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HomeMy WebLinkAbout109 - 09/06/1977 - TO CONTRACT AN INDEBTEDNESS ON BEHALF OF THE CITY BY ISSUING GENERAL OBLIGATION BONDS IN THE PRINCIP ORDINANCE NO. 109, 1977 AN ORDINANCE TO CONTRACT AN INDEBTEDNESS ON BEHALF OF THE CITY OF FORT COLLINS, COLORADO, AND UPON THE CREDIT THEREOF BY ISSUING GENERAL OBLIGATION BONDS OF THE CITY IN THE PRINCIPAL AMOUNT OF $ 5, 000 , 000 , FOR THE PURPOSE OF EX- TENDING AND IMPROVING THE MUNICIPAL WATERWORKS SYSTEM OF THE CITY, PRESCRIBING THE FORM OF SAID BONDS , PROVIDING FOR THE LEVY OF TAXES AND THE PLEDGE OF THE NET INCOME AND REVENUE OF THE SYSTEM TO PAY THE BONDS AND THE INTEREST THERE- ON , PROVIDING OTHER DETAILS IN CONNECTION THEREWITH, AND DECLARING AN EMERGENCY WHEREAS , the City of Fort Collins presently owns and operates a municipal waterworks system ( sometimes referred to as the "system" ) for the City and its inhabitants, and WHEREAS , the City Council has determined that it is necessary to extend and improve the system, and WHEREAS , the estimated cost of such improvements is approximately $5, 000, 000, and the City Council has determined that general obligation bonds of the City in the amount not exceeding $5, 000, 000 should be issued for such purpose, and WHEREAS, Section 20 3 of the City Charter provides in part that securities issued for water purposes may be issued by Council action without an election and shall not be included in the determination of the debt limitation, and WHEREAS , the City Council has determined that the proposed issue of general obligation bonds will be for the purpose of improving or extending the municipal waterworks system of the City, and therefore pursuant to the City Charter, no election is required prior to the issuance thereof , and WHEREAS, by a resolution previously passed and adopted by the City Council , notice of sale of bonds has been published in accordance with law, and all bids received prior to 10 00 A.M on Tuesday , September 6 , 1977 , have been opened and tabulated ; and WHEREAS , the City Council has awarded the bonds to First National Bank of Oregon the highest and best bidder for the purchase thereof, and WHEREAS, the City Council has determined at this time to authorize the issuance of bonds in the principal amount of $5 , 000 , 000, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT COLLINS, COLORADO- Section 1 Bond Details . That for the purpose of extending and improving the municipal waterworks system of the City , the City shall issue its general obligation negotiable coupon bonds in the principal amount of $5, 000, 000 , each to be designated "General Obligation Water Bond , Series 1977" , ( referred to herein as the " 1977 Bonds" or the "bonds" ) 14 - (e ) The City shall cause all rates, fees and service charges appertaining to the system to be collected as soon as reasonable, shall prescribe and enforce rules and regulations for the payment thereof and for the connection with and the discon- nection from properties of the system, and shall provide methods of collection and penalties , including but not limited to denial of service for non-payment of such rates , fees and service charges , to the end that net revenues of the system shall be adequate to meet the requirements hereof ( f ) At regular periods each year it will render bills for water services furnished Until paid , all water rates, fees, tolls and charges shall constitute a lien on the property served , and the City shall take whatever action is legally permissible promptly to enforce and collect delinquent water rates , fees , tolls and charges , and to enforce said liens (g ) At least once each year it will furnish Boettcher and Company , Denver, Colorado, and the purchaser of the 1977 Bonds, with a complete statement of the receipts and disbursements of and for the system for the fiscal year immediately preceding such statements ( h ) It will carry workmen ' s compensation, public liability and other forms of insurance on insurable system prop- erty , in such amounts as is customarily carried on prudently operated systems of like character Section 7 Severability That if any one or more sections or parts of this Ordinance shall be adDudged unen- forceable or invalid , such 3udgment shall not affect, impair or invalidate the remaining provisions of this Ordinance , it being the intention that the various provisions -hereof are severable . Section 8 Repealer All ordinances or parts thereof in conflict with this Ordinance are hereby repealed Section 9 Ordinance Irrepealable. After the bonds are issued , this Ordinance shall be and remain Irrepealable until said bonds and the interest thereon shall have been fully paid, sat- isfied and discharged Section 10 Declaration of Emergency That in order to take advantage of the favorable bond market and to complete the issuance and sale of the bonds to the purchaser thereof at the earliest possible date, so that funds will be available for the payment of the costs of the extensions and improvements, it is hereby declared that an emergency exists and that this ordinance is necessary for the preservation of public peace , health , safety and property , shall