged and set aside to pay the Debt
Service Requirements of the Bonds.
The Bonds constitute an irrevocable and first lien (but
not necessarily an exclusive first lien) upon the Net Pledged
Revenues.
The Bonds, any Additional Parity Bonds and any other
Parity Securities hereafter authorized to be issued and from time
to time Outstanding are equitably and ratably secured by a lien
on the Net Pledged Revenues and shall not be entitled to any
priority one over the other in the application of the Net Pledged
Revenues regardless of the time or times of the issuance thereof,
it being the intention of the Council that there shall be no
priority among the Bonds, any Additional Parity Bonds and any
other Parity Securities, regardless of the fact that they may be
actually issued and delivered at different times.
B. Issuance of Additional Parity Bonds. Nothing
herein, subject to the limitations stated in Section 7F hereof,
prevents the issuance by the City of Additional Parity Bonds
payable from the Net Pledged Revenues and constituting a lien on
the Net Pledged Revenues on a parity with, but not prior or
superior to, the lien thereon of the Bonds; but before any such
Additional Parity Bonds are authorized or actually issued the
City shall satisfy the following conditions:
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( 1) Absence of Default. At the time of the
adoption of the supplemental ordinance or other instrument
authorizing the issuance of the Additional Parity Bonds as
provided in Section 7F hereof, the City shall not be in
default in making any payments required by Section 5 hereof.
(2) Historic Revenues Tests.
(a) As certified by the Consulting Engineer
for the Improvement, the Net Pledged Revenues for any
consecutive twelve ( 12 ) month period during the
preceding twenty-four (24) months must have been equal
to at least one hundred twenty-five percent ( 125%) of
the Combined Average Annual Debt Service Requirements
of the Bonds then Outstanding, any Additional Parity
Bonds then Outstanding, and the Additional Parity Bonds
proposed to be issued plus the estimated Average Annual
Debt Service Requirements of any Additional Parity
Bonds expected to be needed to complete the
Improvement. If any adjustment in rates, fees, tolls
or charges or tap fees or plant investment fees, or any
combination thereof, for the direct or indirect
connection with, or use of, the Sewerage Facilities is
made by the City during such twelve ( 12 ) month period,
the Consulting Engineer shall adjust the calculation of
the Net Pledged Revenues to reflect the amount thereof
that would have been received if such adjustment had
been in effect throughout such twelve ( 12) month
period; and
(b) As certified by the Consulting Engineer
for the Improvement, the Net Pledged Revenues
(considering as Income for the purpose of this Section
7B(2 ) (b) only revenues derived from the imposition of
rates, fees, tolls and charges, including supplemental
user fees, for service rendered) for any consecutive
twelve (12 ) month period during the preceding
twenty-four (24) months must have been equal to at
least one hundred percent ( 100%) of the Combined
Average Annual Debt Service Requirements of the Bonds
then Outstanding, any Additional Parity Bonds then
Outstanding, and the Additional Parity Bonds proposed
to be issued plus the estimated Average Annual Debt
Service Requirements of any Additional Parity Bonds
expected to be needed to complete the Improvement. If
any adjustment in rates, fees, tolls or charges,
including supplemental user fees, for service rendered
is made by the City during such twelve ( 12 ) month
period, the Consulting Engineer shall adjust the
calculation of the Net Pledged Revenues as herein
modified to reflect the amount thereof that would have
D4426 103 07/25/86
been received if such adjustment had been in effect
throughout such twelve ( 12 ) month period.
For purposes of this Section 7B(2 ) , when computing the
Average Annual Debt Service Requirements for any issue of
securities bearing interest at a variable, adjustable,
convertible or other similar rate which is not fixed for the
entire term thereof, it shall be assumed that any such
securities Outstanding at the time of the computation will
bear interest during any period, if the interest rate for
such period has not been determined, at a fixed rate equal
to the higher of 9 .2% per annum or the highest interest rate
borne during the preceding twenty-four (24) months by
Outstanding securities of the City bearing interest at a
variable, adjustable, convertible or other similar rate or,
if no such securities of the City are Outstanding at the
time of the computation, by any similar securities for which
the interest rate is determined by reference to an index
comparable to that to be utilized in connection with the
securities proposed to be issued, or if the interest rate
for such period has been determined and is not subject to
variation, adjustment or conversion prior to the expiration
of such period, at the fixed rate so determined. It shall
further be assumed that any such securities which may be
tendered prior to maturity for purchase at the option of the
Owner thereof will mature on their stated maturity or
mandatory redemption dates.
(3 ) Adequate Reserves. The proceedings under
which any such Additional Parity Bonds are issued must
provide for the deposit of moneys to the Debt Service
Reserve Fund on substantially the same terms as provided in
Section 5F hereof and contain a covenant by the City to
maintain the Debt Service Reserve Fund in an amount at least
equal to the minimum amount required by Section 5F hereof.
Alternatively, if such action is deemed by the City to be
necessary or desirable in order to comply with any statute
or regulation governing the exemption from federal income
taxes of interest on any such Additional Parity Bonds, the
proceedings under which any such Additional Parity Bonds are
issued may provide for the deposit of moneys to a reserve
fund or account (other than the Debt Service Reserve Fund)
established and maintained for any such Additional Parity
Bonds on substantially the same terms as provided in Section
5F hereof and contain a covenant by the City to maintain
such reserve fund or account in an amount at least equal to
the minimum amount required by Section 5F hereof, except as
may be necessary to comply with such statute or regulation.
Any such reserve fund or account shall have a claim to the
Net Pledged Revenues equal to and on a parity with that of
the Debt Service Reserve Fund.
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C. Certification of Revenues. Where certifications
of revenues are required by this Ordinance, the specified and
required written certifications of the Consulting Engineer that
revenues are sufficient to pay the required amounts shall be
conclusively presumed to be accurate in determining the right of
the City to authorize, issue, sell and deliver Additional Parity
Bonds .
D. Subordinate Securities Permitted. Nothing herein,
subject to the limitations stated in Section 7F hereof, prevents
the City from issuing Subordinate Securities for any lawful
purpose.
E. Superior Securities Prohibited. Nothing herein
permits the City to issue Superior Bonds or Superior Securities.
