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
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