take effect upon passage, and be published within five ( 5 ) days following the passage hereof . - 23 - Section 11 Publication This Ordinance , after its passage , shall be numbered and recorded , and the adoption and publication shall be authenticated by the signature of the Mayor and the City Clerk, and by the Certificate of Publication Introduced and finally passed and adopted this 6th day of September - A D 1977 ( S E A L ) ATTEST Mayor City C e i - 24 - The City Council has determined that the 1977 Bonds authorized herein, in the principal amount of $5, 000, 000, are not included within the debt limitation of the City, in accordance with Section 20 3 of the City Charter, which exempts from the debt limitation bonds issued for water purposes The 1977 Bonds shall be dated October 1 , 1977 and consist of 1 , 000 bonds in the denomination of $5, 000 each, num- bered 1 to 1 , 000, inclusive The net effective interest rate of this issue of bonds is 4 84 % per annum. Interest shall be payable on April 1 , 1978, and semi-annually thereafter on the 1st day of April and the 1st day of October each year, as evidenced by interest coupons attached to said bonds at the rates set forth below , and the bonds shall mature serially on October 1 , as follows Amount Maturity Interest Rate $ 50 , 000 1979 5 00 7 50, 000 1980 5 00 50 , 000 1981 5 00 50, 000 1982 5 00 9 50 , 000 1983 5 00 % 50, 000 1984 5 00 175, 000 1985 5 00 9 250 , 000 1986 4 50 275 , 000 1987 4 50 300 , 000 1988 4 50 9 $325 , 000 1989 4 60 9 350 , 000 1990 4 75 % 375, 000 1991 4 75 400 , 000 1992 4 75 7 400 , 000 1993 4 90 425, 000 1994 4 90 $450 , 000 1995 5 00 9 475 , 000 1996 5 00 500 , 000 1997 5 00 9 Bonds maturing on or before October 1 , 1988 , shall not be redeemable prior to their respective maturity dates Bonds maturing in the years 1989 and thereafter, shall be re- deemable at the option of the City on October 1 , 1988, and on any interest payment date thereafter, in inverse numerical order, upon payment of par , accrued interest and the following redemption premium 28 of principal , if redeemed from October 1 , 1988 to April 1 , 1990, inclusive, 1% of principal , if redeemed from October 1 , 1990 to April 1 , 1992, inclusive, at par and accrued interest only if redeemed on or after October 1 , 1992 - 15 - Notice of prior redemption shall be given by publication at least one time in a newspaper having general circulation in the City of Fort Collins, not less than thirty (30 ) days prior to the date of redemption, and notice shall also be given by mailing a copy of the notice by registered , first class mail , to the original purchaser of the bonds , at least thirty (30 ) days prior to the date of redemption The bonds and the interest coupons attached thereto shall be payable in lawful money of the United States of America, at the office of the Director of Finance, in Fort Collins, Colo- rado Section 2 Form and Execution of Bonds and Interest Coupons . The bonds shall be signed by the facsimile signature of the Mayor of the City, with the facsimile of the seal of the City appearing thereon, attested by the manual signature of the City Clerk and countersigned with the facsimile signature of the Director of Finance The interest coupons attached to said bonds shall bear the facsimile signature of the Director of Finance, and when issued as aforesaid as part of said bonds , shall be the binding obligations of the City according to their import Should any officer whose manual or facsimile signature appears on said bonds or the interest coupons attached thereto cease to be such officer before delivery of the bonds to the purchaser, such manual or facsimile signature shall nevertheless be valid and sufficient for all purposes The bonds and interest coupons attached thereto shall be in substantially the following form - 16 - (Form of Bond ) UNITED STATES OF AMERICA STATE OF COLORADO COUNTY OF LARIMER CITY OF FORT COLLINS GENERAL OBLIGATION WATER BOND, SERIES 1977 No. $5 , 000 The City of Fort Collins , in the County of Larimer , State of Colorado, acknowledges itself indebted and promises to pay to the bearer hereof the principal sum of FIVE THOUSAND DOLLARS on the 1st day of October, 19_, with interest thereon at the rate of per centum ( 8 ) per annum, payable on April 1, 1978, and semi- annually thereafter on the 1st day of April and the 1st day of October each year, both principal and interest being payable in lawful money of the United States of America, at the office of the Director of Finance, in Fort Collins, Colorado, upon presentation and surrender of said coupons and this Bond as they severally become due Bonds of this issue maturing on or before October 1 , 1988 , are not redeemable prior to their respective maturity dates . Those bonds maturing in the years 1989 and thereafter , shall be redeemable at the option of the City on October 1 , 1988, and on any interest payment date thereafter, in inverse numerical order, upon payment of par, accrued interest and the following redemption premium 28 of principal , if redeemed from October 1 , 1988 to April 1, 1990, inclusive, 1% of principal, if redeemed from October 1, 1990 to April 1, 1992, inclusive, at