HomeMy WebLinkAbout06348ORDINANCE NO. 6348 . ^
AN ORDINANCE AUTHORIZING THE ISSUANCE BY THE CITY OF
PUEBLO, COLORADO, OF ITS GENERAL OBLIGATION REFUNDING
BONDS, SERIES 1998, IN THE AGGREGATE PRINCIPAL AMOUNT OF
$7,100,000 FOR THE PURPOSE OF DEFRAYING THE COST OF
REFUNDING THE CITY'S GENERAL OBLIGATION REFUNDING BONDS,
SERIES 1987A AND PAYING CERTAIN COSTS AND EXPENSES
ASSOCIATED WITH THE ISSUANCE OF SUCH BONDS; PRESCRIBING
THE FORM OF SAID BONDS; APPROVING A PAYING AGENCY
AGREEMENT; PROVIDING FOR THE LEVY OF GENERAL AD VALOREM
TAXES TO PAY THE PRINCIPAL OF AND INTEREST ON SUCH BONDS,
RATIFYING ACTION HERETOFORE TAKEN AND RELATING TO SUCH
BONDS; PROVIDING OTHER DETAILS IN CONNECTION WITH SUCH
BONDS; AND APPROVING THE FORM OF THE PRELIMINARY OFFICIAL
STATEMENT.
WHEREAS, the City of Pueblo, in the County of Pueblo and State of Colorado (the
"City "), is a municipal corporation duly organized and existing as a home rule city pursuant to
Article XX of the Constitution of the State of Colorado (the "Constitution ") and the home rule
charter of the City (the "Charter "); and
WHEREAS, all legislative powers possessed by the City, conferred by Article XX of the
State Constitution, or contained in the Charter, as either has from time to time been amended, or
otherwise existing by operation of law, are vested in a board of councilmen, also known as the
city council (the "City Council "); and
WHEREAS, the City Council previously authorized the issuance by the City of its
General Obligation Refunding Bonds, Series 1987A (the "Refunded Bonds ") in the aggregate
principal amount of $8,805,000, of which $7,270,000 is presently outstanding; and
WHEREAS, the City Council has determined that it is in the best interest of the City to
issue its General Obligation Refunding Bonds, Series 1998 (the "Bonds ") in the aggregate
principal amount of $7,100,000 to provide for the refunding of the Refunded Bonds; and
WHEREAS, the Bonds will be issued at a lower net effective interest rate than that of the
Refunded Bonds, which will result in a net present value debt service saving to the City; and
WHEREAS, the payment of the principal of and interest on the Bonds will be guaranteed
by a municipal bond insurance policy (the "Bond Insurance Policy ") to be issued simultaneously
with the delivery of the Bonds by Financial Security Assurance Inc. (the "Bond Insurer "); and
WHEREAS, the City Council has determined that it is in the best interest of the City to
sell the Bonds pursuant to public sale; and
WHEREAS, the City Council, by separate resolution of the City Council, has provided
for an Official Notice of Bond Sale; and
02- 13375.05
WHEREAS, the public sale of the Bonds will be held on October 13, 1998 and the City
Council will supplement this Ordinance by resolution on such date to award the sale of the
Bonds to the winning bidder and to provide the interest rates for the Bonds (subject to the
limitations contained in this Ordinance); and
WHEREAS, there have been filed with the City Clerk (the "Clerk ") the Paying Agent
Agreement, dated as of October 15, 1998 (the "Paying Agent Agreement "), between the City and
The Bank of Cherry Creek, N.A., as paying agent (the "Paying Agent "), and the Preliminary
Official Statement, dated October 1, 1998 (the "Preliminary Official Statement ") relating to the
Bonds; and
WHEREAS, it is now necessary by ordinance to authorize the issuance of the Bonds, and
to provide details of and the security for the Bonds; and
BE IT ORDAINED BY THE CITY COUNCIL OF PUEBLO, that
Section 1. Definitions. In addition to terms otherwise defined herein, the following
terms shall have the following meanings, as used herein:
"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, the City's general fund, and its outstanding debt and other obligations.
"Bond Fund' shall mean the fund by that name created pursuant to Section 12 hereof.
"Bond Insurance Policy" means one or more policies of insurance issued by the Bond
Insurer insuring the timely payment of the principal of and interest on the Bonds without regard
to acceleration or advancement of maturity or redemption prior to maturity, other than mandatory
sinking fund redemption, if any.
"Bond Insurer" means Financial Security Assurance Inc., and its successors and assigns.
"Code" shall mean the Internal Revenue Code of 1986, as amended, and any Regulations
promulgated thereunder.
"Investment Instructions" shall mean the Investment Instructions, dated the date of
delivery of the Bonds, delivered by Kutak Rock to the City, as the same may be superseded or
amended.
"Material Event" shall mean any of the following events, if material, with respect to the
:.1e
(a) principal and interest payment delinquencies;
(b) non - payment related defaults;
02- 13375.05 2
(c) unscheduled draws on debt service reserves reflecting financial
difficulties;
(d) unscheduled draws on credit enhancements reflecting financial
difficulties;
(e) substitution of credit or liquidity providers or their failure to perform;
(f) adverse tax opinions or events affecting the tax - exempt status of the
Bonds;
(g) modifications to rights of owners of the Bonds;
(h) calls of Bonds;
(i) defeasances of Bonds;
0) release, substitution, or sale of property securing repayment of the Bonds;
and
(k) rating changes.
"Material Event Notice" shall mean written or electronic notice of a Material Event.
"MSRB" shall mean the Municipal Securities Rulemaking Board. The current address of
the MSRB is 1640 King Street, #300, Alexandria, Virginia 22314.
"NRMSIR" 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 (as defined in Section 24 hereof). The NRMSIRs as of the date
of this Ordinance are as follows: JJ Kenny Information Systems, The Repository, 65 Broadway —
16th Floor, New York, New York 10006 -2503; Thompson NRMSIR, Secondary Market
Disclosure, 395 Hudson Street — 3 Floor, New York, New York 10014 -3669; Bloomberg
Municipal Repositories, Municipal Department, P.O. Box 840, Princeton, NJ 08542 -0840; and
DPC Data Inc., One Executive Drive, Fort Lee, New Jersey 07024.
"Paying Agency Agreement" shall mean the Paying Agency Agreement, dated as of
October 15, 1998, between the City and the Paying Agent, as amended.
"Paying Agent" shall mean The Bank of Cherry Creek, N.A., or any successor paying
agent appointed by the City, acting as, among other things, paying agent, registrar and
authenticating agent under this Ordinance.
"Permitted Investments" means the following investments, so long as such investments
are permitted under the laws of the State of Colorado, 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
02- 13375.05 3
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)
General Services Administration
Participation certificates
(iii) Government National Mortgage Association (GNMA or "Ginnie
Mae ")
GNMA - guaranteed mortgage- backed bonds
GNMA - guaranteed pass- through obligations
(iv) U.S. Maritime Administration
Guaranteed Title XI financing
(v) 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
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
02- 13375.05 4
(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 "; "A- -, ; or "AArn."
(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
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 (selleriborrower) 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.
(1) 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
02- 13375.05 5
(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, or such longer
period as may be approved by the Bond Insurer.
(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:
(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
Paying Agent: Repo meets guidelines under state law for legal investment of
public funds.
(m) 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
02- 13375.05 6
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.
"Regular Record Date" shall mean the fifteenth day of the month (whether or not d
business day) prior to each interest payment date with respect to the Bonds.
"Refunded Bonds" shall mean the City's General Obligation Refunding Bonds, Series
1987A.
"Registered Owner" shall mean any person or persons in whose name or names a Bond
shall be registered on the registration books of the City maintained by the Paying Agent.
"Special Record Date" shall have the meaning ascribed to such term in Section 3(e)
hereof.
"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 defined in Section 20 hereof). As
of the date of this Ordinance, no SID exists within the State.
Section 2. Authorization of Bonds. For the purpose of providing funds to defray the
cost of refunding the Refunded Bonds and paying all necessary incidental and appurtenant costs
and expenses in connection therewith, the City shall issue its "General Obligation Refunding
Bonds, Series 1998," in the aggregate principal amount of $7,100,000. The Bonds shall be
general obligation bonds of the City, and the full faith and credit of the City are hereby pledged
to the punctual payment of the principal of and interest on the Bonds, as more particularly
hereinafter set forth.
Section 3. Bond Details.
(a) The Bonds shall be issued as fully registered bonds without coupons in the
denominations of $5,000 and any integral multiple thereof.
(b) The Bonds shall be dated October 15, 1998, and shall bear interest from
their date; provided that if interest on the Bonds shall be in default, Bonds issued in
exchange for Bonds surrendered for transfer or exchange shall bear interest from the date
to which interest has been paid in full on the Bonds surrendered or if no interest has been
paid thereon, then from October 15, 1998. Interest on the Bonds shall be payable on
May 1 and November 1 of each year, commencing May 1, 1999 Interest on the Bonds
shall be calculated on the basis of 360 -day year, assuming twelve 30 -day months.
(c) The Bonds shall be consecutively numbered, shall mature on the 1st day
of each May and November in the principal amounts and years set forth below, and shall
bear interest at the rates per annum (not to exceed a net effective interest rate of 5.50 %),
as set forth in a resolution to be subsequently adopted by the City Council.
02- 13375.05 7
Maturity Date Principal Amoudt
May 1, 1999
$ 360,000
November 1, 1999
390,000
May 1, 2000
395,000
November 1, 2000
405,000
May 1, 2001
410,000
November 1, 2001
420,000
May 1, 2002
430,000
November 1, 2002
440,000
May 1, 2003
445,000
November 1, 2003
455,000
May 1, 2004
465,000
November 1, 2004
475,000
May 1, 2005
485,000
November 1, 2005
495,000
May 1, 2006
510,000
November 1, 2006
520,000
(d) If upon presentation of a Bond to the Paying Agent at maturity, payment
of any Bond is not made as herein provided, interest shall continue to accrue thereon at
the interest rate designated in the Bond until the principal thereof is paid in full.
(e) Principal of the Bonds shall be payable in lawful money of the United
States of America at the principal operations office of the Paying Agent, presently located
at 3033 East First Avenue, in Denver, Colorado. Interest on the Bonds shall be payable
by check or draft of the Paying Agent mailed on the interest payment date to the
Registered Owners thereof as of the Regular Record Date (or, so long as Cede & Co.
shall be the Registered Owner, such amount may be paid by wire transfer); provided,
however, any such interest not so timely paid or duly provided for shall cease to be
payable to the person who is the Registered Owner thereof at the close of business on the
Regular Record Date and shall be payable to the person who is the Registered Owner
thereof at the close of business on a Special Record Date for the payment of any such
defaulted interest. Such Special Record Date shall be fixed by the Paying Agent
whenever moneys become available for payment of the defaulted interest, and notice of
the Special Record Date shall be given to the Registered Owners of the Bonds not less
than ten days prior thereto by first -class mail to each such registered owner as shown on
the registration books on a date selected by the Paying Agent, stating the date of the
Special Record Date and the date fixed for the payment of such defaulted interest..
(f) 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 Bonds or (ii) the City discontinues use of the Securities Depository pursuant to
02- 13375.05 8
Section 3(i) hereof, any other securities depository which agreed to follow procedures
required to be followed by a securities depository in connection with the Bonds and
which is selected by the City with the consent of the Paying Agent.
(g) Except as otherwise provided in this Section, the 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 Bond
shall be registered in the name of Cede & Co., as the nominee of The Depository Trust
Company. Except as provided in subsection (i) of this Section, the 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."
(h) 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 interest in the Bonds, (ii) the delivery to any Agent Member, beneficial owner
of the Bonds or other Person, other than the Securities Depository, of any notice with
respect to the Bonds or (iii) the payment to any Agent Member, beneficial owner of the
Bonds or other Person, other than the Securities Depository, of any amount with respect
to the principal of or interest on the Bonds. So long as the certificates for the Bonds
issued under this Ordinance are not issued pursuant to subsection (i) 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 Bonds for all purposes whatsoever,
including, without limitation, (i) the payment of principal of and interest on such Bonds,
(ii) giving notices of redemption and other matters with respect to such Bonds and
(iii) registering transfers with respect to such Bonds. In connection with any notice or
other communication to be provided to the Registered Owners of the 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 Bonds, give the Securities
Depository notice of such record date not less than 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 Bonds.
(i) 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 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
02- 13375.05 9
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 (g) of this
Section shall no longer be applicable and the City shall execute and the Paying Agent
shall authenticate and deliver certificates representing the Bonds as provided below. In
addition, the City may determine at any time that the Bonds shall no longer be
represented by global certificates and that the provisions of subsections (g), (h) and (i) of
this Section shall no longer apply to the Bonds. In such event, the City shall execute and
the Paying Agent shall authenticate and deliver certificates representing the Bonds as
provided below. Certificates for the Bonds issued solely in exchange for a global
certificate pursuant to this subsection 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 Bonds to the Persons in whose
names such Bonds are so registered.
0) Until the Bonds in definitive form are ready for delivery, the Paying Agent
may execute and deliver, subject to the provisions, limitations and conditions set forth
above, one or more Bonds in temporary form, whether printed, typewritten, lithographed
or otherwise produced, substantially in the form of the definitive Bonds, with appropriate
omissions, variations and insertions, and in authorized denominations. Until exchanged
for Bonds in definitive form, such Bonds in temporary form shall be entitled to the lien
and benefit of this Ordinance. Upon the presentation and surrender of any Bonds in
temporary form, the Paying Agent shall, without unreasonable delay, prepare, execute
and deliver, in exchange therefor, a Bond or Bonds in definitive form. Such exchange
shall be made without making any charge therefor to the Registered Owner of such Bond
in temporary forma
Section 4. Paying Agent; Transfer and Exchange. The Paying Agent shall act as
paying agent, bond registrar and authenticating agent hereunder for purposes of the Bonds unless
the City shall designate and appoint a successor Paying Agent. Any Paying Agent shall be a
commercial bank with trust powers. The Paying Agent shall maintain on behalf of the City
books for the purpose of registration and transfer of the Bonds, and such books shall specify the
person entitled to the Bonds and the rights evidenced thereby, and all transfers of Bonds and the
rights evidenced thereby. Bonds may be transferred or exchanged upon payment of a transfer
fee, any tax or governmental charge required to be paid with respect to such transfer or exchange
and any cost of typing or printing bonds in connection therewith, at the principal operations
office of the Paying Agent. Bonds may be exchanged for a like aggregate principal amount of
Bonds of other authorized denominations of the same maturity and interest rate. Upon surrender
for transfer of any Bond, duly endorsed for transfer or accompanied by an assignment duly
executed by the Registered Owner or his or her attorneys duly authorized in writing, the City
shall execute and the Paying Agent shall authenticate and deliver in the name of the transferee or
transferees a new Bond or Bonds of the same maturity and interest rate for a like aggregate
principal amount. The person in whose name any Bond shall be registered shall be deemed and
regarded as the absolute owner thereof for all purposes, whether or not payment on any Bond
shall be overdue, and neither the City nor any Paying Agent shall be affected by any notice to the
contrary.
02- 13375.05 10
Section 5. Redemption. The Bonds are not subject to redemption prior to their stated
maturities.
Section 6. Bond Insurance Policy. As long as the Bond Insurance Policy shall be in
full force and effect, the Paying Agent shall comply with the following provisions:
If, on the third business day prior to the related scheduled interest payment date or
principal payment date or the date to which Bond maturity has been accelerated (for this Section
"Payment Date "), there is not on deposit with the Paying Agent, moneys sufficient to pay the
principal and interest on the Bonds due on such Payment Date, the Paying Agent shall give
notice to the Bond Insurer and to its designated agent (if any) (the "Insurer's Fiscal Agent ") by
telephone or telecopy of the amount of such deficiency by 12:00 noon, New York City time, on
such business day. If, on the second business day prior to. the related Payment Date, there
continues to be a deficiency in the amount available to pay the principal of and interest on the
Bonds due on such Payment Date, the Paying Agent shall make a claim under the Bond
Insurance Policy and give notice to the Bond Insurer and the Insurer's Fiscal Agent (if any) by
telephone of the amount of such deficiency, and the allocation of such deficiency between the
amount required to pay interest on the Bonds and the amount required to pay principal of the
Bonds, confirmed in writing to the Bond Insurer and the Insurer's Fiscal Agent by 12:00 noon,
New York City time, on such second business day by filling in the form of Notice of Claim and
Certificate delivered with the Bond Insurance Policy.
In the event the claim to be made is for a mandatory sinking fund redemption installment,
upon receipt of the moneys due, the Paying Agent shall authenticate and deliver to affected
Registered Owners who surrender their Bonds a new Bond or Bonds in an aggregate principal
amount equal to the unredeemed portion of the Bond surrendered. The Paying Agent shall
designate any portion of payment of principal on Bonds paid by the Bond Insurer, whether by
virtue of mandatory sinking fund redemption, maturity or other advancement of maturity, on its
books as a reduction in the principal amount of Bonds registered to the then current Registered
Owner, whether DTC or its nominee or otherwise, and shall issue a replacement Bond to the
Bond Insurer, registered in the name of Financial Security Assurance Inc., in a principal amount
equal to the amount of principal so paid (without regard to authorized denominations); provided
that the Paying Agent's failure to so designate any payment or issue any replacement Bond shall
have no effect on the amount of principal or interest payable by the City on any Bond or the
subrogation rights of the Bond Insurer.
The Paying Agent shall keep a complete and accurate record of all funds deposited by the
Bond Insurer into the Policy Payments Account and the allocation of such funds to payment of
interest on and principal paid in respect of any Bond. The Bond Insurer shall have the right to
inspect such records at reasonable times upon reasonable notice to the Paying Agent.
Upon payment of a claim under the Bond Insurance Policy, the Paying Agent shall
establish a separate special purpose trust account for the benefit of Registered Owners referred to
in this Section as the "Policy Payments Account" and over which the Paying Agent shall have
exclusive control and sole right of withdrawal. The Paying Agent shall receive any amount paid
under the Bond Insurance Policy in trust on behalf of Registered Owners and shall deposit any
such amount in the Policy Payments Account and distribute such amount only for the purposes
02- 13375.05 11
of making the payments for which a claim was made. Such amounts shall be disbursed by the
Paying Agent to Registered Owners in the same manner as principal and interest payments are to
be made with respect to the Bonds under the Sections hereof regarding payment of Bonds. It
shall not be necessary for such payments to be made by checks or wire transfers separate from
the check or wire transfer used to pay debt service with other funds available to make such
payments.
Funds held in the Policy Payments Account shall not be invested by the Paying Agent
and may not be applied to satisfy any costs, expenses or liabilities of the Paying Agent.
Any funds remaining in the Policy Payments Account following a Bond payment date
shall promptly be remitted to the Bond Insurer.
The Bond Insurer shall, to the extent it makes any payment of principal of or interest on
the Bonds, become subrogated to the rights of the recipients of such payments in accordance
with the terms of the Bond Insurance Policy.
Section 7. Execution of Bonds. The Bonds shall be executed in the name and on behalf
of the City with the manual or facsimile signature of the President or Vice President of the City
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 or Deputy or Assistant City Clerk. Should any
officer whose manual or facsimile signature appears on the Bonds cease to be such officer before
delivery of any Bond, such manual or facsimile signature shall nevertheless be valid and
sufficient for all purposes. The President or Vice President of the City Council and the City
Clerk or Deputy or Assistant City Clerk are hereby authorized and directed to prepare and to
execute the Bonds in accordance with the requirements of this Ordinance. When the Bonds have
been duly executed, the Paying Agent is authorized to, and shall, authenticate the Bonds as
Paying Agent. No 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 Bond shall be conclusive evidence and the
only competent evidence that such 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 representative of the Paying Agent, but it shall not be
necessary that the same representative sign the certificate of authentication on all of the Bonds
.issued hereunder.
Section 8. Delivery of the Bonds. Upon the original issuance, execution and
authentication of the Bonds, the Paying Agent shall deliver the Bonds as described in Section 11
herein upon receipt of the purchase price therefor.
Section 9. .Replacement of Bonds. If any outstanding Bond shall become lost,
apparently destroyed or wrongfully taken, it may be reissued in the form and tenor of the lost,
destroyed or taken bond upon the Registered Owner furnishing, to the satisfaction of the Paying
Agent: (a) proof of ownership (which shall be shown by the registration books of the Paying
Agent), (b) proof of loss, destruction or theft, (c) an indemnity to the City and the Paying Agent
with respect to the Bond lost, destroyed or taken, and (d) payment of the cost of preparing and
02- 13375.05 12
issuing the new security, in which case the Paying Agent shall then. 'authenticate the Bonds
required for reissuance.
Section 10. Form of Bonds. The Bonds shall be in substantially the form attached
hereto as Exhibit A, with such omissions, insertions, endorsements and variations as may be
required by the circumstances and allowed by this Ordinance, Colorado law and the Charter.
Section 11. Sale; Official Statement. The Bonds, when executed as provided by law,
shall be delivered to the purchaser thereof designated in a subsequent resolution adopted by the
City Council for a purchase price set forth in such supplemental resolution, plus accrued interest,
if any, from Octoberl5, 1998 to the date of delivery thereof.
The proceeds of the Bonds shall be used exclusively for defraying the cost of refunding
the Refunded Bonds and to pay all necessary incidental and appurtenant costs and expenses .
incurred in connection therewith.
Neither the purchaser of the Bonds nor any subsequent Registered Owner or Registered
Owners of any of the 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 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 Bonds, that the Bonds have been issued for a valuable consideration in
full conformity with law.
The Preliminary Official Statement relating to the Bonds is hereby approved. The
President or Vice President of the City Council is authorized and directed to execute and deliver
a final Official Statement in substantially the form of the Preliminary Official Statement, but
with such changes therein as shall be deemed necessary, with the approval of the City Attorney,
within seven business days from the public sale date of the Bonds.