F. Supplemental Ordinances . Additional Parity Bonds
or Subordinate Securities shall be issued only after
authorization thereof by ordinance, supplemental ordinance or
other instrument of the Council, in substantially the same form
as this Ordinance, stating the purpose or purposes of the
issuance of such additional securities, directing the application
of the proceeds thereof to such purpose or purposes, directing
the execution thereof, and fixing and determining the date,
series designation, principal amount, maturity or maturities,
maximum rate or rates of interest, and prior redemption
privileges of the City with respect thereto, and providing for
payments to and from the Sewer Fund in accordance with this
Ordinance. All additional securities shall bear such date, shall
be payable as to principal on December 1 and as to interest on
June 1 and December 1 and shall be subject to redemption prior to
maturity on such terms and conditions, as may be provided, and
shall bear interest at such rate or rates as may be fixed by
ordinance, instrument or other document of the Council . Nothing
herein shall be construed to prohibit the issuance of additional
securities payable from the Net Pledged Revenues, the interest on
which is payable more frequently than semiannually.
Section 8. Covenants.
The City hereby particularly covenants and agrees with
the Owners of the Bonds from time to time, and makes provisions
which shall be a part of its contract with such Owners, which
covenants and provisions shall be kept by the City continuously
until all of the Bonds have been fully paid and discharged:
A. Rate Maintenance. The City shall prescribe,
revise, and collect rates, fees, tolls, and charges and tap fees
and plant investment fees, or any combination thereof, which may
be imposed by the City whether for the direct or indirect
connection with or the use of the Sewerage Facilities and
D4426 105 07/28/86
reasonable penalties for any delinquencies, which shall produce
Income sufficient, together with any other moneys legally
available therefor and credited to the Sewer Fund, to make the
payments and accumulations required by this Ordinance, and which
shall produce Net Pledged Revenues sufficient, together with all
other moneys legally available therefor and credited to the Sewer
Fund after payment of Operation and Maintenance Expenses, to pay
an amount at least equal to 125% of the Combined Average Annual
Debt Service Requirements of the Outstanding Bonds and every
other issue of Outstanding Additional Parity Bonds and
Outstanding Parity Securities plus any amounts required to meet
then existing deficiencies pertaining to any fund relating to the
Net Pledged Revenues or any securities payable therefrom. For
purposes of this Section 8A, when computing the Average Annual
Debt Service Requirements for any issue of securities bearing
interest at a variable, adjustable, convertible or other similar
rate which is not fixed for the entire term thereof, it shall be
assumed that any such securities Outstanding at the time of the
computation will bear interest during any period, if the interest
rate for such period has not been determined, at a fixed rate
equal to the higher of 9 .2% per annum or the highest interest
rate borne during the preceding twenty-four (24) months by
Outstanding securities of the City bearing interest at a
variable, adjustable, convertible or other similar rate or, if no
such securities of the City are Outstanding at the time of the
computation, by any similar securities for which the interest
rate is determined by reference to an index comparable to that to
be utilized in connection with the securities proposed to be
issued, or if the interest rate for such period has been
determined and is not subject to variation, adjustment or
conversion prior to the expiration of such period, at the fixed
rate so determined. It shall further be assumed that any such
securities which may be tendered prior to maturity for purchase
at the option of the Owner thereof will mature on their stated
maturity or mandatory redemption dates.
In the event that such rates, fees, tolls, and charges
and tap fees and plant investment fees at any time should not be
sufficient to make all of the payments and accumulations required
by this Ordinance, the Council shall increase its rates, fees,
tolls, and charges and tap fees and plant investment fees to such
extent as to insure the payments and accumulations required by
the provisions of this Ordinance.
B. Collection of Charges. The City shall cause all
rates, fees, tolls, and charges and tap fees and plant investment
fees pertaining to the Sewerage Facilities to be billed promptly
and collected as soon as reasonable, shall prescribe and enforce
rules and regulations or impose contractual obligations for the
payment thereof, to the end that the Net Pledged Revenues shall
be adequate to meet the requirements of this Ordinance and any
D4426 106 07/25/86
other ordinance or instrument supplemental thereto. The rates,
fees, tolls, and charges and tap fees and plant investment fees
due shall be collected in any lawful manner.
C. Competent Management. The City shall employ
experienced and competent management personnel for each component
of the Sewerage Facilities. If the City shall fail to pay the
Debt Service Requirements of the Bonds promptly as the same
become due, or if the City shall fail to keep any of the
covenants herein contained, and if such default shall continue
for a period of sixty (60) days, or if the Net Pledged Revenues
of the Sewerage Facilities in any Fiscal Year, together with
other legally available revenue and money, shall fail to equal at
least the amount of the Debt Service Requirements of the Bonds,
and other obligations payable from the Net Pledged Revenues due
in the Comparable Bond Year, the City shall retain a firm of
competent management Persons skilled in the operation of sewerage
facilities to assist in the management of the Sewerage Facilities
so long as such default continues or the said revenues, proceeds
and income are less than the amount hereinabove designated.
D. Performance of Duties . The City, acting by and
through its officers, or otherwise, shall faithfully and
punctually perform, or cause to be performed, all duties with
respect to the Income and the Sewerage Facilities required by the
Constitution and laws of the State and the ordinances,
resolutions and contracts of the City, including, without
limitation, the proper segregation of the proceeds of the Bonds
and the Income and their application from time to time to the
respective funds provided therefor.
E. Costs of Bond Issue and of Performance. Except as
otherwise specifically provided herein, all costs and expenses
incurred in connection with the issuance of the Bonds, payment of
the Debt Service Requirements thereof, or the City" s performance
of or compliance with any covenant or agreement contained in this
Ordinance shall be paid exclusively (but only from the
appropriate special fund in the manner authorized herein) from
the proceeds of the Bonds, from the Net Pledged Revenues, or from
other legally available moneys, and in no event shall any of such
costs or expenses be required to be paid out of or charged to the
general fund of the City.
F. Contractual Obligations. The City will perform
all contractual obligations undertaken by it under the contract
with the Purchaser ap described in Section 4B hereof and any
other agreements relating to the Bonds, the Income, or the
Sewerage Facilities .
