HomeMy WebLinkAbout1974-087-10/03/1974-SETTING FORTH THE UNDERSTANDING OF THE CITY OF FORT COLLLINS REGARDING A PROVISION IN THE CONTRACT F a
RESOLUTION 74-87
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
THE PLATTE RIVER POWER AUTHORITY
WHEREAS, the City of Fort Collins, (the "Participant") on
the day of August 15, 1974, entered into a Contract for Electric
Service with the PLATTE RIVER POWER AUTHORITY, ("Platte River") wherein
Platte River 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,
WHEREAS, Paragraph 2 (b) of said Contract for Electric
Service provides that the rate charged by Platte River shall be
reviewed annually and shall be revised, if necessary, so as to provide
sufficient revenues to Platte River, with the revenues of Platte River
from all other sources , to enable Platte River to make payments on
account of principal of and interest on all indebtedness of Platte River,
WHEREAS, Platte River is now in the process of arranging an
interim borrowing from MORGAN GUARANTY TRUST COMPANY OF NEW YORK in the
principal amount of $2,500,000 00 with an interest rate of 7-1/2 percent
(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,
WHEREAS, Platte River intends to repay such interim borrowing
from the proceeds of long-term publicly marketed indebtedness of Platte
River which Platte River intends to issue prior to September 1 , 1975,
and in the event Platte River should subsequently determine that the
marketing of its long-term indebtedness will not be in the best interest
of Platte River or its municipal participants, Platte River intends to
repay such interim borrowing with the proceeds from other interim
borrowing to be arranged by Platte River prior to September 1 , 1975
WHEREAS, Platte River and the Participant recognize that
Platte River could, to September 1 , 1975, increase its rates in an
amount which would be sufficient, with or without revenues from other
sources , to make payment of principal of and interest on said interim
borrowing maturing on September 1 , 1975, and in view of the fact that
Platte River is an agency and instrumentality of the Participant and
other municipalities, and not an independent organization except in
form and name, Platte River could so increase its rates, or require
prepayment for power to be furnished 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
Platte River constitute the fundamental assurance of repayment being
relied upon by the MORGAN GUARANTY TRUST COMPANY OF NEW YORK in entering
into such interim loan agreement with Platte River
NOW, THEREFORE, BE IT RESOLVED by the City Council of the
City of Fort Collins , Colorado, that such City, having reviewed the
Contract for Electric Service between the City of Fort Collins , (the
"Participant") , and Platte River ("Seller") , does hereby recognize and
agree that Paragraph 2 (b) of said Contract for Electric Service was
intended to and does empower and authorize Platte River, if necessary,
to increase the rate charged by it pursuant to said Contract for
Electric Service, or to require prepayments for power to be furnished
in the future to be made by the participating town and cities , so as
to provide Platte River with sufficient revenues , with the revenues
of Platte River from all other sources , as to allow Platte River to
repay at maturity the principal and interest as required by the loan
agreement between Platte River and the MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, and notes executed in connection therewith
a Passed and adopted at a regular meeting of the City Council
' held this 3rd day of October, 1974
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ATTEST
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City Clerk
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