Section 12. Payment of Debt Service. For the purpose of providing the necessary
moneys to meet the interest accruing on the Bonds as the same becomes due, and for the purpose
of providing for the payment of the principal of the Bonds as they serially mature, there shall be
levied on all the taxable property in the City, in addition to all other taxes and other revenues
available to pay the Bonds, and as allowed by State law, direct annual taxes sufficient to pay
such principal and interest promptly as the same respectively become due, and such taxes, when
collected, shall be deposited into an account hereby created and designated as the "General
Obligation Refunding Bonds, Series 1998 Bond Fund" (the "Bond Fund ") which account shall
be applied solely for the purpose of the payment of the principal of and interest on the Bonds,
respectively, and for no other purpose whatever until the indebtedness so contracted under this
Ordinance shall have been fully paid, satisfied and discharged, but nothing.herein prevents the
City from depositing into such account, and applying to the payment of the principal of and
interest on the Bonds, any other funds that may be in its treasury and available for that purpose,
and upon such payments, the levies herein provided may thereupon to that extent be diminished.
The sums hereinbefore provided to meet the principal of and interest on the Bonds when due are
hereby applied for that purpose, and such amounts for each year shall be included in the annual
budget and appropriation bill or bills to be adopted and passed by the Council in each year
respectively while any of the Bonds are outstanding and unpaid as to principal or interest. No
02- 13375.05 13
Charter or constitutional provision enacted or becoming effective after the issuance of the Bonds
shall in any manner be construed as limiting or impairing the obligation of the City to levy
general ad valorem taxes, without limitation of rate or amount, sufficient for the payment of the
principal of and interest on the Bonds as they become due. The full faith and credit of the City
are hereby pledged for the punctual payment of the principal of and the interest on the Bonds.
In the event that the mill levy of the City in any year fails to produce an amount sufficient
to pay the principal of and interest on or in connection with the Bonds becoming due in the next
succeeding year, the deficit shall be made up in the next levy, and taxes shall continue to be
levied until the Bonds and the interest thereon shall be paid in full.
Section 13. Disposition of the Bond Proceeds. The Bond proceeds shall be paid as
follows:
(a) accrued interest, if any, shall be credited to the Bond Fund;
(b) an amount shall be transferred to The Bank of Cherry Creek, N.A, which
shall be sufficient, when used together with available moneys of the City, to pay and
redeem the Refunded Bonds on November 1, 1998; and
(c) the remaining proceeds of the Bonds shall be used to pay the costs of
issuing the Bonds.
Section 14. Investments. The proceeds of the Bonds shall be used exclusively for the
purposes recited herein and in the Bonds; provided, however, that all, or any proper portion of,
the proceeds of the Bonds in the Bond Fund and other moneys therein may be invested in
Permitted Investments. All earnings, income, profits and losses with respect to the Bond Fund
shall be retained in the Bond Fund.
Section 15. Tax Covenants.
(a) The City covenants that it shall not use or permit the use of any proceeds
of the Bonds or any other funds of the City from whatever source derived, directly or
indirectly, to acquire any securities or obligations, and shall not take or permit to be taken
any other action or actions, which would cause any of the Bonds to be an "arbitrage
bond" within the meaning of Section 148 of the Code, or would otherwise cause the
interest on the Bonds to be includible in gross income for federal income tax purposes.
The City covenants that it shall at all times do and perform all acts and things permitted
by law and which are necessary in order to assure that interest paid by the City on the
Bonds shall, for purposes of federal income taxation, not be includible in gross income
under the Code or any other valid provision of law.
(b) In particular, but without limitation, the City further represents, warrants
and covenants to comply with the following restrictions of the Code, unless it receives an
opinion of nationally recognized bond counsel stating that such compliance is not
necessary:
02- 13375.05 14
(i) Gross proceeds of the Bonds shall not be .iised in a manner which
will cause the Bonds to be considered "private activity bonds" within the meaning
of the Code.
(ii) The Bonds are not and shall not become directly or indirectly
"federally guaranteed."
(iii) The City shall timely file Internal Revenue Form 8038 -G which
shall contain the information required to be filed pursuant to subsection 149(e) of
the Code.
(iv) The City shall comply with the Investment Instructions delivered
to it on the date of issue of the Bonds with respect to the application and
investment of Bond proceeds.
Section 16. Defeasance. The Bonds may be defeased at the discretion and by action of
the City Council, subject to provisions concerning their payment and any other contractual
limitations contained in this Ordinance, as authorized and permitted by law. A Bond shall not be
deemed to be outstanding hereunder if it shall have been paid and cancelled or if cash funds or
direct general obligations of, or obligations the payment of the principal of and interest on which
are unconditionally guaranteed by, the United States of America, or evidences of interest in any
such obligations ( "Governmental Obligations "), shall have been deposited in trust for the
payment thereof. In computing the amount of the deposit described above, the City may include
interest to be earned on the Governmental Obligations.
Section 17. Approval of Paying Agency Agreement. The Paying Agency Agreement,
in substantially the form presented to the City Council, is hereby authorized and approved, and
the President or Vice President of the City Council and the City Clerk or any Deputy or Assistant
City Clerk are hereby directed to execute and deliver the Paying Agency Agreement in
substantially the form approved, but with such changes therein as shall be deemed necessary or
desirable by the officers executing the same, their execution to be conclusive evidence of the
City's approval of any changes from the form hereby approved.
Section 18. Miscellaneous Documents. The President or Vice President of the City
Council and the City Clerk or Deputy or Assistant City Clerk, are hereby authorized and directed
to execute and deliver any and all closing documents necessary or desirable in connection with
the issuance of the Bonds.
Section 19. Exercise of Home Rule Power. Pursuant to Article XX of the State
Constitution and the Charter, the City hereby determines and declares the issuance of the Bonds
to be a local matter, and therefore all statutes of the State of Colorado which might otherwise
apply in connection with the issuance of the Bonds are hereby superseded.
Section 20. Undertaking to Provide Ongoing Disclosure.
(a) This Section constitutes the written undertaking of the City for the benefit
of the owners of the 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
02- 13375.05 15
CFR Part 240, § 240. 15c2 -12) (the "Rule "). The owners of the "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 owners of Bonds and each owner of a 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 the following information:
(i) Annual Financial Information; and
(ii) Material Event Notices.
(c) The City shall while any Bonds are Outstanding provide Annual Financial
Information within 188 days after the end of the City's fiscal year (the "Submission
Date "), beginning with the City's fiscal year ending December 31, 1999, 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 Bonds are Outstanding. It
shall be sufficient if the City provides 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.
(d) If a Material Event occurs while any Bonds are Outstanding, the City shall
promptly 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 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 20 will be in effect from the date of
delivery of the Bonds until the earliest of (i) the date all principal and interest on the
Bonds has been legally defeased pursuant to the terms of this Ordinance; (ii) the date that
the City 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
Bonds.
(g) This Section 20 may be amended without the consent of the owners of the
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
02- 13375.05 16
provided by this Ordinance upon the occurrence of an "Event of Default" shall not apply
to any such failure. The owners of Bonds may enforce specific performance of the
undertakings herein by any available judicial proceeding. Unless otherwise required by
law, no owner of a Bond shall be entitled to damages for the City's non - compliance with
its obligations under this Section.
Section 21. Events of Default. Each of the following events is hereby declared an
"Event of Default ":
(a) Nonpayment of Principal. If payment of the principal of any of the
Bonds herein authorized to be issued shall not be made when the same shall become due
and payable at maturity or earlier redemption; or
(b) Nonpayment of Interest. If payment of any installment of interest shall
not be made when the same becomes due and payable or within thirty days thereafter; or
(c) Incapable to Perform. If the City shall for any reason be rendered
incapable of fulfilling its obligations hereunder; or
(d) Default of any Provision: If the City shall make default in the due and
punctual performance of its covenants or conditions, agreements and provisions
contained in the Bonds or in this Ordinance on its part to be performed, other than those
delineated in Paragraphs (a), (b) and (c) of this Section or a default under Section 20
hereof , and if such default shall continue for thirty (30) days after written notice
specifying such default and requiring the same to be remedied shall have been given to
the City by the Bond Insurer or the registered owners of twenty -five percent (25 %) in
aggregate principal amount of the Bonds then outstanding and the Bond Insurer; or
(e) Bankruptcy. The City shall file a petition for bankruptcy or shall be
declared insolvent by a court of competent jurisdiction.
Section 22. Remedies for Defaults. Upon the happening and continuance of any of the
Events of Default as provided in Section 21 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
principal amount of the 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 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 Bonds then outstanding. The failure of the Bond Insurer or any such
02- 13375.05 17
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 23. Amendment. 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, to make any amendment or supplement to this Ordinance which, in
the opinion of nationally recognized bond counsel, is not to the material prejudice of the
Registered Owner. 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 principal amount of the Bonds authorized by
this Ordinance and outstanding at the time of the adoption of such amendatory or supplemental
ordinance; provided, however, that no such ordinance shall have the effect of permitting:
(a) an extension of the maturity of any Bond authorized by this Ordinance; or
(b) a reduction in the principal amount of any Bond, or the rate of interest
thereon; or
(c) a reduction of the principal amount of Bonds required for consent to such
amendatory or supplemental Ordinance; or
(d) the establishment of priorities as between Bonds issued and outstanding
under the provisions of this. Ordinance; or
(e) the modification of or otherwise affecting adversely the rights of the
Registered Owners of less than all of the Bonds then outstanding.
Section 24. Qualified Tax - Exempt Obligations. The City, including any entities acting
on behalf of or subordinate to the City, does not anticipate issuing more than $10,000,000 of tax -
exempt obligations during calendar year 1998, which is the calendar year in which the Bonds are
issued. No proceeds of the Bonds will be used in a manner which would cause the Bonds to be
private activity bonds. Accordingly, the City hereby designates the Bonds as "qualified tax -
exempt obligations" pursuant to Section 265(b)(3)(B)(i) of the Code.
Section 25. No Recourse Against Officers, Employees or Agents. No recourse shall
be had for the payment of the principal of or premium, if any, or interest on any of the Bonds or
for any claim based thereon or upon any obligation, covenant 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
02- 13375.05 18
,1,.1.., � ■ice ■�u f
condition of and consideration for the passage of this Ordinance, the execution of the Paying
Agency Agreement, and the issuance of the Bonds.
Section 26. Severability. If any provision of this Ordinance shall be held or deemed to
be or shall, in fact, be illegal, inoperative or unenforceable, the same shall not affect any other
provision or provisions hereof or render the same invalid, inoperative or unenforceable to any
extent whatever.
Section 27. Governing Law. This Ordinance will be governed by and construed in
accordance with the laws of the State of Colorado.
Section 28. Repeals. All ordinances, or parts thereof, in conflict with this Ordinance,
are hereby repealed. After the Bonds have been issued, this Ordinance shall be and remain
irrepealable until the Bonds and the interest thereon shall be fully paid, satisfied and discharged
in the manner herein provided, or sufficient provision shall have been made for such payment,
satisfaction and discharge. After any of the Bonds are issued, this Ordinance shall be and remain
irrepealable until the Bonds and interest thereon shall be fully paid or provided for.
Section 29. Records. A true copy of this Ordinance, as adopted by the City Council of
the City, shall be numbered and recorded, and its adoption and publication shall be authenticated
by the signatures of the President or Vice President of the City Council and City Clerk or Deputy
or Assistant City Clerk.
[Remainder of this page left blank intentionally]
02- 13375.05 19
INTRODUCED AND PRESENTED FOR A FIRST TIME ON. SEPTEMBER 14, 1998
ORDERED PUBLISHED BY TITLE ONLY, PRESENTED A SECOND TIME AND
FINALLY PASSED AND ADOPTED ON SEPTEMBER 28, 1998.
INTRODUCED: September 14, 1998
All
By Al Gurgle
Councilperson
APPROVED:
City 4rk President of tholity'66ncil
APPROVED AS TO FORM BY
CITY ATTORNEY:
i
J
City Attorney
02- 13375.05 20
ED
I]
City of Pueblo
OFFICE OF THE CITY ATTORNEY
127 Thatcher Building
October 29, 1998 PUEBLO, COLORADO 81003
Kutak Rock Financial Security Assurance Inc.
2900 Manville Plaza Stewart Tower, Suite 2350
717 Seventeenth Street One Market
Denver, CO 80202 San Francisco, CA 94105
Piper Jaffray, Inc.
1050 17th Street, Suite 2100
Denver, CO 80265 -2101
$7,100,000
City of Pueblo, Colorado
General Obligation Refunding Bonds
Series 1998
Ladies and Gentlemen:
As City Attorney for the City of Pueblo, Colorado (the "City "), I am authorized to furnish opinions
that may be required in connection with the issuance by the City of $7,100,000 aggregate principal
amount of its General Obligation Refunding Bonds, Series 1998 (the "Bonds ") issued pursuant to the
home rule charter of the City, as amended (the "Charter "), the constitution and laws of the State of
Colorado, and in accordance with the provisions of Ordinance No. 6348 finally adopted and approved
by the City Council of the City (the "City Council ") on September 28, 1998 (the "Ordinance "),
Resolution No. 8534 (the "Public Bid Resolution ") adopted and approved by the City Council on
September 28, 1998 and Resolution No. 8542 (the "Supplemental Resolution ") adopted and approved
by the City Council on October 13, 1998.
In that capacity I have examined the following:
(a) The Ordinance, the Public Bid Resolution and the Supplemental Resolution.
(b) The Charter.
(c) The Paying Agency Agreement, dated as of October 15, 1998 (the "Paying Agency
Agreement "), between the City and Bank of Cherry Creek, N.A., as registrar and paying agent for
the Bonds.
(d) The Preliminary Official Statement, dated October 1, 1998, distributed by the
Underwriter in connection with the sale of the Bonds and the final Official Statement, dated October
13, 1998, distributed by the Underwriter in connection with the sale of the Bonds (collectively, the
"Official Statement ").
(e) Such other public records, documents and proceedings as I have deemed relevant and
necessary in rendering this opinion.
Based on the foregoing and assuming the due execution and delivery of the foregoing documents by
all parties except the City and its officials, I am of the opinion that:
1. The City is a home rule municipality, duly organized and existing under the
constitution and laws of the State of Colorado and the Charter.
2. The Ordinance, the Public Bid Resolution and the Supplemental Resolution have been
duly adopted by the City Council of the City and are in full force and effect as of the date hereof in
the forms in which it were finally adopted and approved, and the Paying Agency Agreement, the
Ordinance, the Public Bid Resolution and the Supplemental Resolution constitute valid, legally
binding and enforceable obligations of the City (subject in each case to usual equity principles and to
any applicable bankruptcy, reorganization, insolvency, moratorium or other laws affecting the
enforcement of creditors' rights generally from time to time in effect).
3. To the best of my knowledge, the issuance, execution and delivery of the Bonds by
the City and the performance by the City of its obligations with respect to the Bonds will not
constitute a default under or a conflict with any agreement or instrument to which the City is a party
or by which the City is bound.
4. There is no action, suit, proceeding, inquiry or investigation at law or in equity or
before or by any court, public board or body, pending or, to the best of my knowledge, threatened,
to which the City is a party, wherein an unfavorable decision, ruling or finding would adversely affect
the transactions contemplated by the Ordinance, the Public Bid Resolution, the Supplemental
Resolution or the Official Statement or the validity or enforceability of the Paying Agency Agreement
or the Bonds.
5. The information contained in the Official Statement with respect to the City is, to the
best of my knowledge, true and correct in all material respects and does not contain any untrue
statement of a material fact or omit to state a material fact necessary in order to make the statements
contained therein, in light of the circumstances under which they were made, not misleading,
however, I express no opinion as to the accuracy of the financial and statistical data contained in the
Official Statement.
Very truly yours,
m s �/_
Thomas �.lagger
/j p
Document No. 1
CERTIFICATE OF PROCEEDINGS OF CITY OF PUEBLO
STATE OF COLORADO )
COUNTY OF PUEBLO ) ss.
CITY OF PUEBLO )
I, Gina Dutcher, the duly qualified and acting City Clerk of the City of Pueblo, County of
Pueblo and State of Colorado (the "City "), do hereby certify that:
1. Attached hereto as Exhibit A is a true, correct and complete copy of the City's
Ordinance No. 6348 (the "Ordinance ") as introduced, passed and approved on first reading by
the City Council of the City (the "City Council ") on September 14, 1998.
2. Attached hereto as Exhibit B is a proof of publication indicating that the
Ordinance was published by title in the Pueblo Chieftain on September 17, 1998.
3. Attached hereto as Exhibit C is a true, correct and complete copy of the
Ordinance as finally passed, adopted and approved by the City Council on September 28, 1998.
The Ordinance is in full force and effect and has not been amended, modified or repealed since
its adoption.
4. Attached hereto as Exhibit D is a true, correct and complete copy of the City's
Resolution No. 8534 (the "Public Bid Resolution ") as introduced, passed and approved by the
City Council on September 28, 1998.
5. Attached hereto as Exhibit E is a proof of publication indicating that the summary
of the-Official Notice of Bond Sale contained in the Public Bid Resolution was published in the
Bond Buyer on October _, 1998.
6. Attached hereto as Exhibit F is a true and correct copy of the Official Notice of
Bond Sale as executed by the President of the City Council.
7. Sealed bids were received and publicly opened at 10:00 a.m. on October 13, 1998
in accordance with the Public Bid Resolution and the Official Notice of Bond Sale. True and
correct copies of all bids received, including an executed copy of the accepted bid, are attached
hereto as Exhibit G.
8. Attached hereto as Exhibit H is a true, correct and complete copy of the City's
Resolution No. 8542 (the "Supplemental Resolution ") as introduced, passed and approved by the
City Council on October 13, 1998.
02- 13470.02
9. The Ordinance, the Public Bid Resolution and the Supplemental Resolution have
been authenticated by the signature of the President of the City Council and by my signature, as
City Clerk, sealed with the seal of the City and made a part of the records of the City Council.
10. Attached hereto as Exhibit I are pages of the journal of City Council proceedings
which correctly reflect the proceedings of the City Council had and taken at lawful regular
meetings of the City Council held on September 14, 1998, September 28, 1998 and October 13,
1998, insofar as they pertain to the adoption of the Ordinance, the Pubic Bid Resolution and the
Supplemental Resolution.
11. Public notice of all the City Council meetings at which action was taken in
connection with the Ordinance, the Public Bid Resolution and the Supplemental Resolution was
given in the manner and at the times required by law, and such meetings were open at all times to
the general public.
12. A quorum was present throughout all meetings of the City Council at which
action was taken in connection with the Ordinance, the Public Bid Resolution and the
Supplemental Resolution.
13. Attached hereto as Exhibit J is a true, complete and correct copy of the home rule
charter of the City of Pueblo, Colorado (the "Charter ") and that such provisions of the Charter
were in effect at all times during the proceedings relating to the issuance by the City of the
Bonds and at the present time, to and including the date of this certificate.
IN WITNESS WHEREOF, I have hereunto set my hand and the seal of the City of
Pueblo, this October 29, 1998.
[SEAL]
CITY OF PUEBLO, COLORADO
By
City Cl
U
02- 13470.02 2
OFFICIAL NOTICE OF BOND SALE
S7,
City of Pueblo, Colorado
General Obligation Refunding Bonds
Series 1998
PUBLIC NOTICE IS HEREBY GIVEN that the City Council (the "City Council ") of the
City of Pueblo, Colorado (the "City ") will on Tuesday, October 13, 1998 at the hour of 10:00
a.m., Pueblo time, at the offices of the City at One City Hall Place, P.O. Box 1427, Pueblo,
Colorado 81002, receive and publicly open sealed bids for the purchase of the Bonds more
particularly described below.
Issue. The Bonds to be sold are the "City of Pueblo, Colorado, General Obligation
Refunding Bonds, Series 1998" (the "Bonds ") in the aggregate principal amount of 57,100,000.
The Bonds will be dated October 15, 1998 and will be issued as fully registered bonds, in
denominations of $5,000 and integral multiples thereof, by means of a book entry system with no
physical distribution of bond certificates to the public.
Information Available From Preliminary Official Statement. Reference is made to the
Preliminary Official Statement dated October 1, 1998 (the "Preliminary Official Statement ") for
information as to the authorization and purpose of the Bonds; security for the Bonds; the City's
rights to issue additional obligations; the book -entry system, transfer, exchange and place of
payment of the Bonds; and other information relating to the Bonds and the City.
Bond Insurance. A municipal bond insurance policy issued by Financial Security
Assurance Inc. will insure payment of the principal of and interest on all of the Bonds when due,
as described in the Preliminary Official Statement under "SECURITY FOR THE BONDS —
Bond Insurance." The premium for such bond insurance will be paid by the City.
Maturities. The Bonds will mature on May 1 and November 1 in the years and in the
amounts of principal as designated below:
Maturity Date Principal Amount
May 1, 1999
S 360,000
November 1, 1999
390,000
May 1, 2000
395,000
November 1, 2000
405,000
May 1, 2001
410,000
November 1, 2001
420,000
May 1, 2002
430,000
November 1, 2002
440,000
May 1, 2003
445,000
November 1, 2003
455,000
May 1, 2004
465,000
November 1, 2004
475,000
May 1, 2005
485,000
November 1, 2005
495,000
May 1, 2006
510,000
November 1, 2006
520,000
Prior Redemption. The Bonds are not subject to redemption prior to their stated
maturities.
Interest Rates and Limitations. Interest shall be payable on May 1 and November 1 of
each year, commencing on May 1, 1999, and will be computed on the basis of a 360 -day year of
twelve 30 -day months. There is no limit on the number of rates specified, except that one
interest rate only shall be specified for the Bonds of any maturity. Supplemental interest
coupons will not be permitted. The rate must be stated in a multiple of 1 /8th or 1 /20th of 1% per
annum. A zero rate of interest may not be named. The maximum differential between the lowest
and the highest interest rates stated in the bid may not exceed two percent (2 %) per annum. The
interest rate specified for any maturity of Bonds may not be lower than that specified for Bonds
of any earlier maturity (i.e., only repeating or ascending rates may be bid for the Bonds).
Limitations on Discount and Premium. It is permissible to bid (a) a premium above the
par amount of the Bonds or (b) a discount, but any discount bid may not exceed one percent (1 %)
of the par amount of the Bonds. Such discount may include both an underwriting discount and
original issue discount but the aggregate of such discounts shall not exceed the limitation
described above. Each bid shall specify the amount of the premium or the discount, if any.
