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HomeMy WebLinkAbout1990 Ordinance No. 0619 (d) IlY AtmlORITY Ci'.OTNAllCE NO.~ SERIES OF 1990 COONCIL BILL UO. 69 INTROClOCFD BY ClXJNCIL MEZ.1BER WIGGINS All ORDilw.::E APP110'/ING A I.QI\N FRCt4 nm COLORADO ID\TER RESOURCES 1IND J?a·IEll DEVELCPMENI' l\IJl'HOP.ITY IN THE PRINCIPAL A:-wttr OF $12,750 1000 FOR SANl'rAA'i SF.klER PllRPOOES; l\Lll.'HORIZING THE FORH AtlD ElCE'Cl"l'ICtl OF THE 1.0,1\N AGRm!EN!' AllD A SPEX:IAL REVENUE GOVERN!-IEllrAL !\GENC'i Brnll TO E.VIDE!lCE SUCH LCWI; PLEDGING CTRTI\IN OF nm llEr REVENUES 'Jf THE C!TY ' S SANITARY SEWEil. S'iS'l'EM TO THE REPA'il·IENI' OF SUCH Ila.JD; AND PRESCRIBING onlER DCl'AILS IN COllID:'l'ICN ~/ITH. I~, the City of Engle.cod, Coloraco (the "City"), is a duly organized and acting hare rule nunicipality, created and operating p.ir!3Uant to Article )0( of the Constitution of the State of Colorado and a hone rule charter (the "Charter") adopted in accordance therewith; and ll'fiER.EM, the Chart<'r provi des that tr.a City may issue revenue bonds as now or hereaft er provided by stat utes of the State of Colorado for municipalities of every class; and l'll!EREAS , the City owns, opo..rates, and maintains a nunicipal sanitary sewer sys tem a.1d a sewage treatrrent plant as an incare producing enterprise (the "System"); and \·ll!EREAS , the City Council (the "Council") of the City has detennined that it is necess ary to e.'<tend and inprove the sewag£ treatrrent plant, and that there are insufficient rrcneys in the City treasury to pay the costs thereof; and l·IP.ERE.I\S, the Council has detennined that in order to finance such capital inproverents to the sewage tre1'.trrene plant , it is necessary and advisable and in the best interests of the City to enter into a loan agree,-ent (the "Loan Agreement") with the O:,lorado Water Resources and Pa.er Developrrent .-.Uthority (the "Authority"), a body corporate and political subdivision of the State of Colorado, pursuant to which the Authority shall loan the City the am:,unt of $12,750,000 (the "Loan") for such purposes; and -1- WHEREAS, the Author i t y will obta i n mon•~•s to f un d tho, Loan to the City through the issuance of its bonds (the "Authority Bonds"); and WHEREAS , the City's repayment obligations under the Loan Agreement shall be evidenced by a special revenue governmenta l agency bond (the "Bond ") to be issued by the City to the Authority; and WHEREAS, such Loan shnll be payable solely from and secured by a pledge of and an irrevocable lien on certain reve nues o f the system; and WHEREAS, the city's obligations under the Loan Agreement and the Bond shall not constitute a debt or indebtedness of the city within the meaning of any Charter, c onstitutional, or statutory provision or l i mitation, nor shall it be considered or held to be a general obligation of the City ; and WHEREAS , there have been presented to thA Council the forms of the Loan Agreemen'.: and Bond (collectively, the "Financing oo,~uments 11 ) ; and WHEREAS, the Council des i res to approve the forms of the Financing Documents and authorize the execution thereo!; and WHEREAS, pursuant to §18-8-308, c,n .s., all known potential conflicting interests with respect to the Bond an d the expenditure of the proceeds thereof have been disclor.ed to the Council and the Colorado Secretary of State; and WHEREAS, the Council has determined that no member of the Council has a personal or priva ts interest, as s uch t erms are used in §24-18-109, C.R.S., in the matter now pending be!ore t hs Council, and that no m . ..>er of the Council has any inte.·est, as such term is ur ,d in §24-18-201, C.R.s . in a ny contract made or to be made pursuant to this Ordinance; BE IT ORDAINED BY THE CITY COU NCIL OF THE .CITY OF ENGLEWOOD, COLORADO: -2- Section l , Approvals 1 /\uthorizations I and An1endments. The forms of the Financing Documents presented at this meeting are incorporated herein by reference and are hereby approved . Tha City ahall entar into and perfo1.111 its obligations under the Financ ing Documents in the forms<:>( such documents, with only such changes aG are not incons i stent herewith. The Mayor and City Clark ara hereby authorized and directed to execute tha Financing Documents and to affix the seal of the city thereto, and further to execute and authenticate such other documents or certificates as are daamed necessary