Loading...
HomeMy WebLinkAbout004 - 01/21/1986 - PROVIDING FOR THE ISSUANCE OF SPECIAL ASSESSMENT BONDS FOR THE CITY'S HEART SPECIAL IMPROVEMENT DIST ORDINANCE NO. 4, 1986 AN ORDINANCE CONCERNING THE CITY OF FORT COLLINS, COLORADO, HEART SPECIAL IMPROVEMENT DISTRICT NO. 84; RATIFYING ACTION HERETOFORE TAKEN IN CONNECTION THEREWITH; PROVIDING FOR THE COLLECTION OF SPECIAL ASSESSMENTS TO BE LEVIED TO DEFRAY THE COSTS OF IMPROVEMENTS THEREIN; PROVIDING FOR THE ISSUANCE OF SPECIAL ASSESSMENT BONDS PAYABLE FROM THE ASSESSMENTS TO BE LEVIED IN SAID DISTRICT; PRESCRIBING DETAILS IN CONNECTION WITH SAID ASSESSMENTS, BONDS AND DISTRICT, INCLUDING THE MANNER OF ADDITIONALLY SECURING AND EFFECTING THE PAYMENT OF SAID BONDS; PRESCRIBING DUTIES OF CERTAIN PUBLIC OFFICIALS IN CONNECTION WITH SAID ASSESSMENTS, BONDS AND DISTRICT; REPEALING . ALL ORDINANCES AND OTHER ACTION OF THE CITY TO THE EXTENT INCONSISTENT HEREWITH; AND PROVIDING OTHER MATTERS RELATING THERETO. . WHEREAS, the City of Fort Collins ( the "City" ) , in the County of Larimer and State of Colorado ( the "State" ) , is a political subdivision of the State, a body corporate and politic, and a municipal corporation duly organized and existing as a home-rule city under Article XX of the State Constitution and the Charter of the City ( the "Charter" ) ; and WHEREAS, the City Council ( the "Council" ) of the City, pursuant to the Charter and Chapter 16 of the Code of the City of Fort Collins ( the "Code" ) relating to local public improvements and the financing thereof, has established by Ordinance No. 129 , 1984 passed on first reading on September 4, 1984 and on second reading on October 30 , 1984 ( the "Ordinance Creating the District" ) , within the corporate limits of the City, a local improvement district known and designated as the City of Fort Collins, Colorado, Heart Special Improvement District No. 84 (the "District" ) , for the purpose of making certain local street , water , sanitary sewer, storm drainage and irrigation ditch improvements and assessing the cost thereof to the property benefited thereby; and WHEREAS, pursuant to the Code and the Ordinance Creating the District, the City Manager has entered into an agreement with all the property owners in the District ( the "Owners" ) setting forth the respective rights and responsibilities of the parties in the formation of the District and construction, installation and acquisition of the improvements in the District; and WHEREAS, pursuant to the Code and the Ordinance Creating the District, upon completion and acceptance of the improvements in the District and determination of the final cost thereof, the Director of Finance will prepare an assessment roll for the District and after a notice thereof and a hearing thereupon, assessments shall be levied by ordinance; and WHEREAS, the City and the officers thereof desire to sell the special assessment bonds of the District in the principal amount of $1 , 300 , 000 ( the "Bonds" ) ; and WHEREAS, the City has received a commitment from the First Interstate Bank of Fort Collins, N.A. , Fort Collins, Colorado ( the "initial purchaser" ) , to purchase such Bonds for 980 of the principal amount thereof, plus accrued interest to the date of delivery; and WHEREAS, the City and its officers have determined, and do hereby determine, with the approval of the Council , that it is necessary and for the best interests of the City and the District and the inhabitants thereof that, pursuant to the Charter and the Code, the City issue and sell the Bonds of "City of Fort Collins, Colorado, Heart Special Improvement District No. 84 , Series 1986" in the aggregate principal amount of $1, 300, 000 to the initial purchaser for 980 of the principal amount thereof plus accrued interest , for the purposes of paying the cost of said local improvements , including all proper incidental expenses ; and -2- WHEREAS, the Council has further determined, and does hereby declare, that the payment of the interest on and the principal of said Bonds shall be additionally secured as provided by this ordinance pursuant to Article V. Section 20 . 6 of the Charter ; and WHEREAS, all such Bonds are herein authorized to be, and they shall be, issued upon approval by the Council; and WHEREAS, due to the foregoing provisions and for other good and sufficient reasons , the Council has determined, and does hereby declare, that it is necessary and for the best interests of the City and the District and the inhabitants thereof that this ordinance be adopted and, pursuant to Article II , Section 7 of the Charter , the Council hereby deems it appropriate that said ordinance be published by title. NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT COLLINS: Section 1 . All action ( not inconsistent with the provisions of this ordinance) heretofore taken by the City, the Council and the officers of the City, directed toward the creation of the District , the acquisition, construction and installation of the public improvements therein, the sale and issuance of its public local improvement special assessment Bonds and the levy of assessments for that purpose, be, and the same hereby is, ratified, approved and confirmed. Section 2 . The City be, and it hereby is , authorized, empowered and directed, and it shall be its duty, to receive, collect and enforce the payment of all assessments to be made and levied for said local improvements, and all installments thereof, all interest thereon, and all penalties accrued, in the same manner and at the same time or times as pres<;ribed by the Code, by the Ordinance Creating the District and by this ordinance, and to pay and disburse said payments , the installments thereof, the interest thereon, and penalties thereto, to any person or persons -3- i . i lawfully entitled thereto, subject however to the appointment of any successor paying agent to disburse said payments as herein provided. Section 3 . Subject to Section 16-25 of the Code concerning the certification and delivery of the assessment roll to the County Treasurer of Larimer County for collection of assessments