Bid Proposal. Any bidder is required to submit an unconditional bid specifying the
lowest rate or rates of interest and as appropriate, the discount or premium, at which the bidder
will purchase all of the Bonds. It is also requested for informational purposes only, but is not
required, that each bid disclose the True Interest Cost (i.e., actuarial yield) on the Bonds
expressed as a nominal annual percentage rate. See "Basis of Award," below. Each proposal
must be submitted on the official bid form prepared by the City and must be enclosed in a sealed
envelope marked on the Outside "Proposal for City of Pueblo, Colorado, General Obligation
2
Refunding Bonds, Series 1998" and addressed to Mr. Bill Martin, Finance Director, City of
Pueblo, Colorado, One City Hall Place, P.O. Box 1427, Pueblo, Colorado 81002.
Successful Bidder's Reoffering Melds. At or before noon, Pueblo time, on October 13,
1998, the successful bidder (or manager of the purchasing account) for the Bonds must provide
to the Finance Director of the City and to the City's financial consultant, by facsimile
transmission (see "Information" below), the initial offering price and yield to the public
(excluding bond houses, brokers, or similar persons acting in the capacity of underwriters or
wholesalers) at which prices a substantial amount of each maturity of the Bonds was sold, in an
aggregate dollar amount, including accrued interest. The information as to initial offering prices
shall be based on the successful bidder's expectations as of October 13, 1998 and not on actual
facts after October 13, 1998. Such facsimile notification must be confirmed by written certificate
in form and substance satisfactory to the City's Bond Counsel on the date of delivery of and
payment for the Bonds. The successful bidder must also certify to the City in writing prior to
delivery of the Bonds that the Bonds were sold as fixed interest rate Bonds as described in the
Preliminary Official Statement.
Good Faith Deposit. Each bid shall be accompanied by a good faith deposit in the
amount of S 150,000 in the form of a certified or cashier's check, or a financial surety bond issued
by an insurance company licensed to issue such surety bond in the State of Colorado, made
payable to the order of the City of Pueblo, Colorado. If a check is used, it must accompany each
bid. If a financial surety bond is used, it must be submitted to the City or its financial consultant
prior to the opening of the bids, and must identify each bidder whose good faith deposit is
guaranteed by such financial surety bond. If the winning bidder is a bidder utilizing a financial
surety bond, then that bidder is required to submit its good faith deposit to the City in the form of
a cashier's check (or wire transfer such amount as instructed by the City or its financial
consultant) not later than 10:00 a.m. (Pueblo time) on the next business day following the award.
If such good faith deposit is not received by that time, the financial surety bond may be drawn by
the City to satisfy the good faith deposit requirement. The City will deposit for collection the
good faith deposit of the winning bidder. No interest on any good faith deposit will accrue to the
purchaser or any other bidder. The good faith deposit of the winning bidder will be applied to
the purchase price of the Bonds. In the event the winning bidder fails to honor its accepted bid,
its good faith deposit and any interest accrued thereon will be retained by the City. Good faith
deposit checks accompanying bids other than the bid which is accepted will be returned promptly
upon the determination of the winning bid.'
Sale Reservations. The City Council reserves the right (a) to reject any and all bids for
the Bonds, (b) to reoffer the Bonds for sale as provided by law, and (c) to waive any irregularity
or informality in any bid. In addition, the City reserves the privilege of changing the date and/or
time of sale of the Bonds. Any change in the date and/or time of sale of the Bonds will be
communicated via Munifacts. If the City Council changes the sale date and/or time, this Official
Notice of Bond Sale shall remain effective, except as amended by such Munifacts
communication or other amendment communicated to potential bidders.
If bids are not taken on October 13, 1998 or if all bids are rejected on October 13, 1998,
the City may reoffer the Bonds for sale at any time thereafter. The time and date of any
subsequent Bond sale will be announced via Munifacts wire service before the time of the sale.
Basis of Award. The Bonds, subject to the reservations and limitations set forth herein,
will be sold to the responsible bidder making the best bid therefor. The best bid will be
determined by computing the True Interest Cost on the Bonds (i.e., using an actuarial or TIC
method) for each bid received and an award will be made (if any is made) to the responsible
bidder submitting the bid which results in the lowest true interest cost for the Bonds. "True
Interest Cost" on the Bonds as used herein means that yield which if used to compute the present
worth as of the date of the Bonds of all payments of principal and interest to be made on the
Bonds from their date to their respective maturity dates using the interest rates specified in the
bid and the principal amounts maturing as shown in the Maturity Schedule stated herein,
produces an amount equal to the principal amount of the Bonds less any discount bid or plus any
premium bid. No adjustment shall be made in such calculation for accrued interest on the Bonds
from their date to the date of delivery thereof. Such calculation shall be based on a 360 -day year
and a semiannual compounding interval. If there are two or more equal bids for the Bonds and
such equal bids are the best bids received, the City will determine which bid will be accepted, if
any.
Time of Award. Bids will be opened at the time hereinabove specified. The City
Council expects to take action by motion, awarding the Bonds or rejecting all bids, at a regular
meeting of the City Council commencing at 7:30 p.m. on Tuesday, October 13, 1998, and upon
determining the best bid. In any event the City Council will take action by motion, awarding the
Bonds or rejecting all bids, not later than 36 hours after the expiration of the time herein
specified for opening bids.
jVanner and Time of Delivery. The good faith deposit of the winning bidder will be
credited to the purchaser at the time of delivery of the Bonds (without accruing interest), If the
successful bidder for the Bonds fails or neglects to complete the purchase of the Bonds when the
Bonds are made ready and are tendered for delivery, the amount of this good faith deposit will be
forfeited (as liquidated damages for noncompliance with the bid) to the City, except as
hereinafter provided. In that event the City Council may reoffer the Bonds for sale as provided
by law. The purchaser will not be required to accept delivery of any of the Bonds if they are not
tendered for delivery within 60 days from the date herein stated for opening bids, and if the
Bonds are not so tendered within said period of time, the good faith deposit will be returned to
the purchaser upon its request (without accruing interest). The City contemplates, however,
effecting delivery of the Bonds to the purchaser on or about October 29, 1998.
Payment at and Place of Delivery. The successful bidder or bidders will be required to
make payment of the balance due for the Bonds (a) at a bank or trust company in Denver,
Colorado, or (b) at the successful bidder's request and expense, at some other bank or trust
company in the United States of America, as requested. Payment of the balance of the purchase
price due at delivery must be made in Federal Reserve Funds or other funds acceptable to the
City for immediate and unconditional credit to the City. The Bonds will be delivered at the
4
office of The Depository Trust Company in New York, New York, on confirmation by the City
of receipt of the balance of the purchase price.
CUSIP Numbers. CUSIP numbers will be ordered by the financial consultant and paid
for by the City as a cost of issuance. CUSIP numbers will be printed on the Bonds. If a wrong
number is imprinted on any Bond or if a number is not printed thereon, any such error or
omission will not constitute cause for the successful bidder to refuse delivery of any Bond.
Official Statement. The City has prepared the Preliminary Official Statement, which is
deemed by the City to be final as of its date for purposes of allowing bidders to comply with
Rule 15c2- 12(b)(1) of the Securities and Exchange Commission (the "Rule "), except for the
omission of certain information as permitted by the Rule. The Preliminary Official Statement is
subject to revision, amendment and completion in a Final Official Statement, as defined below.
Copies of the Preliminary Official Statement and other information concerning the City
and the Bonds may be obtained prior to the sale from the sources listed under "Information"
below.
The City will, as soon as practicable after the award of the Bonds to the winning bidder,
update the information contained in the Preliminary Official Statement to the date of the award,
and such updated Preliminary Official Statement will constitute the "Final Official Statement"
relating to the Bonds. The City authorizes the winning bidder to distribute the Final Official
Statement in connection with the offering of the Bonds. The City will provide to the winning
bidder an amount not to exceed 200 copies of the Final Official Statement on or before the
seventh business day following the date of the award to the winning bidder. The winning bidder
may obtain additional copies of the Final Official Statement at its expense. The Final Official
Statements will be delivered to the winning bidder at the offices of the financial consultant at the
address listed below. If the winning bidder fails to pick up the Final Official Statements at the
offices of the financial consultant, the Final Official Statements will be forwarded to the winning
bidder by mail or another delivery service mutually agreed to between the winning bidder and
the financial consultant.
For a period beginning on the date of the Final Official Statement and ending 25 days
following the date the winning bidder shall no longer hold for sale any of the Bonds, if any event
concerning the affairs, properties or financial condition of the City shall occur as a result of
which it is necessary to supplement the Final Official Statement in order to make the statements
therein, in light of the circumstances existing at such time, not misleading, the City shall, at the
request of the winning bidder, notify the winning bidder of any such event of which the Finance
Director has actual knowledge and shall cooperate fully in preparation and furnishing of any
supplement to the Final Official Statement necessary, in the reasonable opinion of the City and
the winning bidder, so that the statements therein as so supplemented will not be misleading in
the light of the circumstances existing at such time.
Secondary Market Disclosure Undertaking. Pursuant to Securities and Exchange
Commission Rule 15c2 -12, the City will undertake to provide certain ongoing disclosure,
including certain annual operating data and financial information, audited financial statements
5
and the occurrence of certain material events. A form of the undertaking is set forth in the
Preliminary Official Statement. v
Transcript and Legal Opinion. The validity and enforceability of the Bonds will be
approved by Kutak Rock, Denver, Colorado, as Bond Counsel. The purchaser will receive a
transcript of legal proceedings, which will include, among other documents:
(a) a certificate executed by officials of the City, including the City Attorney,
stating that there is no litigation pending affecting the validity of the Bonds as of the date
of their delivery;
(b) a certificate executed by the Finance Director or other authorized official
of the City stating that, to the best of his knowledge, the Final Official Statement as of its
date did not contain any untrue statement of a material fact or omit to state any material
fact necessary to make the statements made in the Final Official Statement, in the light of
the circumstances under which they were made, not misleading, and that, to the best of
his knowledge, since the date of the Final Official Statement no event has occurred which
would cause the Final Official Statement as of the date of the delivery of the Bonds to
contain any untrue statement of a material fact or to omit to state any material fact
necessary to make the statements made in the Final Official Statement, in the light of the
circumstances under which they were made, not misleading (provided that, if between the
date of the public sale of the Bonds and the date of delivery of the Bonds, any event
should occur or be discovered which would cause the Final Official Statement to contain
an untrue statement of a material fact or to omit to state a material fact necessary to make
the statements therein, in the light of the circumstances under which they were made, not
misleading, the City shall notify the purchaser thereof, and if in the opinion of the City or
the purchaser such event requires the preparation and publication of a supplement or
amendment to the Final Official Statement, the City, at its sole expense, will supplement
or amend the Final Official Statement in a form and in a manner approved by the
purchaser and by Kutak Rock, Denver, Colorado, as Bond Counsel to the City);
(c) a letter from Kutak Rock, addressed to the purchaser of the Bonds, to the
effect that the firm has not independently verified the information contained in the Final
Official Statement, but that during the course of the participation by the firm in the
preparation of the Final Official Statement no information came to the attention of the
firm to lead it to believe that the Final Official Statement (except the financial statements
and other statistical and financial data contained in the Final Official Statement, and
except information relating to the Bond Insurer and The Depository Trust Company
contained in the Final Official Statement, as to which such firm will make no statement)
as of its date either contained an untrue statement of any material fact or omitted to state a
material fact necessary to make the statements made, in the light of the circumstances
under which they were made, not misleading; and
(d) the opinion of Kutak Rock as to the validity, enforceability and tax -
exempt status of interest on the Bonds.
It
Information. This Official Notice of Sale (a condensation of which has been ordered
published), the Preliminary Official Statement, the official bid form and other information
concerning the City and the Bonds may be obtained from Mr. Bill Martin, Finance Director, One
City Hall Place, P.O. Box 1427, Pueblo, Colorado 81002 (telephone 719 -584- 0845, fax
719 -584- 0844), or from the City's financial consultant, James Capital Advisors Inc., 8101 E.
Belleview Avenue, Suite A60 -502, Denver, Colorado 80237 (telephone 303 - 699 - 4.164, fax
303- 699 - 4888).
BY ORDER OF THE CITY COUNCIL OF THE CITY OF PUEBLO, COLORADO,
dated this September 28, 1998.
President of the City Council
7
Document No. 6
OMNIBUS CERTIFICATE AND RECEIPT
A. The undersigned, each for themselves, being first duly sworn on oath, deposes
and says:
1. That they are, respectively, the duly elected, or appointed, qualified and acting
President of the City Council and City Clerk of the City of Pueblo, Colorado (the "City ").
2. That the City is a municipal corporation of the State of Colorado (the "State "),
duly organized and existing under and by virtue of a home rule city charter (the "Charter ")
adopted pursuant to Article XX of the Constitution of the State and that the City was
incorporated as a municipal corporation and a statutory town under the laws of the State of
Colorado and became a home rule city pursuant to the Constitution of the State in the year 1954.
3. That at all times during the proceedings relating to the adoption of Ordinance
No. 6348 (the "Ordinance ") on September 14, 1998 and September 28, 1998, the proceedings
relating to the adoption of Resolution No. 8534 (the "Public Bid Resolution ") on September 28,
1998 and the proceedings relating to the adoption of Resolution No. 8542 (the "Supplemental
Resolution ") on October 13, 1998, and on the date of this certificate, the following, respectively,
were the duly elected, or appointed, qualified and acting members of the City Council and
officers of the City:
President: Cathy A. Garcia
Vice President: Richard Golenda
Members: Albert GurUIe
Corinne Koehler
Robert Schilling
Dr. Bill Sova
John Verna
City Manager: Lewis A. Quigley
Director of Finance: Billy G. Martin
City Clerk: Gina Dutcher
City Attorney: Thomas E. Jagger, Esq.
4. That all meetings of the City Council at which action was taken in connection
with the issuance and the approval of the City's General Obligation Refunding Bonds, Series
02- 13470.03
1998 in the aggregate principal amount of $7,100,000 (the "Bonds ") and the adoption of the
Ordinance, the Public Bid Resolution and the Supplemental Resolution were open to the public
at all times and advance public notice of the time and place of each of the meetings was duly
given in accordance with the conditions of the laws of the State of Colorado.
5. That the City has complied with all provisions of the laws of the State and has full
power and authority to consummate all transactions contemplated by the Bonds, the Ordinance,
the Public Bid Resolution and the Supplemental Resolution.
6. That the City has duly authorized all necessary action to be taken by it for: (a) the
execution, delivery, issuance and sale of the Bonds; (b) the adoption of the Ordinance, the Public
Bid Resolution and the Supplemental Resolution; (c) the execution and delivery of the Official
Statement, dated October 13, 1998, relating to the Bonds (the "Official Statement ") and the
Paying Agency Agreement, dated as of October 15, 1998 (the "Paying Agency Agreement "),
between the City and The Bank of Cherry Creek, N.A., as paying agent for the Bonds; and
(d) the execution, delivery, receipt and due performance of any and all agreements and
documents as may be required to be executed, delivered and received by the City in order to
carry out, give effect to and consummate the transactions contemplated by the Ordinance, the
Public Bid Resolution and the Supplemental Resolution.
7. That the undersigned know of no reason why the City cannot issue the Bonds
pursuant to the Ordinance, the Public Bid Resolution, the Supplemental Resolution and the
Charter.
8. That the Bonds do not exceed any debt limitation applicable to the City in the
Charter, nor are there any conditions precedent to the issuance of the Bonds which have not been
met or have not occurred.
9. That to the best of our knowledge, no litigation is pending or threatened in any
court to restrain or enjoin the issuance or sale of the Bonds, or in any way contesting or affecting
any authority for or the validity of the Bonds, the Ordinance, the Public Bid Resolution, the
Supplemental Resolution, the Bond Purchase Agreement or the Paying Agency Agreement or the
City's corporate existence or boundaries, or the titles of the officers or any of them, to their
respective offices, or the City's right to use the proceeds of the Bonds as contemplated by the
Ordinance, the Public Bid Resolution and the Supplemental Resolution.
10. That to the best of our knowledge, no consent, approval, authorization, order,
filing (other than the filing of the Form 8038 -G with the Internal Revenue Service), registration,
qualification, election or referendum, of or by any person, organization, court or governmental
agency or public body whatsoever not already obtained, is required in connection with the
issuance, delivery or sale of the Bonds, or the consummation of the other transactions effected or
contemplated by the Ordinance, the Public Bid Resolution, the Supplemental Resolution or the
Official Statement.
11. That the Bonds conform to the descriptions thereof contained in the Ordinance,
the Public Bid Resolution and the Supplemental Resolution, and the Bonds have been duly
02- 13470.03 2
authorized, executed and authenticated and constitute validly issued and legally binding general
obligations of the City.
12. That the City has complied with all the terms of the Ordinance, the Public Bid
Resolution and the Supplemental Resolution which must be complied with by the City prior to or
concurrently with the delivery of the Bonds, and such documents are in full force and effect.
13. That the organization of the City has been fully effected; that the validity of such
organization has never been and is not now being questioned or challenged; that the City as
originally organized and incorporated has never been consolidated with or annexed to any other
municipality; and that no territory has ever been disconnected from the City as originally
incorporated.
14. That the Official Statement has been reviewed by us and by officers and
employees of the City who have knowledge as to the transactions and matters discussed in the
Official Statement, and who are in a position to ascertain, based upon such knowledge, the
accuracy and sufficiency of the statements and information set forth in the Official Statement
concerning the matters described therein. Based upon the foregoing, nothing has come to our
attention which would cause us to believe, and nothing has come to the attention of those other
officers and employees of the City who have reviewed the Official Statement which would cause
them to believe, that the information included in the Official Statement contains any untrue
statement of a material fact, or omits to state a material fact necessary to make the statements
made therein, in light of the circumstances under which they were made, not misleading.
15. That the execution, delivery, receipt and due performance of any and all
agreements and documents required to be executed, delivered and received by the City in order
to carry out, give effect to and consummate the transactions contemplated by the Ordinance, the
Public Bid Resolution and the Supplemental Resolution and compliance by the City with the
provisions thereof, including, without limitation, the issuance and delivery of the Bonds and the
execution and delivery of the Paying Agency Agreement, will not conflict with or constitute on
the part_ of the City a breach of or a default under any existing law, court or administrative
regulation, decree or order or any agreement, indenture, mortgage, lease or other instrument to
which the City is subject or by which it is or may be bound.
16. That the representations and warranties of the City contained in the Ordinance,
the Public Bid Resolution and the Supplemental Resolution are true and correct and the City has
performed all of its agreements therein contained that are required to be performed at or
simultaneously with the date hereof.
B. The undersigned, Cathy A. Garcia, President of the City Council of the City of
Pueblo, Colorado deposes and says that:
1. The Bonds have been duly executed by the City, conform to the specifications set
forth in the Ordinance, the Public Bid Resolution and the Supplemental Resolution and have
been delivered to The Bank of Cherry Creek, N.A., as paying agent for the Bonds (the "Paying
Agent ").
02- 13470.03 3
2. The Paying Agent is hereby requested to authenticate the Bonds and to deliver the
Bonds to Piper Jaffray Inc. upon receipt by the City of payment for the Bonds as provided in the
Supplemental Resolution.
C. The undersigned, Gina Dutcher, City Clerk of the City of Pueblo, Colorado
deposes and says that:
The City hereby acknowledges that it has received the full purchase price for the Bonds
as provided in the Supplemental Resolution and has applied the proceeds of the Bonds as
provided in the Ordinance and the Supplemental Resolution.
[The remainder of the page is left blank intentionally.]
02- 13470.03 4
IN WITNESS WHEREOF, we have hereunto set our hands and the official seal of the
City as of this October 29, 1998.
[SEAL]
B y L " GEC. �c �� � • .�:/�.. -�. �� �
President of the City Council
By
City Cl
02- 13170.03
PAYING AGENCY AGREEMENT
THIS PAYING AGENCY AGREEMENT, dated as of October 15, 1998 (this "Paying
Agency Agreement "), governs the appointment by the CITY OF PUEBLO, COLORADO (the
"City ") of THE BANK OF CHERRY CREEK, N.A., a national banking association duly
organized and existing under the laws of the United States of America, as paying agent, registrar
and authenticating agent (the "Paying Agent ") for the City's $7,100,000 General Obligation
Refunding Bonds, Series 1998 (the "Bonds ") issued pursuant to Ordinance No. 6348 (the
"Ordinance ") of the City.
1. The Paying Agent shall act as agent of the City for the limited purpose of being
paying agent, registrar and authenticating agent for the Bonds and shall not in such capacities be
a trustee or other fiduciary for the registered owners of the Bonds. The Paying Agent, and its
officers, directors and employees, may become the registered owner or registered owners of, or
acquire any interest in, any Bonds with the same rights that it or they would have if it were not
the paying agent, registrar and authenticating agent hereunder, may engage or be interested in
any financial or other transactions with the City or any agents thereof, and may act on, or as
depositary, trustee or agent for, any committee or body of registered owners of the Bonds or
other obligations of the City or any agents thereof, as freely as if it were not the paying agent,
registrar and authenticating agent hereunder.
2. On or prior to each date established for payment of principal, interest or premium,
if any, on the Bonds (a "Due Date "), the City shall furnish funds to the Paying Agent in amounts
sufficient to pay all amounts due. The Paying Agent shall have no duty to collect, or notify the
City of, amounts due on the Bonds. The Paying Agent shall have no duty to make any payments
prior to any Due Date nor until fiends necessary to cover all payments due on the Due Date have
been deposited with it. The Paying Agent shall never be required to advance its own funds for
any payments in connection with the Bonds.
3. The Paying Agent shall not be obligated to segregate the fiends held as paying
agent or registrar unless otherwise required by law, and shall not be liable for payment of interest
on any funds held in its capacity as paying agent or registrar.
4. The City shall furnish the Paying Agent with a sufficient supply of blank Bonds
and from time to time shall renew such supply when necessary upon the request of the Paying
Agent. Blank Bonds shall be signed by authorized officers of the City and shall bear the seal of
the City, or shall bear, to the extent permitted by law, the facsimile signature of such officers and
the facsimile of said seal.
5. The Paying Agent agrees to act as Paying Agent under and as described in the
Ordinance. The Paying Agent shall perform all duties required of it under the Ordinance as
Paying Agent, including its duties as paying agent, registrar and authenticating agent thereunder.