G. Further Assurances. At any and all times the City
shall, so far as it may be authorized by law, pass, make, do,
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execute, acknowledge, deliver, and file or record all and every
such further instruments, acts, deeds, conveyances, assignments,
transfers, other documents, and assurances as may be necessary or
desirable for the better assuring, conveying, granting, assigning
and confirming all and singular the rights, the Net Pledged
Revenues and other funds hereby pledged, or intended so to be, or
which the City may hereafter become bound to pledge, or as may be
reasonable and required to carry out the purposes of this
Ordinance. The City, acting by and through its officers, or
otherwise, shall at all times, to the extent permitted by law,
defend, preserve and protect the pledge of the Net Pledged
Revenues and other funds pledged hereunder and all the rights of
every Owner of any of the Bonds against all claims and demands of
all Persons whomsoever.
H. Conditions Precedent. Upon the date of issuance
of any of the Bonds, all conditions, acts and things required by
the Constitution or laws of the United States of America, the
Constitution or laws of the State, the Charter, and this
Ordinance to exist, to have happened, and to have been performed
precedent to or in the issuance of the Bonds shall exist, have
happened and have been performed, and the Bonds, together with
all other obligations of the City, shall not contravene any debt
or other limitation prescribed by the Constitution or laws of the
United States of America or the Constitution or laws of the State
or the Charter.
I . Efficient Operation and Maintenance. The City
shall at all times operate the Sewerage Facilities properly and
in a sound and economical manner. The City shall maintain,
preserve and keep the Sewerage Facilities properly or cause the
same so to be maintained, preserved, and kept, with the
appurtenances and every part and parcel thereof in good repair,
working order and condition, and shall from time to time make or
cause to be made all necessary and proper repairs, replacements
and renewals so that at all times the maintenance of the Sewerage
Facilities may be properly and advantageously conducted. All
salaries, fees, wages and other compensation paid by the City in
connection with the repair, maintenance and operation of the
Sewerage Facilities shall be fair and reasonable.
J. Records and Accounts . The City will keep proper
books of record and account, separate and apart from all other
records and accounts, showing complete and correct entries of all
transactions relating to the funds referred to herein.
K. Rules Regulations and Other Details. The City,
acting by and through its officers, shall establish and enforce
reasonable rules and regulations governing the construction,
operation, care, repair, maintenance, management, control, use
and services of the Sewerage Facilities. The City shall observe
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and perform all of the terms and conditions contained in this
Ordinance and shall comply with all valid acts, rules,
regulations, orders and directives of any legislative, executive,
administrative or judicial body applicable to the Sewerage
Facilities or the City.
L. Payment of Governmental Charges. The City shall
pay or cause to be paid all taxes and assessments or other
municipal or governmental charges, if any, lawfully levied or
assessed upon or in respect of the Sewerage Facilities or upon
any part thereof or upon any portion of the Income, when the same
shall become due, and shall duly observe and comply with all
valid requirements of any municipal or governmental authority
relative to the Sewerage Facilities, or any part thereof, except
for any period during which the same are being contested in good
faith by proper legal proceedings . The City shall not create or
suffer to be created any lien or charge upon the Sewerage
Facilities, or any part thereof, or upon the Income, except the
pledge and lien created by this Ordinance for the payment of the
Debt Service Requirements due in connection with the Bonds and
except as herein otherwise permitted. The City shall pay or
cause to be discharged or shall make adequate provision to
satisfy and to discharge, within ninety (90) days after the same
shall become payable, all lawful claims and demands for labor,
materials, supplies or other objects which, if unpaid, might by
law become a lien upon the Sewerage Facilities, or any part
thereof, or the Income, but nothing herein requires the City to
pay or to cause to be discharged or to make provision for any
such tax, assessment, lien or charge, so long as the validity
thereof is contested in good faith and by appropriate legal
proceedings .
M. Protection of Security. The City, its officers,
agents and employees, shall not take any action in such manner or
to such extent as might prejudice the security for the payment of
the Debt Service Requirements of the Bonds and any other
securities payable from the Net Pledged Revenues according to the
terms thereof. No contract shall be entered into nor any other
action taken by which the rights of any Owner of any Bonds or
other security payable from Net Pledged Revenues might be
prejudicially and materially impaired or diminished.
N. Accumulation of Interest Claims. In order to
prevent any accumulation of claims for interest after maturity,
the City shall not directly or indirectly extend or assent to the
extension of the time, for the payment of any claim for interest
on any of the Bonds or any other securities payable from the Net
Pledged Revenues; and the City shall not directly or indirectly
be a party to or approve any arrangements for any such extension
or for the purpose of keeping alive any of such claims for
interest. If the time for the payment of any such installment of
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interest is extended in contravention of the foregoing
provisions, such installment or installments of interest after
such extension or arrangement shall not be entitled in case of
default hereunder to the benefit or the security of this
Ordinance, except upon the prior payment in full of the principal
of all of the Bonds and any such securities the payment of which
has not been extended.
0. Prompt Payment of Bonds. The City shall promptly
pay the Debt Service Requirements of every Bond at the places, on
the dates, and in the manner specified herein and in the Bonds
according to the true intent and meaning hereof.
P. Use of Principal and Interest and Debt Service
Reserve Funds. The Principal and Interest Fund and the Debt
Service Reserve Fund shall be used solely and only, and the
moneys credited to such funds are hereby pledged, for the purpose
of paying the Debt Service Requirements of the Bonds, Additional
Parity Bonds and any other Parity Securities at maturity or upon
prior redemption, subject to Section 9 hereof.
Q. Additional Securities . The City shall not
hereafter issue any bonds or securities relating to the Sewerage
Facilities and payable from the Net Pledged Revenues, other than
the Bonds, without compliance with the requirements with respect
to the issuance of Additional Parity Bonds or other securities
set forth herein to the extent applicable.
R. Other Liens. Other than as provided herein, there
are no liens or encumbrances of any nature whatsoever on or
against the Sewerage Facilities, or any part thereof, or on or
against the Net Pledged Revenues.