par and accrued interest only if redeemed on or after October 1 , 1992. Notice of such prior redemption shall be given in the time and manner set forth in the ordinance authorizing the issuance of this Bond This Bond is issued by the City Council of the City of Fort Collins , Colorado , for the purpose of extending and improving the municipal waterworks system of the City, under the authority of and in full conformity with the Constitution and Laws of the State of Colorado, the home rule Charter of the City, and pursuant to an Ordinance duly adopted , published and made a law of the City prior to the issuance of this Bond - 17 - It is hereby certified and recited that all the re- quirements of law have been duly complied with by the proper officers of the City in the issuance of this Bond, that the total debt of the City, including that of this Bond , does not exceed any limit of indebtedness prescribed by the Constitution or Laws of the State of Colorado or the Charter of the City, and that provi- sion has been made for the levy and collection of a direct annual tax (general ad valorem tax) on all the taxable property in the City and a pledge of the net revenue of the municipal waterworks system of the City, sufficient to pay the interest on ana princi- pal of this Bond when the same become due . The full faith and credit of the City of Fort Collins, Colorado, are hereby pledged for the punctual payment of the principal of and interest on this Bond. IN TESTIMONY WHEREOF, the City Council of the City of Fort Collins , Colorado, has caused this Bond to be signed with the facsimile signature of the Mayor of the City , sealed with the facsimile of the seal of the City, attested by the manual sig- nature of the City Clerk and countersigned with the facsimile signature of the Director of Finance, and the interest coupons attached hereto to be signed with the facsimile signature of the Director of Finance, as of the lst day of October, 1977 CITY OF FORT COLLINS, COLORADO ( FACSIMILE S E A L ) By ( Facsimile Signature) Mayor ATTEST (Manual Signature ) City Clerk COUNTERSIGNED ( Facsimile Signature) Director of Finance - 18 - (Form of Interest Coupon) No $ April , On the 1st day of October , 19 unless the Bond to which this coupon is attached, if redeemable, has been called for prior redemption, the City of Fort Collins, in the County of Larimer, State of Colorado, will pay to bearer the amount shown hereon in lawful money of the United States of America, at the office of the Director of Finance , in Fort Collins , Colorado , being interest then due on its General Obligation Water Bond , Series 1977, dated October 1 , 1977, bearing No (Facsimile Signature) Director of Finance - 19 - Section 3 Disposition of Bond Proceeds When the bonds have been duly executed , the Director of Finance is hereby directed to deliver the bonds to the purchaser thereof upon receipt of the agreed purchase price therefor The proceeds of the bonds shall be used only for the purpose of extending and improving the municipal waterworks system of the City, and for paying the costs and expenses incurred incidental to the issuance of said bonds and for no other purpose whatever All or any portion of the bond proceeds may be tem- porarily invested , or reinvested , pending such use , in securities or obligations which are lawful investments for such munic- ipalities in the State of Colorado It is hereby covenanted and agreed by the City that the temporary investment or reinvestment of the bond proceeds , or any portion thereof, shall be of such nature and extent, and for such period, that the bonds of the City shall not be or become "arbitrage bonds" within the meaning of Section 103 ( c) of the Internal Revenue Code, and pertinent reg- ulations, and such proceeds, if so invested or reinvested, shall be subject to the limitations and restrictions of said Section 103 ( c) , as the same now exists or may later be amended, and shall further be subject to any applicable regulations of the Internal Revenue Service Neither the purchaser of the bonds nor the subsequent holder of any of them shall be responsible for the application or disposal by the City, or any of its officers, of any of the funds derived from the sale thereof Section 4 Payment of Principal and Interest If necessary, the amount of interest due on said bonds on April 1, 1978 may be advanced from any available funds of the City, or from the proceeds of the bonds authorized by this .Ordinance For the purpose of reimbursing said funds and paying the interest on said bonds as it shall thereafter become due and providing for the ultimate payment of the bonds, there shall be levied on all the taxable property in the City , in addition to all other taxes , direct annual taxes ( general ad valorem taxes ) in each of the years 1977 to 1996, inclusive, without limitation as to rate or amount, sufficient to make such reimbursement and pay the in- terest on all of the bonds outstanding , and the principal thereof, as the same become due and payable, respectively Said taxes , when collected , shall be applied solely for the purpose of the payment of the interest on and principal of the 1977 Bonds and for no