6. The Paying Agent shall make payment, exchange or registration of transfer
(collectively "Transfer ") of Bonds in accordance with the Ordinance. The Paying Agent reserves
the right to refuse to Transfer Bonds until it is satisfied that the endorsement on the Bond is valid
02- 13431.02
and genuine, and for that purpose it may require a guarantee of signature by a firm having
membership in a Medallion Signature Program. The Paying Agent also reserves the right to
refuse to Transfer Bonds until it is satisfied that the requested Transfer is legally authorized, and
it shall incur no liability to the City for any liabilities arising from the refusal in good faith to
make a Transfer, which it, in its judgment, deems improper or unauthorized. The Paying Agent
assumes no responsibility for determining whether or to what extent any Transfer made by it or
other action taken by it may have a bearing on any exemption from the registration requirements
of the Securities Act of 1933 as amended or any similar statute.
7. The Paying Agent shall issue new or duplicate Bonds in lieu of or on account of
Bonds represented to have been lost, apparently destroyed or wrongfully taken, in accordance
with the Ordinance.
8. The Paying Agent may Transfer Bonds registered in the name of or belonging to a
deceased person without requiring the person requesting such Transfer to obtain letters of
administration, letters testamentary, or instruments of assignment from the executors or
administrators of the deceased, or other legal documents generally required, upon receiving
indemnity satisfactory to the Paying Agent; and the Paying Agent is authorized to procure from
a bonding company of its choice a blanket bond covering the transfer of securities without
probate or administration running in favor of said Paying Agent, the City, and any other agents
of the City, and to perform all acts necessary or desirable to assure that the Paying Agent and the
City and other agents of the City will be indemnified on account of any such Transfer.
9. The Paying Agent shall treat the person in whose name any Bond is registered as
the absolute owner of such Bond for the purpose of receiving payment of principal of and
interest on such Bond and for all other purposes whatsoever, whether or not such Bond be
overdue, and the Paying Agent shall not be affected by any notice to the contrary.
10. Unless otherwise instructed, the Paying Agent shall destroy cancelled Bonds any
time after payment and shall furnish to the City periodic destruction certificates.
1 1. In the event the City receives any notice or order which limits or prohibits dealing
in the securities for which the Paying Agent is paying agent, registrar or authenticating agent, it
shall immediately notify the Paying Agent of such notice or order and give a copy thereof to the
Paying Agent.
12. The Paying Agent shall withhold any and all amounts from principal and interest
due registered owners of the Bonds as it may be required from time to time by any government
regulations and shall prepare and file any necessary information returns with respect to all
principal and interest payments.
13. The Paying Agent shall be entitled to payments from the City of its fees and
actual expenses for acting as paying agent, registrar and authenticating agent in accordance with
the fee schedule attached hereto and thereafter as shall be agreed to by the City and the Paying
Agent. All such fees and actual expenses shall be paid notwithstanding that the Bonds have been
refunded or otherwise refinanced at the time the payment is due, so long as the Bonds shall not
oz- 13431.02 2
have actually been paid. The Paying Agent shall not have a lien on any funds deposited with it
as paying agent for payment of its fees.
14. The Paying Agent shall not be liable for action taken, in good faith, in reliance
upon advice from legal counsel and may rely and act upon signatures and documents which it
believes to be genuine, without liability. The Paying Agent shall be liable only for its own
negligence, gross negligence or willful misconduct.
15. The Paying Agent may execute and exercise any of the rights or powers hereby
vested in it or perform any duty hereunder either itself or by or through its attorneys, agents or
employees, and the Paying Agent shall not be answerable or accountable for any act, default,
neglect or misconduct (except as a result of gross negligence or willful misconduct) of any such
attorneys, agents or employees or for any loss to the City resulting therefrom, provided
reasonable care shall have been exercised in the selection and continued employment thereof.
16. In the event of any conflict between this Paying Agency Agreement and the duties
of the Paying Agent under the Ordinance, the provisions of the Ordinance shall control.
17. In any circumstances not covered specifically by the Ordinance or this Paying
Agency Agreement, the Paying Agent shall act in accordance with its normal procedures in such
matters, subject to the provisions of Section 14 hereof.
18. The Paying Agent may resign as paying agent, registrar and authenticating agent,
or may be removed as such by the City on thirty days' prior written notice. In case of resignation
the Paying Agent, or in the case of removal the City, shall pay for all costs and expenses relating
thereto, including costs of giving notices and costs of forwarding or returning fiends, Bonds or
other documents. In such case, the Paying Agent shall promptly present a final statement to the
City, and shall forward all records, fiends, Bonds and other documents relating thereto to the
successor Paying Agent.
19. After one year from the earlier of the final maturity date of the Bonds or the
redemption date of the last outstanding Bond, the Paying Agent shall return any unclaimed fiends
relating to the Bonds to the City and thereafter all of its obligation and duties with respect to the
Bonds shall cease and the Paying Agent shall destroy all Bonds in accordance with its customary
practices.
20. The terms and conditions of this Paying Agency Agreement may be amended
only by written agreement between the City and the Paying Agent.
21. The City shall furnish or cause to be furnished to the Paying Agent an original
copy of each document relating to the Bonds which is reasonably requested by the Paying Agent.
22. This Paying Agency Agreement is executed in the State of Colorado and shall be
construed and enforced in accordance with the laws of the State of Colorado.
[Remainder of page intentionally left blank]
02- 13431.02 j
IN WITNESS WHEREOF, the parties hereto have caused this Paying Agency Agreement
to be executed and delivered by their respective officers thereunto duly authorized as of the date
first above written.
[SEAL]
ATTEST:
By C"
City Cle
[SEAL]
ATTEST:
By
Title
CITY OF PUEBLO, COLORADO
B
President of the City Council
THE BANK OF CHERRY CREEK, N.A., as
Paying Agent
By _
Title
02- 13431.02 4
Document No. 7
NO ARBITRAGE CERTIFICATE
1. In General.
I.I. The undersigned is the President of the City Council of the City of Pueblo,
Colorado (the "City ").
1.2. This No Arbitrage Certificate is executed for the purpose of establishing the
reasonable expectations of the City as to future events regarding $7,100,000 in aggregate
principal amount of the City of Pueblo, Colorado, General Obligation Refunding Bonds, Series
1998 (the "Bonds "). The City's reasonable expectation that the Bonds are not "arbitrage bonds"
is based upon Section 148 of the Internal Revenue Code of 1986, as amended (the "Code ").
1.3. The factual representations contained in this No Arbitrage Certificate are true and
correct and, to the best of the knowledge, information and belief of the undersigned, the
expectations contained in this No Arbitrage Certificate are reasonable.
1.4. The undersigned is an officer of the City to whom the responsibility of issuing
and delivering the Bonds has been delegated.
1.5. The price and yield calculations referenced in Sections 3 and 6 are based on
representations made by Piper Jaffray Inc., as original purchaser for the Bonds (the "Original
Purchaser "). The City is not aware of any facts or circumstances that would cause it to question
the accuracy of the representations made by the Original Purchaser.
1.6. The terms used herein and not otherwise defined shall have the same meanings as
defined in Ordinance No. 6348, finally adopted by the City Council of the City on September 28,
1998 (the "Ordinance ").
2. The Purpose of the Bonds.
2.1. The Bonds are being issued for the purpose of current refunding the City's
General Obligation Refunding Bonds, Series 1987A (the "Refunded Bonds ") and paying the
costs of issuing the Bonds.
2.2. The portion of the Bonds to be used to refund the Refunded Bonds, together with
investment income and other moneys of the City, if any, will not exceed the amount necessary to
refund the Refunded Bonds.
3. Source and Disbursement of Funds.
3.1. The Bonds will be sold to the public at par, less an original issue discount of
$4,374.45, plus $9,999.69 of accrued interest on the Bonds. Accordingly, the net amount
received from the sale of the Bonds will be $7,105,625.24.
02- 13470.03
3.2. The $7,105,625.24 received from the sale of the Bonds is expected to be needed
and fully expended as follows:
(a) $90,340.55 of such proceeds will be expended for the payment of costs
anticipated to be incurred in connection with the issuance of the Bonds, including
$24,496.00 which will be retained by the Underwriter as its fee;
(b) $9,999.69 of accrued interest will be deposited in the Bond Fund
established pursuant to the Ordinance; and
(c) the remaining proceeds in the amount of $7,005,285.00 will be transferred
to The Bank of Cherry Creek, N.A. and used, together with other moneys of the City, to
redeem the Refunded Bonds on November 1, 1998.
4. Refunding Proceeds.
4.1. The proceeds of the Bonds and other moneys of the City to be used to redeem the
Refunded Bonds on November 1, 1998 may be invested in obligations with a yield in excess of
the yield on the Bonds until expended.
5. Bond Fund.
5.1. The Bond proceeds deposited in the Bond Fund representing accrued interest may
be invested without regard to investment yield limitation until expended to pay interest on the
Bonds on May 1, 1999.
5.2. Under the Ordinance, the City is required to deposit moneys sufficient to pay the
principal of and interest on the Bonds into the Bond Fund at the times required by the Ordinance.
The Bond Fund will be held by the City as a bona fide debt service fund, which will be used to
pay the principal of and interest on the Bonds as the same become due, and which will be
depleted at least once a year (except for a reasonable carryover amount not to exceed the greater
of one year's interest thereon or one - twelfth of annual debt service on the Bonds). It is
reasonably expected that all amounts received by the City as income from the investment of
moneys held in the Bond Fund will be expended to pay principal of and interest on the Bonds
within one year of receipt thereof. Moneys deposited in the Bond Fund (other than original
proceeds of the Bonds as set forth in Section 5.1 above) will be invested without regard to yield
limitation and to the extent required by the Code are subject to the rebate requirements of
Section 7 of this No Arbitrage Certificate.
5.3. Any moneys deposited in the Bond Fund which have been held or are expected to
be held for more than 13 months from the date of receipt under the Ordinance will not be
invested in obligations that bear a yield in excess of the yield of the Bonds.
6. Price and Yield of the Bonds.
6.1. The Original Purchaser has represented that the initial offering price to the public
at which a substantial amount of the Bonds were sold (excluding bond houses, brokers and other
02- 13470.03 2
intermediaries) is $7,105,625.24, which is par of $7,100,000.00, less an original issue discount of
$4,374.45, plus accrued interest of $9,999.69.
6.2. As used in this No Arbitrage Certificate, the term "yield" refers to the discount
rate which, when used in computing the present worth of all payments of principal and interest to
be paid on an obligation, produces an amount equal to the issue price. The calculations of yield
have been made on the basis of semiannual compounding using a 360 -day year and upon the
assumption that payments are made from the last day of each semiannual interest payment date.
For purposes of computing yield, the purchase price of any acquired obligation is equal to the
fair market value as of the date of a binding contract to acquire such obligation.
6.3. In computing the yield on the Bonds, the premium paid to Financial Security
Assurance Inc. for insuring the Bonds may be treated as interest on the Bonds. The amount of
such premium is less than the present value of the interest savings achieved as a result of the use
of such bond insurance (using as the discount rate for such present value the estimated yield on
the Bonds determined with regard to such premium).
6.4. The yield on the Bonds has been calculated by the Underwriter to be not less than
3.7105°/x.
7. Rebate Requirement.
7.1. The City acknowledge that the continued exclusion of interest on the Bonds from
gross income of the recipients thereof for purposes of federal income taxation depends, in part,
upon compliance with the arbitrage limitations imposed by Section 148 of the Code, including
the rebate requirement described in this Section. The City has agreed and covenanted in the
Ordinance that it shall not permit at any time or times any of the proceeds of the Bonds or other
funds of the City to be used, directly or indirectly, to acquire any asset or obligation, the
acquisition of which would cause the Bonds to be "arbitrage bonds" for purposes of Section 148
of the Code.
7.2. The City has received and reviewed Instructions prepared by Bond Counsel with
respect to the investment and disposition of moneys on deposit in the various funds and accounts
created under the Ordinance, which instructions have been prepared to comply with Sections 148
of the Code including the rebate requirements of Section 148(f) of the Code. The Instructions
are attached hereto as Exhibit A and, by this reference, expressly incorporated herein. The City
has warranted and covenanted in the Ordinance that it will comply with the Instructions and the
City expects that it will so comply.
7.3. The City will establish such accounting measures and keep all such records as are
necessary to determine any rebate amount for a period of at least six (6) years after the final
retirement of the Bonds.
8. Miscellaneous.
8.1. There are no other obligations of the City which are sold at substantially the same
time as the Bonds, are sold pursuant to a common plan of financing together with the Bonds, and
02- 13470.03 3
will be paid out of substantially the same source of funds (or will have substantially the same
claim to be paid out of substantially the same source of funds) as the Bonds.
8.2. Any amount of income derived from the investment of money received upon the
sale of the Bonds or from the investment of such investment income will, to the extent not
required to be rebated to the federal government, either (a) be used to redeem the Refunded
Bonds or (b) be deposited in the Bond Fund.
8.3. The average life of the Bonds (4.52 years) does not exceed 120% of the expected
average life of the project refinanced by the Bonds (at least 5 years).
[Next page is signature page.]
02- 13470.03 4
Dated: October 29, 1998
[SEAL]
CITY OF PUEBLO, COLORADO
By <_ " �z L� -te �. "�Ier y- d-
President of the City Council
02- 13470.03
INVESTMENT INSTRUCTIONS
October 29, 1995
City of Pueblo, Colorado
One City Hall Place
Pueblo, Colorado 81003
The Bank of Cherry Creek, N.A.
3033 East First Avenue
Denver, Colorado 80206
$7,100,000
City of Pueblo, Colorado
General Obligation Refunding Bonds
Series 1998
Ladies and Gentlemen:
This letter sets forth instructions (the "Instructions ") regarding the investment and
disposition of moneys deposited in various funds and accounts created under Ordinance
No. 6348 (the "Ordinance ") finally adopted by the City Council of the City of Pueblo, Colorado
(the "City ") on September 28, 1998, providing for the issuance by the City of $7,100,000 in
aggregate principal amount of its General Obligation Refunding Bonds, Series 1998 (the
"Bonds "). The Bonds are being issued for the purpose of current refunding the City's General
Obligation Refunding Bonds, Series 1987A and paying the costs of issuing the Bonds.
The purpose of these Instructions is to assure the investment of moneys in the funds and
accounts described herein will comply with the arbitrage limitations imposed by Section 148 of
the Internal Revenue Code of 1986, as amended (the "Code "), and the regulations thereunder
(the "Regulations "), and to further define and explain terms used in certain of the City's tax
covenants in the Ordinance. These Instructions implement the investment provisions of the
Ordinance and the No Arbitrage Certificate executed by the City on the date of issue of the
Bonds (the "No Arbitrage Certificate ") and constitute the "Investment Instructions" referred to in
the Ordinance and the "Instructions" referred to in the No Arbitrage Certificate. Terms not
otherwise defined herein shall have the definitions ascribed to such terms in the Ordinance.
1. Computation of Yield. For purposes of these instructions, the term "yield" shall
have the meaning set forth in the Regulations. The Regulations provide that the term "yield"
means that yield which when used in computing the present worth of all payments of principal
and interest to be paid on an obligation produces an amount equal to the purchase price of such
obligation. The yield of the Bonds and the yield of obligations acquired with moneys described
in these instructions shall be computed by using the same semiannual frequency of interest
compounding. In the case of the Bonds, the purchase price is $7,105,625.24 (which represents
02- 13470.03
$7,100,000.00 aggregate par amount of the Bonds, less an original issue discount of $4,374.45,
plus accrued interest of $9,999.69). The yield of the Bonds has been calculated by the
Underwriter to be not less than 3.7105 %.
2. Investments — General. If the yield of an investment obligation is restricted to a
yield not in excess of either the yield of the Bonds or one - eighth of one percent (.125 %) greater
than the yield on the Bonds, the yield must be the market price of the investment obligation on
an established market. This means that you cannot pay a premium to adjust the yield and that
you cannot accept a lower interest rate than is usually paid. Currently, if an obligation cannot be
purchased on an established market or a bona fide bid price cannot be established at a yield
which does not exceed the target restricted yield, you are limited to the acquisition of United
States Treasury Bonds of Indebtedness, Notes and Bonds - -State and Local Government Series
( "SLGs ") which yield no more than the target restricted yield. These United States Treasury
obligations are available at the Bureau of Public Debt in Parkersburg, West Virginia. The
market price of a certificate of deposit issued by a commercial bank may be determined by a
dealer who maintains an active secondary market in such certificates.
3. Bond Fund.
(a) Moneys which are deposited in the Bond Fund for the purpose of paying
principal and interest on the Bonds within 13 months of receipt of such moneys under the
Ordinance (including accrued interest on the Bonds) may be invested in obligations that
bear a yield in excess of the Bonds. Moneys in the Bond Fund shall be used solely for
the payment of the principal of and interest on the Bonds except to the extent that moneys
therein may be deposited in the Rebate Fund. Pending disbursement to pay debt service,
interest earnings on moneys in the Bond Fund may be invested in obligations that bear a
yield in excess of the yield of the Bonds.
(b) Any moneys deposited in the Bond Fund which have been held or are
expected to be held for more than 13 months from the date of receipt under the Ordinance
may not be invested in obligations that bear a yield in excess of the yield of the Bonds.
(c) The Bond proceeds deposited in the Bond Fund representing accrued
interest may be invested without regard to investment yield limitation until expended to
pay interest on the Bonds on December 1, 1998.
4. Refunding Proceeds. The proceeds of the Bonds and other moneys of the City to
be used to redeem the Refunded Bonds on November 1, 1998 may be invested in obligations
with a yield in excess of the yield on the Bonds until expended.
5. Rebate Requirement. The City shall comply with the rebate requirements
contained in the Code; however, the City expects to comply with the rebate requirements of the
Code pursuant to the exemption contained in Section 148(f)(4)(B) of the Code.
6. Other Tax Compliance Requirements.
(a) The City shall not take any action which would cause the Bonds to
become "federally guaranteed" under the Code. Under the Code, the Bonds will
02- 13470.03 2
considered to be "federally guaranteed" if the payment of principal or interest with
respect to the Bonds is directly or indirectly guaranteed (in whole or in part) by the
United States of America (or any agency or instrumentality thereof) or 5% or more of the
proceeds of the Bonds are used in making loans the payment of principal or interest with
respect to which are guaranteed or invested (directly or indirectly) in federally insured
deposits or accounts. A Bond shall not be treated as federally guaranteed due to (i) the
proceeds of the issue being invested for an initial temporary period until such proceeds
are needed for the purpose for which such Bonds were issued; (ii) investments of a bona
fide debt service fund; (iii) investments of a reserve fund which meet the limitations
placed on reserve funds by the Code; (iv) investments in obligations issued by the United
States Treasury; or (v) other investments permitted by the regulations under the Code.
(b) The City shall not take any action which would cause the Bonds to be
classified as "private activity bonds" under the Code. The Bonds will be classified as
"private activity bonds" if greater than 10% of the net proceeds of the Bonds are used for
any private business use and principal and interest on more than 10% of the net proceeds
of the Bonds are directly or indirectly (i) secured by any interest in (A) property used or
to be used for a private business use or (B) payments in respect of such property or (ii) to
be derived from payments in respect of property, or borrowed money, used or to be used
for a private business use (the "private payment test "). Bonds will also be deemed
private activity bonds if (A) greater than 5% of Bond proceeds are used for a private use
which is unrelated or disproportionate to the City's use of the Bond proceeds and greater
than 5% of the debt service on the Bonds is secured by payments made directly or
indirectly by such private user or (B) an amount exceeding the lesser of 5% or $5 million
of Bond proceeds is used to make a private loan to a person or entity other than a
governmental unit. A lease, management contract or other arrangement between the City
and a nonexempt person with respect to such facilities or any portion thereof will not
result in such facilities being used for federal income tax purposes in the trade or business
of the nonexempt person if the guidelines set forth in Rev. Proc. 97 -13 are satisfied.
In determining whether the Bonds meet the private payment test, the present value
of the payments taken into account shall be compared to the present value of the debt
service to be paid over the term of the Bonds. Debt service includes reasonable credit
enhancement fees but does not include any amount to be paid from proceeds of the issue.
For example, debt service does not include accrued or capitalized interest or other
amounts to be paid with proceeds of the Bonds (e.g., with proceeds in a reserve fund).
For purposes of the discount rate to be applied in such present value calculations, the
yield on the Bonds is computed to be 3.7105 %.
Payments taken into account in determining whether the Bonds meet the private
payment test include payments made for any private business use and payments in
respect of property financed (directly or indirectly with proceeds of the Bonds).
However, any payment that is properly allocable to the payment of ordinary or necessary
expenses directly attributable to the operation and maintenance of the property financed
with the proceeds of the Bonds (other than general overhead or administrative expenses)
shall not be included as a payment taken into account. Similarly, payments to a person
for use of proceeds will only be included to the extent that the present value of such
02- 13370.03 3
payments does not exceed the present value of the debt service allocable to that person's
use of proceeds. For example, if 10% of the proceeds of the Bonds were used by a
person, payments by such person would not be taken into account to the extent that the
present value of such payments exceeded the present value of 10% of the debt service on
the Bonds.
For purposes of the private payment test, certain incidental uses of the projects
refinanced by the Bonds may be disregarded to the extent that the proceeds of the Bonds
which results in the incidental use do not exceed 2 -1/2% of the total proceeds of the
Bonds. The use of the projects refinanced by the Bonds by a person is an incidental use
if such use does not involve the transfer to such person of possession and control in space
that is separated physically from other areas of the projects refinanced by the Bonds and
is not related to any other use of the projects refinanced by the Bonds by the same person.
For example, use of space in common areas of an office building for coin operated
telephones, advertising displays, vending machines, or a newsstand or shoeshine stand
may be disregarded.
7. Change in Law. The instructions set forth herein are based on law in effect as of
this date, and we undertake no obligation to monitor or update the status of these instructions.
Statutory or regulatory changes, including but not limited to clarifying Regulations, may effect
the instructions contained herein. Pursuant to the Ordinance, the City is bound to take all actions
necessary to maintain the tax - exempt status of interest on the Bonds. Accordingly, the City
should retain counsel or other experts from time to time to ensure compliance, in a timely
fashion, with the tax covenants contained in the Ordinance and these Instructions.