to be paid in installments, the Director of Finance . be, and he hereby is, authorized, empowered and directed, . and it shall be his duty, to receive and collect , at the time and in the manner specified in the Code, the Ordinance Creating the District and this ordinance , all assessments, the installments thereof , the interest thereon, and the penalties accrued, to be levied to defray all of the total cost of the designated local improvements in the District and to pay and disburse such payments to the person or persons lawfully entitled to receive the same ( subject to Section 6 hereof) , in accordance with the laws of the State, with the Charter , and with all the ordinances and resolutions of said City heretofore or to be hereafter adopted, including but not limited to the Code, the Ordinance Creating the District , and this ordinance. All moneys received from such assessments , except as provided in Section 5 hereof , shall be placed in a separate fund to be designated "City of Fort Collins , Colorado, Heart Special Improvement District No. 84 , Special Assessment Bonds , Series 1986 , Interest and Bond Retirement Fund" ( the "Bond Fund" ) , and said moneys shall be used for the purpose of paying the principal of and interest on the Bonds and for no other purpose whatsoever , and as security for such payment said fund is ;:ereby exclusively pledged. Section 4 . The Director of Finance shall be, and he also hereby is , authorized, empowered an directed, and it shall be his duty, to receive surplus local improvement district moneys pursuant to Article V. Section 20 . 6 (b) of the Charter , and to place all said moneys in a surplus and deficiency fund heretofore or hereafter established pursuant thereto ( the "Surplus Fund and Deficiency Fund" ) and to disburse therefrom said moneys for the -4- payment of the principal of and interest on the City ' s local improvement or special assessment bonds, including the Bonds herein authorized, to the extent necessary. The Bonds herein authorized, together with bonds of other special or local improvement districts within the City, are and shall continue to be additionally secured and their payment shall be supplemented by the Surplus and Deficiency Fund, which consists of moneys remaining to the credit of special or local improvement districts the bonds of which have been paid in full, both principal and interest; and whenever there is as deficiency in the Bond Fund to meet the payment of outstanding Bonds herein authorized and interest due thereon, as the same become due, the deficiency shall be paid out of the Surplus and Deficiency Fund. Section 5 . Whenever three-fourths ( 3/4 ) of the Bonds authorized herein to be issued for the District have been paid and cancelled and for any reason the remaining assessments are not paid in time to redeem the remaining Bonds of the District , and there is not sufficient money in the Surplus and Deficiency Fund, the Director of Finance shall be, and he hereby is , authorized, empowered and directed and it shall be his duty, to pay on the City ' s behalf the remaining Bonds and the interest thereon when due. The City shall levy additional ad valorem taxes necessary therefor and reimburse itself by collecting the unpaid assessments due the District . Section 6 . For the purpose of defraying the entire cost and expense of making said improvements, including all such proper incidental expenses, there shall be issued in the name of the City, fully registered (i .e. , registered as to both principal and interest, in compliance with § 103 ( j ) of the Internal Revenue Code of 1954, as amended, and the regulations of the Secretary of the Treasury thereunder ) , spe--ial assessment bonds designated "City of Fort Collins , Colorado, Heart Special Improvement District No. 84, Special Assessment Bonds, Series 1986" in the aggregate principal amount of $1,,300 ,000, consisting of ten Bonds, in the denomination of $130 , 000 each, dated as of the -5- first day of February, 1986, being payable to the registered owner thereof on the first day of February, 1996, and bearing interest from date until maturity, payable semiannually on the first day of February and August in each year, commencing on the first day of August, 1986, and the Bonds being in the principal amounts and bearing interest at the rates hereinbelow designated as follows: Interest Rates Principal Amounts (Per Annum) $130,000 7 . 25% $130 , 000 7 .75 $130 ,000 8. 05 $130 , 000 8 . 35 $130 , 000 8. 60 $130 ,000 8 .80 $130 ,000 9 . 00 $130 , 000 9 . 20 $130 ,000 9 . 35 $130 , 000 9 . 50 both principal and interest being payable in lawful money of the United States of America. The principal of any Bond shall be payable to the registered owner as shown on the registration books kept by the City Clerk of the City of Fort Collins in Fort Collins, Colorado, as registrar or her successor ( the "Registrar" ) , upon maturity or prior redemption thereof and upon presentation and surrender at the office of the Director of Finance of the City of Fort Collins in Fort Collins , Colorado, as paying agent or his successor ( the "Paying Agent" ) . Payment of interest on any Bond shall be paid by check or draft mailed by the Paying Agent , on or before each interest payment date (or , if such interest payment date is not a business day, on or before the next succeeding business day) , to the person in whose name -6- . t the Bonds are registered at the close of business fifteen days prior to each regularly scheduled interest payment date ( the "Record Date" ) at his address as it last appears on the registration books kept by the Registrar ; but any interest not so timely paid or duly provided for shall cease to be payable to the person who is the registered owner at the close of business on the Record Date and shall be payable to the person who is the registered owner thereof at the close of business on a special record date ( the "Special Record Date" ) for the payment of such defaulted interest . Such Special Record Date shall be fixed by the Paying Agent whenever moneys become available for payment of the defaulted interest and notice of the Special Record Date shall be given to the registered owners of the Bonds not less than ten days prior thereto by first-class mail to each such registered owner as shown on the Registrar ' s registration books on a date selected by the Registrar , stating the date of the Special Record Date and the date fixed for the payment of such defaulted interest. If, upon • presentation of any Bond at maturity, payment is not made as therein provided, interest thereon shall continue at the same rate per annum until the principal thereof is paid in full . If the Registrar or Paying Agent initially appointed hereunder shall resign, or if the City shall reasonably determine that said Registrar or Paying. 