HomeMy WebLinkAbout06093ORDINANCE NO. 6093
AN ORDINANCE AUTHORIZING THE ISSUANCE OF WATER REVENUE
BONDS, SERIES 1996, IN AN INITIAL AGGREGATE PRINCIPAL AMOUNT
OF APPROXIMATELY $3,978,000 AND IN AN ACCRETED VALUE AT
MATURITY OF APPROXIMATELY $5,435,000, OF THE CITY OF PUEBLO,
COLORADO, FOR THE PURPOSE OF IMPROVING THE CITY'S WATER
FACILITIES AND PAYING THE COSTS OF ISSUING THE SERIES 1996
BONDS; PRESCRIBING THE FORM OF THE SERIES 1996 BONDS;
PROVIDING FOR THE SALE OF THE SERIES 1996 BONDS; PROVIDING
FOR THE APPLICATION OF THE NET REVENUE OF THE MUNICIPAL
WATERWORKS SYSTEM TO PAY THE ACCRETED VALUE AT MATURITY
OF THE SERIES 1996 BONDS; AND PRESCRIBING OTHER DETAILS IN
CONNECTION THEREWITH.
WHEREAS, the City of Pueblo (the "City "), in the County of Pueblo and the State of
Colorado, is a political subdivision of the State, a body corporate and politic, and a home rule city
pursuant to Article XX of the State Constitution and the home rule charter of the City (the
"Charter "); and
WHEREAS, Section 15 -2 of the Charter provides that title to the properties of the former
City water districts have been consolidated and that title to all property of the water works (the
"System ") is in the City, that the entire control, management and operation thereof shall be
exercised by an independent board named the "Board of Water Works of Pueblo, Colorado" (the
"Board "), over which City Council of the City (the "Council ") shall have no jurisdiction or
control, and that the Council shall adopt ordinances requested by the Board which shall be
reasonably necessary to assist the Board in the management of the System; and
WHEREAS, the Board has determined that it is necessary for the management of the
System and in the best interest of the City and its residents that there be authorized to be issued
bonds of the City for the purpose of financing the acquisition, construction and replacement of
water system improvements and the costs of issuing such bonds; and
WHEREAS, the Board has determined that it is in the best interest of the City and its
residents that the payment of the of such bonds be secured by the Net Revenue (as defined herein)
of the System, which Net Revenue result from the control, management and operation of the
System by the Board as specified in the Charter; and
WHEREAS, at the request and upon the advice of the Board (by resolutions of the Board
adopted on May 21, 1996 and June 10, 1996), the Council deems it necessary to authorize by this
Ordinance the issuance of fully registered Water Revenue Bonds, Series 1996 (the "Series 1996
Bonds "), of the City to provide funds for the acquisition, construction, reconstruction,
improvement, betterment, or extension of the City's water facilities, including without limitation
02/103625.2
the acquisition of property, the construction and replacement of storage tanks and water lines, and
all necessary or appropriate appurtenances, property rights, and equipment, including but not
limited to offices (the "Project "), and for the payment of the costs of issuing the Series 1996
Bonds, all as more fully described in this Ordinance; and
WHEREAS, the payment of the Accreted Value at Maturity (as defined herein) of the
Series 1996 Bonds will be insured by a financial guaranty insurance policy (the "Bond Insurance
Policy ") issued by MBIA Insurance Corporation (the "Bond Insurer ") at the time of delivery of
the Series 1996 Bonds; and
WHEREAS, the Council has determined that it is necessary and in the best interests of the
City and its residents that the City provide sufficient funds to finance the Project and pay the costs
of issuing the Series 1996 Bonds, all to the benefit of the City and its residents, in accordance with
the Charter; and
WHEREAS, Article X, Section 20 of the Colorado Constitution ( "Amendment One ")
requires that districts (as defined in Amendment One) not issue bonded debt without prior voter
approval; and
WHEREAS, Amendment One specifically excludes "enterprises" (defined as
government -owned businesses authorized to issue their own revenue bonds and receiving under
10% of their annual revenue in grants from all Colorado state and local governments) from the
restrictions contained therein; and
WHEREAS, the Board constitutes a government -owned business authorized to issue its
own revenue bonds and receives under 10% of its annual revenue in grants from all Colorado state
and local governments; and
WHEREAS, after advertising the sale of the Series 1996 Bonds, the Council hereby finds
that the highest responsible bidder is the hereinafter defined Original Purchaser, whose bid is in
all cases to the best advantage of the City, and the City hereby determines to sell the Series 1996
Bonds to the Original Purchaser; and
WHEREAS, there has been presented to the Council at this meeting proposed forms of the
Paying Agency Agreement, the Preliminary Official Statement and the final Official Statement
(each as defined hereinafter); and
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF PUEBLO,
COLORADO:
Section 1. Except to the extent inconsistent with this Ordinance, all action heretofore
taken by the City, the Board and the officials thereof directed toward the issuance and sale of the
02/103625.2 2
Series 1996 Bonds to the Original Purchaser, for the purposes set forth below, is hereby ratified,
approved and confirmed.
Section 2. For the purpose of providing moneys with which to finance the Project and pay
the cost of issuance, the City shall issue its Water Revenue Bonds, Series 1996 (the "Series 1996
Bonds "), in the original aggregate principal amount of $3,977,956.15 and an aggregate accreted
value at maturity of $5,435,000 (the "Accreted Value at Maturity "), as capital appreciation bonds.
The Series 1996 Bonds shall be dated their date of issuance and delivery to the Original Purchaser.
The Series 1996 Bonds will be compounded each May 1 and November 1, beginning November 1,
1996.
The Series 1996 Bonds shall be issuable solely as fully registered bonds in the
denomination of $5,000 in Accreted Value at Maturity or any integral multiple thereof, numbered
consecutively from R -1. The Series 1996 Bonds shall mature on November 1 of the years, in the
Accreted Value at Maturity, and shall be issued in the original principal amounts, set forth below:
Maturity
( Novemher 1)
Accreted Value
at Maturity
Original Principal
Amount
2001
2002
$ 1, 400, 000.00
4,035,000.00
$1,066,744.00
2,911,212.15
The difference between the original principal amount set forth above and the Accreted Value at
Maturity of any Series 1996 Bond shall constitute interest which shall be payable only upon the
maturity of each such Series 1996 Bond.
The Accreted Value at Maturity on the Series 1996 Bonds shall be payable in lawful money
of the United States of America at the principal corporate trust office of The Bank of Cherry
Creek, N.A., as paying agent for the Series 1996 Bonds (the "Paying Agent ") in Denver,
Colorado, or at the principal corporate trust office of its successor paying agent.
The Series 1996 Bonds shall not constitute a debt or other indebtedness or multi - fiscal
year direct or indirect debt or other financial obligation of the City within the meaning of
any constitution, charter or statutory provision or limitation; the Series 1996 Bonds shall not
be payable from the proceeds of general property taxes; and the Series 1996 Bonds shall not
be considered or held to be general obligations of the City. The Series 1996 Bonds are
special revenue obligations of the City, payable and collectible solely out of and secured by
a pledge of the Net Revenue of the Board.
The Series 1996 Bonds are noncallable for redemption prior to maturity.
02/103625.2
Payment of the Series 1996 Bonds at maturity will be insured by a financial guaranty
insurance policy (the "Bond Insurance Policy ") issued by MBIA Insurance Corporation (the "Bond
Insurer "). In addition the Reserve Fund (as defined herein) will be funded by a Debt Service
Reserve Fund Surety Bond issued by the Bond Insurer in the amount of the Reserve Fund
Requirement (as defined herein), and deposited in the Reserve Fund established by the City with
the Paying Agent pursuant to Section 13 hereof. Payments under the Debt Service Reserve Fund
Surety Bond are governed by the Financial Guaranty Agreement, dated as of July 11, 1996 (the
"Financial Guaranty Agreement ") by and between the City and the Bond Insurer.
Section 3. The Bank of Cherry Creek, N.A., Denver, Colorado, is hereby appointed as
bond registrar (the "Registrar ") for the City for purposes of the Series 1996 Bonds and the City
hereby approves the execution and delivery of the Registration and Paying Agency Agreement,
dated as of June 1, 1996 (the "Paying Agency Agreement "), between the City and the Paying
Agent, to be in form and substance satisfactory to the City Attorney. The President of the Council
is hereby authorized and directed to execute and deliver the Paying Agency Agreement and the
City Clerk or any assistant City Clerk is hereby authorized and directed to attest the Paying
Agency Agreement and affix the seal of the City.
Section 4. The Registrar shall maintain on behalf of the City books for the purpose of
registration and transfer of Series 1996 Bonds, and such books shall specify the person entitled
to each of the Series 1996 Bonds and the rights evidenced thereby, and all transfers of Series 1996
Bonds and the rights evidenced thereby (such person is hereinafter referred to as the "Registered
Owner "). Series 1996 Bonds may be transferred or exchanged by the Registered Owner upon
payment of costs and any taxes or governmental charges required to be paid with respect to such
transfer or exchange, at the principal corporate trust office of the Paying Agent. Series 1996
Bonds may be exchanged for a like aggregate Accreted Value Maturity of Series 1996 Bonds of
other authorized denominations of the same series and maturity. Upon surrender for transfer of
any Series 1996 Bond, duly endorsed for transfer or accompanied by an assignment duly executed
by the Registered Owner of such Series 1996 Bond or his attorneys duly authorized in writing,
the City shall execute and the Registrar shall authenticate and deliver in the name of the transferee
or transferees a new Series 1996 Bond or Bonds for a like aggregate Accreted Value at Maturity.
The person in whose name any Series 1996 Bond shall be registered shall be deemed and regarded
as the absolute owner thereof for all purposes.
Section 5.