Very truly yours,
02- 13470.03 4
Form 8038-G I Information Return for Tax - Exempt Governmental Obligations
► Under Internal Revenue Code section 149(e) OM8 No. 1545 - 0720
(Rev. May 1995) ► See separate Instructions.
Department of the Treasury (Note: Use Form 8038 -GC If the Issue price Is under S100,000.)
Internal Revenue Service
Reporting Authority If Amended Return. check here ► M
1 Issuer's name
2 Issuer's employer identification number
City of Pueblo, Colorado
84;6000616
3 Number and street (or P.O. box if mail is not delivered to street address)
Room/suite
4 Report number
One City Hall Place
9,999.69
G1998 - 1
5 City, town, or pcst office, state, and ZIP code
6 Date of Issue
Pueblo, Colorado 81003
October 29, 1998
7 Name of Issue
8 CUSIP number
General Obligation Refunding Bonds, Series 1998
11/01/2006
i e oT Issue cneCK appiicaDie pox es ana enter the issue rice
9 ❑ Education (attach schedule -see Instructions) , , , , , , , , , , , , , , , , , 9 S
10 ❑ Health and hospital (attach schedule -see instructions), , , , , , , , , , , , , , 10
11 ❑ Transportation , , , , , , , , , , , , , , , , , , , , , , , , , , , 11
12 ❑ Public safety . . . . . . . . . . . . . . . . . . . . . . . . 12
13 ❑ Environment (including sewage bonds) , , , , , , , , , , , , , , , , , , , 13
14 ❑ Housing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
15 ❑ Utilities . . . . . . . . . . . . . . . . . . . . . . . . . 15
16 ❑ Other. Describe (see instructions) ► 16
17 If obligations are tax or other revenue anticipation bonds, check box ► ❑
18 If obligations are in the form of a lease or installment sale, check box ► ❑
Descri ntinn of nhiirnatinnc
I jU VAilj Miscellaneous
34 Enter the amount of the state volume cap allocated to the issue under section 141(b)(5) . . , 34 n
35 Enter the amount of the bonds designated by the issuer under section 265(b)(3)(B)(i)(III) (small issuer exception) 35 7,100,0
36a Enter the amount of gross proceeds invested or to be invested in a guaranteed investment contract (see instructions) 36a -0-
b Enter the final maturity date of the guaranteed investment contract . 11i `\ \\ w
37 Pooled financings: a Proceeds of this issue that are to be used to make loans to other governmental units 37a -0-
b if this issue is a loan made from the proceeds of another tax - exempt issue, check box ► ❑ and enter the name of the
issuer ► and the date of the issue Ili-
38 If the issuer has elected to pay a penalty in lieu of arbitrage rebate, check box . . . 0- ❑
39 If the issuer has identified a hedge, check box , . ► ❑
Under penalties of perjury, I declare that I have examined this return and accompanying schedules and statements, a-.d to the best of my knowledge
and belief, they are true, correct, and complete.
Please
Sign CG` October 29, 1998 Cathy A. Garcia, President
Here � f �:��� � cam, y
Signature of issuer's authorized representative Date Type or pr:-it name and title
For Paperwork Reduction Act Notice, see page 1 of the Instructions. Cat. No. 63773S Form 8038 - (Rev. 5 -95)
Q Printed on rocyclod paper I *U.S. Governmert Printing of9ce: 19 387 -CIJ '20IN
(a)
Maturity date
(b)
Interest rate
(c)
Issue price
(d)
Stated redemption
(e)
Weighted
(�
Yield
(g)
Net interest
9,999.69
22
22
price at maturity
average maturity
cost
19 Final maturity.
11/01/2006
3.75%
Proceeds used for credit enhancement . . . , . . . . , . , 24
520, 000.00
25
20 Entire issue .
' 77 1 \77M
7, 100, 000.00
4.52 ears
%
%
I jU VAilj Miscellaneous
34 Enter the amount of the state volume cap allocated to the issue under section 141(b)(5) . . , 34 n
35 Enter the amount of the bonds designated by the issuer under section 265(b)(3)(B)(i)(III) (small issuer exception) 35 7,100,0
36a Enter the amount of gross proceeds invested or to be invested in a guaranteed investment contract (see instructions) 36a -0-
b Enter the final maturity date of the guaranteed investment contract . 11i `\ \\ w
37 Pooled financings: a Proceeds of this issue that are to be used to make loans to other governmental units 37a -0-
b if this issue is a loan made from the proceeds of another tax - exempt issue, check box ► ❑ and enter the name of the
issuer ► and the date of the issue Ili-
38 If the issuer has elected to pay a penalty in lieu of arbitrage rebate, check box . . . 0- ❑
39 If the issuer has identified a hedge, check box , . ► ❑
Under penalties of perjury, I declare that I have examined this return and accompanying schedules and statements, a-.d to the best of my knowledge
and belief, they are true, correct, and complete.
Please
Sign CG` October 29, 1998 Cathy A. Garcia, President
Here � f �:��� � cam, y
Signature of issuer's authorized representative Date Type or pr:-it name and title
For Paperwork Reduction Act Notice, see page 1 of the Instructions. Cat. No. 63773S Form 8038 - (Rev. 5 -95)
Q Printed on rocyclod paper I *U.S. Governmert Printing of9ce: 19 387 -CIJ '20IN
uses oT
rroceeas OT nona issue iincivaing unaerwrlters a1scounL
21
Proceeds used for accrued interest , , , , , , , , , , , , , , , , , ,
, , ,
21
9,999.69
22
22
Issue price of entire issue (enter amount from line 20, column (c)) . . . . .
. . .
23 Proceeds used for bond issuance costs (including underwriters' discount) 23
24
Proceeds used for credit enhancement . . . , . . . . , . , 24
25
Proceeds allocated to reasonably required reserve or replacement fund . 25
26
Proceeds used to currently refund prior issues . . . . . . . . 26
27
Proceeds used to advance refund prior issues . . . . . . . . 27
28
Total (add lines 23 through 27) . . . . . . . . . . . . . . . . . . . .
. . .
28
29
Nonrefunding proceeds of the issue subtract line 28 from line 22 and enter amount here
.
29
Description of Refunded Bonds (Complete this part only for refunding
bonds.
30
Enter the remaining weighted average maturity of the bonds to be currently refunded .
. . ► years
31
Enter the remaining weighted average maturity of the bonds to be advance refunded .
. . ► years
32
Enter the last date on which the refunded bonds will be called . . . . . . . . .
. , ► November 1, 1998
33
Enter the date(s) the refunded bonds were issued ►
December 23, 1987
I jU VAilj Miscellaneous
34 Enter the amount of the state volume cap allocated to the issue under section 141(b)(5) . . , 34 n
35 Enter the amount of the bonds designated by the issuer under section 265(b)(3)(B)(i)(III) (small issuer exception) 35 7,100,0
36a Enter the amount of gross proceeds invested or to be invested in a guaranteed investment contract (see instructions) 36a -0-
b Enter the final maturity date of the guaranteed investment contract . 11i `\ \\ w
37 Pooled financings: a Proceeds of this issue that are to be used to make loans to other governmental units 37a -0-
b if this issue is a loan made from the proceeds of another tax - exempt issue, check box ► ❑ and enter the name of the
issuer ► and the date of the issue Ili-
38 If the issuer has elected to pay a penalty in lieu of arbitrage rebate, check box . . . 0- ❑
39 If the issuer has identified a hedge, check box , . ► ❑
Under penalties of perjury, I declare that I have examined this return and accompanying schedules and statements, a-.d to the best of my knowledge
and belief, they are true, correct, and complete.
Please
Sign CG` October 29, 1998 Cathy A. Garcia, President
Here � f �:��� � cam, y
Signature of issuer's authorized representative Date Type or pr:-it name and title
For Paperwork Reduction Act Notice, see page 1 of the Instructions. Cat. No. 63773S Form 8038 - (Rev. 5 -95)
Q Printed on rocyclod paper I *U.S. Governmert Printing of9ce: 19 387 -CIJ '20IN
EXCEPT AS OTHERWISE PROVIDED IN THE HEREINAFTER DEFINED
ORDINANCE, THIS GLOBAL BOOK -ENTRY 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.
STATE OF COLORADO
Interest Rate:
UNITED STATES OF AMERICA
COUNTY OF PUEBLO
City of Pueblo, Colorado
General Obligation Refunding Bond
Series 1998
Maturity Date:
1 ,
REGISTERED OWNER:
PRINCIPAL SUM:
Original Issue Date: CUSIP:
October 15, 1998
DOLLARS
The CITY OF PUEBLO, in the County of Pueblo and State of Colorado (the "City "), for
value received, hereby promises to pay to the order of the registered owner named above or
registered assigns, on the maturity date stated above, the principal sum stated above, with interest
thereon from the original issue date stated above, at the interest rate per annum stated above,
payable on May 1, 1999, and semiannually thereafter on the 1st day of May and the 1st day of
November of each year, the principal of this bond being payable upon the surrender of this bond
to The Bank of Cherry Creek, N.A. (together with its successors as such, the "Paying Agent ") at
the principal operations offices of the Paying Agent, presently located at 3033 East First Avenue
in Denver, Colorado, and the interest hereon to be paid to such person as is the registered owner
hereof as of the close of business at the principal operations office of the Paying Agent on the
Regular Record Date by check or draft of the Paying Agent mailed on the interest payment date
to said registered owner. The Regular Record Date is the 15th day of the month (whether or not
a business day) preceding any interest payment date. All payments of principal and interest shall
be made in lawful money of the United States of America.
This bond constitutes a general obligation of the City, and the full faith and credit of the
City are pledged to the punctual payment of the principal of and interest on this bond.
02- 17458.01
This bond is one of an issue of bonds of the City designated General Obligation
Refunding Bonds, Series 1998, issued in the aggregate principal amount of $7,100,000 (the
"Bonds "). The Bonds are being issued by the City for the purpose of providing funds to defray
the cost of refunding the City's General Obligation Refunding Bonds, Series 1987A and paying
certain costs and expenses associated with the issuance of the Bonds, pursuant to and in full
conformity with the constitution and laws of the State of Colorado, the home rule charter of the
City (the "Charter "), and an ordinance duly passed and adopted by the City prior to the issuance
hereof (the "Ordinance ").
The Bonds are not subject to redemption prior to their stated maturities.
This bond may be transferred or exchanged at the principal operations office of the
Paying Agent, presently located at 3033 East First Avenue in Denver, Colorado, but only in the
manner, subject to the limitations and upon payment of the charges provided in the Ordinance
(including any tax or governmental charge required to be paid with respect thereto and any cost
of printing bonds in connection therewith), and upon surrender and cancellation of this bond.
Upon surrender for any transfer, duly endorsed for transfer or accompanied by an assignment
duly executed by the registered owner hereof or his or her attorneys duly authorized in writing, a
new registered Bond or Bonds of the same maturity and interest rate and of authorized
denomination or denominations ($5,000 and integral multiples thereof) for the same aggregate
principal amount will be issued to the transferee in exchange therefor, subject to the provisions
of the Ordinance. In addition, subject to the provisions of the Ordinance, this bond may be
exchanged for a like aggregate principal amount of Bonds of other authorized denominations of
the same maturity and interest rate. Any Bond issued upon transfer or exchange shall bear
interest from the date as described on the face of this bond, unless interest thereon shall be in
default, in which case interest shall accrue from the last interest payment date to which interest
has been paid, or if no interest has been paid, from the original issue date. The City and any
Paying Agent may deem and treat the registered owner hereof as the absolute owner hereof
(whether or not payment on this bond shall be overdue) for the purpose of receiving payment of
or on account of principal hereof and interest due hereon and for all other purposes, and neither
the City nor any Paying Agent shall be affected by any notice to the contrary.
It is hereby certified that all conditions, acts and things required by the constitution and
laws of the State of Colorado, and the Charter and ordinances of the City, to exist, to happen and
to be performed, precedent to and in the issuance of this bond, exist, have happened and have
been performed, and that the Bonds do not exceed any limitations prescribed by said constitution
or laws of the State of Colorado, the Charter or ordinances of the City.
It is also certified, recited and warranted that this bond and each of the other Bonds are
issued under the authority of the Ordinance, the Colorado Constitution and the Charter. It is the
intention of the City that this recital shall conclusively impart full compliance with all of the
provisions of the Ordinance, and that all of the Bonds issued are incontestable for any cause
whatsoever after their delivery for value.
This bond shall not be entitled to any benefit under the Ordinance, or become valid or
obligatory for any purpose, until the Paying Agent shall have signed the certificate of
authentication hereon.
02- 17458.01 2
STATEMENT OF INSURANCE
Financial Security Assurance Inc. ( "Financial Security "), New York, New York, has
delivered its municipal bond insurance policy with respect to the scheduled payments due of
principal of and interest on this Bond to The Bank of Cherry Creek, N. A., Denver, Colorado, or
its successor, as paying agent for the Bonds (the "Paying Agent'). Said Policy is on file and
available for inspection at the principal office of the Paying Agent and a copy thereof may be
obtained from Financial Security or the Paying Agent.
02- 17458.01 4
Date of Authentication:
This bond is one of the Bonds described in the within mentioned Ordinance.
THE BANK OF CHERRY CREEK, N.A.
.
Authorized Representative
FOR VALUE RECEIVED, , the undersigned, hereby
sells, assigns and transfers unto (Tax Identification or Social Security No.
the within bond and all rights thereunder, 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:
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 guaranteed
Signature must be guaranteed
by a member of a Medallion
Signature Program
02- 17458.01 5
IN WITNESS WHEREOF, the City of Pueblo, Colorado, has caused this bond to be
signed with the manual or facsimile signature of the President of the City Council, sealed with a
manual or facsimile of the impression of its seal, and attested with the manual or facsimile
signature of its City Clerk.
[SEAL]
CITY OF PUEBLO, COLORADO
By Cc
Attest: President of the City Council
By
City lerk
02- 174%01
Independent Auditors
The general purpose financial statements of the City as of and for the year ended December 31,
1997, included in this Official Statement, have been audited by independent auditors, McPherson,
Breyfogle, Lichlyter & Daveline, P.C., Certified Public Accountants, Pueblo, Colorado, as set forth in
their report appearing therein.
Additional Information
Copies of statutes, ordinances, opinions, contracts, agreements, financial and statistical data, and
other related reports and documents described in this Official Statement are either publicly available or
available upon request and the payment of a reasonable copying, mailing, and handling charge from the
individuals listed in the "INTRODUCTION ".
Official Statement Certification
The preparation of this Official Statement and its distribution have been authorized by the City
Council. This Official Statement is hereby duly approved by the Council as of the date on the cover page
hereof. This Official Statement is not to be construed as an agreement or contract between the City and
the purchasers or holders of any Bond.
CITY OF PUEBLO, COLORADO
By: /s/ ( GCZ X �A
President, City Council
02- 13172.06 31
t
r u
J:
T
^J J
J J
G M
T
T
j
r J
r
PRELIMINARY OFFICIAL STATEMENT DATED OCTOBER 1, 1998
NENV ISSUE
BOOK ENTRY ONLY
BANK QUALIFIED
RATING: Standard & Poor's
INSURANCE: [applied ford
(See "i lISCELLANEOUS- Ratings ")
In the opinion of Kutak Rock, Bond Counsel, under existing laws, regulations, rulings and judicial decisions and assuming the
aceuracv of certain representations and continuing compliance with certain covenants, interest on the Bonds is excluded from gross
income for federal income tar purposes, is not a specific preference item for purposes of the federal alternative mininuunz tax, and is exempt
front ineonte taxation by the State of Colorado. The City has designated the Bonds as "qualified tar - exempt obligations" under Section
365(b)(3) of the Code. See the caption "TAX MATTERS. "
$7,100,000
CITY OF PUEBLO, COLORADO
GENERAL OBLIGATION REFUNDING BONDS
SERIES 1998 ;, s
Dated: October 15, 1998 Due: As shown below
The Bonds are issued in fully registered form in denominations of S5,000 or integral multiples therf1SM�Festute nds, at
the rates set forth below, is payable semi - annually on May I and November 1 each year, commencing on I ay , Y"9 IT h 'Depository
Trust Company, New York, New York, will act as securities depository for the Bonds, and the Bonds will be registered in the name of
Cede & Co., as nominee of DTC. Purchasers of the Bonds will not receive certificates evidencing their ownership interests in the Bonds.
So long as DTC or its nominee is the registered owner of the Bonds, payments of principal, premium if any, and interest on the Bonds will
be made by the Paying Agent, initially The Bank of Cherry Creek, N.A., Denver, Colorado, directly to DTC, which will remit such
payments to Participants for subsequent distribution to the Beneficial Owners.
Payment of the principal of and interest on the Bonds when due will be guaranteed by a municipal bond insurance policy (the
'Insurance Policy ") to be issued simultaneously with the delivery of the Bonds by Financial Security Assurance Inc.
[Insert Insurer Logo]
MATURITY SCHEDULE
Principal Interest Price or Principal Interest Price or
Maturitv Date Amount* Rate Yield Maturitv Date Amount* Rate Yield
_ - z
'l.
= 'J
May I, 1999
S360,000
May 1, 2003
5445,000
November 1, 1999
390,000
November 1, 2003
455,000
May I, 2000
395,000
May 1, 2004
465,000
November 1, 3000
405,000
November I, 2004
475,000
May 1, 2001
410,000
May 1, 2005
485,000
November 1, 2001
420,000
November I, 2005
495,000
May 1, 2002
430,000
May 1, 2006
510,000
November 1, 2002
440,000
November 1, 2006
520,000
The Bonds are not subject to redemption prior to their stated maturities. Proceeds from the sale of the Bonds will be used to
refund the City's General Obligation Refunding Bonds, Series 1987A and to pay the costs of issuance of the Bonds.
This cover page contains certain information for quick reference only. It is not a summary of this issue. Investors must
read this entire Official Statement to obtain information essential to the making of an informed investment decision
The Bonds are being offered pursuant to a public sale, subject to the approval of legality and certain other matters by Kutak
Rock, Denver, Colorado, as Bond Counsel, and subject to certain other conditions. Certain legal matters will be passed upon for the City
by Thomas E. Jaeger, Esq. James Capital Advisors Inc., Denver, Colorado, is acting as financial advisor to the City with respect to this
financing. It is expected that the Bonds will be available for delivery through the facilities of DTC, on or about October 29, 1998.
*Preliminary; subject to change.
02- 13172.04
JAMES CAPITAL INVESTORS INC.
Financial Advisor
This Official Statement is dated October , 1998.
It
CITY OF PUEBLO, COLORADO
City Council
Cathy A. Garcia, President
Richard Golenda, Vice President
Albert Gurule
Corinne Koehler
Robert Schilling
Dr. Bill Sova
John Verna
City Officials
Lewis A. Quigley, City Manager
Billy G. Martin, Director of Finance
Thomas E. Jagger, Esq., City Attorney
Financial Advisor
James Capital Advisors Inc.
Denver, Colorado
Bond Registrar and Paying Agent
The Bank of Cherry Creek, N.A.
Denver, Colorado
Bond and Special Counsel
Kutak Rock
Denver, Colorado
02- 13172.04
No dealer, salesman, or other person has been authorized to give any information or to make any representation, other
than the information contained in this Official Statement, in connection with the offering of the Bonds, and, if given or made,
such information or representation must not be relied upon as having been authorized by the City. The information in this
Official Statement is subject to change without notice, and neither the delivery of this Official Statement nor any sale hereunder
will, under any circumstances, create any implication that there has been no change in the affairs of the City since the date
hereof. This Official Statement does not constitute all offer or solicitation in any jurisdiction in which such offer or solicitation is
not authorized, or in which any person raking such offer or solicitation is not qualified to do so, or to any person to whoa It is
unlawful to make such offer or solicitation. The information set forth herein has been obtained from the City and other sources
which are believed to be reliable, but it is not guaranteed as to accuracy or completeness.
TABLE OF CONTENTS
Page
INTRODUCTION .......................................................................................... ............................... 1
THEBONDS .................................................................................................. ............................... 4
Description .......................................................................................... ............................... 4
Applicationof Bond Proceeds ............................................................ ............................... 4
Securityfor the Bonds ........................................................................ ............................... 4
Book -Entry Only System .................................................................... ............................... 6
Debt Service Requirements ................................................................. ............................... 8
BONDINSURANCE ..................................................................................... ............................... 9
REVENUES AVAILABLE FOR DEBT SERVICE .................................... ............................... 10
AdValorem Property Taxes ............................................................. ............................... 10
AdValorem Property Tax Data ........................................................ ............................... 11
OverlappingMill Levies ................................................................... ............................... 14
THECITY ...............................................................
Description ................... ...............................
CityPowers .................. ...............................
Governing Body ........... ...............................
Administration and Management ................
City Employees and Employee Benefits.....
Services Available to City Residents..........
Capital Improvements Program ..................
..................................... ............................... 16
..................................... ............................... 16
..................................... ............................... 16
..................................... ............................... 16
..................................... ............................... 17
..................................... ............................... 17
...................................... I............................. 18
..................................... ............................... 18
CITY FINANCIAL OPERATIONS ............................................................. ............................... 19
AccountingPolicies .......................................................................... ............................... 19
Major Sources of General Fund Revenues ....................................... ............................... 19
Historical General Fund Operations ................................................. ............................... 20
Director of Finance's Summary of Material Trends ......................... ............................... 21
BudgetProcess .................................................................................. ............................... 22
Retirement and Pension Matters ....................................................... ............................... 23
InsuranceCoverage ........................................................................... ............................... 23
Deposit and Investment of City Funds .............................................. ............................... 24
Constitutional Amendment Limiting Taxes and Spending ............... ............................... 24
FiscalYear 2000 ............................................................................... ............................... 24
02- 13172.04 11
DEBTSTRUCTURE .................................................................................... ............................... 25
RequiredElections ............................................................................ ............................... 25
Limitation on Indebtedness ............................................................... ............................... 25
GeneralObligation Debt ................................................................... ........... ..................... 25
Estimated Overlapping General Obligation Debt ............................. ........... .I................... 26
LEGALMATTERS ...................................................................................... ............................... 2 8
Pending and Threatened Litigation Involving the City ..................... ............................... 28
No Litigation Certificate ..................................................................... .............................28
TAXMATTERS ........................................................................................... ............................... 29
MISCELLANEOUS ..................................................................................... ............................... 30
Rating............................................................................................... ............................... 30
FinancialAdvisor .............................................................................. ............................... 30
Registrationof Bonds ....................................................................... ............................... 30
Interest of Certain Persons Named in this Official Statement .......... ............................... 30
OriginalPurchaser of the Bonds ...................................................... ............................... 30
IndependentAuditors ........................................................................ ............................... 30
Additional Information ..................................................................... ............................... 31
Official Statement Certification ........................................................ ............................... 31
APPENDIX A— Audited general purpose financial statements of the City as of
and for the year ended December 31, 1997 .................................. ............................... A -1
APPENDIX B— Continuing Disclosure Undertaking .............................................. ............................... B -1
APPENDIX C— Economic and Demographic Information ........................................ ............................0 -1
THE BONDS Ht VE NOT BEEN REGISTERED 47TH THE SECURITIES AND EXCHANGE COMMISSION BY
REASON OF CERT41N EXEMPTIONS CONTAINED LN THE SECURITIES ACT OF 1933, AS AMENDED. IN MAKING AN
INI'F_STWENT DECISION INVESTORS MUST REL Y ON THEIR OWN EXAMINA TION OF THE CITY, THE BONDS AND THE
TER,UI OF THE OFFERING, INCLUDING THE,1 fERITS AND RISKS INVOLVED. THESE SECURITIES HAVE NOT BEEN
RF_CO.UVENDF.D BY ANY FEDERAL OR .STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY.
