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HomeMy WebLinkAbout7923RESOLUTION 7923 A RESOLUTION CONCERNING PROPOSED CITY OF PUEBLO, COLORADO, SEWER REVENUE REFUNDING BONDS, SERIES, 1996; APPROVING AND DIRECTING A NEGOTIATED SALE OF SUCH BONDS; APPROVING AND ADOPTING AN AMENDMENT TO THE AGREEMENT FOR FINANCIAL ADVISORY SERVICES BETWEEN THE CITY AND PRINCIPAL FINANCIAL SECURITIES, INC.; AND PROVIDING THE EFFECTIVE DATE OF THIS RESOLUTION WHEREAS, the City of Pueblo, Colorado, in the County of Pueblo, State of Colorado (the "City ") is a municipal corporation duly organized and existing as a home -rule city pursuant to Article XX of the Constitution of the State of Colorado (the "Constitution ") and the Home Rule Charter of the City (the "Charter "); and WHEREAS, the City has authority under its Charter and the Constitution to issue sewer revenue refunding bonds; and WHEREAS, pursuant to Ordinance No. 5341, adopted on second reading on August 25, 1986 and amended by Ordinance No. 5551, adopted on second reading on July 24, 1989, the City issued its City of Pueblo, Colorado, Sewer Revenue Refunding Bonds, Series 1986 (the "Series 1986 Bonds ") in the initial aggregate principal amount of $11,600,000, of which $11,195,000 aggregate principal amount will remain outstanding on December 1, 1996; and WHEREAS, the City has the option to redeem the Series 1986 Bonds maturing on or after June 1, 1997, which are subject to prior redemption on and after December 1, 1996; and WHEREAS, the City Council has determined that, due to lower interest rates and resulting debt service savings, it is in the best interests of the residents of the City for the City to issue sewer revenue refunding bonds (the "Bonds ") to refund the outstanding Series 1986 Bonds on a current basis, by paying those Series 1986 Bonds maturing on December 1, 1996 at their maturity and by calling for early redemption on December 1, 1996, the Series 1986 Bonds maturing on or after June 1, 1997; and WHEREAS, the City and Principal Financial Securities, Inc. ( "Principal Financial ") previously entered into an Agreement For Financial Advisory Services, dated as of May 1, 1996 (the "Financial Advisory Agreement "), which provides that the Financial Advisory Agreement shall be applicable to all municipal securities issued by the City during the three -year term of the Financial Advisory Agreement, except for certain exceptions and unless otherwise directed by Resolution of the City Council; and WHEREAS, Principal Financial previously has made presentations to the City concerning the issuance of the Bonds by the City, showing the potential savings to be derived from such a current refunding; and WHEREAS, the City Council has determined and hereby determines that it is in the best interests of the residents of the City that the Bonds be sold by the City to Principal Financial on a negotiated basis, after authorization by an Ordinance to be adopted hereafter, rather than offered for public sale on a bid basis because of, among other reasons, the ability of the City in a negotiated sale to take advantage of timing in a volatile interest rate market; and WHEREAS, Rule G -23 of the Municipal Securities Rulemaking Board requires in such a situation (a) that a financial advisor such as Principal Financial make certain disclosures concerning (I) possible conflicts and (ii) the source and anticipated amount of all remuneration it will receive for underwriting the Bonds and (b) and that an agreement be signed to except the municipal securities being sold on a negotiated basis from the Financial Advisory Agreement; and WHEREAS, Principal Financial will make the disclosures required by Rule G -23 in writing to the City prior to the execution of an Amendment dated as of September 1 , 1996 (the "Amendment "), to the Financial Advisory Agreement, which Amendment has been prepared and presented to the members of the City Council at this meeting; NOW, THEREFORE BE IT RESOLVED BY THE CITY COUNCIL OF PUEBLO, THAT: Section 1 . The City hereby deems it to be in the best interests of the residents of the City that sewer revenue refunding bonds to refund the Series 1986 Bonds be, and the same hereby are ordered to be, sold in a negotiated sale to Principal Financial Securities, Inc., subject to the unqualified approving bond counsel opinion of Kutak Rock, and the City specifically consents to the purchase of the Bonds by Principal Financial on a negotiated basis. The City understands that Principal Financial may offer a portion of the Bonds to or through broker /dealers and banks located within the City. Section 2 . The City Council hereby approves and adopts the form of Amendment as presented at this meeting and, subject to receipt from Principal Financial of the disclosures required by Rule G- 23, hereby authorizes and directs the President or Vice President of the City Council to execute the Amendment in the name and on behalf of the City, and further hereby authorizes and directs the City Clerk or one of her deputies to affix the official seal of the City to the Amendment and attest to the seal and the signature of the President or Vice President, all with such changes in the Amendment