(a) The Series 1996 Bonds shall be executed in the name and on behalf of the
City with the manual or facsimile signature of the President of the Council, shall bear a
manual or facsimile of the seal of the City and shall be attested by the manual or facsimile
signature of the City Clerk. Should any officer whose manual or facsimile signature
appears on the Series 1996 Bonds cease to be such officer before delivery of the Series
1996 Bonds, such manual or facsimile signature shall nevertheless be valid and sufficient
for all purposes. The President of the Council and the City Clerk are hereby authorized
02/103625.2 4
and directed to prepare and to execute the Series 1996 Bonds in accordance with the
requirements of this Ordinance. When the Series 1996 Bonds have been duly executed,
the officers of the City are authorized to, and shall, deliver the Series 1996 Bonds to the
Paying Agent for authentication. No Series 1996 Bond shall be secured by this Ordinance
or entitled to the benefit hereof, or shall be valid or obligatory for any purpose, unless the
certificate of authentication of the Paying Agent, in substantially the form set forth in this
Ordinance, has been duly executed by the Paying Agent. Such certificate of the Paying
Agent upon any Series 1996 Bond shall be conclusive evidence and the only competent
evidence that such Series 1996 Bond has been authenticated and delivered hereunder. The
Paying Agent's certificate of authentication shall be deemed to have been duly executed
by it if manually signed by an authorized officer of the Paying Agent, but it shall not be
necessary that the same officer sign the certificate of authentication on all of the Series
1996 Bonds.
(b) For purposes of this Section, "Agent Member" means a member of, or
participant in, the Securities Depository; "Person" means any individual, corporation,
partnership, joint venture, association, joint -stock company, trust, unincorporated
organization or government or any agency or political subdivision thereof and "Securities
Depository" means The Depository Trust Company and its successors and assigns or if,
(i) the then Securities Depository resigns from its functions as depository of the Series
1996 Bonds or (ii) the City discontinues use of the Securities Depository pursuant to
Section 5(e) hereof, any other securities depository which agrees to follow procedures
required to be followed by a securities depository in connection with the Series 1996
Bonds and which is selected by the City with the consent of the Paying Agent.
(c) Except as otherwise provided in this Section, the Series 1996 Bonds in the
form of one global bond for each stated maturity date shall be registered in the name of
the Securities Depository or its nominee and ownership thereof shall be maintained in
book -entry form by the Securities Depository for the account of the Agent Members.
Initially, each Series 1996 Bond shall be registered in the name of CEDE & Co., as the
nominee of The Depository Trust Company. Except as provided in subsection (e) of this
Section the Series 1996 Bonds may be transferred, in whole but not in part, only to the
Securities Depository or a nominee of the Securities Depository or to a successor Securities
Depository selected or approved by the City or to a nominee of such successor Securities
Depository. Each global bond shall bear a legend substantially to the following effect:
"Except as otherwise provided in the Ordinance, this global bond may be transferred, in
whole but not in part, only to another nominee of the Securities Depository (as defined in
the Ordinance) or to a successor Securities Depository or to a nominee of a successor
Securities Depository."
(d) Except as otherwise provided in this Section, the City and the Paying Agent
shall have no responsibility or obligation with respect to (i) the accuracy of the records of
the Securities Depository or any Agent Member with respect to any beneficial ownership
02/103625.2 5
interest in the Series 1996 Bonds, (ii) the delivery to any Agent Member, beneficial owner
of the Series 1996 Bonds or other Person, other than the Securities Depository, of any
notice with respect to the Series 1996 Bonds or (iii) the payment to any Agent Member,
beneficial owner of the Series 1996 Bonds or other Person, other than the Securities
Depository, of any amount with respect to the Accreted Value at Maturity on the Series
1996 Bonds. So long as the certificates for the Series 1996 Bonds issued under this
Ordinance are not issued pursuant to subsection (e) of this Section, the City and the Paying
Agent may treat the Securities Depository as, and deem the Securities Depository to be,
the absolute owner of the Series 1996 Bonds for all purposes whatsoever, including,
without limitation, (A) the payment of Accreted Value at Maturity on such Series 1996
Bonds, (B) giving notices of redemption and other matters with respect to such Series 1996
Bonds and (C) registering transfers with respect to such Series 1996 Bonds. In connection
with any notice or other communication to be provided to the Registered Owners of the
Series 1996 Bonds pursuant to this Ordinance by the City or the Paying Agent with respect
to any consent or other action to be taken by such Registered Owners, the City or the
Paying Agent, as the case may be, shall establish a record date for such consent or other
action and, if the Securities Depository shall be the sole Registered Owner of all of the
Series 1996 Bonds, give the Securities Depository notice of such record date not less than
fifteen (15) calendar days in advance of such record date to the extent possible. The notice
to the Securities Depository provided for in the preceding sentence shall be given only
when the Securities Depository is the sole Registered Owner of the Series 1996 Bonds.
(e) If at any time the Securities Depository notifies the City and the Paying
Agent that it is unwilling or unable to continue as Securities Depository with respect to any
or all of the Series 1996 Bonds or if at any time the Securities Depository shall no longer
be registered or in good standing under the Securities Exchange Act of 1934 or other
applicable statute or regulation and a successor Securities Depository is not appointed by
the City with the consent of the Paying Agent within 90 days after the City receives notice
or becomes aware of such condition, as the case may be, then subsection (c) of this Section
shall no longer be applicable and the City shall execute and the Paying Agent shall
authenticate and deliver certificates representing the Series 1996 Bonds as provided below.
In addition, the City may determine at any time that the Series 1996 Bonds shall no longer
be represented by global certificates and that the provisions of subsections (c), (d) and (e)
of this Section shall no longer apply to the Series 1996 Bonds. In such event, the City
shall execute and the Paying Agent shall authenticate and deliver certificates representing
the Series 1996 Bonds as provided below. Certificates for the Series 1996 Bonds issued
solely in exchange for a global certificate pursuant to this subsection (e) shall be registered
in such names and authorized denominations as the Securities Depository, pursuant to
instructions from the Agent Members or otherwise, shall instruct the City and the Paying
Agent. The Paying Agent shall promptly deliver such certificates representing the Series
1996 Bonds to the Persons in whose names such Series 1996 Bonds are so registered.
02/103625.2 6
Section 6.
(a) As a result of the public sale held pursuant to the City's Resolution and that
resolution's accompanying Notice of Public Sale, the Council hereby sells the Series 1996
Bonds to the highest responsible bidder and to the best advantage of the City, and in
furtherance thereof the Council hereby accepts and approves the offer to purchase the
Series 1996 Bonds as bid by PaineWebber Inc., the Original Purchaser. The Series 1996
Bonds, when executed as provided by law, shall be delivered to the Original Purchaser,
upon receipt of $3,977,956.15 in payment therefor.
(b) Upon the authentication of the Series 1996 Bonds, the Paying Agent shall
deliver the same to the Original Purchaser or its designees as directed by the City as
hereinafter provided. Prior to the authentication and delivery by the Paying Agent of the
Series 1996 Bonds there shall be filed with the Paying Agent the following: (i) a certified
copy of this Ordinance; and (ii) a request and authorization to the Paying Agent on behalf
of the City and signed by the President of the Council to authenticate and deliver the Series
1996 Bonds to the Original Purchaser upon payment to the City of the sum specified in
such request and authorization plus accrued interest thereon to the date of delivery. The
proceeds of the Series 1996 Bonds shall be used exclusively for payment of the cost of the
Project and the costs of issuing the Series 1996 Bonds.
(c) Neither the Original Purchaser nor the subsequent Registered Owner or
Registered Owners of any of the Series 1996 Bonds shall be responsible for the application
or disposal of the funds derived from the sale thereof by the City or any of its officers.
The issuance of the Series 1996 Bonds by the City shall constitute a warranty by and on
behalf of the City, for the benefit of each and every Registered Owner of the Series 1996
Bonds, that the Series 1996 Bonds have been issued for valuable consideration in full
conformity with law.
Section 7. The Series 1996 Bonds shall be in substantially the following form with such
omissions, insertions, endorsements and variations as may be required by the circumstances or by
this Ordinance and which are consistent with this Ordinance:
02/103625.2 7
(Form of Series 1996 Bond)
EXCEPT AS OTHERWISE PROVIDED IN THE HEREINAFTER DEFINED
RESOLUTION, THIS GLOBAL BOOK -ENTRY BOND MAY BE TRANSFERRED, IN
WHOLE BUT NOT IN PART, ONLY TO ANOTHER NOMINEE OF THE SECURITIES
DEPOSITORY (AS DEFINED HEREIN) OR TO A SUCCESSOR SECURITIES DEPOSITORY
OR TO A NOMINEE OF A SUCCESSOR SECURITIES DEPOSITORY.
UNITED STATES OF AMERICA
STATE OF COLORADO
CITY OF PUEBLO
ACTING ON BEHALF OF
BOARD OF WATER WORKS OF PUEBLO, COLORADO
WATER REVENUE BOND
SERIES 1996
I1A
YIELD TO MATURITY ORIGINAL
MATURITY: DATE: PRINCIPAL AMOUNT: ISSUE DATE: CUSIP NUMBER:
REGISTERED OWNER:
ACCRETED VALUE AT MATURITY:
DOLLARS
The City of Pueblo (the "City "), in the County of Pueblo and State of Colorado, for value
received, promises to pay to the Registered Owner (named above), or registered assigns, in the
manner hereinafter provided, and upon presentation and surrender hereof at the principal corporate
trust office of the paying agent, transfer agent and bond registrar named below, the Accreted
Value at Maturity (stated above) on the Maturity Date (stated above) to the Registered Owner
hereof or registered assigns. The Accreted Value at Maturity on this bond is payable in lawful
money of the United States of America, without deduction for exchange or collection charges, at
the principal office of The Bank of Cherry Creek, N.A., Denver, Colorado, as paying agent,
transfer agent and bond registrar (the "Registrar" or "Paying Agent "), or at the office of any
successor paying agent appointed by the City.
This bond is one of a series of water revenue bonds of the City denominated as the "City
of Pueblo, Water Revenue Bonds, Series 1996," which the City is issuing on behalf of the Board
in the original aggregate principal amount of $3,977,956.15 (the "Series 1996 Bonds "). The
Series 1996 Bonds are issued for the purpose of defraying the cost of acquiring, constructing,
reconstructing, improving, bettering, or extending of the City's water facilities, including without
limitation the acquisition of property, the construction and replacement of storage tanks and water
02/103625.2 8
lines, and all necessary or appropriate appurtenances, property rights, and equipment, including
but not limited to offices (the "Project "), and paying the costs of issuing the Series 1996 Bonds.
The Series 1996 Bonds are noncallable for redemption prior to maturity.
Series 1996 Bonds are issuable solely as fully registered bonds in Accreted Values at
Maturity of $5,000 or any integral multiple thereof.
This bond is transferable by the Registered Owner hereof, or by his attorney duly
authorized in writing, at the principal office of the Registrar, but only in the manner, subject to
the limitations and upon payment by the Registered Owner of any cost, tax or governmental
charge required to be paid with respect to such transfer or any exchange as and upon surrender
and cancellation of this bond. Upon such transfer a new Series 1996 Bond or Bonds of the same
maturity or maturities and of authorized denomination or denominations, for the same aggregate
Accreted Value at Maturity and bearing interest at the rate per annum set forth in this bond, will
be issued to the transferee in exchange therefor.