FUR T1IF- R,tfORF, THE FOREGOING AUTHORITIES / /AVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE
..t DFQ('.ACI' OF THIS DOCUMENT AND AN }' RF_PRESENT.I TION TO TIIE CONTRARY lS A CRIMINAL OFFENSE.
03- 1317204 111
X.
ItiDEX OF TABLES
TABLE page
I
Debt Service Requirements ................................................................................ ..............................8
IIHistory
of the City's Mill Levy ......................................................................... .............................12
III
History of City's Assessed Valuation ................................................................ .............................12
IV
History of Assessed and "Actual" Values by Property Classification .............. .............................13
V
Historical Property Tax Collections .................................................................. .............................13
VI
Largest Taxpayers Within the City .................................................................... .............................14
VIISample
Mill Levy ............................................................................................... .............................15
VIII
History of General Fund Revenues, Expenditures, and Changes in Fund Balances ......................21
IX
General Fund Budget Summary and Comparison ............................................. .............................23
XGeneral
Obligations of the City ......................................................................... .............................25
XI
Revenue Obligations of the City ....................................................................... .............................26
XIICertificates
of Participation ............................................................................... .............................26
XIII
Estimated Overlapping General Obligation Debt .............................................. .............................27
XIVHistorical
City Debt Ratios ............................................................................... .............................27
02- 13172.03 IV
REGIONAL MAP
02- 13172.04
C
I\TRODUCTIO\
This Official Statement is furnished to prospective purchasers of $7,100,000 General Obligation
Refunding Bonds, Series 1998, dated October 15, 1998 (the "Bonds "), issued by the City of Pueblo,
Colorado (the "City"). The offering of the Bonds is made only by way of this Official Statement, which
supersedes any other information or materials used in connection with the offer or sale of the Bonds. This
Official Statement speaks only as of its date, and the information contained herein is subject to change.
The information set forth in this Official Statement has been obtained from the City and from
other sources believed to be reliable but is not guaranteed as to accuracy or completeness. This Official
Statement contains, in part, estimates and matters of opinion which are not intended as statements of fact,
and no representation or warranty is made as to the correctness of such estimates and opinions, or that
they will be realized.
The follotiving introductory material is only a brief description of and is qualified by, the store
complete information contained throughout this Official Statement. A full review should be made of the
entire Official Statement and the documents summarized or described herein.
Issuer ........................... The City of Pueblo, Colorado, encompassing approximately 44 square miles, is
located in the south central portion of Colorado, approximately 110 miles south
of Denver and 45 miles south of Colorado Springs. The City has an estimated
population of 103,400. See "THE CITY" and the preceding "REGIONAL
MAP."
Sources of Payment.... The Bonds are general obligations of the City secured by the City's covenant to
levy an ad valorem tax on all of the taxable property in the City. without
limitation of rate and in amounts sufficient to pay the Bonds and the interest
thereon as the same respectively become due. See "THE BONDS - Security for
the Bonds" and "REVENUES AVAILABLE FOR DEBT SERVICE ".
Bond Insurance........... (the "Insurer "), has committed to issue,
effective as of the date of issuance of the Bonds, a policy of insurance
guaranteeing the payment, when due, of the principal of and interest on the
Bonds. The insurance extends over the life of the issue and cannot be canceled
by the Insurer. Payment under the policy is subject to the conditions described in
"BOND INSURANCE."
Purpose ........................ The Bonds are being issued to refund the City's General Obligation Refunding
Bonds, Series 1987A (the "Refunded Bonds ") and to pay the costs of issuance.
See "THE BONDS - Application of Bond Proceeds ".
Payment Provisions .... The Bonds mature and bear interest at the rates (computed on the basis of a 360 -
day year of twelve 30 day months) as set forth on the cover page hereof. Interest
on the Bonds is payable semiannually on May 1 and November 1 each year,
commencing on May 1, 1999. Payments for the principal of and interest on the
Bonds will be made as described in "THE BONDS - Book -Entry-Only System ".
Book- Entry-
Only Registration ....... The Bonds will be issued in fully registered form and will be registered initially
in the name of "Cede &: Co." as nominee for The Depository Trust Company,
New York, New York ( "DTC "), a securities depository. Beneficial ownership
interests in the Bonds may be acquired in principal denominations of $5,000 or
02- 13172.04
r
integral multiples thereof through Participants in the DTC system. Such
beneficial ownership interests will be recorded in the records of the Participants.
The Beneficial Owners will not receive certificates evidencing their interests in
the Bonds so long as DTC or a successor securities depository acts as the
securities depository with respect to the Bonds. So long as DTC. or its nominee is
the Owner of the Bonds, payments of principal, premium, if any, and interest on
the Bonds, as well as notices and other communications made by or on behalf of
the City pursuant to the Bond Ordinance, will be made to DTC or its nominee
only. Disbursement of such payments, notices, and other communications by
DTC to Participants, and by Participants to the Beneficial Owners, is the
responsibility of DTC and the Participants pursuant to rules and procedures
established by such entities. See "THE BONDS- Book -Entry-Only System" for a
discussion of the operating procedures of the DTC system with respect to
payments, registration, transfers, notices, and other matters.
Prior Redemption ....... The Bonds are not subject to redemption prior to their stated maturities.
Registration and
Denominations ............ The Bonds are issued in fully registered form in denominations of $5,000 or
integral multiples thereof.
Tax Status .................... In the opinion of Kutak Rock, Bond Counsel, under existing laws, regulations,
rulings and judicial decisions and assuming continuing compliance with certain
covenants, interest on the Bonds is excluded from gross income for federal
income tax purposes, is not a specific preference item for purposes of the federal
alternative minimum tax, and is exempt from taxation by the State of Colorado.
The City has designated the Bonds as "qualified tax - exempt obligations" under
Section 265(b)(3) of the Code. See the caption "TAX MATTERS."
Continuing
Disclosure
Undertaking ................ Pursuant to the requirements of Securities and Exchange Commission Rule 15c2-
12 (17 CFR Part 240, § 240.15c2 -12), the City has agreed for the benefit of the
holders of the Bonds to provide certain financial information, other operating
data and notices of material events after the Bonds are issued (the "Continuing
Disclosure Undertaking "). A form of the City's Continuing Disclosure
Undertaking is attached hereto as Appendix A.
Authority for
Issuance ....................... The Bonds are issued in full conformity with the City Charter, the constitution
and laws of the State of Colorado, and pursuant to an authorizing ordinance (the
"Bond Ordinance ") adopted by the City Council of the City (the "Council ").
Delivery
Information ................. The Bonds are offered when, as, and if issued by the City subject to prior sale
and the approving legal opinion of Bond Counsel. It is expected that the Bonds
will be available for delivery on or about October 29, 1998, against payment
therefor.
02- 13172.04 2
Exchange and
Transfer ....................... While the Bonds remain in book -entry -only form, transfer of ownership by
Beneficial Owners may be made as described under the caption "THE
BONDS— Book -Entry-Only System." In the event that DTC ceases to act as
securities depository for the Bonds, the Bond Ordinance provides for the transfer
of Bonds by the Bond Registrar pursuant to specified terms and provisions.
Financial
Statements ................... Appended hereto are the audited general purpose financial statements of the City
as of and for the year ended December 31, 1997, being the most recent audited
financial statements available for the City.
Debt Ratios .................. The following are selected City debt ratios upon issuance and delivery of the
Bonds.
City 1998 Certified Assessed Valuation ...........................
City 1998 Statutory "Actual" Value'''' .. ...............................
City General Obligation Debt Outstanding Upon Issuance
ofthe Bonds ...................................... ...............................
Population.............................................. ...............................
City Debt as a Ratio of:
1998 Assessed Valuation ................... ...............................
1998 Statutory "Actual" Valuation' ... ...............................
City Debt Per Capita .............................. ...............................
Estimated Overlapping General Obligation Debt 1 ' 1 ...............
Sum of City and Overlapping Debt ........ ...............................
City and Overlapping Debt as a Ratio of:
1998 Assessed Valuation (2) ................... ...............................
1998 Statutory "Actual" Valuation'' ... ...............................
City and Overlapping Debt Per Capita ... ...............................
........................... $461,740,250
........................... $3,210,706,306
............................ $21,085,000
............................ 103,400
............................. 4.6%
............................. 0.7%
............................. $204
............................. $48,140
......... .................... $21,133,140
...... 4.6
...... 0.7
...... $204
( "For definitions of and descriptions of the methodology used in computing assessed valuation, statutory
"actual" value, estimated population, general obligation debt outstanding, and estimated overlapping
general obligation debt, see "THE BONDS - Security for the Bonds ", "REVENUES AVAILABLE FOR
DEBT SERVICE ", and "DEBT STRUCTURE ".
(2 ) Preliminary certified value as of August 25, 1998. Such value is subject to change prior to the final
certification date of December 10.
Sources: Pueblo County Assessor's Office, the City, and individual overlapping entities
ALL OF THE SUMMARIES OF THE STATUTES, RESOLUTIONS, OPINIONS,
CONTRACTS, AND AGREEMENTS DESCRIBED IN THIS OFFICIAL STATEMENT ARE
SUBJECT TO THE ACTUAL PROVISIONS OF SUCH DOCUMENTS. The summaries do not purport
to be complete statements of such provisions and reference is made to such documents, copies of which
are either publicly available or available upon request and the payment of a reasonable copying, mailing,
and handling charge from: City of Pueblo, Colorado, P.O. Box 1427, Pueblo, Colorado 81022, telephone:
(719) 584 -0800; or James Capital Advisors Inc., 8101 E. Belleview, Suite A60 -502, Denver, Co, 80237,
telephone: (303) 699 -4464.
02- 13172.01
P
THE BONDS
Description
The Bonds are general obligations issued by the City in the total principal amount of $7,100,000
and dated October 15, 1998. Provisions regarding payment of the Bonds, exchange and transfer, and
certain other matters are set forth in the "INTRODUCTION ". For a complete statement of the details and
conditions of the Bond issue, reference is made to the authorizing Bond Ordinance, copies of which are
available from the Financial Advisor prior to delivery of the Bonds.
Application of Bond Proceeds
The Refunded Bonds. As stated in the Bond Ordinance, the Bonds are being issued by the City
for the purpose of refinancing City bonded debt at a lower interest rate, and thus are permitted by Article
X, Section 20 of the Colorado Constitution. Proceeds from the sale of the Bonds will be used to refund
the City's General Obligation Refunding Bonds, Series 1987A, originally issued in the aggregate
principal amount of 58,805,000 and now outstanding in the aggregate principal amount of $7,270,000
(the "Refunded Bonds "). The City expects to make the November 1, 1998 principal and interest payment
on the Series 1987A Bonds with money collected prior to the issuance of the Bonds. Entering into and
completing the refunding program herein authorized at this time will enable the Council to reduce the net
effective interest rate of the obligation represented by the Refunded Bonds and effect other economies.
follows:
Application of Bond Proceeds. The estimated application of the proceeds of the Bonds, is as
SOURCES*
Par Amount of Bonds
USES*
Redemption of Refunded Bonds ..................
Costs of issuance, including underwriting
discount 1 ' 1 , bond insurance premium,
professional fees and printin�u costs .........
Total ................... ...............................
Preliminary; subject to change.
See "iv1ISCELLANEOUS Underwriting."
Security for the Bonds
$ 7.100,000
General Obligation Debt. In the opinion of Bond Counsel, the Bonds are general obligations of
the City and all of the taxable property in the City is subject to the levy of an ad valorem tax without
limitation of rate and in amounts sufficient to pay the Bonds and the interest thereon. The Bonds are
secured by the City's obligation to certify a rate of levy sufficient, together with other legally available
funds and revenues, to meet the debt service requirements on the Bonds. The ad valorem property taxes
to be levied for the purpose of meeting the debt service requirements on the Bonds shall be in addition to
any and all other taxes which may be levied for other purposes of the City.
Additionally, the Bond Ordinance provides that in the event that the mill levy of the City fails to
produce an amount sufficient to pay the principal of and interest on or in connection with the Bonds
02-13172.04 4
becoming due in the next succeeding year, the deficit shall be made up in the next levy, and taxes shall
continue to be levied until the Bonds and the interest thereon shall be paid in full.
Amendments to Bond Ordinance. The Bond 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, to make any amendment or supplement to the Ordinance which, in the opinion of nationally
recognized bond counsel, is not to the material prejudice of the Registered Owner. The 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
principal amount of the Bonds authorized by the Ordinance and outstanding at the time of the adoption of
such amendatory or supplemental ordinance; provided, however, that no such ordinance shall have the
effect of permitting: (a) an extension of the maturity of any Bond authorized by the Ordinance;.or (b) a
reduction in the principal amount of any Bond, or the rate of interest thereon; or (c) a reduction of the
principal amount of Bonds required for consent to such amendatory or supplemental Ordinance; or (d) the
establishment of priorities as between Bonds issued and outstanding under the provisions of this
Ordinance; or (e) the modification of or otherwise affecting adversely the rights of the Registered Owners
of less than all of the Bonds then outstanding.
Bond Ordinance Irrepealable. The Bond Ordinance provides that after any of the Bonds are
issued, such ordinance shall remain irrepealable, but amendable, until the Bonds and the interest accruing
thereon shall have been fully paid, satisfied, and discharged.
Future Chances in Laws. Various Colorado laws and constitutional provisions apply to the
imposition, collection, and expenditure of ad valorem property taxes and the operation of the City. There
is no assurance that there will not be any change in the interpretation of, or additions to applicable laws,
provisions, and regulations which would have a material effect, directly or indirectly, on the affairs of the
City and the imposition, collection, and expenditure of ad valorem property taxes.
Limitations on Remedies Available to Bondholders. There is no bond trustee or similar person
to monitor or enforce the provisions of the Bond Ordinance and Bondholders should be prepared to
enforce such provisions themselves if the need to do so arises. In the event of a default in the payment of
principal of or interest on the Bonds, there is no provision for acceleration of maturity of the principal of
the Bonds. Consequently, the remedies of Bondholders (consisting primarily of an action in the nature of
mandamus requiring the City and certain other public officials to perform the terms of the Bond
Ordinance) may have to be enforced from year to year. The obligation to pay general ad valorem
property tares is secured by a statutory lien upon the property in question, but is not an obligation for
which a property owner may be held personally liable in the event of a deficiency. In addition, the
Bondholders cannot foreclose on property within the boundaries of the City or sell such property in order
to pay the debt service on the Bonds. See "REVENUES AVAILABLE FOR DEBT SERVICE -Ad
Valorem Property Taxes" for a description of property tax collection and enforcement.
The enforceability of the rights and remedies of the Bondholders, and the obligations incurred by
the City in issuing the Bonds, are subject to the following: the federal bankruptcy code and applicable
bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or affecting the
enforcement of creditors' rights generally, now or hereafter in effect; usual equity principles which may
limit the specific enforcement under state law of certain remedies; the exercise by the United States of
America of the powers granted to it by the federal Constitution; and the reasonable and necessary
exercise, in certain exceptional situations, of the police power inherent in the sovereignty of the State of
Colorado and its governmental bodies in the interest of serving a significant and legitimate public
02- 13172.01 5
r
purpose. Bankruptcy proceedings, or the exercise of powers by the federal or state government, if
initiated, could subject the owners of the Bonds to judicial discretion and interpretation of their rights in
bankruptcy or otherwise, and consequently may entail risks of delay, limitation, or modification of their
rights.
No recourse shall be had for the payment of the principal of or premium, if any, or interest on
any of the Bonds or for any claim based thereon or upon any obligation, covenants or agreement
contained in the Bond 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 the Bond Ordinance, the execution of the Paying Agency Agreement, and
the issuance of the Bonds.
Book -Entry Oniv Svstem
The infornzation in this section concerning DTC and DTC's book -entry -only system has
been obtained from DTC and the City and the Financial Advisor take no responsibility for the accuracy
thereof.
DTC will act as securities depository for the Bonds. The Bonds will be issued as fully registered
securities registered in the name of Cede & Co. (DTC's partnership nominee). One fully registered
certificate is to be issued for each of the Bonds, as set forth on the cover page hereof, each in the
aggregate principal amount of such maturity and will be deposited with DTC.
DTC is a limited - purpose trust company organized under the New York Banking Law, a
"banking, organization" within the meaning of the New York Banking Law, a member of the Federal
Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial
Code, and a . "clearing agency" registered pursuant to the provisions of Section 17A of the Securities
Exchange Act of 1934. DTC holds securities that its participants ( "Participants ") deposit with DTC.
DTC also facilitates the settlement among Participants of securities transactions, such as transfers and
pledges, in deposited securities through electronic computerized book -entry changes in Participants'
accounts, thereby eliminating the need for physical movement of securities certificates. Direct
Participants include securities brokers and dealers, banks, trust companies, clearing corporations and
certain other organizations ( "Direct Participants "). DTC is owned by a number of its Direct Participants
and by the New York Stock Exchange, Inc., the American Stock Exchange, Inc. and the National
Association of Securities Dealers, Inc. Access to the DTC system is also available to others such as
securities brokers and dealers, banks and trust companies that clear through or maintain a custodial
relationship with a Direct Participant, either directly or indirectly ( "Indirect Participants "). The rules
applicable to DTC and its Participants are on file with the Securities and Exchange Commission.
Purchases of the Bonds under the DTC system must be made by or through Direct Participants,
which are to receive a credit for the Bonds on DTC's records. The ownership interest of each Beneficial
Owner is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will
not receive written confirmation from DTC of their purchase, but Beneficial Owners are expected to
receive written confirmations providing details of the transaction, as well as periodic statements of their
holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the
transaction. Transfers of ownership interests in the Bonds are to be accomplished by entries made on the
books of Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive
certificates representing their ownership interests in the Bonds, except in the event that use of the
book -entry system for the Bonds is discontinued.
02- 13172.01
To facilitate subsequent transfers, all Bonds deposited by Participants with DTC are registered in
the name of DTC's partnership nominee, Cede & Co. The deposit of Bonds with DTC and their
registration in the name of Cede & Co. effect no change in beneficial ownership. DTC has no knowledge
of the actual Beneficial Owners of Bonds; DTC's records reflect only the identity of the Direct
Participants to whose accounts such Bonds are credited, which may or may not be the Beneficial Owners.
The Participants remain responsible for keeping accounts of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct Participants, by Direct
Participants to Indirect Participants and by Direct Participants and Indirect Participants to Beneficial
Owners will be governed by arrangements among them, subject to any statutory or regulatory
requirements as may be in effect from time to time.
Redemption notices shall be sent to Cede & Co. If less than all of the Bonds within an issue are
being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct
Participant in such issue to be redeemed.
Neither DTC nor Cede & Co. will consent or vote with respect to Bonds. Under its usual
procedures, DTC mails an omnibus proxy to the issuer as soon as possible after the record date. The
omnibus proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose
accounts the Bonds are credited on the record date (identified in a listing attached to the omnibus proxy).
Principal and interest payments on the Bonds are to be made to DTC. DTC's practice is to credit
Direct Participants' accounts on payable date in accordance with their respective holdings shown on
DTC's records unless DTC has reason to believe that it will not receive payment on the payable date.
Payments by Participants to Beneficial Owners are governed by standing instructions and customary
practices, as is the case with securities held for the accounts of customers in bearer form or registered in
`street name," and will be the responsibility of such Participant and not of DTC, the Paying Agent or the
City, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment
of principal and interest to DTC is the responsibility of the City or the Paying Agent, disbursement of
such payments to Direct Participants shall be the responsibility of DTC, and disbursement of such
payments to the Beneficial Owners shall be the responsibility of Direct and Indirect Participants.
DTC may discontinue providing its services as securities depository with respect to the Bonds at
any time by giving reasonable notice to the City. Under such circumstances, in the event that a successor
securities depository is not obtained, certificates are required to be printed and delivered.
The City may decide to discontinue use of the system of book -entry transfers through DTC (or a
successor securities depository). In that event, certificates will be printed and delivered to Beneficial
Owners.
02- 13172.0.4 7
Debt Service Requirements
Set forth in the following table are the debt service requirements for the Bonds. See the cover
page of this Official Statement for the actual interest rates for each maturity of the Bonds.
TABLE I
Debt Service Requirements
Maturity Principal Interest(l)
May 1, 1999
S 360,000
November 1, 1999
390,000
May 1, 2000
395,000
November 1, 2000
405,000
May 1, 2001
410,000
November 1, 2001
420,000
May 1, 2002
430,000
November 1, 2002
440,000
May 1, 2003
445,000
November 1, 2003
455,000
May 1, 2004
465,000
November 1, 2004
475,000
May 1, 2005
485,000
November 1, 2005
495,000
May 1, 2006
510,000
November 1, 2006
520,000
Total
57.100.000
1 ' ) As estimated by the Financial Advisor
Source: Financial Advisor
Total
02- 13172.04 g
BOND INSURANCE
[to be provided by Bond Insurer]
02- 13172.03
REVE\TUES AVAILABLE FOR DEBT SERVICE
Ad Valorem Property Taxes
The Council has the power, subject to constitutional and statutory guidelines, to certify a levy for
collection of ad valorem taxes against all taxable property within the City. Property taxes are uniformly
levied against the assessed valuation of all taxable property within the City. The property subject to
taxation, the assessment of such property, and the property tax procedure and collections are discussed
below.