as may be approved by the City Attorney and the President or Vice President of the City Council, the signature of the President or Vice President to be conclusive proof of that approval. -2- Section 3 . The President and Vice President of the City Council and the Finance Director of the City are hereby directed to take all other action necessary or appropriate to effectuate the provisions of this Resolution. All action heretofore taken (not inconsistent with this Resolution) is hereby ratified, approved and confirmed. Section 4 . If any section, paragraph, clause or provision of this Resolution shall for any reason be held to be invalid and unenforceable, the invalidity and unenforceability of such section, paragraph, clause or provision shall not affect adversely any of the remaining provisions of this Resolution. Section 5 . This Resolution shall take effect immediately upon its introduction and passage. INTRODUCED August 12 , 1996 BY. Rarmic-1 Corsen _l rlo Councilperson APPROVED: Presid t of the Council ATTEST: City Clerk APPROVED AS TO FORM: A City Attorney -` -3- FIRST AMENDMENT TO AGREEMENT FOR FINANCIAL ADVISORY SERVICES THIS FIRST AMENDMENT TO AGREEMENT FOR FINANCIAL ADVISORY SERVICES is entered into as of \ \ September L , 1996 (this "Amendment "), by and between the City of Pueblo, Colorado, a duly organized municipal corporation, and Principal Financial Securities, Inc., \ \(the "Company "). WHEREAS, the City and the Company previously entered into an Agreement For Financial Advisory Services, dated as of May 1, 1996 (the "Financial Advisory Agreement "), which provides that the Financial Advisory Agreement shall be applicable to all municipal securities issued by the City during the three -year term of the Financial Advisory Agreement, except for certain exceptions and unless otherwise directed by Resolution of the City Council; and WHEREAS, the City Council has determined that, due to lower interest rates and resulting debt service savings, it is in the best interests of the residents of the City for the City to issue sewer revenue refunding bonds (the "Bonds ") to refund on a current basis the City of Pueblo, Colorado, Sewer Revenue Refunding Bonds, Series 1996, currently outstanding in the aggregate principal amount of $11,195,000; and WHEREAS, the City Council has determined and directed through the adoption of Resolution No. 7923on \ \ August 12 , 1996, that, in the best interests of the residents of the City, the Bonds should be sold by the City to the Company on a negotiated basis, after authorization by an Ordinance, rather than offered for public sale on a bid basis; and WHEREAS, Rule G -23 of the Municipal Securities Rulemaking Board requires in such a situation (a) that a financial advisor such as the Company must make certain disclosures concerning (i) possible conflicts and (ii) the source and anticipated amount of all remuneration it will receive for underwriting the Bonds and (b) and that an agreement be signed to except the municipal securities being sold on a negotiated basis from the Financial Advisory Agreement; and WHEREAS, the Company has made the disclosures required by Rule G -23 in writing to the City; and WHEREAS, the City acknowledges receipt of the disclosure by the Company of possible conflicts between its role under the Financial Advisory Agreement and its role as underwriter of the Bonds, as well as the disclosure of the source and estimated amount of all of its remuneration to be received in connection with underwriting the Bonds. WHEREAS, \ \ the Company previously has made presentations to the City concerning the issuance of the Bonds by the City, showing the potential savings to be derived from such a current refunding; and WHEREAS, the City and the Company desire to except the sale of the Bonds from the provisions of the Financial Advisory Agreement; NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements contained herein, the City and the Company agree as follows: 1. Section 7 of the Financial Advisory Agreement is hereby amended and restated to read, after such amendment, as follows: 7. Unless otherwise directed by Resolution of the City Council of City, this Agreement shall be applicable to all Municipal Securities issued and sold by the City during the term of this Agreement on or after May 1, 1996, except Municipal Securities issued and sold pursuant to request by the Board of Water Works of Pueblo, Colorado under Section 15 -2 of the Charter of the City, the $12,850,000 City of Pueblo, Colorado Limited Tax General Obligation Bond Series 1996 (HARP Bonds), and the issue of approximately $12,000,000 aggregate principal amount of the City's Sewer Revenue Refunding Bonds, Series 1996. 2. Other than the amendment made pursuant to Section 1 hereof, the remaining provisions of the Financial Advisory Agreement are hereby confirmed as they exist. 3. This Amendment constitutes the entire understanding and agreement of the parties as to an amendment of the Financial Advisory Agreement. Executed as of the day and year first written above. CITY OF PUEBLO, COLORADO, A Municipal Corporation By Pr id( of City ouncil PRINCIPAL FINANCIAL SECURITIES, INC. By Senior Vice President