The City and the Registrar may deem and treat the Registered Owner hereof (whether or
not this Bond shall be overdue) as the absolute owner of this Bond for the purpose of receiving
payment of or on account of the Accreted Value at Maturity hereof and interest due hereon and
for all other purposes, and neither the City nor the Registrar shall be affected by any notice to the
contrary.
It is hereby certified and recited that all the requirements of law have been fully complied
with by the proper City officers in the issuance of this bond and that the total debt of the City,
including that of this bond, does not exceed any limit of indebtedness prescribed by the
Constitution or laws of the State of Colorado, or the Charter of the City.
The Series 1996 Bonds, of which this is one, are secured by a pledge of the Net Revenue
of the municipal waterworks system of the City (the "System "). The Net Revenue of the System
are defined for purposes of the Series 1996 Bonds as the gross revenue of the System less payment
of operation and maintenance expenses. In addition to the Series 1996 Bonds, the City currently
has outstanding $16,075,000 aggregate principal amount of general obligation bonds which are
additionally payable from the net revenues of the System on a parity with the Series 1996 Bonds.
The City and the Board also may issue additional debt obligations payable on a parity with the
Series 1996 Bonds upon meeting certain terms and conditions of the Ordinance.
The Series 1996 Bonds shall not constitute a debt or other indebtedness or multi - fiscal
year direct or indirect debt or other financial obligation of the City within the meaning of
any constitution, charter or statutory provision or limitation; the Series 1996 Bonds shall not
be payable from the proceeds of general property taxes; and the Series 1996 Bonds shall not
be considered or held to be general obligations of the City. The Series 1996 Bonds are
02/103625.2 9
special revenue obligations of the City, payable and collectible solely out of and secured by
a pledge of the Net Revenue of the Board.
In addition, payment of the Series 1996 Bonds is secured by an insurance policy issued by
MBIA Insurance Corporation, as set forth below under "Statement of Insurance. "
The Series 1996 Bonds have been issued under the authority of, and in full conformity
with, the Constitution, the Charter and the laws of the State of Colorado, and pursuant to an
ordinance duly adopted by the City.
This bond shall not be valid or become obligatory for any purpose or be entitled to any
security or benefit under the proceedings of the City authorizing the issuance of the Series 1996
Bonds until the Certificate of Authentication hereon shall be signed on behalf of the Registrar.
IN WITNESS WHEREOF, the City Council of the City has caused this bond to be
executed with the facsimile signature of the President of the City Council, and to be attested by
the facsimile signature of the City Clerk of the City under the facsimile seal of the City, all as of
the Issue Date.
(FACSIMILE SEAL)
ATTEST:
(Facsimile Signature)
City Clerk
DATE:
(Facsimile Signature)
President of the City Council
02/103625.2 10
CERTIFICATE OF AUTHENTICATION
This bond is one of the Series 1996 Bonds of the issue described in the within - mentioned
Ordinance.
THE BANK OF CHERRY CREEK, N.A., as
Registrar
(Manua nature)
Authorized Officer
02/103625.2 11
STATEMENT OF INSURANCE
MBIA Insurance Corporation (the "Insurer ") has issued a policy containing the following
provisions, such policy being on file at The Bank of Cherry Creek, N.A., Denver, Colorado.
The Insurer, in consideration of the payment of the premium and subject to the terms of
this policy, hereby unconditionally and irrevocably guarantees to any owner, as hereinafter
defined, of the following described obligations, the full and complete payment required to be
made by or on behalf of the Issuer to The Bank of Cherry Creek, N.A., or its successor (the
"Paying Agent ") of an amount equal to (i) the principal of (either at the stated maturity or by any
advancement of maturity pursuant to a mandatory sinking fund payment) and interest on, the
Obligations (as that term is defined below) as such payments shall become due but shall not be so
paid (except that in the event of any acceleration of the due date of such principal by reason of
mandatory or optional redemption or acceleration resulting from default or otherwise, other than
any advancement of maturity pursuant to a mandatory sinking fund payment, the payments
guaranteed hereby shall be made in such amounts and at such times as such payments of principal
would have been due had there not been any such acceleration); and (ii) the reimbursement of any
such payment which is subsequently recovered from any owner pursuant to a final judgment by
a court of competent jurisdiction that such payment constitutes an avoidable preference to such
owner within the meaning of any applicable bankruptcy law. The amounts referred to in clauses
(i) and (ii) of the preceding sentence shall be referred to herein collectively as the "Insured
Amounts." "Obligations" shall mean:
$5,435,000
CITY OF PUEBLO, COLORADO
Acting on Behalf of
BOARD OF WATER WORKS OF PUEBLO, COLORADO
WATER REVENUE BONDS
SERIES 1996
Upon receipt of telephonic or telegraphic notice, such notice subsequently confirmed in
writing by registered or certified mail, or upon receipt of written notice by registered or certified
mail, by the Insurer from the Paying Agent or any owner of an Obligation the payment of an
Insured Amount for which is then due, that such required payment has not been made, the Insurer
on the due date of such payment or within one business day after receipt of notice of such
nonpayment, whichever is later, will make a deposit of funds, in an account with State Street Bank
and Trust Company, N.A., in New York, New York, or its successor, sufficient for the payment
of any such Insured Amounts which are then due. Upon presentment and surrender of such
Obligations or presentment of such other proof of ownership of the Obligations, together with any
appropriate instruments of assignment to evidence the assignment of the Insured Amounts due on
the Obligations as are paid by the Insurer, and appropriate instruments to effect the appointment
of the Insurer as agent for such owners of the Obligations in any legal proceeding related to
payment of Insured Amounts on the Obligations, such instrument being in a form satisfactory to
02/103625.2 12
State Street Bank and Trust Company, N.A., State Street Bank and Trust Company, N.A. shall
disburse to such owners or the Paying Agent payment of the Insured Amounts due on such
Obligations, less any amount held by the Paying Agent for the payment of such Insured Amounts
and legally available therefor. This policy does not insure against loss of any prepayment
premium which may at any time be payable with respect to any Obligation.
As used herein, the term "owner" shall mean the registered owner of any Obligation as
indicated in the books maintained by the Paying Agent, the Issuer, or any designee of the Issuer
for such purpose. The term owner shall not include the Issuer or any party whose agreement with
the Issuer constitutes the underlying security for the Obligations.
Any service of process on the Insurer may be made to the Insurer at its offices located at
113 King Street, Armonk, New York 10504 and such service of process shall be valid and
binding.
This policy in non - cancelable for any reason. The premium on this policy is not
refundable for any reason including the payment prior to maturity of the Obligations.
MBIA INSURANCE CORPORATION
[FORM OF LEGAL OPINION CERTIFICATE]
Legal Opinion Certificate
The undersigned City Clerk of the City of Pueblo, Colorado, hereby certifies that in
connection with the issuance of the Series 1996 Bonds, an opinion in substantially the following
form was delivered by Kutak Rock to the City, and that said original legal opinion was signed by
said firm of attorneys and dated as of the date of original delivery of the Series 1996 Bonds.
CITY OF PUEBLO, COLORADO
By [Facsimile Signature]
City Clerk
[Form of Legal Opinion]
02/103625.2 13
[FORM OF ASSIGNMENT FOR SERIES 1996 BONDS]
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto
(please print or typewrite name and address of transferee) (Tax
Identification or Social Security No. ) the within bond and all rights and
title hereunder, and hereby irrevocably constitutes and appoints
attorney to transfer the within bond on the books kept for registration thereof, with full
power of substitution in the premises.
Dated:
Signature Guaranteed By:
NOTICE: The signature to this assignment must
correspond with the name as it appears upon the face
of the within bond in every particular, without
alteration or enlargement or any change whatever.
Signature(s) must be guaranteed by a
national bank or trust company or by
a brokerage firm having a
membership in one of the major stock
exchanges.
(End of Series 1996 Bond Form)
Section 8. The City, by and through the Board of Water Works of Pueblo, Colorado (the
"Board "), hereby irrevocably pledges to pay the Accreted Value at Maturity on the Series 1996
Bonds from the Net Revenue of the municipal waterworks system (the "System "). The City, by
and through the Board, hereby commits itself to fix and annually to maintain rates and charges for
water and services furnished by the System which, together with moneys on hand and available
therefor, will be sufficient to pay operation and maintenance expenses of the System and the
principal of, premium, if any, and interest on all bonds, including the Series 1996 Bonds, and
other obligations of the System, as they respectively become due. The term "Net Revenue" as
02/103625.2 14
used herein refers to the Gross Revenue of the System less the payment of Operation and
Maintenance Expenses. The term "Gross Revenue" as used herein means all income and revenues
directly or indirectly derived by the Board from the operation and use of the System, or any part
thereof, including without limitation, any rates, fees, plant investment fees, standby charges,
availability fees, tolls, and charges for the services furnished by, or the use of, the System, and
all income attributable to any past or future dispositions of property or rights or related contracts,
settlements, or judgments held or obtained in connection with the System or its operations, and
including investment income accruing from moneys held to the credit of the Water Revenue Fund;
provided however, that there shall be excluded from Gross Revenue any moneys borrowed and
used for providing Capital Improvements; any money and securities, and investment income
therefrom, in any refunding fund, escrow account, or similar account pledged to the payment of
any bonds or other obligations; and any moneys received as grants or appropriations from the
United States, the State of Colorado, or other sources, the use of which is limited or restricted by
the grantor or donor to the provision of Capital Improvements or for other purposes resulting in
the general unavailability thereof, except to the extent any such moneys shall be received as
payments for the use of the System, services rendered thereby, the availability of any such service,
or the disposal of any commodities therefrom. The term "Capital Improvements" as used herein
means the acquisition of land, easements, facilities, and equipment (other than ordinary repairs
and replacements), and the construction or reconstruction of improvements, betterments, and
extensions, for use by or in connection with the System. And the term "Operation and
Maintenance Expenses" as used herein means all reasonable and necessary current expenses of the
Board, paid or accrued, for operating, maintaining, and repairing the System, including without
limitation legal and overhead expenses of the Board directly related to the administration of the
System, insurance premiums, audits, charges of depository banks and paying agents, professional
services, salaries and administrative expenses, labor, and the cost of materials and supplies for
current operation; provided however, that there shall be excluded from Operation and
Maintenance Expenses any allowance for depreciation, payments in lieu of taxes or franchise fees,
legal liabilities not based on contract, expenses incurred in connection with Capital Improvements,
payments due in connection with any bonds or other obligations issued to provide Capital
Improvements, and charges for the accumulation of reserves.