Property Subject to Taxation. Both real and personal property located within the boundaries of
the City, unless exempt, are subject to taxation by the City. Exempt property generally includes property
of the United States of America; property of the State and its political subdivisions; public libraries;
public school property; charitable property; religious property; cemeteries; irrigation ditches, canals, and
flumes; household furnishings; personal effects; intangible personal property; inventories of merchandise
and materials and supplies which are held for consumption by a business or are held primarily for sale;
livestock; agricultural and livestock products; agricultural equipment which is used on the farm or ranch
in the production of agricultural products, and non - profit cemeteries.
Assessment of Property. All taxable property is listed, appraised and valued for assessment as of
January 1 of each year. The "actual" value of taxable property is determined by the county assessor. The
"actual" value of most taxable property is determined based on a "level of value," which is the "actual"
value of such property as ascertained from manuals and associated data prepared and published by the
State property tax administrator for a statutorily defined period preceding the assessment date. The
statutorily defined period for the valuation of property for any odd numbered year is the period beginning
two vears and ending six months prior to January 1 of such year. The statutorily defined period for the
valuation of property does not change during even numbered years. The classes of property the "actual"
value of which is not determined by a level of value include oil and gas leaseholds and lands, producing
mines and other lands producing nonmetallic minerals.
The assessed value of taxable property is then determined by multiplying the "actual" value
(determined as described in the immediately preceding paragraph) times an assessment ratio. The
assessment ratio for all taxable property, other than residential property, with certain exceptions, is fixed
at 29`%). The assessment ratio of residential property changes from year to year based on a
constitutionally mandated requirement to keep the ratio of the assessed value of all other taxable property
to residential property at the same level as it Nvas in the property tax year commencing January 1, 1985.
The assessment ratio of residential property was 14.34% for the 1991 and 1992 levy years, 12.86% for the
1993 and 1994 levy years and 10.36 ° /, for the 1995 and 1996 levy years and is 9.74% for the 1997 and
1998 levy years.
Beginning in May of each year each county assessor hears taxpayers' objections to property
valuations, and the county board of equalization hears assessment appeals. The assessor is required to
complete the assessment roll of all taxable property no later than August 25 each year. The abstract of
assessment prepared therefrom is reviewed by the State property tax administrator. Assessments are also
subject to review at various stages by the State board of equalization, the State board of assessment
appeals and the State courts. Therefore, the City's assessed valuation may be subject to modification as a
result of the review of such entities. In the instance of the erroneous levy of taxes, an abatement or refund
must be authorized by the board of county commissioners; and in no case will an abatement or refund of
taxes be made unless a petition for abatement or refund is tiled within two years after January 1 of the
year following the year in which the taxes were levied. Refunded or abated taxes are prorated among all
taxing jurisdictions which levied a tax against the property.
02- 1.172.04 10
p
Taxation Procedure. The assessed valuation and statutory "actual" valuation of taxable property
within the City is required to be certified by the county assessor to the City no later than August 25 each
year. The Council then determines a rate of levy which, when levied upon such certified assessed
valuation, and together with other legally available revenues, will raise the amount required annually by
the City for its General Fund and Bond Redemption Fund to defray its expenditures during the ensuing
fiscal year. In determining the rate of levy, the Council must take into consideration the limitations on
certain increases in property tax revenues as described in "Constitutional Amendment Limiting Taxes and
Spending" and "Budgetary Process and Information," below. The Council must certify the City's levy to
the board of county commissioners no later than December 15.
Upon receipt of the tax levy certification of the City and other taxing entities within the county,
the board of county commissioners levies against the assessed valuation of all taxable property within the
county the applicable property taxes. Such levies are certified by the board of county commissioners to
the county assessor, who thereupon delivers the tax list and warrant to the county treasurer for the
collection of taxes.
Property Tar Collections. Taxes levied in one year are collected in the succeeding year. Taxes
certified in 1997, for example, are being collected in 1998. Taxes are due on January 1 in the year of
collection; however, they may be paid in either one installment (not later than the last day of April) or two
equal installments (not later than the last day of February and June 15) without interest or penalty. Taxes
which are not paid within the prescribed time bear interest at the rate of 1% per month until paid. Unpaid
amounts and the accrued interest thereon become delinquent on June 16 of the collection year. The county
treasurer collects current and delinquent property taxes, as well as any interest, penalties, and other
requirements and remits the amounts collected on behalf of the City to the City on a monthly basis.
All taxes levied on real and per property, together with any interest and penalties prescribed
by law, as well as other costs of collection, until paid, constitute a perpetual lien on and against the taxed
property. Such lien is on a parity with the liens of other general taxes. It is the county treasurer's duty to
enforce the collection of delinquent real property taxes by sale of the tax lien on such realty in December
of the collection year and of delinquent personal property taxes by the distraint, seizure and sale of such
property at any time after October 1 of the collection year. There can be no assurance, however, that the
value of taxes, penalty interest and costs due on the property can be recovered by the county treasurer.
Further, the treasurer may set a minimum total amount below which competitive bids will not be
accepted, in which event property for which acceptable bids are not received will be set off to the county.
Taxes on real and personal property may be determined to be uncollectible after a period of six years from
the date of becoming delinquent and canceled by the board of county commissioners.
Ad Valorem Property Tax Data
The City's assessed valuation and mill levies from 1993 to date are set forth in the following
tables. For the 1993 and 1994 levy years, the residential assessment ratio was 12.86 %, all other property
was assessed at 29% of statutory "actual" value and the levels of value for the one and one -half year
period immediately prior to July 1, 1990 were used to determine statutory "actual" value. For 1995 and
1996, the residential assessment ratio was reduced to 10.36 %, and was further reduced to 9.74% for the
1997 and 1998 assessment years. See "Ad Valorem Property Taxes — Assessment of Property" above for
a description of the assessment ratios for taxable property used in each of such years.
02- 13172.03 11
p
TABLE II
History of the City's Mill Levy
Levy /Collection
Year Mill Lew
1993/1994
17.100
1994/1995
17.100
1995/1996
17.100
1996/1997
17.100
1997/1998
15.633
Sources: State of Colorado, Colorado Department of Local
Affairs, Division of Property Taxation, 1993 -1997 State of
Colorado Property Tax Annual Reports; and the Pueblo
County Assessor's Office
TABLE III
History of City's Assessed Valuation
Levy /Collection Assessed Increase or Percent
Year Valuation (Decrease)
Change
1993/1994 $368,568,940 -- --
1994/1995 371,121,120 52,552,180 0.7%
1995/1996 365,332,640' (5,788,480) (1.6)
1996/1997 373,176,830 7,844,190 2.1
1997/1998 429,464,730 56,287,900 15.1
1998/1999 461,740,250 32,275,520 7.5
( "According to City officials, the decrease in assessed valuation was the result of the
change in the residential assessment ratio.
(2) Preliminary certified value as of August 25, 1998. Such value is subject to change
prior to the final certification date of December 10.
Sources: State of Colorado, Colorado Department of Local Affairs, Division of Property
Taxation, 1993 -1997 State of Colorado Property Tax Annual Reports; and the Pueblo
County Assessor's Office
The following table sets forth the 1998 assessed and "actual" valuations of specific classes of
property within the City. As shown below, residential properties have accounted for the largest
percentage of the assessed valuation and will accordingly account for the largest percentage of ad valorem
property taxes levied by the City.
02- 13172.03 12
p
TABLE IV
1998 Assessed and "Actual" Valuation of Classes of Property in the City
The following table sets forth a history of the City's ad valorem property tax collections since
1993.
TABLE V
Historical Property Tax Collections
Levy/
Percent
Percent
Assessed
of Assessed
"Actual" of "Actual"
Class Valuation
Valuation
Valuation Valuation
Residential $237,362,980
51.4%
$2,436,991,581 75.9%
Commercial 170,122,820
36.8
586,630,414 18.3
State Assessed 28,900,710
6.3
99,657,621 3.1
Vacant 13,416,140
2.9
46,262,552 1.4
Industrial 11,471,450
2.5
39,556,724 1.2
Agricultural 191,360
0.0
659,862 0.0
Other Natural Resources 274.790
0.1
947.552 0.1
Total $461,740.250
100.0
$3.210.706.306 100.0
( 'Preliminary 1998 values as of the August 25,
1998 certification date. Such figures are subject to
change prior to the December 10 certification date.
(2) The City's estimated 1998 statutory "actual" value
is $3,210,706,306
based upon the breakdown of
major classifications of property in the City as provided by the Pueblo
County Assessor's Office. The
estimate does not take into account variations within major classifications or permitted exceptions.
Source: Pueblo County Assessor's Office
The following table sets forth a history of the City's ad valorem property tax collections since
1993.
TABLE V
Historical Property Tax Collections
Levy/
Collection
Taxes
Total Tax
Percent of
Year
Levied
Collections
Levy Collected
1992/1993
56,362,876
56,398,760
100.6%
1993/1994
6,239,504
6,169,032
98.9
1994/1995
6,282,710
6,257,982
99.6
1995/1996
6,185,621
6,125,218
99.0
1996/1997
6,321,906
6,294,361
99.6
1997/1998"
6,720,567
6,150,593
91.5
"' Collections through July 31, 1998.
Sources: City Comprehensive Annual Financial Report 1993 -1997, and the City
Set forth in the following table are the ten largest taxpayers within the City for the 1997 levy year
as provided by the Pueblo County Assessor's Office. No independent investigation has been made of and
no representation is made herein as to the financial condition of any of the taxpayers listed below or that
such taxpayers will continue to maintain their status as major taxpayers in the City.
02-13 172.04 13
The City's mill levy is uniformly applicable to all of the properties included in the table, and thus
taxes expected to be received by the City from such taxpayers will be in proportion to the assessed
valuations of the properties. The total tax bill for each of the properties is dependent upon the mill levies
of the other taxing entities which overlap the properties.
TABLE VI
Ten Largest Taxpayers of the City
"I The total 1997 assessed valuation figure of the City used in computing the above percentages was
5429,464,730.
Source: Pueblo County Assessor's Office
Overlapping Mill Levies
Numerous entities located wholly or partially within the City are authorized to levy taxes on
property located within the City. As a result, property owners within the City may be subject to various
mill levies depending upon the location of their property. According to the assessor's office the lowest
total mill levy imposed in 1997 (for payment in 1998) on a taxpayer owning property located in the City
is 84.028 mills and the highest is 101.992 mills. The following table is representative of a sample total
1997 mill levy (for payment in 1998) attributable to taxpayers within the City and is not intended to
portray the mills levied against all properties within the City. Additional taxing entities may overlap the
City in the future. See also "DEBT AND OTHER FINANCIAL OBLIGATIONS — Estimated
Overlapping General Obligation Debt."
02 -131 72.04 14
Percent of
Assessed
Assessed
Name
Valuation
Valuation
US West
$12,743,100
3.0%
Westplains Energy
8,607,990
2.0
Public Service Company of Colorado
4,190,400
1.0
Pueblo Mall Limited Partnership
3,600,480
0.8
TCI Cable Vision of Colorado
2,373,980
0.6
Wal Mart Stores
2,333,350
0.5
Eagle Hardware
2,306,280
0.5
Parkview Health Systems
2,194,200
0.5
Pueblo Bank & Trust
2,128,620
0.5
Qual Med
2.037.210
0_5
Total
$ 42.515,610
9_9%
"I The total 1997 assessed valuation figure of the City used in computing the above percentages was
5429,464,730.
Source: Pueblo County Assessor's Office
Overlapping Mill Levies
Numerous entities located wholly or partially within the City are authorized to levy taxes on
property located within the City. As a result, property owners within the City may be subject to various
mill levies depending upon the location of their property. According to the assessor's office the lowest
total mill levy imposed in 1997 (for payment in 1998) on a taxpayer owning property located in the City
is 84.028 mills and the highest is 101.992 mills. The following table is representative of a sample total
1997 mill levy (for payment in 1998) attributable to taxpayers within the City and is not intended to
portray the mills levied against all properties within the City. Additional taxing entities may overlap the
City in the future. See also "DEBT AND OTHER FINANCIAL OBLIGATIONS — Estimated
Overlapping General Obligation Debt."
02 -131 72.04 14
TABLE VII
Sample Total 1997 Mill Levy
Taxing Entity
Pueblo County
Pueblo Regional Library District
Pueblo School District No. 60
Southeastern Colorado Water Conservancy District
Sample Overlapping Mill Levy (subtotal)
City of Pueblo
Sample Total Mill Levy
(') One mill equals 1 /10 of one cent. Mill
collection of ad valorem property taxes in 1998.
Source: Pueblo County Assessor's Office
1997 Mill Lev,
27.999
5.250
35.146
0.812
69.207
15.633
84.840
levies certified in 1997 are for the
p
02- 13172.O4 15
THE CITY
Description
The City of Pueblo is located in Pueblo County in south central Colorado. The City encompasses
approximately 44 square miles and has an estimated current population of 103,400. The City was
incorporated in 1885 and is one of the original home rule cities under the Constitution of the State.
City Powers
Pursuant to the Charter, the City has all powers which are necessary, requisite, or proper for the
government and administration of its local and municipal matters, as well as all municipal powers
established by the constitution and laws of the State of Colorado. Among those powers, rights, and
liabilities specifically granted by the Charter are the following: to have perpetual succession; to own,
possess, and hold real and personal property; to succeed to all rights and liabilities of the City; to acquire
all benefits, and to assume and pay all bonds, obligations, and indebtedness of the City; to sue and defend,
plead, and be impleaded in all courts and places and in all matters and proceedings; purchase, receive,
hold, and enjoy, or sell and dispose of real and personal property; to have and use a common seal; to
receive bequests, gifts and donations of all kinds of property; and to construct, condemn and purchase,
acquire, lease, and to maintain, conduct, and operate waterworks, light plants, telephone systems, power
plants, transportation systems, heating plants, and any other public utilities or works or ways, for the use
of the City. In carrying out the powers and duties imposed upon it by the Charter and the constitution and
laws of the State of Colorado, the City has the power to acquire, within or without its corporate limits,
lands, buildings, water, water rights and water storage rights, and other properties and any interest in land
and air rights over land, and may take the same upon paying just compensation to the owner as provided
by law.
Governing Bode
The City operates under a council - manager form of government whereby all powers of the City
are vested in an elected City Council. The Council consists of seven members: four of these members are
elected by district and three are elected from the City at large. The members of the Council are elected for
staggered four -year terms at the general municipal election held in November in odd numbered years.
The members of the City Council elect the president of the City Council, who is the presiding officer and
is recognized as head of the City government for ceremonial purposes. The president of the City Council
votes as do other members of the City Council, has no veto power, and has no special administrative
duties. Pursuant to statute, with certain exceptions, no nonjudicial elected official of any political
subdivision of the State can serve more than two consecutive terms in office; however, such term
limitation may be lengthened, shortened or eliminated pursuant to voter approval. The City Council is
subject to such term limitations.
The City Council meets regularly with special meetings held as needed. The president and
members of the City Council, their principal occupation, their length of service on the Council, and terms
of office are set forth in the following table.
02- 13172.04 16
Name
Cathy A. Garcia, President
Richard Golenda, Vice President
Albert Gurule
Corinne Koehler
Robert Schilling
Dr. Bill Sova
John Verna
City Council
Principal Occupation
Executive Director
Bonfils Blood Center
Retired business owner
Business Owner
Stockbroker
Realtor
Chiropractor
Retired business owner
Years of Term
Service Expire
3 1999
2001
1999
2001
2001
2001
1999
The City Council effects its decisions through the passage of ordinances, resolutions, and
motions. All legislative powers of the City are held by the City Council except as provided in the City
Charter. Except as otherwise provided in the Charter, the adoption of ordinances requires an affirmative
vote of four members of the Council for final passage. The City Charter reserves the right of the City's
qualified electors to propose ordinances to the City Council by means of an initiatory petition procedure
and to subject ordinances (except those passed as emergency ordinances and certain other ordinances) to
reconsideration by the City Council or a referendum vote through the submission of a referendary
petition.
Administration and `Ianagement
The City Council appoints all boards and commissions, unless otherwise required by law, and
appoints the City Manager. The City manager is the executive head of the government of the City and is
responsible for the enforcement of the City's laws and ordinances. The City Manager also administers
the operation of all the departments and divisions of the City. The City Manager has the authority to
appoint directors of all departments of the City, including the City Attorney. The staff functions through
the City's various departments which are under the direction of the City Manager. The following is a list
of the administrative and management personnel most directly involved in the issuance of the Bonds, their
duties within the City government, and their background experience.
City Manager. Lewis A. Quigley has served as City Manager since 1987, after having worked
for the City since 1975 in various positions including Assistant City Manager, Interim Fire Chief and
Parks and Recreation Director. Mr. Quigley has a bachelor of'science degree from Indiana University and
a master of science degree from the University of Missouri.
Director of Finance. Billy G. Martin has served as the City's Director of Finance since 1976,
after having served the City in various capacities since 1971, including Chief Accountant and Tax
Auditor. Mr. Martin holds a bachelor of science degree in business administration from the University of
Southern Colorado.
City Employees and Employee Benefits
The City currently employs 1,039 employees including 694 full -time employees, one part -time
employee, and 344 seasonal employees. City employees belong to three unions including the Pueblo
Association of Government Employees, International Association of Firefighters, and International
Brotherhood of Police Officers. The City, through a wholly owned corporation, employs approximately
25 municipal transit workers who are represented by the Amalgamated Transit Workers Local 662. The
02.13172.04 17
transit workers work under a signed one -year contract which expires at the end of 1998. City officials
state employee relations are excellent.
City employees are offered medical and dental insurance plans. Additional benefits include sick
leave and vacation based on, among others, length of service with the City.
Services Available to City Residents
The City provides various services to its residents. Included among these are fire and police
protection, streets and highways, public works and improvements, parks and recreation services, health
and sanitation services, social services, planning and zoning and general administrative services. Water
services are provided by the Board of Water Works of the City. Additional services are provided by
various public and private entities. Electrical, natural gas, and telephone service, as well as medical
facilities, are provided by private entities.
The City owns and operates Pueblo Memorial Airport and a separately incorporated bus company
providing services within the City. The airport facility currently is operated on a self sustaining basis.
with the exception of an annual City subsidy which was $1,442,500 for 1997. The bus company
operations are also subsidized by the City and the federal government, with subsidies from the City's
General Fund and the federal government being 5926,601 and $666,182, respectively, for 1997.
Capital Improvements Program
As part of the budget message or as a separate report attached thereto, the City Manager is
required to annually present a program of proposed capital projects for the ensuing fiscal year and for four
fiscal years thereafter. The City Manager recommends to the City Council those projects to be
undertaken during the ensuing fiscal year and the method of financing such projects. The City Council
may levy annually a tax of not more than two mills to be assessed upon the valuation within the City at
the same time as the regular annual taxes for City expenses, for the benefit of a fund known as the
"Capital Improvement Fund." The City did not levy property taxes in 1997 for the Capital Improvement
Fund.
Pursuant to the proposals submitted by the City Manager, the City annually budgets and expends
funds on capital improvements for street construction, replacement and addition of traffic control devices,
improvements and acquisitions of recreational facilities, and other similar improvements. Capital
improvements ordinarily are funded from the City's Capital Improvement Fund. Expenditures for such
capital improvements were approximately S1.7 million in 1997. This includes moneys derived from a
half cent sales tax increase which is currently scheduled to be in effect until December 31, 2001, the
proceeds of which are being used for job- creating capital improvements within the City and at the Pueblo
Memorial Airport and Industrial Park. The City expects to expend approximately S1.0 million for capital
improvements in 1998.
02- 13172.04 18
p
CITY FINANCIAL OPERATIONS
Accounting Policies
The accounts of the City are organized on the basis of funds and account groups. Such funds are
segregated for the purpose of accounting for the operation of specific activities or attaining certain
objectives. For a description of the various funds and account groups, see "APPENDIX C."
Financial operations are accounted for by the City's Finance Department which prepares monthly
financial statements. State law and the Charter require that an audit be made of the City's financial
statements at the end of the fiscal year. The audited financial statements must be filed with the Council
within six months after the end of the fiscal year and with the state auditor 30 days thereafter. Failure to
file an audit report may result in the withholding of the City's property tax revenues by the county
treasurer pending compliance.
For the past _ years, including 1996, Pueblo has received the Certificate of Achievement for
Excellence in Financial Reporting awarded by the Government Finance Officers Association. Such
certificate is the highest form of recognition for excellence in state and local government financial
reporting and is awarded to governmental entities whose comprehensive annual financial reports are
J
udged to conform substantially to program standards. To receive the award, the report must be easily
readable and understandable. It must include all funds and financial transactions during the fiscal year
and it must go beyond the requirements of generally accepted accounting principles to provide the many
users of government financial statements with a wide variety of information using standard formatting
conventions. The City's 1997 Comprehensive Annual Financial Report will be submitted for
consideration for the award.
The City's fiscal year 1997 general purpose financial statements were audited by McPherson,
Breyfogle, Lichlyter & Daveline, P.C., certified public accountants, Pueblo, Colorado. Such financial
statements are the most current audited financial information available for the City. The general purpose
financial statements from the City's 1997 Financial Statements and Independent Auditor's Report are
appended hereto.
Major Sources of General Fund Revenues
The governmental fund utilized for the general administration and operation of the City is the
General Fund. The major sources of revenue to such fund are sales and use taxes, intergovernmental
revenues, and franchise and occupational taxes.
Sales and Use Tax. Municipal sales and use tax revenue, the City's largest single source of
revenue in the General Fund comprised 534,584,816 (70 %) of total General Fund revenue in 1997, and is
expected to comprise 534,000,000 (73 %) of total General Fund revenue in 1998. The City imposes a sales
tax at the rate of 3.5 %, with 0.5% being dedicated to economic development projects through
December 31, 2001. The sales tax rate will revert to 3.0% at such time unless an extension is approved by
a majority of the electorate voting thereon.
