Loading...
HomeMy WebLinkAbout1973-069-08/16/1973-SETTING FORTH THE UNDERSTANDING OF THE CITY OF FORT COLLINS REGARDING A PROVISION IN THE CONTRACT FO RESOLUTION 73-69 OF THE COUNCIL OF THE CITY OF FORT COLLINS SETTING FORTH THE UNDERSTANDING OF THE CITY OF FORT COLLINS REGARDING A PROVISION IN THE CONTRACT FOR ELECTRICAL SERVICE BETWEEN THE CITY OF FORT COLLINS AND PLATTE RIVER MUNICIPAL POWER ASSOCIATION, INC. WHEREAS, the City of Fort Collins, (the "Participant") on the day of October 21, 1971, entered into a Contract for Electric Service with the Platte River Municipal Power Association, Inc. , ("PRMPA") wherein PRMPA contracted to provide electrical power and energy to the Participant which electrical power and energy the Participant agreed "to take and pay for" at the rate set forth in said Contract for Electric Service the provisions of which are incorporated herein by this reference the same as if set forth in full herein; and WHEREAS, Paragraph 9(b) of said Contract for Electric Service provides that the rate charged by PRMPA shall be reviewed annually and shall be revised, if necessary, so as to provide sufficient revenues to PRMPA, with the revenues of PRMPA from all other sources, to enable PRMPA to make payments on account of principal of and interest on all indebtedness of PRMPA; and WHEREAS, PRMPA is now in the process of arranging an interim borrowing from First National Bank, a national banking association, Fort Collins, Colorado, in the principal amount of $4,000,000.00 with an interest rate not to exceed six percent (60) (with increased interest in the event the interest is not tax exempt) which interim borrowing will mature and become due and payable on September 1, 1975, a copy of the proposed Loan Agreement being attached hereto and incorporated herein by this reference; and WHEREAS, PRMPA intends to repay such interim borrowing from the proceeds of long term publicly marketed indebtedness of PRMPA which PRMPA intends to issue prior to September 1, 1975, and in the event PRMPA should subsequently determine that the marketing of its long term indebted- ness will not be in the best interest of PRMPA or its municipal partici- pants PRMPA intends to repay such interim borrowing with the proceeds from other interim borrowing to be arranged by PRMPA prior to September 1, 1975; and WHEREAS, PRMPA and the Participant recognize the PRMPA could, prior to September 1, 1975, increase its rates in an amount which would be sufficient, with or without revenues from other sources, to make payments of principal of and interest on said interim borrowing maturing on September 1, 1975; and, in view of the fact that PRMPA 'is an agency and instrumentality of the Participant and other municipalities, and not an independent organization except in form and name, PRMPA could so increase its rates, or require prepayment for power to be furnished in the future if funds should be required for the payment of principal and interest on said interim borrowing; and WHEREAS, such rate increasing and fund raising abilities of PRMPA constitute the fundamental assurance of repayment being relied upon by the First National Bank in entering into such interim loan agreement with PRMPA. NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF FORT COLLINS that the Council, having reviewed the Contract for Electric Service between the City of Fort Collins (the "Participant") , and PRMPA ("Seller") , does hereby recognize and agree that Paragraph 9(b) of said Contract for Electric Service was intended to and does empower and authorize PRMPA, if necessary, to increase the rate charged by it pursuant to said Contract for Electric Service, or to require pre-payments for power to be furnished in the future to. be made by the participating town and cities, so as to provide PRMPA with sufficient revenues, with the revenues of PRMPA from all other sources, as to allow PRMPA to repay at maturity the principal and interest as required by the loan agreement between PMPRA and the First National Bank, and notes executed in con- nection therewith. Passed and adopted at a regular meeting of the City Council held this 16th day of August, 1973. Mayor ATTEST: ,City Clerk -2-