The Board is required to apply the Net Revenue monthly in the following order of priority:
(i) to the credit of the Bond Fund established pursuant to Section 13 hereof in the amounts set
forth in Section 13 hereof; (ii) to the credit of any reserve fund established with respect to any
Parity Lien Bonds (as defined herein), if required, (iii) to the credit of any other fund or account
hereafter established for the payment of the principal of, premium if any, and interest on any
Subordinate Lien Bonds (as defined herein); and (iv) to the credit of any other fund or account as
may be designated by the Board.
Section 9. The terms "municipal waterworks system" or "System" as used herein shall
include not only the property comprising the System at the present time, but all improvements,
extensions, enlargements, betterments, replacements and additions thereto which may hereafter
be constructed or acquired by the City by and through the Board.
02/103625.2 15
Section 10. The City hereby additionally irrevocably covenants and agrees with each and
every Registered Owner of the Series 1996 Bonds that so long as any of the Series 1996 Bonds
remain outstanding:
(a) By and through the Board, it will continue to operate and manage the
System in an efficient and economical manner and keep and maintain separate accounts of
the receipts and expenses thereof in such manner that the Gross Revenue, Operation and
Maintenance Expenses and Net Revenue may at all times be readily and accurately
determined.
(b) It will not sell or alienate any of the property constituting any part or all of
the System in any manner or to any extent as might materially adversely affect the
payment of the Series 1996 Bonds.
(c) By and through the Board, there shall be charged against all purchasers of
service from the System such rates, charges and other amounts as shall produce revenues
from the System adequate to meet the requirements of this and other sections of this
Resolution.
(d) By and through the Board, the City shall cause all rates, fees and service
charges appertaining to the System to be collected as soon as reasonable, shall prescribe
and enforce rules and regulations for the payment thereof and for the connection of
properties with and the disconnection of properties from the System, and shall provide
methods of collection and penalties, including but not limited to denial of service for
nonpayment of such rates, fees and service charges, to the end that Net Revenue of the
System shall be adequate to meet the requirements hereof.
(e) By and through the Board, the City shall promptly render bills for services
furnished by or for the use of the System, shall use all legal means to assure prompt
payment thereof, shall take such action as may be necessary to make delinquent rates, fees,
tolls, and charges of the System a lien upon the real property served, and to the extent
permitted by law, shall discontinue service to any user who becomes delinquent in the
payment of such charges until the delinquency and all interest, costs and expenses incident
thereto have been paid in full.
(f) By and through the Board, the City shall, at least once a year in the time
and manner provided by law, cause an audit to be performed of the records relating to the
revenues and expenditures of the System. In addition, at least once a year in the time and
manner provided by law, the City, by and through the Board, shall cause a budget to be
prepared and adopted. Copies of the budget and the audit will be filed and recorded in the
places, time, and manner provided by law.
02/103625.2 16
(g) By and through the Board, the City will promptly transmit Net Revenue of
the System and such additional funds at such times and in such amounts as shall be
sufficient to pay promptly (i) the Accreted Value at Maturity of the Series 1996 Bonds,
and (ii) all costs and expenses incurred in connection with the issuance of the Series 1996
Bonds including the preparation, publication and issuance of supplements or amendments
to the Official Statement. Such Net Revenue of the System and additional funds will be
included in the annual appropriation and budget resolutions of the Board.
(h) By and through the Board, the City has and shall continue to maintain the
System as an "enterprise" within the meaning Article X, Section 20 of the Colorado
Constitution for the Board's 1996 fiscal year. Specifically, but not by way of limitation,
the Board has covenanted and agreed that the System shall not receive 10 % or more of its
annual revenue in grants from all Colorado state and local governments combined during
its 1996 fiscal year.
(i) The City, by and through the Board, will carry worker's compensation,
public liability and other forms of insurance on insurable System property, in such
amounts as is customarily carried on prudently operated systems of similar character and
size.
0) By and through the Board, the City shall establish, maintain, enforce, and
collect rates, fees, plant investment fees, availability fees, tolls, and charges for services
furnished by or for the use of the System to create Gross Revenue each fiscal year
sufficient to pay Operation and Maintenance Expenses and to create Net Revenue in an
amount equal to not less than 110% of the amount necessary to pay when due (a) the
Accreted Value at Maturity of the Series 1996 Bonds coming due during such fiscal year
and (b) the principal of and interest on any Parity Lien Bonds (as defined in Section 14
hereof) coming due during such fiscal year. By and through the Board, the City shall also
establish, maintain, enforce, and collect rates, fees, plant investment fees, availability fees,
tolls, and charges for services furnished by or for the use of the System to create Gross
Revenue each fiscal year sufficient to pay Operation and Maintenance Expenses and to
create Net Revenue in an amount equal to not less than 100% of the principal of and
interest on any and all bonds and indebtedness coming due during such fiscal year on
which the Board is required to make payments from the Net Revenue of the System. In
the event that the Gross Revenue at any time is not sufficient to comply with the covenants
in this subsection 0), the City, by and through the Board, shall increase such rates, fees,
plant investment fees, availability fees, tolls, and charges to an extent which will ensure
such compliance and all of the payments and accumulations required by this Ordinance.
(k) The Board will comply with the letter of investment instructions delivered
to the City on the date of issue of the Series 1996 Bonds with respect to the application and
investment of the Series 1996 Bond proceeds.
02/103625.2 i7
Section 11. Proceeds derived from the sale of the Series 1996 Bonds in the approximate
amount of $77,956 shall be expended for payment of the costs and expenses incurred in
connection with the issuance of the Series 1996 Bonds.
Section 12. Proceeds derived from the sale of the Series 1996 Bonds in the approximate
amount of $3,900,000 shall be deposited with the Board and used to finance the Project.
Section 13.
(a) The City hereby establishes with the Board the "City of Pueblo, Colorado,
Water Revenue Bond Fund" (the "Bond Fund "), to be used for the payment of the
Accreted Value at Maturity on the Series 1996 Bonds and the principal of, premium, if
any, and interest on any Parity Lien Bonds issued pursuant to Section 14 hereof, into
which there shall be deposited by the Board on the 25th day of each month one -sixth (1/6)
of the interest due on any then outstanding current interest Parity Lien Bonds on the next
succeeding interest payment date and one - twelfth (1/12) of the principal due on any then
outstanding current interest Parity Lien Bonds on the next succeeding principal payment
date. For the Series 1996 Bonds and any other outstanding capital appreciation Parity Lien
Bonds, the Board shall deposit one - twelfth (1/12) of the Accreted Value at Maturity of the
Series 1996 Bonds and such other capital appreciation Parity Lien Bonds on the 25th date
of each month, beginning twelve months prior to the maturity date of such capital
appreciation bonds. Such payments shall commence November 25, 2000 for the Series
1996 Bonds. The Bond Fund shall be maintained with the Board. Moneys in the Bond
Fund shall be transferred to the Paying Agent, as necessary, at least 5 days prior to the
payment date for such bonds, and shall be deposited into the Paying Agent Bond Fund,
hereby established by the City with the Paying Agent.
Any investment income earned on amounts credited to the Bond Fund will be
credited to the Bond Fund. For purposes of making the deposits required as set forth
above, any investment income so credited to the Bond Fund will be deemed the credit of
Net Revenue to the Bond Fund.
(b) The City hereby establishes with the Paying Agent the "City of Pueblo,
Colorado, Water Revenue Reserve Fund" (the "Reserve Fund "), to be used only for the
payment of the Accreted Value at Maturity on the Series 1996 Bonds if insufficient funds
are available therefor in the Paying Agent Bond Fund. The Reserve Fund shall be funded
in the amount of the Reserve Fund Requirement, which means, with respect to the Series
1996 Bonds, $397,795, which may be satisfied by the deposit of cash or a Debt Service
Reserve Fund Surety Bond issued by the Bond Insurer in at least the required amount of
the Reserve Fund Requirement with respect to the Series 1996 Bonds and, with respect to
any series of Parity Lien Bonds, the lesser of (a) 10% of the principal amount of such
Parity Lien Bonds, or (b) the maximum annual debt service in any "Bond Year" (as
defined for such Parity Lien Bonds) on such Parity Lien Bonds. The Reserve Fund
02/103625.2 18
Requirement may be satisfied either by the deposit of cash or by the provision of a debt
service reserve fund surety bond in at least the amount of the Reserve Fund Requirement,
issued by an insurance company rated in the highest rating category by Standard & Poor's
and Moody's, or by a combination of cash and a debt service reserve surety bond.
On the date of delivery of the Series 1996 Bonds, a Debt Service Reserve Fund
Surety Bond in the amount of the Reserve Fund Requirement, issued by the Bond Insurer,
will be delivered to the Paying Agent and will constitute the Reserve Fund. Prior to any
draws on the Debt Service Reserve Fund Surety Bond, the Paying Agent shall deliver to
the Bond Insurer a Demand For Payment in the form attached as an exhibit to the
Financial Guaranty Agreement at least three days prior to the date on which funds are
required.
If at any time any amounts are drawn upon the Debt Service Reserve Fund Surety
Bond or withdrawn from the Reserve Fund, or if on any valuation date there is any
deficiency in the Reserve Fund, then during each month thereafter, after the deposits to
the Bond Fund required under subparagraph (a) above, there is to be deposited, on or
before the 26th day of each month, in the following order of priority, (i) to the credit of
the Bond Insurer an amount equal to one -sixth of such amount drawn upon the Debt
Service Reserve Fund Surety Bond and (ii) to the credit of the Reserve Fund an amount
equal to one -sixth of such amount so withdrawn or of such deficiency, until the Debt
Service Reserve Fund Surety Bond has been reinstated in its full amount and /or the amount
on deposit in the Reserve Fund shall be equal to the Reserve Fund Requirement.
Moneys in the Reserve Fund or, after any cash in the Reserve Fund has been
depleted, the Debt Service Reserve Fund Surety Bond, shall be used solely to make up any
deficiencies in moneys available in the Paying Agent Bond Fund required for payment of
Accreted Value at Maturity of the Series 1996 Bonds on any maturity date, through and
including November 1, 2002.
Investments, if any, within the Reserve Fund shall be valued at fair market value,
and shall be marked to market the first Business Day of October of each year while the
Series 1996 Bonds are Outstanding. For purposes of such valuation, the Debt Service
Reserve Fund Surety Bond shall not be considered to be an "investment. " Such
investments, if any, shall not have maturities which exceed five years from the date
acquired.