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 address last shown on the registration books, appoint a successor Registrar or Paying Agent, or both. Every such successor Registrar or Paying Agent shall be a bank or trust company located in and in good standing in the State of Colorado and having a capital and surplus of not less than $5 , 000 , 000 . It shall not be required that the same institution serve as both Registrar and Paying Agent hereunder , but the City shall have the right to have the same institution serve as both Registrar and Paying Agent hereunder . -7= The proceeds of the Bonds, other than amounts to be used to pay interest on the Bonds through January 31, 1987 and amounts received as accrued interest on the Bonds, which shall be deposited in the Bond Fund, shall be deposited in the account to be established for the District in the City' s Capital Projects Fund ( the "Capital Projects Fund" ) , and shall be used to pay the cost , and expense of making said improvements in the District, including all such proper incidental costs . Section 7 . All of the Bonds shall be subject to prepayment prior to maturity in ascending interest rate order , and at any time, subject to the provisions of the following sentence, from available funds in the Bond Fund at the option of the City, at a price equal to the principal amount thereof with accrued interest to the redemption date. Within thirteen months of receipt of moneys initially deposited in the Bond Fund (other than from Bond proceeds) it shall be the duty of the Director of Finance to call in, and the duty of the Paying Agent to pay, a suitable number of any Bonds outstanding, provided that the Bond Fund (except 'for amounts initially deposited therein from Bond proceeds) shall be depleted at least once a year except for a reasonable carryover amount not to exceed the greater of one year ' s earnings on the Bond Fund or one-twelfth of annual debt service on the Bonds. Notice of prior redemption shall be given by the Director of Finance in the name of the City by mailing copy of such notice by registered mail at least forty-five days and not more than sixty days prior to the designated redemption date to the initial purchaser and to each registered owner of any Bonds designated for redemption, at their addresses as the same shall last appear upon the registration books kept by the registrar . Such notice shall specify the number or numbers of the Bonds to be so redeemed and the date fixed for redemption, and shall further state that on such date there will become and be due and payable upon each Bond so called at the Paying Agent the principal amount thereof with accrued interest to the redemption date, and that from and after such date interest shall -8- cease. Notice having been given in the manner hereinabove provided, the Bond or Bonds so called shall become due and payable on the date so designated, and upon presentation thereof at the Paying Agent, the City will pay the Bond or Bonds so called. If less than all of a Bond is prepaid, the prepayments shall be noted on the prepayment panel as provided in Section 13 . Section 8. The Bonds herein authorized to be issued may be refunded in accordance with and under the conditions imposed by the laws of the State and the City in force at the effective date of this ordinance and not otherwise. Section 9 . The person in whose name a Bond shall be registered on the registration books kept by the Registrar shall be deemed and regarded as the absolute owner thereof for all purposes and payment of principal of and interest on any Bond shall be made only to or upon the written order of the registered owner thereof or his legal representative. A Bond shall be fully transferable by the registered owner thereof in person or by his duly authorized attorney on the registration books kept at the office of the Registrar upon presentation o•f the• Bond together with a duly executed written instrument of transfer satisfactory to the Registrar . Such transfer shall be noted on such registration books and on the Bond. Such transfer shall be without charge to the owner of the Bond, except that the Registrar may require the payment by the owner of the Bond of any tax or other governmental charge required to be paid with respect to such transfer . The Registrar shall not be required to transfer any Bond during the period of fifteen days next preceding any interest payment date, nor to transfer any Bond after the publication of mailing of notice calling such Bond for redemption as herein provided, nor during the period of fifteen Jays next preceding such publication or mailing of notice of redemption, except the unredeemed portion of Bonds being redeemed in part . -9- 1 Section 10 . The Bonds shall be executed in the name of the City, shall be signed by the manual or facsimile signature of the Mayor, shall be countersigned by the manual or facsimile signature of the Director of Finance, shall bear the seal of the City or a facsimile thereof and shall be attested and subscribed by the manual or facsimile signature of the City Clerk . The Mayor , Director of Finance and City Clerk, by the execution of a signature certificate relating to the Bonds, shall adopt as and for their respective signatures the facsimiles thereof appearing on the Bonds ' and shall thereby execute them. The Bonds bearing the