or desirable i n connection thurewith. The Financing Documents shall be executed in substantially the forms approved at this meeting, provided that such documents may be completed, corrected , or revised as deemed necessary by th• parties thereto in order to carry out the purpose,. of this Ordinance . The executl.on of any instrument or certificat1, or other doc:ument in connection with the matters referred to herein by the Mafor and City Clerk or by other appropriate officers of the City, shall be conclusive evidence of the approval by the City of such instrument. Section 2. Bond Details. The Bond shall be in the principal amount of $12,750 ,000, shall bear interest at a rate not .t, exceed 10.25\ per annum, shall mature as provided in the Loan Agreement, but in no event later than September l, 2012, and shall be payable in the time and manner, and shall be subject to prior redemption, as set forth in the Financing Docum ~nts. The maximum net affective interest rate authorized for the Bond is 5.251 par annum, and the ectual net effective interest rate of the Bond does not exceed such rate . The City shall execute and deliver to the Authority a Governmental Agency P.'>nd pursuant to the Loan Agreement as evidence of the Loan ·•· ;ayments (as defined in the Loan Agreement) • Notwithstandin'. dny other provision of this Ordinance, the Mayor and the City Clerk are authorized to enter· into the Financing Documents only if the actual terms of the Loan and the Bond as to interest rate and maximum net effective .< interest rate are equal to or less than the amounts set forth in this section 2. section J. Limited Obllgation; Finding of No Indebted- !!!!!· The principal of the Bond and the interest thereon shall be payable solely from certain of the nEt revenues derived by the city from the ownership and operation of the System as set forth in Exhibit A to the Loan Agreement (the "Pledged Revenues"), The Financing Documents shall constitute an irrevocable lien upon the Pledged Revenues, and the Pledged Revenues are hereby pledged to the payment of the Bond; provided however, that such lien shall be subject , subordinate, and junior to any additional obligations which may be issued hereafter having a lien on the Pledged Revenues which is superior to the lien thereon of the Financing Documents as provided in Exhibit F to the Loan Agreement. The Authority may not look to any general or other fund of the City, other than the special funds and accounts specified in this Ordinance, for the payment of the principal of and interest on the Bond. The obligations of the City under the Financing Documents shall not cor.sti tute or be held to bE' a d"bt or an indebtedness of the City or any other governmental entitr with~n the meaning of any provision or limitation of the Charter or rhe constitution or laws of the State of Colorado. The obligatlons of the City under the Financing Do•,uments are not secured by the .c ull faith and credit or taxing powers of the City or of any "fedr ,·al, state, or local government or agency. In addition, no elected or appointed officers or agents of the City shall be subject to any pecuniary liability in connection with any agreement, covenant, or undertaking by the City, or by them, contained in any document executed in connection with t ,1e authorization, execution, and delivery of the Financing Documents or this Ordinance or with respect to any action taken or ~mitted to be taken in good faith with reference thereto. Section 4. Disposition and I nvestment of Bond Proceeds. The proceeds of the Bond shall be applied only to pa.y t he costs -4- C and expenses o f e xtending and improving the sewage treatment plant, including reimbursement to the City for capital expenditures heretofore incurred and paid from City funds i n ar,cicipation of the incurrence of long-term financing therefor , an,1 all other costs and expenses incident thereto, including without limitation the costs o·. ;:,btaining the Loan. Neither the Authority nor any subsequent owner(s) of the Bond shall be responsible for the a p plication or disposal by the City or any of its off i cers of the funds derived f rom the Bond , In the avant that all of the proceeds of the Bond are not required to pay such costs and eY.penses, any remain i ng amount shall be used for the p urpose of paying the principal amount of the Bond and the interest thereon. Section 5. Bond Account . There is hereby established as a book account of the City's Sewer Fund the "Colorado Water Resources and Power Development Authority Bond Account" (the "Bond Account"). Subject to the prior l ien on the Pledged Revenues of any ad d itional obligations which ma y be issued hereafter having a lien on the Pledged Revenues which is !,uperior to the lien thereon of the Financing Documents as provide,! in Exhibit F to the Loan Agreement , the City shall credit to the Bond Account each year from the Pledged Revenues an amount sufficient, together •.1ith other moneys available therefor in th•? Bond Account or otherwise available as provided in the Financing Documents, to pay when due the principal of and interest on the Bond, Moneys held in the Bond A,,count may be invested or deposited in accordance with the laws of the State or. Colorado . The investment of moneys in the Bond Account shall, however , be subject to the covena nts and provisions of Section 4 hereof. Any investment income earned an amounts on deposit in the Bond Account shall remain int~, Bond Account. Section 6 . City Representative. Pursuant to Exhibit B of the Loan Agreement, Stewart H, Fonda, Di r ector o f Utilities, is hereby designated as the Authorized Of !ice r (as d efined in the Loan Agreement) fo r the purpose of performing any act or executing -s- any document relating to the Bond, the City, or the Loan Agreement. A copy of this Ordinance shall be furnished to the Authority as evidence o! such des i gnation. Section 7, Incontestable Recital. The Bond shall recite that it is issued under the authority o! Title 31, Article 35, Part 4, C.R.S. Such recital shall conclusively impart full cc:,mpl.i ance with all provisions and limitations o! said Part 4, and such Bond issued contain1ng such recital shall be inr;ontestable !or any cause whatsoever n!ter its del ivery !or value. Section 8 . Estiniated Life of System Improvements. It is hereby determined t .bat the estimated life of the sewage treatment plant improvemencs to be financed with the proceeds o! the Bond is not less than 22 years from the date of the Bond. Section 9. Direction to Take Authorizing Action. The appropriate officers of the City and members of the Council are hereby authorized and directed to take all other actions necessary or appropriate to effectuate t :,e provisions of this Ordinance, including but not limited to sue,: certificates and affidavits as may reasonably be required by the Authority. Section 10. Ratification and Approval of Prior Actions. Al: actions heretofore taken '>y the officers of the City and members of the Council, not inconsistent with the provisions of this Ordinance, relating to the Financing Doc uments, or actions to be taken in respect thereof, are hereby ratified, approved, and confirmed. Section 11. Author '.ty' s Official appropriate officers and employees of the authorized and directed to furnish and Statement. The City are hereby supply information concerning the City to the Authority for use in the preparation of an Official Statement to be used to market the Authority's Bonds. Section 12 . Statutes Supers~ded . Any provisions hereof which are inconsistent c:,r at variance with the provisions of state statutes are hereby superseded pursuant to the powers granted the City under the Charter and the constitution of the State of Colorado. -6- C Section 13. Repealer. All acts, orders, ordinanc~•, or resolutions, or parts thereof, in conflict herewith are hereby · repealed to the extent of such conflict . section 14. S1tverabili ty. Should any one or moi:9 sections or provisions of this Ordinance be judicially determined invaLid or unenforceable, such determination shall not affect, im pair, or invalidate the remi,ining provisions hereof, the int ntion being that the various provisions hara~! are severable. Section 15. Ordinance Irrapaalable. After said Bond is .ssued, this Ordinance shall be and remain irrepaalable until sald e-0 nd and the interest thereon shall have been fully pai~, aetis!ied and discharged. Section 16. Publication and Effective Date. This Ordir~nce, after its final passage, shall be numbareq and recorded, and the adoption ~nd publication shall be authenticated by the signa ♦-~u--·s c.: the Mayor and the City Clerk, and by the -7- certificate of Publication. 