In addition to, and after the deposits of Net Revenue described above, there shall
be deposited with the Bond Insurer an amount representing interest due on amounts, if any,
advanced under the Debt Service Reserve Fund Surety Bond pursuant to the terms and
conditions of the Financial Guaranty Agreement.
02/103625.2 19
(c) Moneys in the Bond Fund, the Paying Agent Bond Fund and the Reserve
Fund may be invested only in Permitted Investments. Any interest earnings or other
income or investments in the Reserve Fund shall be deposited in the Bond Fund, and on
investments in the Bond Fund and the Paying Agent Bond Fund, will be credited to those
funds.
"Permitted Investments" means the following investments, so long as such investments are
permitted under the laws of the State, for funds of the City:
(a) Direct obligations of the United States of America (including obligations
issued or held in book -entry form on the books of the Department of the Treasury, and
CATS and TGRS) or obligations the principal of and interest on which are unconditionally
guaranteed by the United States of America.
(b) Bonds, debentures, notes or other evidence of indebtedness issued or
guaranteed by any of the following federal agencies and provided such obligations are
backed by the full faith and credit of the United States of America (stripped securities are
only permitted if they have been stripped by the agency itself):
(i) Farmers Home Administration (FHA)
Certificates of beneficial ownership
(ii) Federal Housing Administration Debentures (FHA)
(iii) General Services Administration
Participation certificates
(iv) Government National Mortgage Association (GNMA or "Ginnie
Mae ")
GNMA - guaranteed mortgage- backed bonds
GNMA - guaranteed pass - through obligations
(v) U.S. Maritime Administration
Guaranteed Title XI financing
(vi) U.S. Department of Housing and Urban Development (HUD)
Project Notes
Local Authority Bonds
(c) Bonds, debentures, notes or other evidence of indebtedness issued or
guaranteed by any of the following non -full faith and credit U.S. government agencies
(stripped securities are only permitted if they have been stripped by the agency itself):
(i) Federal Home Loan Bank System
Senior debt obligations
(ii) Federal Home Loan Mortgage Corporation (FHLMC or
"Freddie Mac ")
Participation Certificates
02/103625.2 20
Senior debt obligations
(iii) Federal National Mortgage Association (FNMA or "Fannie Mae ")
Mortgage- backed securities and senior debt obligations
(excluded are stripped mortgage securities which are valued
greater than par on the portion of unpaid principal)
(iv) Student Loan Marketing Association (SLMA or "Sallie Mae ")
Senior debt obligations
(v) Resolution Funding Corp. ( REFCORP) Only the interest
component of REFCORP strips which have been stripped by request
to the Federal Reserve Bank of New York in book entry form are
acceptable
(vi) Farm Credit System consolidated systemwide bonds and notes.
(d) Money market funds registered under the Federal Investment Company Act
of 1940, whose shares are registered under the Federal Securities Act of 1933, and having
a rating by Standard & Poor's ( "S &P ") of "AAAm -G "; "AAAm "; or "AAm."
(e) Certificates of deposit secured at all times by collateral described in (a) or
(b) above. Such certificates must be issued by commercial banks, savings and loan
associations or mutual savings banks whose student loan obligations are rated "A -1 +" or
better by S &P. The collateral must be held by a third party and the Registered Owners
of the Series 1996 Bonds must have a perfected first security interest in the collateral.
(f) Certificates of deposit, savings accounts, deposit accounts or money market
deposits which are fully insured by FDIC, including BIF and SAIF.
(g) Investment Agreements, including GIC's, acceptable to the Bond Insurer.
(h) Commercial paper rated, at the time of purchase, "Prime - 1" by Moody's
Investors Service ( "Moody's ") or "A -1 +" or better by S &P.
(i) Bonds or notes issued by any state or municipality which are rated by
Moody's or S &P in one of the two highest rating categories assigned by such agencies.
0) Federal funds or bankers acceptances with a maximum term of one year of
any bank which has an unsecured, uninsured and unguaranteed obligation rating of "Prime
- 1" or "A3" or better by Moody's and "A -1 +" or better by S &P.
(k) Repurchase agreements provide for the transfer of securities from a dealer
bank or securities firm (seller /borrower) to a municipal entity (buyer /lender), and the
transfer of cash from a municipal entity to the dealer bank or securities firm with an
agreement that the dealer bank or securities firm will repay the cash plus a yield to the
municipal entity in exchange for the securities at a specified date.
02/103625.2 21
Repurchase Agreements ( "repos ") must satisfy the following criteria or be approved
by the Bond Insurer.
(i) Repos must be between the municipal entity and a dealer bank or
securities firm:
(A) Primary dealers on the Federal Reserve reporting dealer list
which fall under the jurisdiction of the SIPC and which are
rated "A" or better by S &P and Moody's, or
(B) Banks rated "A" or above by S &P and Moody's.
(ii) The written repo contract must include the following:
(A) Securities which are acceptable for transfer are:
(1) Direct U.S. governments, or
(2) Federal agencies backed by the full faith and credit
of the U.S. government (and FNMA & FMAC).
(B) The term of the repo may be up to 30 days.
(C) The collateral must be delivered to the municipal entity,
trustee (if trustee is not supplying the collateral) or third
party acting as agent for the trustee (if the trustee is
supplying the collateral) before /simultaneous with payment
(perfection by possession of certificated securities).
(D) The trustee has a perfected first - priority security interest in
the collateral.
(E) Collateral is free and clear of third -party liens and in the
case of SIPC broker was not acquired pursuant to a repo or
reverse repo.
(F) Failure to maintain the requisite collateral percentage, after
a two -day restoration period, will require the trustee to
liquidate collateral.
(G) Valuation of Collateral:
02/103625.2 22
(1) The securities must be valued weekly, marked -to-
market at current market price plus accrued interest.
The value of collateral must be equal to 104 % of the
amount of cash transferred by the municipal entity to
the dealer bank or security firm under the repo plus
accrued interest. If the value of securities held as
collateral slips below 104% of the value of the cash
transferred by municipality, then additional cash
and /or acceptable securities must be transferred. If,
however, the securities used as collateral are FNMA
or FHLMC, then the value of collateral must equal
105%.
(iii) Legal opinion which must be delivered to the municipal entity and
Trustee: Repo meets guidelines under state law for legal investment
of public funds.
(1) Pre - refunded municipal bonds rated "Aaa " by Moody's and "AAA " by S &P.
If, however, the issue is only rated by S &P (i.e., there is no Moody's rating), then the
pre- refunded bonds must have been pre - refunded with cash, direct U.S. or U.S.
guaranteed obligations, or AAA rated pre - refunded municipals to satisfy this condition.
"Qualified Surety Bond" means any insurance policy, surety bond, letter of credit or
similar instrument deposited in or credited to the Reserve Fund as provided in Section 3.08 hereof
in lieu of or in partial substitution for cash or Permitted Investments on deposit in the Reserve
Fund. Any such insurance policy, surety bond, letter of credit or similar instrument must be
issued by an entity having a rating in the highest rating category assigned by Moody's Investors
Service and Standard & Poor's Ratings Group and, if rated by A.M. Best & Company, must also
be rated in the highest rating category by A.M. Best & Company, at the time such policy, surety,
bond, letter of credit or similar instrument is deposited in or credited to the Reserve Fund.
Section 14. The City, at the direction of the Board, may issue additional notes, bonds or
other securities payable from the Net Revenue of the System provided for herein having a lien on
the Net Revenue of the System on a parity with (the "Parity Lien Bonds ") or subordinate to (the
"Subordinate Lien Bonds "), but not prior or superior to, the lien thereon of the Series 1996 Bonds
authorized herein; provided, however, the Board or the City, at the direction of the Board, may
issue Parity Lien Bonds only upon compliance with the following conditions:
(a) the Board is then and as of the date of issuance of the Parity Lien Bonds will
be, in substantial compliance with all of the covenants of this Ordinance, and no Event of
Default shall have occurred and be continuing hereunder;
02/103625.2 23
(b) the Board is then and as of the date of issuance of the Parity Lien Bonds will
be, current in the accumulation of all amounts required to be then accumulated in the Bond
Fund as required by this Ordinance;
(c) the Net Revenue for the fiscal year immediately preceding the date of
issuance of such Parity Lien Bonds is sufficient to pay an amount representing not less than
110% of the average annual debt service requirements for the Bonds, any outstanding
Parity Lien Bonds, and the Parity Lien Bonds proposed to be issued. For purposes of such
test, the Net Revenue may be increased if there has been adopted a schedule of increases
in rates, fees, plant investment fees, availability fees, tolls, and charges during or since
the preceding fiscal year by adding to the actual revenues for said preceding fiscal year,
an estimated sum equal to 100% of the estimated increase in revenues which would have
been realized during said preceding fiscal year, had such increase been in effect during all
of said preceding fiscal year;
(d) the Net Revenue for the fiscal year immediately preceding the date of
issuance of such Parity Lien Bonds is sufficient to pay an amount representing not less than
100% of the average annual debt service requirements for any and all outstanding bonds
which require payments from the Net Revenue of the System. For purposes of such test,
the Net Revenue may be increased if there has been adopted a schedule of increases in
rates, fees, plant investment fees, availability fees, tolls, and charges during or since the
preceding fiscal year by adding to the actual revenues for said preceding fiscal year, an
estimated sum equal to 100% of the estimated increase in revenues which would have been
realized during said preceding fiscal year, had such increase been in effect during all of
said preceding fiscal year; and
(e) the City, by and through the Board, establishes a reserve fund for such
proposed Parity Lien Bonds in a amount equal to the lesser of (i) 10% of the principal
amount of such proposed Parity Lien Bonds and (ii) the maximum annual debt service on
such proposed Parity Lien Bonds.
A written certificate by the President of the Board or the Board's Executive Director that
the conditions set forth in Subsection 15(a) and (e) above have been met, and a written certificate
by a certified public accountant or consulting engineer that the conditions set forth in
Subsections 15(b), (c) and (d) above have been met, shall conclusively determine the right of the
Board or the City to authorize, issue, sell, and deliver the proposed Parity Lien Bonds. Any Net
Revenue shall be distributed among the Series 1996 Bonds and all Parity Liens Bonds on a pro rata
basis, without regard to the existence of a funded debt service reserve or a surety bond.