facsimile signatures of the officers in office at the time of the authorization thereof shall be the valid and binding obligations of the City, notwithstanding that before the delivery thereof and payment therefor any or all of the persons whose facsimile signatures appear thereon shall have ceased to fill their respective offices . The Mayor, Director of Finance and City Clerk, at the time of the execution of a signature certificate relating to the Bonds by each of said officers , may each adopt as and for his or her own facsimile signature the facsimile signature of his or her predecessor in office in the event that such facsimile signature appears on any of the Bonds . The City Clerk shall preserve a record of the Bonds in a suitable book provided and kept for that purpose in her office. No Bond shall be valid or obligatory for any purposes unless the Registrar has duly executed the provision of registration thereon. The provision for registration shall be deemed to have been duly executed by the Registrar if manually signed by the Registrar or , in the case of any successor registrar , an authorized officer of the successor registrar , but it shall not be necessary that the same officer sign the provision for registration on all of the Bonds issued hereunder nor upon all transfers of any one Bond. In the event that the spaces in the provision for registration are insufficient to reflect all transfers of a Bond, the Registrar may, upon -10- • 1 surrender of such Bond, replace the same with a new registered Bond bearing the same number . The Registrar shall cancel the Bond surrendered but shall preserve a record thereof . If any Bond shall be lost, stolen, destroyed or mutilated, the Registrar shall, in accordance with Ordinance No. 80-1984, and upon receipt of ( i ) such evidence or information relating thereto, ( ii ) a surety bond in the total amount of principal and interest and ( iii ) such reimbursement for expenses as the Registrar may reasonably require, register and deliver to the registered owner thereof a replacement for such Bond . bearing the same number as the Bond so replaced. If such lost, stolen, destroyed or mutilated Bond shall have matured, the registrar may direct the Paying Agent to pay such Bond in lieu of replacement . Section 11 . Except as herein stated, the Bonds authorized by this ordinance and the interest thereon shall be payable solely from the Bond Fund, consisting only of moneys collected (principal, interest and penalties, if any) from the assessments to be levied to pay for the improvements;_ provided that any proceeds from the sale of the Bonds remaining in the account for the District in the City ' s Capital Projects Fund after the payment or reimbursement to the City of all the costs and expenses of making the improvements shall be deposited in the Bond Fund and used for Bond redemption. Any assessments in the Bond Fund remaining after the Bonds, both principal and interest , are paid in full, shall be deposited in the Surplus and Deficiency Fund referred to in Section 4 hereof . Immediately upon the collection of any assessments, the moneys therefrom shall be deposited in the Bond Fund; and the Bond Fund is and will continue to be irrevocably and exclusively pledged for the payment of the principal of and the interest on the Bonds. The City, as well as redeeming the Bonds with any such surplus Bond proceeds and with assessments collected during the thirty days after the publication of the assessment ordinance following its final passage, shall redeem the Bonds as herein provided from the remaining assessments payable in ten substantially equal annual -11- 1 installments of principal, and from annual payments of interest thereon, to the extent moneys are available therefor in the Bond Fund as herein provided. The City hereby covenants for the benefit of each owner of the Bonds that the total cost of the improvements in the District shall be apportioned, levied and assessed against assessable tracts and parcels of land in the District, in accordance with the Charter and the Code, by ordinance to be hereafter adopted upon completion of the improvements in the District . Section 12 . The. Bonds issued pursuant to this ordinance shall not be a debt of the City, and the City shall not be liable thereon, nor shall it thereby pledge its full faith and credit for their payment, nor shall the Bonds be payable out of any funds other than the special assessments, and other moneys pledged to the payment thereof, as herein authorized. Each Bond issued under this ordinance shall recite in substance that said Bond and the interest thereon are payable solely form the special assessments and other moneys pledged to the payment thereof. The payment )of Bonds is not secured by an encumbrance, mortgage or other pledge of property of the City except for such special assessments and other moneys pledged for the payment of Bonds . No property of the City, subject to said exceptions , shall be liable to be forfeited or taken in payments of the Bonds . Section 13 . The Bonds shall be in substantially the following form, with such omissions, insertions, endorsements and variations as to any recitals of fact or other provisions as may may be required by the circumstances, be required or permitted by this ordinance, or be consistent with this ordinance and necessary or appropriate to conform to the rules and requirements of any governmental authority or any usage or requirement of law with respect thereto. -12- I (Form of Bond) UNITED STATES OF AMERICA STATE OF COLORADO COUNTY OF LARIMER CITY OF FORT COLLINS, COLORADO HEART SPECIAL IMPROVEMENT DISTRICT NO. 84 SPECIAL ASSESSMENT BOND SERIES 1986 No. R- $130 , 000 Interest Rate Maturity Date Dated As Of February 1, 19_ February 1, 1986 The City of Fort Collins ( the "City" ) , in the County of Larimer and State of Colorado, a municipal corporation duly organized and existing, for value received, hereby promises, out of special funds available for the purpose, as hereinbelow set forth, to pay to the registered owner hereof, as hereinbelow provided, the principal