Loading...
HomeMy WebLinkAbout133 - 11/05/1985 - AUTHORIZING THE ISSUANCE OF SALES AND USE TAX REVENUE BOND ANTICIPATION NOTES, SERIES DECEMBER 1, 19 ORDINANCE NO. 133 , 1985 AN ORDINANCE AUTHORIZING THE ISSUANCE OF CITY OF FORT COLLINS, COLORADO, SALES AND USE TAX REVENUE BOND ANTICIPATION NOTES, SERIES DECEMBER 1 , 1985, DATED DECEMBER 1, 1985, IN THE AGGREGATE PRINCIPAL AMOUNT OF $9 , 000 , 000, FOR THE PURPOSES OF DEFRAYING, IN WHOLE OR IN PART, THE COST OF ACQUIRING, CONSTRUCTING AND INSTALLING A SWIMMING POOL/ICE RINK FACILITY FOR THE CITY AND PAYING THE PRINCIPAL OF AND INTEREST ON AN INTERFUND LOAN FROM THE WATER FUND OF THE CITY INCURRED FOR SUCH PURPOSE. WHEREAS, the City of Fort Collins, Colorado (the City) , has need for and desires to acquire, construct and install a swimming pool/ice rink facility and to pay the principal of and interest on an interfund loan from the Water Fund of the City incurred for such purpose (the Project) ; and WHEREAS, the City is empowered by the provisions of part 1 of article 14 of title 29 , Colorado Revised Statutes , as amended (the Act) , to issue bond anticipation notes in anticipation of the issuance by the City at a later date of sales and use tax revenue bonds and to make such bond anticipation notes payable from the proceeds of the sale of such sales and use tax revenue bonds or additional bond anticipation notes or other moneys of the City legally available for such purpose, including sales and use taxes imposed by the City; and WHEREAS, the City is empowered by its Charter to issue sales and use tax revenue bonds by action of the Council (the Council) of the City without an election; and WHEREAS, pursuant to Ordinance No . 58, 1967, Ordinance No . 140, 1979, and Ordinance No. 149 , 1981 , the City has heretofore imposed a 2-1/4% tax upon sales and purchases of tangible personal property at retail and storage, use, distribution and consumption of tangible personal property purchased or acquired at retail , within the City (the Base Sales and Use Tax) ; and WHEREAS, pursuant to Ordinance No. 29, 1984 , the City has heretofore imposed an additional 1/4% tax upon sales and purchases of tangible personal property at retail and storage, use, distribution and consumption of tangible personal property purchased or acquired at retail , within the City (the Additional Sales and Use Tax) , and earmarked the proceeds thereof for the acquisition, construction and installation of the Project; and WHEREAS, the City has heretofore issued its Sales and Use Tax Revenue Bonds, dated May 1, 1980 , August 1 , 1981, October 1 , 1982, December 1, 1982, and November 1 , 1984 , and its Sales and Use Tax Revenue Note, Series 1985A, dated September 1, 1985, and -2- may hereafter issue other securities on a parity therewith having a first lien upon the Base Sales and Use Tax revenues (the Prior Bonds) ; and WHEREAS, the City has not heretofore issued any obligations payable from the Additional Sales and Use Tax revenues; and WHEREAS, the Council hereby determines that it is reasonable, necessary and prudent at this time to issue its Sales and Use Tax Revenue Bond Anticipation Notes, Series December 1, 1985, dated December 1, 1985, in the aggregate principal amount of $9 , 000 , 000 (the Notes) , in order to acquire, construct and install the Project and further to provide for the payment of the Notes as hereinafter provided; and WHEREAS, the City has received a proposal for the purchase of the Notes upon terms favorable to the City from United Bank of Fort Collins National Association, Fort Collins , Colorado, and Morgan Guaranty Trust Company of New York, New York, New York (the Purchasers) , and the Council has determined to accept the same; and WHEREAS, there has been filed in the office of the City Clerk a form of Loan Agreement, dated as of December 1, 1985 , between the City and the Purchasers . BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT COLLINS , COLORADO, THAT: 1 . Award of Contract . The contract for the purchase of the Notes is hereby awarded to the Purchasers upon the terms set forth in this Ordinance and the Loan Agreement . 2 . Authorization and Description. To provide funds for the purpose of acquiring, constructing and installing the Project the City shall issue the Notes . The Notes shall be issuable in fully registered form in such form and in such denominations as are provided in the Loan Agreement . The Notes shall mature and all principal shall be payable no later than five (5) years from the date of issue of the Notes as provided in the Loan Agreement . The Council hereby estimates and determines that the time needed to effect the purposes for which the Notes are issued is not less than six (6) years . The Notes shall bear interest on the unpaid principal balance thereof at a rate per annum equal to sixty-eight percent (68%) of the rate of interest publicly announced by Morgan Guaranty Trust Company of New York from time to time as its prime rate on the dates, in the manner, and subject to the terms and conditions provided in the Loan Agreement . -3- 3 . Net Effective Interest Rate . The maximum net effective interest rate for the Notes is 15% per annum. The actual net effective interest rate on the Notes does not exceed said limitation. 