S. Disposal of Sewerage Facilities Prohibited.
Subject to Section 8V hereof, except for the use of the Sewerage
Facilities and services pertaining thereto in the normal course
of business, neither all nor a substantial part of the Sewerage
Facilities shall be sold, mortgaged, pledged, encumbered,
alienated or otherwise disposed of, until all of the Bonds have
been paid in full, as to all Debt Service Requirements thereof,
or unless provision has been made therefor, or until the Bonds
have otherwise been redeemed, including, without limitation, the
termination of the pledge as herein authorized. Subject to
Section 8V hereof, the City shall not dispose of its title to the
Sewerage Facilities or to any useful part thereof, including any
property necessary to the operation and use of the Sewerage
Facilities and the lands and interests in lands comprising the
Sewerage Facilities.
T. Surety Bonds. Each official or other person
having custody of any Net Pledged Revenues or responsible for
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their handling shall be fully bonded at all times, which bond
shall be conditioned upon the proper application of said moneys .
The cost of each such bond shall be considered an Operation and
Maintenance Expense, unless otherwise provided by law.
U. Arbitrage. The City shall make no investment or
other use of the proceeds of the Bonds, which, if such investment
or other use had been reasonably expected on the date the Bonds
are issued, would have caused the Bonds to be arbitrage bonds
within the meaning of Section 103(c) of the Internal Revenue Code
of 1954, as amended, and the regulations thereunder. In
addition, the City shall take no action which would cause the
interest on the Bonds to become subject to federal or State
income taxes under any federal or State laws or regulations
hereafter enacted or promulgated.
V. Disposal of Property. No part of the Sewerage
Facilities shall be sold, leased, mortgaged, pledged, encumbered
or otherwise disposed of or otherwise alienated, until all of the
Bonds have been paid in full, or unless provision has been made
therefor, or until the Bonds have otherwise been redeemed;
provided, however, that the City may sell, exchange or lease at
any time and from time to time any property or facilities
constituting part of the Sewerage Facilities and not useful in
the construction, reconstruction or operation thereof; but any
proceeds of any such sale or exchange received and not used to
replace such property so sold or exchanged shall be deposited in
the Sewer Fund, and any proceeds of any such lease received shall
be deposited by the City as revenues of the Sewerage Facilities .
W. Loss from Condemnation. If any part of the
Sewerage Facilities is taken by the exercise of a power of
eminent domain, the amount of any award received by the City as a
result of such taking shall be expended upon the improvement of
the Sewerage Facilities or shall be applied to the redemption of
the Outstanding Bonds, any Outstanding Additional Parity Bonds
and any Outstanding Parity Securities in accordance with the
provisions hereof and of any other instrument pertaining to the
issuance of any such Additional Parity Bonds or Parity Securities
at maturity or upon prior redemption if the authorizing
ordinances authorize the prior redemption of such securities or
shall be deposited in the Sewer Depreciation and Capital
Improvements Fund and held as a reserve for expenditure
subsequently upon such capital improvements, or any combination
thereof, as the Council may determine.
X. Inspection of Records . Any Owner of any of the
Bonds or any other securities payable from the Net Pledged
Revenues, any duly authorized agent or agents of such Owner, or
the Purchaser shall have the right at all reasonable times to
inspect all records, accounts and data relating thereto,
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concerning the Sewerage Facilities or the Income, to make copies
of such records, accounts and data at the Owner' s or Purchaser' s
expense, and to inspect the Sewerage Facilities and properties
comprising the Sewerage Facilities.
Y. Audits Required. The City, annually following the
close of each Fiscal Year, shall order an audit for the Fiscal
Year of the books and accounts pertaining to the Sewerage
Facilities to be made forthwith by an independent accountant, and
order an audit report showing the receipts and disbursements for
each fund or account pertaining to the Sewerage Facilities or the
Income. The City shall furnish a copy of each such audit report
to the Bond Insurer. All expenses incurred in the making of the
audits and reports required by this subsection shall be regarded
and paid as an Operation and Maintenance Expense .
Z. Insurance and Reconstruction. The City shall at
all times maintain with responsible insurers all such insurance
reasonably required and obtainable within limits and at costs
deemed reasonable by the City as is customarily maintained with
respect to sewerage facilities of like character against loss of
or damage to the Sewerage Facilities and against public and other
liability to the extent at least reasonably necessary to protect
the interest of the City and of each Owner of Bonds or any other
securities payable from the Net Pledged Revenues, except as
herein otherwise provided. If any useful part of the Sewerage
Facilities shall be damaged. or destroyed, the City shall, as
expeditiously as possible, commence and diligently proceed with
the repair or replacement of the damaged or destroyed property so
as to restore the same to use. The proceeds of any insurance
appertaining to the Sewerage Facilities shall be payable to the
City and (except for proceeds of use and occupancy insurance)
shall be applied to the necessary costs involved in such repair
and replacement, and to the extent not so applied shall (together
with the proceeds of any such use and occupancy insurance) be
deposited in the Sewer Fund as Income. If the costs of such
repair and replacement of the damaged or destroyed property
exceed the proceeds of such property insurance available for
payment of the same, moneys in the Sewer Fund shall be used to
the extent necessary for such purpose, as permitted by Section 5J
hereof.
Section 9 . Defeasance.
When all Debt Service Requirements of the Bonds have
been duly paid, the pledge and lien and all obligations hereunder
shall thereby be discharged and the Bonds shall no longer be
deemed to be Outstanding within the meaning of this Ordinance .
There shall be deemed to be such due payment when the City has
placed in escrow or in trust with a Trust Bank located within or
without the State moneys or Federal Securities in an amount
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sufficient ( including the known minimum yield available for such
purpose from Federal Securities in which such amount wholly or in
part may be initially invested) to pay all Debt Service
Requirements of the Bonds, as the same become due at their
maturity date or upon any Redemption Date as of which the City
shall have exercised or shall have obligated itself to exercise
its option to call Bonds for prior redemption. The Federal
Securities shall be non-callable and shall become due prior to
the respective times at which the proceeds thereof shall be
needed, in accordance with a schedule established and agreed upon
between the City and such bank at the time of the creation of the
escrow or trust, or the Federal Securities shall be subject to
redemption at the option of the Owner thereof to assure such
availability as so needed to meet such schedule. Any Debt
Service Requirements of the Bonds paid by the Bond Insurer shall
not be deemed paid pursuant to this Ordinance until paid by the
City in accordance herewith. Nothing herein shall be construed
to prohibit a partial defeasance of the Outstanding Bonds in
accordance with the provisions of this Section 9.