sum of ONE HUNDRED AND THIRTY THOUSAND DOLLARS on the first day of February 1996 , with interest hereon at the interest rate per annum specified above, such interest being payable commencing on the first day of August 1986 , and semiannually thereafter on the first day of August and February in 'each year . Both principal and interest are payable in lawful money of the United States of America. The principal of this bond shall be payable to the registered owner hereof as shown on the registration books kept for that purpose at the office of the City Clerk of the City, in Fort Collins, Colorado, as registrar , or her successor ( the "registrar" ) , upon- maturity a,:d presentation and surrender of this bond at the office of the Director of Finance of the City, in Fort Collins, Colorado, as paying agent , or his successor ( thee "paying agent" ) under the ordinance of the City ( the "Bond Ordinance" ) authorizing this -13- i Bond and the series of which it is one. The interest hereon shall be paid to the registered owner hereof by check or draft mailed by the paying agent, on or before each interest payment date (or , if such interest payment date is not a business day, on or before the next succeeding business day) , to such registered owner at his address as it last appears on the registration books kept for that purpose by the registrar at the close of business on the fifteenth day of the calendar month next preceding such interest payment date, but any interest payments in default shall be payable as provided in the Bond Ordinance. If, upon presentation at maturity, payment of this bond is not made as herein provided, interest hereon shall continue at the same rate per annum until the principal hereof is paid in full . This bond is one of a series subject to prepayment in ascending interest rate order, by the City, at its option at any . time, at a price equal to the principal amount thereof with accrued interest to the redemption date. Redemption shall be made upon giving prior notice by mailing a copy of such notice to the registered owner of each bond to be redeemed at the address shown on the registration books not less than forty-five days nor more than sixty days prior to the redemption date in the manner and upon the conditions provided in the Bond Ordinance . If a portion of the principal of this bond is called for prepayment, no payment of the principal of, interest on or prior redemption premium due in connection with this bond due on and after the prepayment date shall be made unless this bond is presented to the Paying Agent and notation of the installments of principal so called for prepayment is made on the reverse side hereof. This bond is one of a series of negotiable, special assessment bonds issued by the City of Fort Collins and payable in ascending interest rate order and by lot in denominations of $5, 000 within any interest rate, and which are in the aggregate principal amount of $1, 300 ,000 . Said bond series is issued in payment for local improvements made and to be- made in the -14- CITY OF FORT COLLINS, COLORADO HEART SPECIAL IMPROVEMENT DISTRICT NO. 84 ( the "District" ) pursuant to and in accordance with the Charter of the City, with Chapter 16 of the Code of the City, and in accordance with the ordinance creating the District and all laws and proceedings thereunto enabling. Pursuant to the Bond Ordinance, reference to which is made for further details, the principal of and the interest on the bonds of the series of which this is one, except as hereinbelow stated, shall be payable solely from a special fund designated "City of Fort Collins , Colorado, Heart Special Improvement District No. 84, Special Assessment Bonds, Series 1986 , Interest and Bond Retirement Fund" ( the "Bond Fund" ) consisting only of moneys collected by the City from the special assessments (principal, interest. and penalties, if any) to be levied against all the assessable tracts and parcels of land in the District ; provided that any proceeds from the sale of the bonds remaining after the payment of all the costs and expenses of making the local improvements shall be deposited in the Bond Fund and shall be used for bond redemption. The Bond Fund is irrevocably and exclusively pledged for the full and prompt payment of all the bonds to the extent moneys therein are available therefor , as provided in the Bond Ordinance. The bonds, together with similar securities of other special or local improvement districts in the City, shall be additionally secured and their payment shall be supplemented by moneys , if any, in the City ' s Local Improvement District Surplus and Deficiency Fund ( the "Surplus and Deficiency Fund" ) . Whenever there is a deficiency in the Bond Fund to meet the payment of outstanding bonds , principal and interest , as the same become due, the deficiency shall be made up fron_ the• Surplus and Deficiency Fund. Whenever three-fourths of the bonds of the series of which this is one have been paid and cancelled- and for any reason the remaining assessments therefor are not paid in time to redeem -15- • 1 \the remaining bonds of the district and interest due thereon, and there is not sufficient money therefor in the Surplus and Deficiency Fund, then the City shall pay such remaining bonds when due and interest due thereon, levy additional ad valorem taxes necessary therefor and reimburse itself by collecting the unpaid assessments due the District. The assessments to be levied in the District shall constitute a lien in the several amounts to be assessed against each assessable tract or parcel of land assessed from the date of the final publication of the assessment ordinance. The lien for such assessments shall be prior and superior to all other liens , claims, encumbrances and titles, whether prior in time or not and shall constitute such a lien until paid provided, however : (a) Any assessment lien is coequal with the lien for general (ad valorem) taxes but is subject to extinguishment (unless redeemed) by the sale of any property on account of the nonpayment of general taxes ; (b) Any assessment