The City's presently outstanding General Obligation Water Refunding Bonds, Series 1991,
General Obligation Water Refunding Bonds, Series 1984B, and General Obligation Water
Refunding Bonds, Series 1984A, which, upon the issuance of the Series 1996 Bonds, will be
02/103625.2 24
outstanding in the collective aggregate principal amount of $16,075,000, constitute Parity Lien
Bonds with respect to the Series 1996 Bonds.
So long as no Event of Default shall have occurred and be continuing hereunder, the Board
or the City, at the Board's request may issue Subordinate Lien Bonds if the Net Revenue for the
fiscal year immediately preceding the date of issuance of such Subordinate Lien Bonds is sufficient
to pay an amount representing not less than 100 % of the average annual debt service requirements
for any and all outstanding bonds which require payments from the Net Revenue of the System,
including the proposed Subordinate Lien Bonds. For purposes of such test, the Net Revenue may
be increased if there has been adopted a schedule of increases in rates, fees, plant investment fees,
availability fees, tolls, and charges during or since the preceding fiscal year by adding to the actual
revenues for said preceding fiscal year, an estimated sum equal to 100 % of the estimated increase
in revenues which would have been realized during said preceding fiscal year, had such increase
been in effect during all of said preceding fiscal year. A written certificate by a Certified Public
Accountant or Consulting Engineer that the condition set forth above has been met, shall
conclusively determine the right of the Board or the City to authorize, issue, sell, and deliver such
Subordinate Lien Bonds.
Section 15. The distribution and use of the Preliminary Official Statement in connection
with the offering and sale of the Series 1996 Bonds are in all respects hereby confirmed and
approved. The form of final Official Statement, as presented at this meeting, is hereby approved
and adopted, and the President of the Council is authorized and directed to approve and sign, on
behalf of the City, the final Official Statement for use in connection with the offering and sale of
the Series 1996 Bonds. The execution of the final Official Statement by the President of the
Council shall be conclusively deemed to evidence the approval of the form and contents thereof
by the City.
Section 16. The Council of the City, having been fully informed of and having considered
all the pertinent facts and circumstances, and based upon the best information and belief of the
members of the Council, does hereby find, determine and declare that:
(a) the issuance of the Series 1996 Bonds and the financing of the Project, and
all procedures undertaken incident thereto, are in full compliance and conformity with all
presently applicable requirements, provisions and limitations prescribed by the Constitution
and laws of the State of Colorado and the City's Charter;
(b) all covenants, statements, representations and agreements contained in the
Series 1996 Bonds are hereby approved and adopted as the covenants, statements,
representations and agreements of the City;
(c) the City covenants with the Original Purchaser and all subsequent
Registered Owners of the Series 1996 Bonds that it will make no use of the proceeds of
the Series 1996 Bonds at any time during the term thereof which, if such use had been
02/103625.2 25
reasonably expected on the date the Series 1996 Bonds are issued, would have caused the
Series 1996 Bonds to be "arbitrage bonds" within the meaning of Section 148 of the
Internal Revenue Code of 1986, as amended (the "Code ");
(d) the City shall timely file Internal Revenue Form 8038 -G which shall contain
the information required to be filed pursuant to Section 149(e) of the Code;
(e) the Series 1996 Bonds shall not become directly or indirectly federally
guaranteed within the meaning of Section 149(b) of the Code;
(f) the City covenants that the gross proceeds of the Series 1996 Bonds shall
not be used in a manner which will cause the Series 1996 Bonds to be considered "private
activity bonds" within the meaning of Section 141 of the Code; and
(g) the City will cause the Board to comply with the letter of investment
instructions delivered to it on the date of issue of the Series 1996 Bonds with respect to the
application and investment of the Series 1996 Bond proceeds.
Section 17. Payment of the Series 1996 Bonds shall be additionally secured by a bond
insurance policy issued by MBIA Insurance Corporation, and the City agrees to pay the premium
for such bond insurance, but only from the proceeds of the Series 1996 Bonds.
Section 18. The President of the Council, the City Clerk and the Director of Finance of
the City shall, and they are hereby authorized and directed to take all necessary or appropriate
actions and to execute and deliver all other agreements, certificates and documents as may be
necessary or desirable to effectuate the provisions of this Ordinance and to comply with the
requirements of law.
Section 19.
(a) This Section constitutes the written undertaking of the City for the benefit of the Registered
Owners of the Series 1996 Bonds required by Section (b)(5)(i) of Securities and Exchange
Commission Rule 15c2 -12 under the Securities Exchange Act of 1934, as amended (17 CFR Part
240, § 240. 15c2 -12) (the "Rule "). The Registered Owners of the Series 1996 Bonds for purposes
of this Section shall be the beneficial owners as well as the Registered Owners. This Section is
for the benefit of the Registered Owners of Series 1996 Bonds and each Registered Owner of a
Series 1996 Bond shall be a beneficiary of this Section with the right to enforce this Section
directly against the City.
(b) The City, as an "obligated person" within the meaning of the Rule,
undertakes to provide or cause the Board to provide the following information:
02/103625.2 26
(i) Annual Financial Information; and
(ii) Material Event Notices.
The term "Annual Financial Information" shall mean the financial information, which shall
be based on financial statements prepared in accordance with generally accepted accounting
principles ( "GAAP "), and operating data of the type contained in the Official Statement,
including audited financial statements and financial information and operating data relating
to the City and the Board, the Board's and the City's general funds, and their outstanding
debt and other obligations. The term "Material Event Notices" shall mean written or
electronic notice of a Material Event. The term "Material Event" shall mean any of the
following events, if material, with respect to the Series 1996 Bonds: (1) Principal and
interest payment delinquencies; (2) Non - payment related defaults; (3) Unscheduled draws
on debt service reserves reflecting financial difficulties; (4) Unscheduled draws on credit
enhancements reflecting financial difficulties; (5) Substitution of credit or liquidity
providers or their failure to perform; (6) Adverse tax opinions or events affecting the tax -
exempt status of the Series 1996 Bonds; (7) Modifications to rights of owners of the Series
1996 Bonds; (8) Calls of Series 1996 Bonds; (9) Defeasances of Series 1996 Bonds;
(10) Release, substitution, or sale of property securing repayment of the Series 1996
Bonds; and (11) Rating changes.
(c) The City shall while any Series 1996 Bonds are legally Outstanding provide,
or cause the Board to provide, Annual Financial Information within 188 days after the end
of the Board's fiscal year (the "Submission Date "), beginning with the Board's fiscal year
ending December 31, 1996, to each then existing NRMSIR and the SID, if any, such
Annual Financial Information within two days of the day it receives it (the "Report Date ")
while any Series 1996 Bonds are Outstanding. It shall be sufficient if the City provides,
or causes the Board to provide, to each then existing NRMSIR and the SID, if any, the
Annual Financial Information by specific reference to documents previously provided to
each NRMSIR and the SID, if any, or filed with the Securities and Exchange Commission
and, if such a document is a final official statement within the meaning of the Rule,
available from the MSRB. The term " NRMSIR" shall mean shall mean a nationally
recognized municipal securities information repository, as recognized from time to time
by the Securities and Exchange Commission for the purposes referred to in the Rule. The
NRMSIRs as of the date of this Ordinance are as follows: Kenny Information Systems, 65
Broadway -16th Floor, New York, New York 10006 -2503; Thompson Financial Services,
Attention: Municipal Disclosure, 395 Hudson Street, New York, New York 10014 -3669;
Disclosure Inc., 5161 River Road, Bethesda, Maryland 20816 -1584; Moody's NRMSIR,
99 Church Street, New York, New York 10007; Bloomberg Municipal Repositories, P.O.
Box 840, Princeton, New Jersey 08542 -0840; and R.R. Donnelley Financial Municipal
Securities Disclosure Archive, 55 Main Street, Hudson, Massachusetts 01749. The term
"SID" shall mean any state information depository as operated or designated by the State
of Colorado as such for the purposes referred to in the Rule. As of the date of this
02/103625.2 27
Ordinance, no SID exists within the State. The term "MSRB" shall mean the Municipal
Securities Rulemaking Board. The current address of the MSRB is 1640 King Street,
1#300, Alexandria, Virginia 22314.
(d) If a Material Event occurs while any Series 1996 Bonds are legally
Outstanding, the City shall promptly provide or cause the Board to provide to the MSRB
and the SID, if any, such Material Event Notice. Each Material Event Notice shall be so
captioned and shall prominently state the date, title, and CUSIP numbers of the Series
1996 Bonds.
(e) Unless otherwise required by law and subject to technical and economic
feasibility, the City shall employ such methods of information transmission as shall be
reasonably requested or recommended by the designated recipients of the City's
information.
(f) The undertaking in this Section will be in effect from the date of delivery
of the Series 1996 Bonds until the earliest of (i) the date the Accreted Value at Maturity
on the Series 1996 Bonds is no longer legally Outstanding pursuant to the terms of this
Ordinance; (ii) the date that the City and the Board shall no longer constitute an "obligated
person" within the meaning of the Rule; or (iii) the date on which those portions of the
Rule which required this written undertaking are held to be invalid by a court of competent
jurisdiction in a non - appealable action, have been repealed retroactively or otherwise do
not apply to the Series 1996 Bonds.
(g) This Section may be amended without the consent of the Registered Owners
of the Series 1996 Bonds, in compliance with the Rule and any interpretive guidance
related to the Rule. The Paying Agent shall provide notice of such amendment to each
NRMSIR.
(h) Any failure by the City to perform in accordance with this Section shall not
constitute an "Event of Default" under this Ordinance, and the rights and remedies
provided by this Ordinance upon the occurrence of an "Event of Default" shall not apply
to any such failure. The Registered Owners of Series 1996 Bonds may enforce specific
performance of the undertakings herein by any available judicial proceeding. Unless
otherwise required by law, no owner of a Series 1996 Bond shall be entitled to damages
for the City's non - compliance with its obligations under this Section.
Section 20. Each of the following events is hereby declared an "Event of Default":
(a) Nonpayment of Accreted Value as Maturity. If the Accreted Value at
Maturity of the Series 1996 Bonds herein authorized to be issued shall not be made
(without regard to payments made by the Bond Insurer under the Policy) when the same
shall become due and payable at maturity; or
02/103625.2 28
(b) Default under the Board's Bond Resolution. If an "event of default" has
occurred and is continuing under the Board's bond resolution authorizing the issuance and
delivery of the Series 1996 Bonds; or
(c) Default of any Provision. If the City defaults in the performance of any
other of its covenants in this Ordinance (other than a default under Section 19 hereof), and
such default continues for 30 days after written notice specifying such default and
requiring the same to be remedied is given to the City by the Registered Owners of 25 %
in aggregate Accreted Value at Maturity of the Series 1996 Bonds then outstanding;
provided that, so long as it is not in default of its obligations under its bond insurance
policy, the Bond Insurer shall be deemed a Registered Owner of the Series 1996 Bonds for
purposes of such notice; or
(d) Bankruptcy. The City shall file a petition for bankruptcy or shall be
declared insolvent by a court of competent jurisdiction.