4 . Nature of Obligation. The Notes shall be special and limited obligations of the City and shall be payable as to principal and interest solely out of the net proceeds of sales and use tax revenue bonds hereafter to be issued by the City (the Anticipated Bonds) or any bond anticipation notes issued in substitution for the Notes (the Replacement Notes) , when and if issued, sold and delivered, out of the Additional Sales and Use Tax revenues and, subject to prior contractual limitations contained in the ordinances authorizing the issuance of the Prior Bonds, out of the Base Sales and Use Tax revenues , all as provided in the Loan Agreement . The registered owners of the Notes may not look to any general or other fund of the City for payment of the principal of or interest on the Notes , except the special funds created and described in the Loan Agreement . However, the City may at its option deposit other legally available funds or revenues in said special fund and apply the same for the payment of the principal of or interest on the Notes . 5 . Payment of Principal and Interest . The principal of and interest on the Notes shall be payable in lawful money of the United States of America to the registered owners of the Notes by the Finance Director of the City as provided in the Loan Agreement . 6 . Redemption. The Notes shall be subject to prepayment in whole or in part prior to their maturity date without prepayment premium or penalty upon seven (7) days ' notice to the registered owners of the Notes as provided in the Loan Agreement . 7. Execution. The Notes shall be signed by and on behalf of the City with the manual signature of the Mayor, shall bear the seal of the City, shall be signed and attested with the manual signature of the City Clerk, and shall be countersigned with the manual signature of the Finance Director . Should any officer whose manual signature appears on the Notes cease to be such officer before issuance of any Note, such manual signature shall nevertheless be valid and sufficient for all purposes . 8. Registration, Transfer , and Exchange. Upon their execution and prior to their delivery the Notes shall be registered for the purpose of payment of principal and interest in the office of the City Clerk. Thereafter , the Notes shall be transferable only upon the registration books of the City by the City Clerk as provided in the Loan Agreement . -4- 9 . Delivery. The Notes, when executed and registered as provided herein and in the Loan Agreement, shall be delivered by the City to the Purchasers , and the proceeds of the Notes shall be drawn down as provided in the Loan Agreement not later than Dgcember 31, 1985, in accordance with the Loan Agreement . 10 , Application of Proceeds . The sum of $9 ,000 ,000, constituting all of the proceeds of the Notes, is hereby appropriated and shall be used for the purposes stated herein or such other purposes as may be approved by the Council and for no other purposes, provided, however , that any portion of the proceeds may be temporarily invested pending such use, with such temporary investment to be made consistent with the covenant hereinafter made concerning arbitrage bonds . The Purchasers shall not be in any way responsible for the application of the proceeds of the Notes by the City or any of its officers . 11 . Pledge and Lien. The net proceeds of the Anticipated Bonds or the Replacement Notes, when and if issued, sold and delivered, the revenues derived from the Additional Sales and Use Tax and, subject to prior contractual limitations contained in the ordinances authorizing the issuance of the Prior Bonds , the revenues derived from the Base Sales and Use Tax, together with all securities in which the same may be invested from time to time, are hereby irrevocably pledged to secure the payment of the principal of and interest on the Notes, all as provided in the Loan Agreement . This pledge shall be valid and binding from and after the date of the first draw under the Notes, and such proceeds and revenues, 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 priority of the lien of this pledge shall be as described in the Loan Agreement. 12 . Anticipated Bonds and Replacement Notes . The City shall in good faith make every reasonable effort to issue and sell a sufficient amount of Anticipated Bonds or Replacement Notes at one time or from time to time so that on or before the maturity date of the Notes there will be sufficient net proceeds from such bond or note sales to pay in full the principal of the Notes . 13 . Arbitrage. The City shall make no investment or other use of the proceeds of the Notes at any time during the term thereof which, if such investment or other use had been reasonably expected on the date the Notes are issued, would have caused the Notes to be arbitrage bonds within the meaning of Section 103(c) of the Internal Revenue Code of 1954 , as amended, and the regulations promulgated thereunder . 