lien on any tract or parcel of land is prior and superior to any assessment lien thereon subsequently levied; and (c) Any assessment lien is possibly coequal with same liens imposed by the State of Colorado or any subdivision thereof and may be subordinate to certain liens and claims in favor of the United States of America or any agency or instrumentality thereof . It is hereby certified, recited and declared that the bonds are issued by approval of the City Council ; and that the principal amount of the bonds does not exceed the amount authorized by law to be issued. I -16- It is hereby also certified, recited and declared that the proceedings taken to date with reference to issuing the bonds and making such public local improvements have been regularly had and taken in compliance with law; that all prerequisites to issuing the bonds have been performed; and that all acts, conditions and things essential to the validity of this bond exist, have happened and have been done in due time, form and manner as required by law. This bond is transferable (subject to certain terms and conditions set forth in the Bond Ordinance) by the registered owned hereof in person or by his duly authorized attorney on the registration books kept at the office of the registrar upon presentation of this bond together with a duly executed written instrument of transfer satisfactory to the registrar . Such transfer shall be noted on such registration books and on the bond. . The City, the registrar and the paying agent may deem and treat the person in whose name this bond is registered as the absolute owner hereof, whether or not this bond shall be overdue, for the purpose of receiving payment•and for all other purposes . This bond shall not be valid or obligatory for any purpose until the registrar shall have manually signed the provision for registration herein. IN TESTIMONY WHEREOF, the City Council of the City of Fort Collins has caused this bond to be executed in the name of and on behalf of the City and to bear the manual or facsimile signature of the Mayor of the City, to be countersigned with the manual or facsimile signature of the Director of Finance, to bear the manual or facsimile seal of the City and to be attested by the manual or facsimile signature of the City Clerk , all as of the first day of February, 1986. -17- I' Signed: (Manual or Facsimile Signature) Mayor Countersigned: (Manual or Facsimile Signature) Director of Finance (SEAL] Attest : (Manual or Facsimile Signature) City Clerk (End of Form of Bond) -18- (Form of Registration Provision) PROVISION FOR REGISTRATION This bond is registered in the office of the City Clerk of the City of Fort Collins, in Fort Collins, Colorado, as registrar, or her successor, in the name of the last owner listed below; and the principal and interest on this bond shall be payable only to such owner , all in accordance with the ordinance authorizing the issuance of this bond. No transfer of this bond shall be valid unless made on the registration books kept by the registrar by the registered owner or his duly authorized attorney and noted in the registration blank below. Date of In Whose Name Signature of Registration Registered Registrar (End of Form of Registration Provision) -19- J J PREPAYMENT PANEL The following installments of principal (or portions thereof) of this bond have been prepaid by the City of Fort Collins, Colorado in accordance with the terms of the ordinance authorizing the issuance of this bond. Due Date of Installment (or Principal Date of portion thereof) Amount Signature of Prepayment Prepaid Prepaid District Treasurer -20- (Form of Assignment Provision) ASSIGNMENT PROVISION For value received, hereby assigns and transfers unto the within bond and hereby irrevocably constitutes attorney, to transfer the same on the books of the registrar , with full power of substitution in the premises . Dated: The signature affixed to the above assignment is guaranteed as that of the assignor designated above. THE FIRST INTERSTATE BANK OF FORT COLLINS, N.A. By: Title: (End of Form of Assignment Provision) -21- Section 14 . When the Bonds have been duly sold, executed and registered, the Director of Finance shall deliver them to the initial purchaser on receipt of the purchase price. The funds realized from the sale of the Bonds, and investment income therefrom, shall be deposited as hereinabove provided and applied solely to defray the costs and expenses of making the improvements, the cost of which improvements is to be ultimately defrayed by special assessments; provided, that after said costs and expenses are paid, any funds remaining in the account established for' the District in the City ' s Capital Projects Fund from the sale of the Bonds or investment income therefrom shall be deposited in the Bond Fund and used for the purpose of redeeming Bonds; and provided further, that all moneys received as accrued interest at the time of delivery of any of the Bonds shall be deposited into the Bond Fund to apply to the payment of interest next due on the Bonds and $115,813 of the proceeds of the Bonds shall be deposited into the Bond Fund and shall be used to pay the interest on the Bonds through January 31 , 1987 . The initial purchaser of the Bonds, however, shall in. no manner be responsible for the application by the City, or, any of its officers , of any of the funds derived from the sale thereof . There is hereby appropriated the sum of $1, 300 , 000 for the payment of capitalized interest, the purchase of improvements and payment of associated costs. Section 15 . So long as any of the Bonds remain outstanding, the City will keep or cause to be kept true and accurate books of records and accounts showing full and true entries covering the collection and disposition of said special assessments as well as any delinquencies in the collection thereof, covering deposits and disbursements in each of said special funds herein desig.iated, covering the redemption of Bonds, both principal and interest, and covering disbursements to defray the cost of the improvements, including incidental