Section 10. Default Provisions and Remedies of Bond
Owners.
A. Events of Default. Each of the following events
is hereby declared to be and to constitute an Event of Default by
the City:
( 1) Nonpayment of Principal or Premium. Payment
of the principal of any of the Bonds or any premium due in
connection with the redemption thereof is not made when the
same becomes due and payable, either at maturity or upon
prior redemption, or otherwise;
(2 ) Nonpayment of Interest. Payment of any
installment of interest on any of the Bonds is not made when
the same becomes due and payable;
(3 ) Incapacity to Perform. The City for any
reason becomes incapable of fulfilling its obligations
hereunder;
(4) Nonperformance of Duties. The City shall
have failed to carry out and to perform (or in good faith to
begin the performance of) all acts and things lawfully
required to be carried out or to be performed by it under
any contract relating to the Income or to the Sewerage
Facilities, including, without limitation, this Ordinance,
and such failure shall continue for sixty (60) days after
receipt of notice from the Owners of twenty-five percent
(25%) in aggregate principal amount of the Bonds then
Outstanding; provided that if such failure cannot be cured
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within such sixty (60) days and if during that period
corrective action has commenced to remedy such failure and
subsequently is diligently pursued by the City to the
completion of such performance, an Event of Default shall
not be deemed to have occurred;
(5 ) Failure to Reconstruct. The City
discontinues or unreasonably delays or fails to carry out
with reasonable dispatch the reconstruction of any
revenue-producing part of the Sewerage Facilities which is
condemned, destroyed or damaged and is not promptly repaired
or replaced (whether such failure to repair the same is due
to impracticality of such repair or replacement, or is due
to a lack of moneys therefor, or for other reason) ;
( 6) Appointment of Receiver. An order or decree
is entered by a court of competent jurisdiction, with the
consent or acquiescence of the City, appointing a receiver
or receivers for the Sewerage Facilities or for the Income
and any other moneys subject to the lien to secure the
payment of the Bonds, or both the Sewerage Facilities and
such moneys, or if any order or decree, having been entered
without the consent or acquiescence of the City, is not
vacated or discharged or stayed on appeal within sixty (60)
days after entry;
(7) Default of Any Provision. The City makes any
default in the due and punctual performance of any other of
the representations, covenants, conditions, agreements and
other provisions contained in the Bonds or in this Ordinance
on its part to be performed, and if such default continues
for sixty (60) days after written notice, specifying such
default and requiring the same to be remedied, is given to
the City by the Owners of twenty-five percent (25%) in
aggregate principal amount of the Bonds then Outstanding;
provided that if such default cannot be cured within such
sixty (60) days and if during that period corrective action
has commenced to remedy such default and subsequently is
diligently pursued to the completion of such performance, an
Event of Default shall not be deemed to have occurred;
(8) Payment Default on Parity Securities. The
City fails to pay when due any Debt Service Requirements of
any Parity Securities.
B. Remedies for Defaults. Upon the happening and
continuance of any gvent of Default, provided that the Bond
Insurer has made all payments of principal and interest on the
Bonds as required by the Bond Insurance Policy, the Bond Insurer,
acting alone, shall have the right to direct all remedies against
the City with respect to the Bonds, and no such remedies shall be
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exercised without the consent of the Bond Insurer. Subject to
the foregoing, the Owner or Owners of not less than twenty-five
percent (25%) in aggregate principal amount of the Bonds then
Outstanding, including, without limitation, a trustee or trustees
therefor, may proceed against the City and its agents, officers
and employees to protect and to enforce the rights of any Owner
of Bonds under this Ordinance by mandatory injunction or by other
suit, action, or special proceedings in equity or at law, in any
court of competent jurisdiction, either for the appointment of a
receiver or an operating trustee or for the specific performance
of any covenant or agreement contained herein or for any proper
legal or equitable remedy as such Owner or Owners may deem most
effectual to protect and to enforce the rights aforesaid, or
thereby to enjoin any act or thing which may be unlawful or in
violation of any right of any Owner of any Bond, or to require
the City to act as if it were the trustee of an expressed trust,
or any combination of such remedies, or as otherwise may be
authorized by any statute or other provision of law. All such
proceedings at law or in equity shall be instituted, had and
maintained for the equal benefit of all Owners of the Bonds, any
Additional Parity Bonds or other Parity Securities then
Outstanding. Any receiver or operating trustee appointed in any
proceedings to protect the rights of such Owners hereunder may
collect, receive and apply all Income arising after the
appointment of such receiver or operating trustee in the same
manner as the City itself might do . The consent to any such
appointment is hereby expressly granted by the City.
Notwithstanding the foregoing or any other applicable provision
of law, no Event of Default shall result in acceleration of any
obligation of the City represented by the Bonds.
C. Rights and Privileges Cumulative. The failure of
any Owner of any Outstanding Bond to proceed in any manner herein
provided shall not relieve the City or any of its officers,
agents or employees of any liability for failure to perform to
carry out any duty, obligation or other commitment. Each right
or privilege of any such Owner or trustee therefor is in addition
and is cumulative to any other right or privilege, and the
exercise of any right or privilege by or on behalf of any Owner
shall not be deemed a waiver of any other right or privilege
thereof. Each Owner of any Bond shall be entitled to all of the
privileges, rights and remedies provided or permitted in this
Ordinance and as otherwise provided or permitted by law or in
equity or by statute, except as provided in Sections 12A and 12B
hereof, and subject to the applicable provisions concerning the
Income and the proceeds of the Bonds. Nothing herein affects or
impairs the right of any Owner of any Bond to enforce the payment
of the Debt Service Requirements due in connection with this Bond
or the obligation of the City to pay the Debt Service
Requirements of each Bond to the Owner thereof at the time and
the place expressed in such Bond.