'lllis Ordinance shall becare effective thirty (30) days after publication following final passage. Introdllced, airendl!d/ read in full , and pulled on first reading oo Deeeriler 3, 1990. Published as a Bill for an Ordii ,ar;c e oo Deetm:>er 6, 1990, as 1111111ded. Read by title and passed on f i nlil read'ng oo the 17th day of Decent,er, 1990. Published by title as Ordin= .~ ,. 6 /, Series of 1990, on the 20th day of Deeerber, 1990. ATl'ESTED: ~«&.,;{!~ Pitrca H. ere,,,, City Clerk I , Patricia H. Crow, City Clerk for the City of Ehglewood, Colorado, hereby certify that the forego'ng is a true o:,p-j of the Ordinance paned oo final reading and published by title as Ordinance !lo. (LL, Series of 1:190. COUNCIL COMMUNICATION DATE December 3, 1990 INITIATED BY AGENDA ITEM 11 (0(1) BI -C!ty Supervisory Committee SUBJECT Loan approval for Bl-City Wastewater Treatment Plant Expansion STAFF SOURCE Linda Martin, Acting Director or Finance Stu Fonda, Director or Bl-City Wastewater Treatment Plant ISSUE/ACTION PROPOSED The staff recommends the City Council adopt an Ordinance approving the loan from the Colorado Water Resources and Power Development Authority. You will note that the Ogures for the principal am ou m of the loan. lhe Interest rate of the bonds and the maximum net effective Interest rate In Section 2 or the Ordinance are blank. On Monday, December 3, 1990, the Power Authority will Inform us as to th e amount they will lo a n us and their best estimate or the percentage rate. We are assum ing the principal amount or the loan to be provided to the City or Englewood by the Power Authority w111 be In the S10 to S12 million range and the Interest rate or the loan will be a round nve percent. PREVIOUS COUNCIL ACTION The City Council met \\Olh the Lltlleton City Council on November 26, 1990 lo discuss the Bl-City conslrucllon project. The discussion Included financing options for the project. STAFF ANALYSIS City staff and Steve Lyon ""th Hanlfen , Imhoff, In c. conducted a casl1 now projection for a twenty-year period to determine whether borrowing from the Power Au thority would result In an advantage to the City . We lo oked at three options whi ch are outlined below: Option I: $12 million loan fro m Power Authority at 5% 20 year paybac k Sewer Fnnrl Balance at 21st Year $14 .7 million Present Balance or Balance at 7 .5% $3.1 million Option ll: Cash funding of project from Sewer Fund Balance Option Ill: Power Authority Loan at 5% with a 10 year payback Sewer Fu nd Balance at 21st Year $5 .7 m1lllon $10.8 million Present Balance of Balance at 7 .5% S1.2 million $2.3 million It ls to the long-term financial advantage to borrow from the Power Authority for a twenty- year period (Option I.) rather than finan ce the Bl-City plant from existing cash (Option II.I In light of the potential liability of Lo,.:i,,, these funds w111 pr0\1de an excellent hedge . BACKGROUND The Colorado Water and Power Developm en t Authority ls :he ag ency responsible for administering the Federal "201" wastewater rogram. Und r this program , the City may borrow fro m the Power Authority at 65% of the market r.rtr which the Au th ority ma rket bonds (based on Englewood 's pledge to repay.) In today's market. En g!e, .. ood cou ld obtaln an Interest rate of about 7 .5% lfwe Issued bonds In the nor mal fa s hi on . Under the option available from the Powe r Authority, we \1111 be abl e to borrnw at ~ r a lt of about 5%. The Power Authority a nd Clty sta ff have reviewed the p1 -r,c~a• lo de1crr.1 lne lf there was a posstble confilct \11th the Federal 1986 Tax Reform Ar\ relu tl n. tu urbltrage earnings. The Authority and the City have received opinions from t,uo separate bond counsel regarding their beli ef that no such confilct exists for the City In t his financing. FINANCIAL Project costs are as foll ows: Co nstru ctio n Cost Construction Management 5% Contin ge ncy TOTAL f,25, 117,000 l.:>0 4,000 Ll.0ll ,voo S28,30 l ,000 The City of Englewood \1111 b e responsible for one half of the amo unt or $14,150.500 . Shoul d the Authority provide a loan ofSI0 to S12 millio n we \1111 need to expen~ $2 ,150.500 to S4 , 150,500 from th e Sewer Fund Balancr As of I 2 /3 1 /89, the Sewer Fund had S14,294 ,8 46 In the Sewer Fund Balance. The exp , n~1 ture of S2 to S4 million from Fund Bal ance "111 not compromise the Fund. nor \1111 lt comprom ise the term s of this loan agreement. Payment of th • bonds \\111 be made from sewer fund user fees and earnings from accum ulated development fees .