Section 21. Upon the happening and continuance of any of the Events of Default as
provided in Section 20 of this Ordinance, then and in every case the Bond Insurer or the
Registered Owners of not less than twenty -five percent (25 %) in aggregate Accreted Value at
Maturity of the Series 1996 Bonds then outstanding, with the consent of the Bond Insurer,
including but not limited to a trustee or trustees therefor, may proceed against the City, its
council, and its agents, officers and employees to protect and enforce the rights of the Bond
Insurer or any Registered Owner of Series 1996 Bonds under this Ordinance by mandamus or
other suit, action or special proceedings in equity or at law, in any court of competent jurisdiction,
either for the specific performance of any covenant or agreement contained herein or in an award
of execution of any power herein granted for the enforcement of any proper legal or equitable
remedy as the Bond Insurer or such Registered Owners may deem most effectual to protect and
enforce the rights aforesaid, or thereby to enjoin any act or thing which may be unlawful or in
violation of any right of the Bond Insurer or any Registered Owner, or to require the governing
body of the City to act as if it were the trustee of an express trust, or any combination of such
remedies. All such proceedings at law or in equity shall be instituted, had and maintained for the
equal benefit of all Registered Owners of the Series 1996 Bonds then outstanding. The failure of
the Bond Insurer or any such Registered Owner so to proceed shall not relieve the City or any of
its officers, agents or employees of any liability for failure to perform any duty. Each right or
privilege of any such Registered Owner (or trustee thereof) is in addition and cumulative to any
other right or privilege, and the exercise of any right or privilege by or on behalf of the Bond
Insurer or any Registered Owner shall not be deemed a waiver of any other right or privilege
thereof.
Section 22. This Ordinance may be amended or supplemented by ordinance adopted by
the City Council in accordance with law, without receipt by the City of additional considerations
and without the consent of the Registered Owners but with the written consent of the Bond
Insurer, (a) to cure any ambiguity, to cure, correct or supplement any formal defect or omission
021103625.2 29
or inconsistent provision contained in this Ordinance, to make any provision necessary or desirable
due to a change in law, to make any provisions with respect to matters arising under this
Ordinance, or to make any provisions for any other purpose, if such provisions are necessary or
desirable and do not materially adversely affect the interests of the Registered Owners of the
Series 1996 Bonds; (b) to subject to this Ordinance or pledge to the payment of the Series 1996
Bonds additional revenues, properties or collateral; and (c) to grant or confer upon the Registered
Owners any additional rights, remedies, powers or authority that may be lawfully granted to or
conferred upon the Registered Owners. This Ordinance may be amended or supplemented for any
other reason by ordinance adopted by the City Council in accordance with law, without receipt
by the City of any additional consideration but with the written consent of the Bond Insurer and
the Registered Owners of seventy -five percent (75 %) in aggregate Accreted Value at Maturity of
the Series 1996 Bonds authorized by this Ordinance and outstanding at the time of the adoption
of such amendatory or supplemental ordinance; provided however, that without the consent of the
Registered Owners of all the Bonds affected thereby, nothing shall permit, or be construed as
permitting: (a) a change in the terms of the maturity of any Series 1996 Bond, in the Accreted
Value at Maturity of any Series 1996 Bond, or in the terms of prior redemption of any Series 1996
Bond; (b) an impairment of the right of the Registered Owners to institute suit for the enforcement
of any payment of the Accreted Value at Maturity of the Series 1996 Bonds when due; (c) the
creation of a lien upon the Net Revenue ranking prior to the lien of the Series 1996 Bonds; (d) a
privilege or priority of any Series 1996 Bond over any other Series 1996 Bond; or (e) a reduction
in the percentage in Accreted Value at Maturity of the Series 1996 Bonds the consent of whose
Registered Owners is required for any such amendatory or supplemental ordinance.
Section 23. If any one or more sections or parts of this Ordinance shall be adjudged
unenforceable or invalid, such judgment shall not affect, impair or invalidate the remaining
provisions of this Ordinance, it being the intention that the various provisions hereof are
severable.
Section 24. All ordinances or parts thereof in conflict with this Ordinance are hereby
repealed to the extent of such conflict.
Section 25. This Ordinance is, and shall constitute, a legislative measure of the City, and
after the Series 1996 Bonds hereby authorized are issued, sold and are Outstanding, this Ordinance
shall constitute a contract between the City and the Registered Owners of the Series 1996 Bonds,
and shall be and remain irrepealable until the Series 1996 Bonds, and the interest accruing thereon
shall have been fully paid, satisfied and discharged.
Section 26. This Ordinance, immediately on its passage, shall be recorded in the Book
of Ordinances kept for that purpose, authenticated by the signatures of the President of the Council
and the City Clerk, and shall be published as required by the Charter of said City.
Section 27. No recourse shall be had for the payment of the Accreted Value at Maturity
on any of the Series 1996 Bonds or for any claim based thereon or upon any obligation, covenant
02/103625.2 30
or agreement contained in this Ordinance or the Paying Agency Agreement against any past,
present or future officer, employee or agent of the City, or of any successor public corporation,
as such, either directly or through the City or any successor public corporation, under any rule
of law or equity, statute or constitution or by the enforcement of any assessment or penalty or
otherwise, and all such liability of any such officers, employees or agents as such is hereby
expressly waived and released as a condition of and consideration for the passage of this
Ordinance, the execution of the Paying Agency Agreement, and the issuance of the Series 1996
Bonds.
Section 28. In the event that, on the second Business Day, and again on the Business Day,
prior to any maturity date on the Series 1996 Bonds, the Paying Agent has not received sufficient
moneys to pay all the Accreted Value at Maturity on the Series 1996 Bonds due on the second
following or following, as the case may be, Business Day, the Paying Agent shall immediately
notify the Bond Insurer or its designee on the same Business Day by telephone or telegraph,
confirmed in writing by registered or certified mail, of the amount of the deficiency. In the event
of any such deficiency, the Paying Agent shall first call upon the Bond Insurer to pay the amount
of the deficiency pursuant to the Debt Service Reserve Fund Surety Bond deposited in the Reserve
Fund, pursuant to the Financial Guaranty Agreement, and only then shall call upon the Bond
Insurer to pay under the Bond Insurance Policy.
If the deficiency is made up in whole or in part prior to or on the payment date, the Paying
Agent shall so notify the Bond Insurer or its designee.
In addition, if the Paying Agent has notice that any Registered Owner has been required
to disgorge payments of Accreted Value at Maturity on the Series 1996 Bonds to a trustee in
bankruptcy or creditors or others pursuant to a final judgment by a court of competent jurisdiction
that such payment constitutes a voidable preference to such Registered Owner within the meaning
of any applicable bankruptcy laws, then the Paying Agent shall notify the Bond Insurer or its
designee of such fact by telephone or telegraphic notice, confirmed in writing by registered or
certified mail.
The Paying Agent is hereby irrevocably designated, appointed, directed and authorized to
act as attorney -in -fact for Registered Owners of the Series 1996 Bonds as follows: if and to the
extent there is a deficiency in amounts required to pay Accreted Value at Maturity on the Series
1996 Bonds, the Paying Agent shall (i) execute and deliver to State Street Bank and Trust
Company, N.A., or its successors under the Bond Insurance Policy (the "Insurance Paying
Agent "), in form satisfactory to the Insurance Paying Agent, an instrument appointing the Bond
Insurer as agent for such Registered Owners in any legal proceeding related to the payment of
such Accreted Value at Maturity and an assignment to the Bond Insurer of the claims for Accreted
Value at Maturity to which such deficiency relates and which are paid by the Bond Insurer, (ii)
receive as designee of the respective Registered Owners (and not as Paying Agent) in accordance
with the tenor of the Bond Insurance Policy payment from the Insurance Paying Agent with
021103625.2 31
respect to the claims for Accreted Value at Maturity so assigned, and (iii) disburse the same to
such respective Registered Owners.
Payments with respect to claims for Accreted Value at Maturity of Series 1996 Bonds
disbursed by the Paying Agent from proceeds of the Bond Insurance Policy shall not be considered
to discharge the obligation of the City with respect to such Series 1996 Bonds, and the Bond
Insurer shall become the owner of such unpaid Series 1996 Bonds and claims for the interest in
accordance with the tenor of the assignment made to it under the provisions of this subsection or
otherwise.
Irrespective of whether any such assignment is executed and delivered, the City and the
Paying Agent hereby agree for the benefit of the Bond Insurer that:
(a) They recognize that to the extent the Bond Insurer makes payments, directly
or indirectly (as by paying through the Paying Agent), on account of Accreted Value at
Maturity on the Series 1996 Bonds, the Bond Insurer will be subrogated to the rights of
such Registered Owners to receive the amount of such principal and interest from the City,
with interest thereon as provided and solely from the sources stated in this Ordinance and
the Series 1996 Bonds; and
(b) They will accordingly pay to the Bond Insurer the amount of such Accreted
Value at Maturity (including Accreted Value at Maturity recovered under subparagraph
(ii) of the first paragraph of the Bond Insurance Policy, which Accreted Value at Maturity
shall be deemed past due and not to have been paid), with interest thereon as provided in
this Ordinance and the Series 1996 Bonds, but only from the sources and in the manner
provided herein for the payment of Accreted Value at Maturity on the Bonds to Registered
Owners, and will otherwise treat the Bond Insurer as the owner of such rights to the
amount of such principal and interest.
In connection with the issuance of Parity Lien Bonds, the City shall deliver to the Bond
Insurer a copy of the disclosure document, if any, circulated with respect to such Parity Lien
Bonds.
Copies of any amendments made to the documents executed in connection with the
issuance of the Series 1996 Bonds which are consented to by the Bond Insurer shall be sent to
Standard & Poor's Ratings Group, as division of The McGraw -Hill Companies, Inc.
The Bond Insurer shall receive notice of the resignation or removal of the Paying Agent
and the appointment of a successor thereto.