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D. Duties Upon Default. Upon the happening of any of
the Events of Default as provided in Section 10A hereof, the
City, in addition, will do and perform all proper acts on behalf
of and for the Owners of the Outstanding Bonds to protect and to
preserve the security created for the payment of their Bonds and
to insure the payment of the Debt Service Requirements of the
Bonds promptly as the same become due. During any period of
default, so long as any of the Bonds, as to any Debt Service
Requirements, are Outstanding, except to the extent it may be
unlawful to do so, all Net Pledged Revenues shall be paid into
the Principal and Interest Fund on an equitable and prorated
basis, and used for the purposes therein provided. If the City
fails or refuses to proceed as in this Section 10D provided, the
Owner or Owners of not less than twenty-five percent (25%) in
aggregate principal amount of the Bonds then Outstanding, after
demand in writing, may proceed to protect and to enforce the
rights of the Owners of the Bonds as hereinabove provided; and to
that end any such Owners of Outstanding Bonds shall be subrogated
to all rights of the City under any agreement or contract
involving the Net Pledged Revenues entered into prior to the
effective date of this Ordinance or thereafter while any of the
Bonds are Outstanding. Nothing herein requires the City to
proceed as provided herein if it determines in good faith and
without any abuse of its discretion that if it so proceeds it is
more likely than not to incur a net loss rather than a net gain
or such action is likely to affect materially and prejudicially
the Owners of the Outstanding Bonds and any Outstanding Parity
Securities.
E. Evidence of Security Owners. Any request, consent
or other instrument which this Ordinance may require or may
permit to be signed and to be executed by the Owner of any Bonds
or other securities may be in one instrument or more than one
instrument of similar tenor and shall be signed or may be
executed by each Owner in person or by his attorney appointed in
writing. Proof of the execution of any such instrument or of any
instrument appointing any such attorney, or the ownership by any
Person of the securities, shall be sufficient for any purpose of
this Ordinance (except as otherwise herein expressly provided) if
made in the following manner:
( 1) Proof of Execution. The fact and the date of
the execution by any Owner of any Bonds or other securities.
or his attorney of such instrument may be proved by the
certificate, which need not be acknowledged or verified, of
any officer of a. bank or trust company satisfactory to the
City Clerk or of any notary public or other officer
authorized to take acknowledgments of deeds to be recorded
in the state in which he purports to act, that the
individual signing such request or other instrument
acknowledged to him the execution, duly sworn to before such
D4426 116 07/25/86
notary public or other officer; the authority of the
individual or individuals executing any such instrument on
behalf of a corporate Owner of any securities may be
established without further proof if such instrument is
signed by an individual purporting to be the president or
vice-president of such corporation with the corporate seal
affixed and attested by an individual purporting to be its
secretary or an assistant secretary; and the authority of
any Person or Persons executing any such instrument in any
fiduciary or representative capacity may be established
without further proof if such instrument is signed by a
Person or Persons purporting to act in such fiduciary or
representative capacity; and
(2 ) Proof of Ownership. The amount of Bonds
owned by any Person executing any instrument as an Owner of
Bonds, and the numbers, date and other identification
thereof, together with the date of his ownership of the
Bonds, shall be determined from the registration books of
the City. The amount of other securities, if applicable,
owned by any Person executing any instrument as an owner of
such securities, and the numbers, date and other
identification thereof, together with the date of his
ownership, if in bearer form, may be proved by a certificate
which need not be acknowledged or verified, in form
satisfactory to the City Clerk, executed by a member of a
financial firm or by an officer of a bank or trust company,
insurance company or ' financial corporation or other
depository satisfactory to the City Clerk, or by any notary
public or other officer authorized to take acknowledgments
of deeds to be recorded in the state in which he purports to
act, showing at the date therein mentioned that such Person
exhibited to such member, officer, notary public or other
officer so authorized to take acknowledgments of deeds or
had on deposit with such depository the securities described
in such certificate or, if in registered form shall be
determined from the related registration books; but the City
Clerk may nevertheless in his or her discretion require
further or other proof in cases where he or she deems the
same advisable .
F. Warranty Upon Issuance of Bonds. Any of the Bonds
as herein provided, when duly executed and registered for the
purposes provided for in this Ordinance, shall constitute a
warranty by and on behalf of the City for the benefit of each and
every future Owner of. any of the Bonds that the Bonds have been
issued for a valuable consideration in full conformity with law.
G. Immunities of Purchaser. The Purchaser and any
associate thereof are under no obligation to any Owner of the
Bonds for any action that they may not take or in respect of
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anything that they may or may not do by reason of any information
contained in any reports or other documents received by them
under the provisions of this Ordinance. The immunities and
exemption from liability of the Purchaser and any associate
thereof hereunder extend to their partners, directors,
successors, assigns, employees and agents.
Section 11 . Amendment of Ordinance.
A. Amendment of Ordinance Not Requiring Consent of
Bond Owners and Bond Insurer. The City may, without the consent
of, or notice to, the Owners of the Bonds or the Bond Insurer,
adopt such ordinances supplemental hereto (which amendments shall
thereafter form a part hereof) for any one or more or all of the
following purposes:
( 1) To cure or correct any formal defect,
ambiguity or inconsistent provision contained in this
Ordinance;
(2 ) To appoint successors to the Paying Agent,
Registrar, Transfer Agent or Escrow Bank;
(3 ) To designate a trustee for the Owners of the
Bonds, to transfer custody and control of the Income to such
trustee, and to provide for the rights and obligations of
such trustee;
(4) To add to the covenants and agreements of the
City or the limitations and restrictions on the City set
forth herein;
(5) To pledge additional revenues, properties or
collateral to the payment of the Bonds;
(6) To cause this Ordinance to comply with the
Trust Indenture Act of 1939, as amended from time to time;
or
(7) To effect any such other changes hereto which
do not in the opinion of nationally recognized bond counsel
materially adversely affect the interests of the Owners of
the Bonds.
B. Amendment of Ordinance Requiring Consent of Bond
Owners and Bond Insurer. Exclusive of the amendatory ordinances
covered by Section 11A hereof, this Ordinance may be amended or
modified by ordinances or other instruments duly adopted by the
Council , without receipt by it of any additional consideration,
but with the written consent of the Owners of sixty-six percent
(66%) in aggregate principal amount of the Bonds Outstanding at
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the time of the adoption of such amendatory ordinance and of the
Bond Insurer, provided that no such amendatory ordinance shall
permit:
( 1) Changing Payment. A change in the maturity
or in the terms of redemption of the principal of any
Outstanding Bond or any installment of interest thereon; or
(2 ) Reducing Return. A reduction in the
principal amount of any Bond or the rate of interest thereon
without the consent of the Owner of the Bond; or
(3 ) Prior Lien. The creation of a lien upon or a
pledge of revenues ranking prior to the lien or to the
pledge created by this Ordinance; or
(4) Modifying Amendment Terms. A reduction of
the principal amount or percentages of Bonds, or any
modification otherwise affecting the description of Bonds,
otherwise changing the consent of the Owners of Bonds, which
may be required herein for any amendment hereto; or
(5) Priorities Among Bonds or Parity Securities.