expenses; and the City will permit an inspection and examination of all. books and accounts at all reasonable times by a -22- representative of the initial purchaser of the Bonds . In addition, the City at least once a year will cause at its regular annual audit, an audit to be made relating to said books and accounts by a certified public accountant to be employed by the City at its own expense, and a copy of said audit immediately after its completion will be furnished by the City, without charge, to the initial purchaser . Section 16 . The officers of the City be, and they hereby are, authorized and directed to take all action necessary or appropriate to effectuate the provisions of this ordinance, including, without limiting the generality of the foregoing, the printing of the Bonds, including thereon a certified true copy of Bond counsel ' s approving opinion, and the execution of such certificates as may reasonably be required by the initial purchaser thereof, relating, inter alia, to the execution of the Bonds, the tenure and identity of the municipal officials, the absence and existence of factors affecting the exemption of interest on the Bonds from federal and state income taxation, the accuracy of property descriptions, the delivery of the' Bonds , and the absence of litigation pending or threatened affecting the validity of the Bonds, if such is in accordance with the facts . Section 17 . Any registered owner of any one or more of the Bonds may, either at law or in equity, by suit, action, mandamus or other appropriate proceedings in any court of competent jurisdiction, protect the liens created by this ordinance on the proceeds of said assessments and the moneys in each of said special funds, and may by suit , action, mandamus or other appropriate proceedings enforce and compel the performance of any duty imposed upon the City by the provisions of this ordinance, or any ordinance heretofore or hereafter adopted concerning the District , including, without limiting the generality of the foregoing, the segregation of special assessments and taxes, proceeds and revenues for said funds , the proper application thereof, and the appointment of a receiver . -23- Section 18. The City covenants for the benefit of the owners of the Bonds that it will not make any use of the proceeds of the Bonds, any funds reasonably expected to be used to pay the principal of or interest on the Bonds, or any other funds of the City, and will not make any use of the facilities financed with the proceeds of the Bonds, which would cause the interest on the Bonds• to become subject to federal income taxation, and that it will not take any action or omit to take any action with respect to the Bonds , the proceeds thereof or the facilities financed thereby if such action or omission would cause the interest on the Bonds to become subject to federal income taxation. This covenant requires the City to comply with the provisions of Section 103 of the Internal Revenue Code of 1954, as amended. The City covenants for the benefit of the owners of the Bonds that it will take all steps necessary to comply with the additional requirements applicable to the Bonds imposed under H.R. 3838, 99th Congress, 1st Session, passed by the House of Representatives of the United States on .December 17, 1985 , ( the "Bill" ) to the extent necessary to maintain the exemption of interest on the Bonds from federal income taxation. In furtherance of this covenant the City makes the following additional covenants : (a) The City will not permit any of the gross proceeds of the Bonds or any of the facilities financed with such proceeds to be used in such a manner as to cause the Bonds to be "nonessential function bonds" as defined in § 141 (a) ( 1) of the Internal Revenue Code of 1985 proposed to be enacted by the Bill ( the "Proposed Code" ) . (b) The City will not use any of the proceeds of the Bonds directly or indirectly to make or finance loans to persons other than governmental units nor will the City permit any of the gross proceeds to be used -24- directly or indirectly in any trade or business carried on by any person other than a governmental unit if such use would require an allocation of unused volume cap under § 141 (a) ( 3 ) of the Proposed Code. (c) The City will spend at least 5% of the net proceeds of the Bonds within 30 days of the date of delivery of the Bonds to carry out the governmental purpose of the Bonds as required by § 149 (c) ( 1) of the Proposed Code. (d) The City will expend all of the net proceeds of the Bonds within three years of the date of the delivery of the Bonds as required by § 149 (c) ( 2 ) of the Proposed Code. ( e) The City will rebate to the United States the amounts required to be so rebated by § 147 ( e) of the Proposed Code at the times and in the manner required thereby. ( f) The City will not invest any portion of the proceeds of the Bonds directly or indirectly to acquire investment property (as defined in § 147 (b) ( 2 ) of the Proposed Code) which produces a yield (as such term is used in § 147 (b) ( 1 ) of the Proposed Code) over the term of the Bonds which is materially higher (as such term is used in § 147 (b) ( 1 ) of the Proposed Code) than the yield on the Bonds , or to replace funds which were used directly or indirectly to acquire such investment property, except this covenant does not prohibit ( i ) investment of such proceeds for a reasonable temporary period until such proceeds are needed for the purpose for which the Bonds are issued in compliance with and for a time no longer than -25- that designated in § 147 (c) of the Proposed Code, or ( ii ) investment of such proceeds in a reasonably required reserve or replacement fund in an amount not greater than that provided in § 147 (d) ( 1) ( 2 ) of the Proposed Code. (g) The City will not, at any time during any Bond year , invest in nonpurpose obligations (as that term is used in § 147 (d) ( 3) of the Proposed Code) with a yield (as that term is used in § 147 (d) ( 3 ) of the Proposed Code) higher than the yield on the Bonds , any amounts subject to § 147 (d) ( 3) (B) of the Proposed Code in excess of 150% of the debt service on the Bonds (as defined in § 147 (d) ( 3 ) (D) of the Proposed Code) for such Bond year , and the aggregate amount so invested shall be promptly and appropriately reduced as the amount of outstanding Bonds is reduced, all as required by § 147 (d) ( 3 ) of the Proposed Code, except this covenant does not prohibit investment of amounts for temporary periods specified in § 147 (d) ( 3 ) (C) of the Proposed Code or required the disposition of an investment if such disposition is not required by § 147 (d) ( 3 ) (E) of the Proposed Code . (h) The City will submit to the Secretary of the .Treasury the information required by § 149 ( e) of the Proposed Code at the times required thereby. -26- 1 I • I ( i ) For the purposes of Section 802 (e) ( 3) (B) of the Bill, the City hereby designates the Bonds as a qualified project bond (as defined in Section 8. 02 (e) ( 3 ) (E) of the Bill) . Notwithstanding the foregoing additional covenants , in the event that compliance with any of the foregoing additional covenants ceases to be required in order to maintain the exemption of interest on the Bonds from federal income taxation under the Bill (because of a change in the effective date applicable to that requirement, or because of a substantive change in the provisions of the Bill imposing that requirement ) the City shall no longer be required to comply with that covenant . Section 19 . This ordinance may be amended or supplemented by an ordinance or ordinances adopted by the Council in accordance with the Charter and Code of the City, as amended, and without the receipt by the City of any additional consideration, with the written consent of the registered owners of seventy-five percent ( 75% ) of the Bonds authorized by this ordinance and outstanding at the time of the adoption of such amendatory or supplemental ordinance, provided, however , that no such ordinance shall .have the effect of permitting: (a) An extension of the maturity of any Bond authorized by this ordinance; or (b) A reduction in the principal amount of any Bond or the rate of interest thereon without the written consent of the registered owner of said Bond; or (c) The creation of a lien upon or a . pledge of property, revenues or funds , ranking prior to the liens or pledges created by this ordinance; or -27- (d) A reduction of the principal amount of Bonds required for consent of such amendatory or supplemental ordinance. Section 20 . After the .Bonds have been issued, this ordinance shall constitute a contract between the City and the registered owner or owners of the Bonds, and shall be and remain irrepealable until the Bonds and the interest accruing thereon shall have been fully paid, satisfied and discharged. Section 21 . If any section, paragraph, clause or provision of this ordinance shall for any reason be held to be invalid or unenforceable, the invalidity or unenforceability of such section, paragraph, clause or provision shall not affect any of the remaining provisions of this ordinance. Section 22. All acts, orders, resolutions and ordinances, and parts thereof, in conflict with this ordinance be, and the same hereby are, rescinded; provided, that, to the extent that any provision of this ordinance might be deemed inconsistent with any provision of the Code or the ordinance creating the District , this ordinance shall supersede any such inconsistent provision only to the extent of such inconsistency . Section 23 . The published title of the subject matter of this ordinance shall be in substantially the following form, and the publication made before final passage of this ordinance shall additionally include the notice substantially as set forth in Section 24 of this ordinance: -28- (Form of. Published Title) ORDINANCE NO. AN ORDINANCE CONCERNING THE CITY OF FORT COLLINS, COLORADO, HEART SPECIAL IMPROVEMENT DISTRICT NO. 84 ; RATIFYING ACTION HERETOFORE TAKEN IN CONNECTION THEREWITH; PROVIDING FOR THE COLLECTION OF SPECIAL ASSESSMENTS TO BE LEVIED TO DEFRAY THE COSTS OF IMPROVEMENTS THEREIN; PROVIDING FOR THE ISSUANCE OF SPECIAL ASSESSMENT BONDS PAYABLE FROM THE ASSESSMENTS TO BE LEVIED IN SAID DISTRICT; PRESCRIBING DETAILS IN CONNECTION WITH SAID ASSESSMENTS, BONDS AND DISTRICT, INCLUDING THE MANNER OF ADDITIONALLY SECURING AND EFFECTING THE PAYMENT OF SAID . BONDS; PRESCRIBING DUTIES OF CERTAIN PUBLIC OFFICIALS IN CONNECTION,' WITH SAID ASSESSMENTS, BONDS AND DISTRICT; REPEALING ALL ORDINANCES AND OTHER ACTION OF THE CITY TO THE EXTENT INCONSISTENT HEREWITH; AND PROVIDING OTHER MATTERS RELATING THERETO. PUBLIC NOTICE IS HEREBY GIVEN that the above-entitled ordinance of the City of Fort Collins was introduced and considered favorably on the first reading on January 7 , 1986 . The text of the ordinance is available for public inspection and acquisition at the office of the City Clerk at 300 West La Porte Avenue, in Fo_t Collins, • Colorado, during normal office hours. -29- BY ORDER OF THE COUNCIL OF THE CITY OF FORT COLLINS dated this January 7 , 1986 . /s/ City Clerk (End of Form of Published Title) -30- Section 24 . There shall be added to said title as published before final passage, the following paragraph: "The Council will consider said ordinance for final passage at the Council Chambers , 300 West La ' Porte, in the City, on January 21, 1986, being not earlier than seven days after the first publication of said ordinance, at the hour of 6 : 30 p.m. " Section 25 . Immediately upon its final passage, this ordinance shall be recorded in the book or ordinances of the City kept for that purpose, authenticated by the signatures of the Mayor and of the City Clerk, and within five days after final passage, shall be published by title and number in The Coloradoan, a newspaper published and of general circulation in the City; and this ordinance shall be in full force and effect ten days after such final passage. INTRODUCED, CONSIDERED FAVORABLY ON FIRST READING on January 7 , 1986 and to be presented for final passage on January 21, 1986 . Mayor [ SEAL] Attest : City `Clerk -31-