The Bond Insurer shall receive copies of all notices required to be delivered to Registered
Owners or to the Paying Agent and, on an annual basis, copies of the City's and the Board's
audited financial statements and annual budget. All notices required to be given to the Bond
02/103625.2 32
Insurer under this Ordinance shall be in writing and shall be sent by registered or certified mail
addressed to Municipal Bond Investors Assurance Corporation, 113 King Street, Armonk, New
York 10504 Attention: Surveillance.
Section 29. If the City shall pay or cause to be paid, or there shall be otherwise paid or
provision for payment made, to or for the Registered Owners of the Bonds, of the principal of and
interest on the Series 1996 Bonds at the time and in the manner stipulated herein and therein, and
shall pay or cause to be paid to the Bond Insurer and the Paying Agent all sums of moneys due
or to become due according to the provisions of the Financial Guaranty Agreement and the
provisions hereof, then this Ordinance and the rights hereby granted shall cease, determine and
be void, whereupon the lien hereof shall be cancelled and discharged.
Any Series 1996 Bond shall be deemed to be paid within the meaning of this Section when
(a) payment of the principal of and premium, if any, and interest on such Series 1996 Bond shall
have been made or cause to have been made in accordance with the terms thereof, or (b) there
shall have been set apart in the accounts established hereunder, including the Reserve Fund, a sum
sufficient to pay, when due, the entire principal of the Series 1996 Bonds remaining unpaid,
together with interest accrued and to accrue thereon, or (c) the City shall have caused to be
irrevocably deposited in trust, Governmental Obligations, the principal of and interest on which
will be sufficient to pay the principal of, premium, if any, and interest on the Series 1996 Bonds
as they become due, either on maturity or earlier redemption. At such times as a Series 1996
Bond shall be deemed to be paid hereunder, as aforesaid, it shall no longer be secured by or
entitled to the benefits of this Ordinance, except for the purposes of any such payment from such
moneys or Governmental Obligations. Governmental Obligations hereunder shall include only
those investments listed in paragraph (a) of the definition of Permitted Investments.
02/103625.2 33
INTRODUCED AND PRESENTED FOR A FIRST TIME ON MAY 28, 1996
ORDERED PUBLISHED BY TITLE ONLY, PRESENTED A SECOND TIME AND FINALLY
PASSED AND ADOPTED ON JUNE 10, 1996.
ATTEST:
City Cle
INTRODUCED: May 28, 1996
By Al Gurule
Councilperson
APPROVED:
Presid t of the City Council
02/103625.2 34
STATE OF COLORADO ]
S5.
COUNTY OF PUEBLO ]
The Board of Water Works of Pueblo, Colorado (the "Board "), of the City of Pueblo,
Colorado, duly constituted under the City's Charter, met in special session at 319 Wcst 4th
Street, in the City of Pueblo, Colorado on Monday, June 10, 1996, at 2 : oo P.M. There were
present at said meeting the following members of the Board:
President:
Secretary- Treasurer:
Other Members
Absent:
Kevin F. McCarthy
Verdon L. Johnson
Vera Ortegon
Michael W. Stillman
David F. Trujillo
MICHAEL W. STILLMAN
, constituting all the members thereof.
There were also present: Alan C. Hamel, Jerry J. Cantrell, William F. Mattoon,
Jaim Manire and Bill Gorham.
Member Vera Ortegon
resolution, to wit:
introduced and moved the adoption of the following
02199761 1
RESOLUTION NO. 96 - 7
CONCERNING TI•IE ISSUANCE BY THE CITY OF PUEBLO, COLORADO,
ACTING ON BEH.ALF OF THE BOARD OF WATER WORKS OF PUEBLO,
COLORADO, OF WATER REV ENUE. BONDS, SERIES 1996.
WHEREAS, Section 15-2 of the Charter of the City of Pueblo, Colorado (the "City "),
provides that title to the properties of the former districts now consolidated and any property of
the water works system (the "System ") is in the City, and that the entire control, management
and operation of the System shall be exercised by an independent board tuned "Board of Water
Works of Ptieblu, Colorado" (the "Board "), over which the Council of the City (the "Council ")
shall have no jurisdiction or control, and the Council shall adopt all ordinances requested by the
Board which shall be reasonably necessary to assist the Board in the management of the System;
and
WHEREAS, the Board has determined that it is necessary for the management of the
System and in the best interest of the City and its residents that there be authorized to be issued
by the City water revenue bonds (the "Series 1996 Bonds ") for the purpose of financing the
acquisition, construction and replacement of water system improvements and the costs of issuing
such bonds; and
`4'HL-RE.AS, t t: Board has determined that it is in the best ir.:erest of the City and its
residents that the I'�ayraent 01 such Series 1996 B(mds he secured by the net revenue of thy-
System, which net rtvenut! results front the control, inxiagernent and operation of the Systern
r r' t t er;
by th Bawd as s ,.- ec i�ted ir. ,:�e Chi :r,��, nntl
WIIEREAS, the Board and the City have arran�lTed for payment of the principal of and
interest on the Series 1996 Bonds to be insured by MBI.A Insurance Corporation ([he "Bond
Insurer "); and
WH,ER,AS, pursuant to the request and upon the advice of the Board contained in a
resolution (the "play Resolution ") of the Board adopted on May 21, 1996, the Council passed
on first presentation on May 28, 1996, an ordinance (the "Ordinance ") authorizing the issuance
of the Series 1996 Bonds; and
WHEREAS, the Board hereby reaffirms its determination to have the City issue the
Series 1996 Fonds pursuant to the Charter; and
WHEREAS, after distributing a Notice of Bond Sale relating to the sale of the Series
1996 Bonds and receiving and reviewing the bids submitted to purchase the Series 1996 Bonds,
the Board hereby finds that the highest responsible bidder is the hereinafter defined Original
Purchaser, whose bid is in all cases to the best advantage of the Board and the City, and the
District hereby requests tic City to sell the Series 1996 Bonds to the Original Purchaser; and
NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF WATER WORKS OF
PUEBLO, COLORADO, 'THAT:
Section 1. The Board requests that the Council adopt on final present;ttion an Ordinance
in the form set forth as Exhibit A to this Resolution, which form of Ordinance is hereby
incorporated by reference and which contains certain information unavailable and therefore not
contained in the Ordinance as passed on first presentation by the Council. The Board requests
the Council to issue the Series 1996 Bonds, on behalf of tho Board, pursuant to the Ordinance.
Section 2. The Board hereby reaffirms all of its pledges, covenants, agreements and
representations contained in the May Resolution as if they had been made anew herein.
Section 3. The board will keep books and records of the System, which are separate and
apart from all hooks, records and accounts of the City, in which complete and correct entries
are to be made in accordance with standard principles of accounting of all transactions relating
to the System, and the Bond Insurer shall have the right at all reasonable times, and at its own
expense, to inspect the System and all parts thereof, and all records, accounts and data of the
Board or the City relating thereto.
Section Q. After carefully reviewing the bids received as a result of the public bidding
prc)cedtlre held pursuant to tlh: Board's ~lay Resolution and a)Zesoluti�,n adoptid n the City
can lt'lav 28, 1996, and die Notice of BJnd Sale contained in those resolutions, the Board hereby
requests tile. City to Sell t,'-I-- Series 1996 Bonds to the highest responsible bidder and to the best
advantage of the Board and the Cit), and in furtherarce thereof the Beard her -.by determines that
the offer to purchase the .Series 1996 Bonds as bid b Paine Webber, Inc. ^_ (tile
"Original Purchaser "), is the highest responsible bid and to the best advantage of the Board and
the City. The Series 1996 Bonds, when executed as provided by law, shall be delivered to the
Original Purchaser, upon receipt of the purchase price therefor and as set forth in the Ordinance.
Section S. This Resolution is, and shall constitute, a legislative measure of the Board,
and after the Series 1996 Bonds are issued, sold and are outstanding, this Resolution shall
constitute a contractual obligation of the Board to and for the benefit of the City and the
registered owners of the Series 1996 Bonds, and shall be and remain irrepealable until the Series
1996 Bonds and the interest accruing thereon shall have been fully paid, satisfied and
discharged.
Section d. This Resolution shall take effect i iuiiediately upon passage and .a certified
copy thereof shall be transmitted forthwith by the Executive Director of the Board to the City
Council.
Section 7. The Board shall tinkly perform all acts to be performed by the City under
the Ordinance for which acts the power to perform is vested in the Board under ,Section 15 -2 of
the Charter of the City. The officers of the Board are hereby authorized and directed to take
all action necessary or appropriate to effectuate the provisions of this Resolution.
1 2
ADOPT - FI) AND SIGNED this 10th day of JUne 1996.
B
e
President, Board of W Works of Pucblo,
Colorado
(SEAL)
ATTEST:
1
By
Secretary -Treas �er
U- r, 63. I
The motion to adept the foregoing resolution was duly seconded by Board Member
DAVID F. TRUJILLO , put tip a vote and unanimously carried, all members present voting YES
on the adoption of said resolution, the vote being as follows:
Those voting YES:
Board Members:
KEVIN F. McCARTHY
VERDON L. JOHNSON
VERA ORTEGON
DAVID F. TRUJILLO
Absent:
MICHAEL W. STILLMAN
Sy - —
President
A :TEST:
B
y
Secretary -Trea. rcr
02!99'0).1 4
STATF. OF COLORADO )
) SS.
COUNTY OF PUEBLO J
I, Verdon L. Johnson, the duly elected, qualified and acting Secretary- Treasurer of the
Board of Water Works of Pueblo, Colorado, do hereby certify:
1. That the foregoing paces numbered 1 through 4, inclusive, are a true, perfect and
complete copy of the record of proceedings of the Board had and taken at a special meeting; of
said Board held at 319 West 4th Street, in the City of Puebla, Colorado, on Monday, June 10,
1996, commencing at the hour of 2 :oo p.m., so far as said proceedings relate to a resolution
concerning the sale and issuance of the City of Pueblo, Colorado, Water Revenue Bonds, Series
1996, as recorded in the regular official record hook of the proceedings of the Board kept in lily
office.
2. That said proceedings were duly held and the persons therein named were present
at said meeting as therein shown.
3. That each of the five members of the Board was duly notified of said meeting.
4. That the rreetirg was open to members of the cone:al public after proper notice
to the extent requir,,d by the Iaws of the State of Colorado.
IN WITNESS WHEREOF, I have hereunto set my hard and the seal of said Board this
lothdaG' of June 1996.
(SEAL) B
Secretary- Treasu r
o. y1n:3 r
5