The establishment of priorities as among Bonds issued and
Outstanding under the provisions of this Ordinance or as
among Bonds and other Parity Securities; or
(6) Partial Modification. Any modifications
otherwise materially and prejudicially affecting the rights
or privileges of the Owners of less than all of the Bonds
then Outstanding.
Whenever the Council proposes to amend or modify this
Ordinance under the provisions of this Section 11B it shall give
notice of the proposed amendment by mailing such notice to the
Purchaser or to any successor thereof known to the City Clerk, to
all registered Owners of Bonds at the addresses appearing on the
registration books of the City, and to the Bond Insurer. Such
notice shall briefly set forth the the nature of the proposed
amendment and shall state that a copy of the proposed amendatory
ordinance or other instrument is on file in the office of the
City Clerk for public inspection.
C. Time for and Consent to Amendment. Whenever at
any time within one ( 1) year from the date of the completion of
the notice required to be given by Section 11B hereof there shall
be filed in the office of the City Clerk an instrument or
instruments executed by the Owners of at least sixty-six percent
(66%) in aggregate principal amount of the Bonds then Outstanding
and the Bond Insurer, which instrument or instruments shall refer
to the proposed amendatory ordinance or other instrument
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described in such notice and shall specifically consent to and
approve the adoption of such ordinance or other instrument,
thereupon, but not otherwise, the Council may adopt such
amendatory ordinance or instrument and such ordinance or
instrument shall become effective . If the Owners of at least
sixty-six percent (66%) in aggregate principal amount of the
Bonds then Outstanding, at the time of the adoption of such
amendatory ordinance or instrument, or the predecessors in title
of such Owners, and the Bond Insurer shall have consented to and
approved the adoption thereof as herein provided, no Owner of any
Bond whether or not such Owner shall have consented to or shall
have revoked any consent as herein provided shall have any right
or interest to object to the adoption of such amendatory
ordinance or other instrument or to object to any of the terms or
provisions therein contained or to the operation thereof or to
enjoin or restrain the City from taking any action pursuant to
the provisions thereof. Any consent given by the Owner of a Bond
pursuant to the provisions thereof shall be irrevocable for a
period of six (6) months from the date of the completion of the
notice above provided for and shall be conclusive and binding
upon all future Owners of the same Bond during such period. Such
consent may be revoked at any time after six (6) months from the
completion of such notice, by the Owner who gave such consent or
by a successor in title, by filing notice of such revocation with
the City Clerk, but such revocation shall not be effective if the
Owners of sixty-six percent (66%) in aggregate principal amount
of the Bonds Outstanding as herein provided, prior to the
attempted revocation, shall have consented to and approved the
amendatory instrument referred to in such revocation.
D. Unanimous Consent. Notwithstanding anything in
the foregoing provisions contained, the terms and the provisions
of this Ordinance, or of any ordinance or instrument amendatory
thereof, and the rights and the obligations of the City and of
the Owners of the Bonds may be modified or amended in any respect
(except as would adversely affect the rights of the Owners of any
Parity Securities) upon the adoption by the City and upon the
filing with the City Clerk of an instrument to that effect and
with the consent of the Owners of all the then Outstanding Bonds
and the Bond Insurer, such consent to be given in the manner
provided in Section 11C hereof; and no notice to Owners of Bonds
shall be required as provided in Section 11B hereof, nor shall
the time of consent be limited except as may be provided in such
consent.
E. Exclusion of Bonds. At the time of any consent or
of other action taken hereunder the Registrar shall furnish to
the City Clerk a certificate, upon which the City Clerk may rely,
describing all Bonds to be excluded for the purpose of consent or
of other action or of any calculation of Outstanding Bonds
provided for hereunder, and, with respect to such excluded Bonds,
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the City shall not be entitled or required with respect to such
Bonds to give or obtain any consent or to take any other action
provided for hereunder.
F. Notation on Bonds. Any of the Bonds delivered
after the effective date of any action taken as provided in
Section 11B hereof, or Bonds Outstanding at the effective date of
such action, may bear a notation thereon by endorsement or
otherwise in form approved by the Council as to such action; and
if any such Bonds so executed and delivered after such date does
not bear such notation, then upon demand of the Owner of any Bond
Outstanding at such effective date and upon presentation of his
Bond for such purpose at the principal office of the City,
suitable notation shall be made on such Bond by the City Clerk as
to any such action. If the Council so determines, new Bonds so
modified as in the opinion of the Council to conform to such
action shall be prepared, executed and delivered; and upon demand
of the Owner of any Bond then Outstanding, shall be exchanged
without cost to such Owner for Bonds then Outstanding upon
surrender of such Outstanding Bonds.
G. Proof of Instruments and Bonds. The fact and date
of execution of any instrument under the provisions of this
Section 11, the amount and number of the Bonds owned by any
Person executing such instrument, and the date of his registering
the same may be proved as provided by Section 10E hereof.
Section 12 . Miscellaneous.
A. Character of Agreement. None of the covenants,
agreements, representations, or warranties contained herein or in
the Bonds shall ever impose or shall be construed as imposing any
liability, obligation, or charge against the City (except for the
special funds pledged therefor) or against the general credit of
the City payable out of general funds or out of any funds derived
from general property taxes. Neither shall the covenants,
agreements, representations, or warranties contained herein or in
the Bonds impose or be construed as imposing any liability,
obligation, or charge against the Bond Insurer.
B. No Pledge of Property. The payment of the Bonds
is not secured by an encumbrance, mortgage or other pledge of
property of the City except for the Net Pledged Revenues. No
property of the City, subject to such exception with respect to
the Net Pledged Revenues, pledged for the payment of the Bonds,
shall be liable to be .forfeited or taken in payment of the Bonds .