other purpose whatever, until the bonds authorized by this Ordinance, both principal and interest, shall - 20 - have been fully paid, satisfied and discharged Nothing herein contained shall be so construed as to prevent the City from applying any available income or revenues of the municipal water- works system, or any other funds or revenues that may be in the City treasury and available for that purpose, to the payment of said bonds and the interest thereon Upon the application of such funds or revenues as aforesaid , the levy or levies herein provided may thereupon to that extent be diminished The sums herein provided to pay the interest on said bonds and to discharge the principal thereof when due, are hereby appropriated for that purpose , and said amounts for each year shall also be included in the annual budget and the appropriation bills to be adopted and passed by the City Council of the City in each year, respectively. It shall be the duty of the City Council of said City, annually, at the time and in the manner provided by law for levying other City taxes, if such action shall be necessary to effectuate the provisions of this ordinance , to ratify and carry out the provisions hereof with reference to the levying and collection of taxes, and such taxes, when collected , shall be kept for and applied only to the payment of the interest on and prin- cipal of said bonds, as hereinabove specified Section 5 Pledge of the Net Income and Revenue of the Municipal Waterworks System By Ordinance No 64, 1974 , the City Council has authorized the issuance of its General Obligation Water Refunding Bonds , Series 1974, (hereafter referred to as the "1974 Bonds ' ) in the principal amount of $1, 935, 000, dated De- cember 1, 1974 In addition to the provision for a tax levy for the payment of the 1974 Bonds , the ordinance-provides for a pledge of the net revenue of the municipal waterworks system for the payment of the principal of and interest on the 1974 Bonds Similarly, the City hereby irrevocably pledges to pay the princi- pal of and the interest on the 1977 Bonds from the net revenues of the municipal waterworks system The City hereby reserves the right to secure, without restriction, any water bonds and refund- ing water bonds of the City hereafter issued equally and ratably with the 1974 Bonds and the 1977 Bonds The City also hereby commits itself to fix and annually to maintain rates and charges for water and services furnished by the system which , together with moneys on hand and available therefor, will be sufficient to pay operation and maintenance expenses of the system and the principal of and interest on all bonds and other obligations of - 21 - the system, as they respectively become due, and for the other payments required by Art IX , Section 6 of the City Charter The term "net revenues" as used herein refers to the gross revenues of the system after the payment of operation and maintenance expenses The term "operation and maintenance expen- ses as used herein means all current reasonable and necessary expenses of operating, maintaining and repairing the system, but does not include any allowance for depreciation or capital re- placements and improvements The terms "municipal waterworks system" or "system" as used herein shall include not only the property comprising the waterworks system of the City of Fort Collins at the present time, but all additions and betterments thereto and improvements and extensions thereto which may hereafter be constructed or acquired by the City Section 6 . Covenants of the City The City hereby additionally irrevocably covenants and agrees with each and every holder of the 1977 Bonds that so long as any of said bonds remain outstanding ( a) It will continue to operate and manage the system in an efficient and economical manner and keep and maintain separate accounts of the receipts and disbursements thereof in such manner that the revenues thereof may at all times be readily and accurately determined . ( b) It will not sell or alienate any of the property constituting any part or all of the system in any manner or to any extent as might reduce the security provided for the payment of the 1977 Bonds , but the City may sell any portion of such property which shall have been replaced by other similar property of at least equal value , or which shall cease to be necessary for the efficient operation of the system (c) The rates for all services rendered by the system to the City and to its inhabitants and to all consumers within or without the boundaries of the City shall be reasonable and ]ust , taking into account and consideration the cost and value of the system and the proper and necessary allowance for the depreciation thereof and the amounts necessary for the retirement of all bonds and other securities or obligations payable from the revenues of the system, and the accruing interest thereon (d ) There shall be charged against all purchasers of service such rates and amounts as shall be adequate to meet the requirements of this and the preceding sections hereof , and said rates and amounts from the system shall be sufficient to satisfy the requirements of Section 5 hereof 22 - I