14 . Defeasance. When all of the principal of and interest on the Notes have been duly paid, all obligations hereunder shall thereby be discharged and the Notes shall no longer be -5- deemed to be outstanding. There shall be deemed to be such due payment when the City has placed in escrow or in trust with a trust bank located within or without the State of Colorado bills , certificates of indebtedness, notes, bonds, or other similar securities which are direct obligations of, or the principal and interest of which obligations are unconditionally guaranteed by, the United States of America (Federal Securities) in an amount sufficient (including the known minimum yield available for such purpose from Federal Securities in which such amount may wholly or in part be initially invested) to pay all principal and interest due on the Notes at maturity. The Federal Securities shall become due prior to the respective times at which the proceeds thereof shall be needed, in accordance with a schedule established and agreed upon between the City and such bank at the time of the creation of the escrow or trust, or the Federal Securities shall be subject to redemption at the option of the owner thereof to assure such availability as so needed to meet such schedule . 15 . Rights and immunities . Except as herein otherwise expressly provided, nothing herein expressed or implied is intended or shall be construed to confer upon or to give to any person, other than the City and the registered owners from time to time of the Notes, any right, remedy, or claim under or by reason hereof or any covenant, condition, or stipulation hereof . All the covenants, stipulations, promises, and agreements herein contained by and on behalf of the City shall be for the sole and exclusive benefit of the City and the registered owners of the Notes . No recourse shall be had for the payment of the principal of and interest on the Notes or for any claim based thereon or otherwise upon this Ordinance, or any other instrument pertaining hereto, against any individual member of the Council or any officer or other agent of the City, past , present, or future, either directly or indirectly through the City, or otherwise, whether by virtue of any constitution, charter, statute, or rule of law, or by the enforcement of any penalty or otherwise, all such liability, if any, being by the acceptance of the Notes and as a part of the consideration of their issuance specially waived and released. 16 . Authorized Acts . The officers of the City are hereby authorized and directed to enter into such agreements and take all action necessary or appropriate to effectuate the provisions of this Ordinance and to comply with the requirements of law, including, without limiting the generality of the foregoing: a. The execution of the Loan Agreement in the form filed with the City Clerk and hereby approved with such changes thereto not inconsistent with the provisions of this Ordinance as may be approved by the Finance Director of the City; and -6- • b. The execution of such certificates as may be reasonably required by the Purchasers relating to the signing of the Notes; the tenure and identity of the City officials; the outstanding sales and use tax revenue bonds or bond anticipation notes of the City; if in accordance with the facts, the absence of litigation, pending or threatened, affecting the validity of the Notes or the Anticipated Bonds; the exemption from federal income taxation of the interest on the Notes; and receipt of the Notes and the purchase price thereof; and C . The payment of the interest on the Notes as the same shall become due and the principal of the Notes at maturity or upon exercise of any prepayment option without further warrant or order . 17 . Ratification of Actions . All actions heretofore taken by the City and by the officers thereof not inconsistent herewith directed toward the authorization, issuance, and sale of the Notes are hereby ratified, approved, and confirmed. 18 . Repealer of Measures . All ordinances, resolutions , acts, orders, or parts thereof of the City in conflict with this Ordinance are hereby repealed, except that this repealer shall not be construed so as to revive any ordinance, resolution, act , order, or part thereof heretofore repealed. 19 . Ordinance Irrepealable. This Ordinance is, and shall constitute, a legislative measure of the City, and after the Notes are issued, sold, and outstanding, this Ordinance shall constitute a contract between the City and the registered owners of the Notes and shall be and remain irrepealable until the Notes, both principal and interest, shall have been fully paid, satisfied, and discharged. 20 , Inconsistent Provisions of Act Superseded. Any inconsistency between the provisions of this Ordinance and the Loan Agreement and those of the Act is intended by the Council . To the extent of any such inconsistency the provisions of this Ordinance and the Loan Agreement shall be deemed made pursuant to the Charter of the City and shall supersede to the extent permitted by law the conflicting provisions of the Act . 21 . Severability. If any paragraph, clause, or provision of this Ordinance is judicially adjudged invalid or unenforceable, such judgment shall not affect, impair, or invalidate the remaining paragraphs , clauses, or provisions hereof, the intention being that the various paragraphs, clauses, or provisions hereof are severable. -7- INTRODUCED, READ, APPROVED ON FIRST READING, AND ORDERED PUBLISHED BY NUMBER AND TITLE ONLY this 15th day of October, 1985 . CITY OF FORT COLLINS, COLQRADO By: lukt t (CITY) 'Mayor (SEAL) ATTES City Clerk -8- READ, FINALLY PASSED ON SECOND READING, AND ORDERED PUBLISHED BY NUMBER AND TITLE ONLY this 5th day of November, 1985 . CITY OF FORT COLLINS, COLORADO (CITY) By: AuAWA s li (SEAL) ATTEST: City Clerk -9-