C. Statute of Limitations. No action or suit based
upon any Bond or other obligation of the City shall be commenced
after it is barred by any statute of limitations pertaining
thereto. Any trust or fiduciary relationship between the City
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and the Owner of any Bond or the obligee regarding any such
obligation shall be conclusively presumed to have been repudiated
on the maturity date or other due date thereof unless the Bond is
presented for payment or demand for payment of such other
obligation is otherwise made before the expiration of the
applicable limitation period. Any moneys from whatever source
derived remaining in any fund or account reserved, pledged or
otherwise held for the payment of any such obligation, action or
suit, the collection of which has been barred, shall revert to
the Sewer Fund, unless the Council shall otherwise provide by
ordinance. Nothing herein prevents the payment of any such Bond
or other obligation after an action or suit for its collection
has been barred if the Council deems it in the best interests of
the City or the public so to do and orders such payment to be
made.
D. Delegated Duties. The officers of the City are
hereby authorized and directed to enter into such agreements and
take all action necessary or appropriate to effectuate the
provisions of this Ordinance and to comply with the requirements
of law, including, without limitation:
( 1) Printing of Bonds. The printing of the
Bonds, including the printing upon each such Bond of a copy
of the approving legal opinion of Ballard, Spahr, Andrews &
Ingersoll, bond counsel , duly certified by the City Clerk,
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 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;
(2 ) Execution Registration and Delivery of
Bonds. The execution and registration of the Bonds and the
delivery of the Bonds to the Purchaser pursuant to the
provisions of this Ordinance ;
(3 ) Information. The assembly and dissemination
of financial and other information concerning the City and
the Bonds;
(4) Official Statement. The preparation of a
final official statement for the use of prospective buyers
of the Bonds, including, without limitation, the Purchaser
and its associates, if any; and
(5) Closing Certificates. The execution of the
Escrow Agreement and such certificates as may be reasonably
required by the Purchaser, relating, inter alia, to:
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( a) The signing of the Bonds;
(b) The tenure and identity of the officials
of the City;
(c) If in accordance with fact, the absence
of litigation, pending or threatened, affecting the
validity of the Bonds;
(d) The exemption of interest on the Bonds
from federal and State income taxation;
(e) The delivery of the Bonds and the
receipt of the Bond purchase price;
(f) The accuracy and adequacy of information
provided in the preliminary official statement and
official statement prepared for prospective buyers of
the Bonds.
E . Successors. Whenever herein the City is named or
is referred to, such provision shall be deemed to include any
successors of the City, whether so expressed or not. All of the
covenants, stipulations, obligations and agreements by or on
behalf of and other provisions for the benefit of the City
contained herein shall bind and inure to the benefit of any
officer, board, district, . commission, authority, agency,
instrumentality or other Person or Persons to whom or to which
there shall be transferred by or in accordance with law any
right, power or duty of the City or of its respective successors,
if any, the possession of which is necessary or appropriate in
order to comply with any such covenants, stipulations,
obligations, agreements or other provisions hereof.
F. Rights and Immunities. Except as herein otherwise
expressly provided, nothing herein expressed or implied is
intended or shall be construed to confer upon or to give to any
Person, other than the City, the Bond Insurer, and the Owners
from time to time of the Bonds, any right, remedy or claim under
or by reason hereof or any covenant, condition or stipulation
hereof. All the covenants, stipulations, promises and agreements
herein contained by and on behalf of the City shall be for the
sole and exclusive benefit of the City, the Bond Insurer, and any
Owner of any of the Bonds .
No recourse shall be had for the payment of the Debt
Service Requirements of the Bonds or for any claim based thereon
or otherwise upon this Ordinance authorizing their issuance or
any other ordinance or instrument pertaining thereto, against any
individual member of the Council, or any officer or other agent
of the City, past, present or future, either directly or
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indirectly through the City, or otherwise, whether by virtue of
any constitution, statute or rule of law or by the enforcement of
any penalty or otherwise, all such liability, if any, being by
the acceptance of the Bonds and as a part of the consideration of
their issuance specially waived and released.
G. Notices. Any notices required or permitted to be
given to the Bond Insurer hereunder shall be addressed as
follows:
Financial Guaranty Insurance Company
175 Water Street
New York, New York 10038
Attention: President
H. Facsimile 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 and
the City Clerk 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.
I . Ordinance Irrepealable. This Ordinance is, and
shall constitute, a legislative measure of the City and after any
of the Bonds are issued, this Ordinance shall constitute an
irrevocable contract between the City and the Owner or Owners of
the Bonds; and this Ordinance, subject to the provisions of
Sections 9 and 11 hereof, if any Bonds are in fact issued, shall
be and shall remain irrepealable until the Bonds, as to all Debt
Service Requirements, shall be fully paid, cancelled and
discharged, as herein provided.
J. Statutory Limitations Met. The Council hereby
determines that the provisions and limitations of the Act and any
other applicable law imposed on the issuance of the Bonds have
been met.
K. Ratification. All action not inconsistent with
the provisions of this Ordinance heretofore taken by the City or
its officers, and otherwise by the City directed toward the
issuance of the Bonds is hereby ratified, approved and confirmed.
L. Repealer. All ordinances, resolutions, bylaws,
orders, and other instruments, or parts thereof, inconsistent
herewith are hereby• repealed to the extent only of such
inconsistency. This repealer shall not be construed to revive
any ordinance, resolution, bylaw, order, or other instrument, or
part thereof, heretofore repealed.
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M. Severability . If any section , subsection ,
paragraph, clause or other provision of this Ordinance shall
for any reason be held to be invalid or unenforceable, the
invalidity or unenforceability thereof shall not affect any of
the remaining sections, subsections, paragraphs, clauses or
provisions of this Ordinance.
Introduced, considered favorably on first reading, and
ordered published this 1st day of July, A.D. 1986, and to be
presented for final passage on the 15th day of July, A. D. 1986.
'&Z-
Mayo
ATTEST:
City Clerk
READ, AMENDED, FINALLY PASSED AS AMENDED ON SECOND
READING, AND ORDERED PUBLISHED ONCE BY NUMBER AND TITLE ONLY
this 15th day of July, A.D. 1986.
yor
ATTEST:
AaM4�& -N �' -�-
City Clerk
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