Pursuant to the City's Sales Tax Ordinances, the City Council cannot adopt a mill levy exceeding
19.75 per thousand dollars assessed valuation for municipal purposes (excluding water bonds) without
causing the City's Sales and Use Tax Ordinances to become null and void.
Property Taves. One of the largest General Fund revenue sources to the City is the ad valorem
tax annually levied on and against all of the taxable property within the City Taxes levied in one year are
02- 13172.04 19
collected in the following year. See "REVENUES AVAILABLE FOR DEBT SERVICE —Ad Valorem
Property Tax Data." The City's General Fund levy in 1997 produced 56,309,127 or 13% of the total
revenue in the General Fund.
Other Revenue Sources. The City also receives General Fund revenues from several additional
sources including intergovernmental, franchise and room taxes, licenses and permits, charges for services,
fines and forfeits, interest on investments.
Historical General Fund Operations
Set forth hereafter is a five -year comparative statement of revenues, expenditures, and changes in
fund balances for the City's General Fund. The following information should be read together with the
City's financial statements and accompanying notes appended hereto. Preceding years' financial
statements may be obtained from the sources noted in "MISCELLANEOUS— Additional Information."
P
02- 1317104 20
...
TABLE VIII
History of General Fund Revenues, Expenditures,
and Changes in Fund Balances
Excess of revenues
Over expenditures
1993
1994
1995
1996
1997
Revenues:
Taxes
$34,251,562
536,361,127
$38,487,529
$40,315,714
$44,483,162
State and federal grants
--
--
--
143,629
147,331
Licenses and permits
100,982
119,807
122,231
126,555
128,122
Other agencies
815,444
878,416
934,754
1,759,841
3,225,439
Charges for services
205,158
224,897
265,870
328,206
352,710
Fines and forfeits
560,099
568,266
661,491
799,083
790,116
Interest income
127,032
113,564
150,270
288,567
328,166
Other
211.763
288,322
83.798
371.045
301
Total
36,272.040
38.554.399
40.705.943
44.132.640
49.756.961
Expenditures:
7,762,466'
9,627,619
10,062,265
Residual equity transfer
29( 9.949
General government
3,787,287
3,950,781
4,193,406
4,455,194
4,989,733
Public safety
15,363,067
16,438,142
15,681,429
18,320,764
21,193,667
Parks and recreation
2,095,696
2,127,277
2,230,794
2,497,423
2,683,631
Transportation
2,288,916
2,388,450
2,326,711
2,333,615
2,451,463
Public works
2,976,653
3,236,648
2,916,767
3,022,100
3,211,131
Insurance and contingencies
347,587
473,891
2,094,175
1,865,115
2,004,043
Intergovernmental
1.565.497
1545.528
1.771.595
1884,452
1.942.538
Total
28.424.703
30.160.717
31.214.877
34.378.663
38,476.206
Excess of revenues
Over expenditures
7.847.337
8.393.682
9.491.066
9.753.977
11.280.755
Other financing sources (uses):
Proceeds from capital lease
--
--
--
--
642,005
Transfers from other funds
2,954,257
2,716,406
2,911,659
2,925,916
3,103,900
Transfers to other funds
( 10.071.539 )
( 10.210.785 )
( 10.740.365 )
( 11.998.899 )
( 13,505.992 )
Total
(7.117.282
(7.494.379
(7.828.706
(9.072.983
(9.760087
Excess of revenue
and other financing sources
over expenditures and other
financing (uses)
730,055
899,303
1,662,360
680,994
1,520,668
Fund Balance, January 1
2,791,067
3,371,173
7,762,466'
9,627,619
10,062,265
Residual equity transfer
29( 9.949
64 2631l
202.793
(246,34
967.774
Fund balance, December 31
5 3.221.173 ( '
$ 4.206.213 ( '
5 9.627.619
$ 10.062.265
$ 12.550.707
"' The General Fund balances differ because of a prior period adjustment made to reflect the City's implementation
of a Governmental Accounting Standards Board Statement relating to compensated absences.
1 '' The General Fund balances differ as a result of a prior period adjustment made to reflect the City's
implementation of a Governmental Accounting Standards Board Statement relating to the collection of taxpayer
assessed tax revenues.
Source: City of Pueblo Comprehensive Annual Financial Reports, 1993 -1997
Director of Finance's Summary of Material Trends
In the last four years and including the first seven months of 1998 the most notable increase in
City revenues were the general sales and use tax. The City's economy has been strong with the increase
in new businesses that range from a service industry to retail outlets. Not only was the sales tax
p
02- 13172.04 21
p
increasing, but also added to the surge in the economy was the increase in assessed valuation which leads
to higher property tax collections.
Fund balances have also grown over the last few years due to controlling expenditures as well as
legal growth in revenue under the TABOR amendment. The largest increase in debt service funds was
the result of the issuance of the 1997 HARP (Historic Arkansas River Project) bonds for $12,850,000, in
connection with which the citizens also approved a revenue and spending change of $1,100,000 for debt
service payments out of the City's revenues in excess of the TABOR limits.
Also, there will be a ballot issue in November 1998, for the citizens to consider, which entails
potential voter- approved revenue and spending changes for all excess revenue for the next five years, for
the purpose of capital expenditures.
Budget Process
The City is required by law to adopt an annual budget setting forth all proposed expenditures for
each, department, office, and agency of the City, including the Municipal Court and City Council. The
budget must show estimates of all anticipated revenue of the City from all sources including bond issues,
if any, for the ensuing fiscal year, including an estimate of revenue needed from ad valorem taxes to meet
estimated expenditures of the City. The budget must give comparative figures showing the actual
expenditures and revenues for corresponding items and sources for the preceding two fiscal years in full
and for the current fiscal year. Statements of the bonded and other indebtedness of the City must be
given, showing the debt service requirements, the amount of authorized but unissued debt, and the
condition of any capital expenditure funds and special funds. The budget must provide a statement of the
estimated surplus or deficit balance for the current fiscal year.
Each year, not later than the first regular meeting of the Council in October, the City Manager
must propose a budget for the ensuing budget year. Notice must be given that a public hearing on the
proposed budget will be held before its final adoption and that the proposed budget will be open for
inspection by the public. Prior to adoption, any elector of the City may register his or her objections to
the proposed budget in writing. The City must adopt its budget, as well as an appropriation ordinance and
a tax levy ordinance prior to the first day of December. Following adoption of the budget, the City
Council certifies to the county assessor the amount to be levied on taxable property within the City for
collection by the county treasurer.
In general, the City cannot expend money for any of the purposes set out in the appropriation
ordinance in excess of the amount appropriated. However, in the case of an emergency or some
contin.zency which was not reasonably foreseeable, the City Council may authorize the expenditure of
funds in excess of the budget by a resolution adopted by a majority vote of the City Council membership.
If the City receives revenues which were unanticipated at the time of adoption of the budget, or if there is
a cash surplus sufficient to meet a need, the City Council may authorize a supplemental appropriation by
resolution.
General Fund Budget Summary and Comparison. Set forth hereafter is a summary and
comparison of the City's 1998 and 1997 budgets, as adopted, as compared to year to date actual unaudited
f i-yures for the seven month period ended July 31, 1998. The City has budgeted for the majority of its
General Fund revenues to be derived from sales and use tax.
02- 13172.04 22
TABLE IX
General Fund Budget Summary
1998 Year to Date
"Unaudited year to date figures through July 31, 1998.
Source: City of Pueblo 1998 Budget and City Finance Department
Retirement and Pension Matters
See Note 14 to the City's financial statements appended hereto for a discussion of the City's
pension plans.
Insurance Coverage
The Council acts to protect the City against loss and liability by maintaining certain insurance
coverages. The City is insured as a member of CIRSA, a property and liability insurance pool established
for Colorado municipalities on January 1, 1982. CIRSA provides liability coverage, including errors and
omissions; property coverage; and specific catastrophe coverage, which is renewable annually on
January 1st. See Note 7 to the City's financial statements appended hereto for a discussion of CIRSA.
The City Manager believes the City's present insurance coverage to be adequate. However, there can be
no assurance that the City will continue to maintain this level of coverage.
02- 13172.04 23
(unaudited)
1998 Budget
1997 Budget
REVENUES:
Taxes
530,138,504
544,503,567
$39,540,906
Licenses and Permits
70,539
125,200
114,000
Intergovernmental
553,754
947,413
818,413
Charges for Services
190,774
226,300
211,800
Fines and Forfeitures
514,913
781,500
655,000
Other
412,880
230,900
185,000
Other Financing Sources
1,775,052
3,475,564
4,230,118
Other Financing Uses
(8,250,501)
(13,883,365)
(11,641,831)
Prior Year Carryover
--
716,000
471.788
Total Funds Available
5 25.405.915
$ 37.123,079
S 34 585.194
EXPENDITURES:
General Government
S3,183,901
$ 5,310,269
$ 4,835,836
Fire Protection
4,175,649
7,117,848
6,600,000
Police Protection
6,818,488
11,745,000
10,902,401
Park and Recreation
1,691,456
2,820,000
2,686,962
Transportation
1,322,661
2,550,836
2,426,724
Highways and Streets
1,485,955
2,871,187
2,705,345
Sanitation
195,897
187,022
198,854
Public Building Maintenance
268,108
441,359
416,765
Intergovernmental
1,977,715
2,079,558
1,854,307
Insurance and Contingent
1.136,458
2.000.000
1,958.00
Total Expenditures
S 22,256,288
S 37,123,079
5 34.585_194
"Unaudited year to date figures through July 31, 1998.
Source: City of Pueblo 1998 Budget and City Finance Department
Retirement and Pension Matters
See Note 14 to the City's financial statements appended hereto for a discussion of the City's
pension plans.
Insurance Coverage
The Council acts to protect the City against loss and liability by maintaining certain insurance
coverages. The City is insured as a member of CIRSA, a property and liability insurance pool established
for Colorado municipalities on January 1, 1982. CIRSA provides liability coverage, including errors and
omissions; property coverage; and specific catastrophe coverage, which is renewable annually on
January 1st. See Note 7 to the City's financial statements appended hereto for a discussion of CIRSA.
The City Manager believes the City's present insurance coverage to be adequate. However, there can be
no assurance that the City will continue to maintain this level of coverage.
02- 13172.04 23
Deposit and Investment of City Funds
State statutes set forth requirements for the deposit of City funds in eligible depositaries and for
the collateralization of such deposited funds. See also Note 3 to the City's financial statements appended
hereto. The City also may invest available funds in accordance with applicable state statutes. The
investment of the proceeds of this issue also is subject to the provisions of the Federal Tax Code. See
"TAX MATTERS."
Constitutional Amendment Limiting Taxes and Spending
General. At the general election on November 3, 1992, the voters of the State approved the
addition of Article X, Section 20 to the State constitution (the "Amendment "), which limits the ability of
the State and local governments such as the City to increase revenues, debt and spending and restricts
property, income and other taxes. Generally, the Amendment limits the percentage increases in spending
and property tax revenues to the prior year's amounts, adjusted for inflation, local growth and voter
approved changes. The Amendment authorizes "voter- approved revenue changes" which allow local
governments such as the City to exceed the otherwise mandated limitations on revenues and spending.
(See below.) See "Debt Structure- Required Elections" for a description of the Amendment's limitations
on the City's borrowing power.
Many of the provisions of the Amendment are ambiguous and will require judicial interpretation.
Pending such judicial interpretation, the application of the Amendment could adversely affect the
financial condition and operations of the City and other Colorado local governments to an extent that
cannot be predicted.
Enterprises. Enterprises are excluded from the provisions of the Amendment. As defined in the
Amendment, enterprise means a government- oNvned business authorized to issue its own revenue bonds
and receiving under 10% of annual revenue in grants from all Colorado state and local governments
combined.
Voter- Approved Revenue Changes. Voter- approved revenue changes are dollar amounts that are
exceptions to, and not part of, the City's base for purposes of calculating fiscal year spending under the
Amendment. With such changes, the City may retain and spend revenues which otherwise would have to
be refunded as exceeding the limitations mandated by the Amendment.
Since the Amendment was adopted, the City has presented five potential revenue changes to the
voters, and all of those changes were approved. Three were for single year exceptions, where the money
was used for designated purposes; one was for the limited term of a %¢ sales tax extension, where the
money is used for economic development; and one was for the limited term of, and to pay off, a bond
issue. None of these voter - approved revenue changes has been challenged legally.
Fiscal Year 2000
Computer programmers and other designers of equipment that use microprocessors have
consistently abbreviated dates by eliminating the first two digits of the year, creating an assumption
within such computers that these two digits xvould alNvays be 19. As the year 2000 approaches, such
systems will be unable to accurately process certain date -based information. This phenomenon and the
business and operational problems that it poses for businesses and governments are collectively referred
to as the Year 2000 Issue. According to City officials, the City has formulated remediation plans and
expects to institute the plans in third quarter 1999. City officials believe the Year 2000 Issue is unlikely
to have a material effect on the City's future financial results.
02- 13172.04 24
DEBT STRUCTURE
Required Elections
Article X, Section 20 of the Colorado Constitution requires that, except for refinancing bonded
debt at a lower interest rate, the City must have voter approval in advance for the creation of any multiple -
fiscal year direct or indirect City debt or other financial obligation whatsoever without adequate present
cash reserves pledged irrevocably and held for payments in all future fiscal years. Enterprises, as defined
in Article X, Section 20, are excluded from the application of said Section and the voter approval
requirements established therein. For a discussion of Article X, Section 20 see "CITY FINANCIAL
OPERATIONS- Constitutional Amendment Limiting Taxes and Spending."
Limitation on Indebtedness
Pursuant to the Charter, the aggregate amount of indebtedness of the City may not exceed 10% of
the assessed valuation of taxable property within the City as of the last preceding assessment for City
purposes. Bonds issued for the acquisition, extension or improvement of water or the municipal water
works system, local improvement district bonds, revenue bonds and refunding bonds are not included
within such computation. Based upon the City's preliminary 1998 certified assessed valuation as of the
August 25 certification date of 5461,740,250, the current debt limitation is approximately 546,174,025,
with the amount of outstanding debt applicable to the debt limitation being 521,945,890.
General Obli Debt
"Debt" or "indebtedness" as used in this section means, generally, obligations backed by the
City's full faith and credit and secured by the unlimited power of the City to levy ad valorem property
taxes for the payment of bonds and the interest thereon. Any general obligation indebtedness of the City
is subject to the election requirements described above in "Required Elections." The following table sets
forth the City's outstanding general obligation debt as of the date of this Official Statement.
TABLE X
General Obligations of the City of Pueblo
Principal Amount
Obligation Outstanding
Limited Tax General Obligation Bonds, Series 1996 S12,075,000
General Obligation Street and Bridge Refunding Bonds, Series 1992 1,910,000
General Obligation Refunding Bonds, Series 1998 (when issued and
outstanding) 7.100,000
Total 5 21,085.000
Revenue Obligations
The City Council has the power to issue revenue bonds, subject to the election requirements
described above in "Required Elections," payable from the revenues derived from the operation of
facilities to be acquired, constructed or improved with the proceeds of the bonds, or payable in whole or
02- 13172.04 25
part from available proceeds of sales and use taxes. The following table sets forth the City's outstanding
revenue obligations as of the date of this Official Statement.
TABLE XI
Revenue Obligations of the City of Pueblo
Principal Amount
Obligation Outstanding_
Sewer Revenue Refunding Bonds, Series 1996 $10,005,000
Capital Improvement Residual Revenue Bonds, Series 1988 1.965.000
Total $11.970,000
Other Financial Obligations
Leases and Long Terns Contracts. The City Council has the authority to enter into installment or
lease option contracts, subject to annual appropriation, for the purchase of property or capital equipment
without prior electoral approval as described above in "Required Elections ". The term of any such
contract may not extend over a period greater than the estimated useful life of the property or equipment.
As of December 31, 1997, the City had long -term contracts and leases outstanding in the amount of
$860,890.
The City has also entered into several lease purchase and sublease agreements with the Pueblo
Municipal Building Corporation to provide for the issuance of certificates of participation for various
public projects. The following table sets forth the City's outstanding certificates of participation as of the
date of this Official Statement.
TABLE X1I
Certificates of Participation of the City of Pueblo
Principal Amount
Obligation Outstanding_
Certificates of Participation, Series 1992 $2,430,000
Golf Course Refunding Certificates of Participation, Series 1995 3,920,000
Certificates of Participation, Series 1995 1.135.000
Total $ 7.485,000
Estimated Overlapping General Obligation Debt
Certain public entities whose boundaries may be entirely within, coterminous with, or only
partially within the City are also authorized to incur general obligation debt, and to the extent that
properties within the City are also within such overlapping public entities such properties will be liable
for an allocable portion of such debt. For purposes of this Official Statement, the percentage of each
entity's outstanding debt chargeable to City property owners is calculated by comparing the assessed
valuation of the portion overlapping the City to the total assessed valuation of the overlapping entity. To
the extent the City's assessed valuation changes disproportionately with the assessed valuation of
overlapping entities, the percentage of general obligation debt for which City property owners are
02 -131 72.04 26
11 ■�II�� 'll I� � 1_.I �L
P
responsible will also change. The following table sets forth the estimated overlapping general obligation
debt chargeable to properties within the City as of the date of this Official Statement.
TABLE X1II
Estimated Overlapping General Obligation Debt
Estimated Net Debt Chargeable
Outstanding General to Properties in the City
Overlapping Public Entity Obligation Debt Percent Amount
Pueblo School District No. 70
$24,070,000 0.2
$48,140
Sources: Pueblo County Assessor's Office; and information obtained from individual entities
General Obligation Debt Ratios
Set forth in the following table are selected general obligation debt ratios for the City for the
years ended December 31, 1993 -1997.
TABLE XIV
Historical City Debt Ratios
Sources: City General Purpose Financial Statements, 1993 -1997; Pueblo County Assessor's Office; Regional
Economics Information System Bureau of Economic Analysis; and the City
02- 13172.04 27
Calendar Year Ended December 31
1993
1994
1995
1996
1997
Debt Outstanding
$12,395,000
$11,790,000
S1 I 10,000
$23,230,000
$22,065,000
Population
100,912
101,373
101,921
102,165
102,723
Assessed Value
$368,568,940
$371,121,120
$365,332,640
$373,176,830
$429,464,730
Ratio of Debt to
Assessed Value
3.4%
3.2%
3.0%
6.2%
5.1%
General Obligation
Debt Per Capita
$123
$116
$109
$227
5215
Personal Income
Per Capita (Pueblo
County)
$16,414
S17,320
$18,674
$19,235
Unavail
Ratio of General
Obligation Debt Per
Capita to Personal
Income Per Capita
0.7%
0.7%
0.6%
1.2%
Unavail
Sources: City General Purpose Financial Statements, 1993 -1997; Pueblo County Assessor's Office; Regional
Economics Information System Bureau of Economic Analysis; and the City
02- 13172.04 27
LEGAL MATTERS
Pending and Threatened Litigation Involving the City
Sovereign Immunity. The Governmental Immunity Act of 1972, Title 24, Article 10, Part 1,
Colorado Revised Statutes (the "Act "), provides that, with certain specified exceptions, sovereign
immunity acts as a bar to any action against a public entity, such as the City, for injuries which lie in tort
or could lie in tort.
The Act provides that sovereign immunity does not apply to injuries occurring as a result of
certain specified actions or conditions. In such instances, the public entity may be liable for injuries
arising from an act or omission of the public entity, or an act or omission of its public employees, which
are not willful and wanton, and which occur during the performance of their duties and within the scope
of their employment. The maximum amounts that may be recovered under the Act, whether from one or
more public entities and public employees, are as follows: (a) for any injury to one person in any single
occurrence, the sum of 5150,000; (b) for an injury to two or more persons in any single occurrence, the
sum of 5600,000; except in such instance, no person may recover in excess of $150,000. Suits against
both the City and a public employee do not increase such maximum amounts which may be recovered.
For injuries occurring prior to July 1, 1986, sovereign immunity limits are deemed to be waived to the
extent that the City's insurance covers such injury. With regard to injuries occurring on and after such
date, the City may, by resolution, increase any maximum amount that may be recovered from the City for
the type of injury described in the resolution. The City has not adopted such a resolution to date. The
City may not be held liable either directly or by indemnification for punitive or exemplary damages. In
the event that the City is required to levy an ad valorem property tax to discharge a settlement or
judgment, such tax may not exceed a total of ten mills per annum for all outstanding settlements or
judgments.
The City may be subject to civil liability and may not be able to claim sovereign immunity for
actions founded upon various federal laws. Examples of such civil liability include, but are not limited to,
suits filed pursuant to 42 U.S.C. §1983 alleging the deprivation of federal constitutional or statutory rights
of an individual. In addition, the City may be enjoined from engaging in anti - competitive practices which
violate the antitrust laws. However, effective July 1, 1986, the Act provides that it applies to any action
brought against a public entity or a public employee in any Colorado state court having jurisdiction over
any claim brought pursuant to any federal law, if such action lies in tort or could lie in tort.
Pending and Threatened Litigation. The City Attorney states that as of the date hereof, to the
best of his knowledge, belief, and information, no litigation of any nature is now pending or threatened,
which, if determined adversely to the City, would not otherwise be covered by insurance or would be
expected to have a material adverse effect upon the City's ability to comply with its obligations under the
Bond Ordinance.
No Litigation Certificate
The purchase of the Bonds is conditioned on, among other things, receipt from the City Attorney
and /or certain City officials of certification at closing that there is no litigation then pending, or to their
knowledge threatened, affecting the validity of or security for the Bonds.
02-13 172.04 28
I 1 1 11V I'IAWINIM
TAY MATTERS
In the opinion of Kutak Rock, Bond Counsel, under existing laws, regulations, rulings and
J udicial decisions, interest on the Bonds is excluded from gross income for federal income tax purposes
and is not a specific preference item for purposes of the federal alternative minimum tax. The opinion
described in the preceding sentence assumes the accuracy of certain representations and compliance by
the City with covenants designed to satisfy the requirements of the Code that must be met subsequent to
the issuance of the Bonds. Failure to comply with such requirements could cause interest on the Bonds to
be included in gross income for federal income tax purposes retroactive to the date of issuance of the
Bonds. The City has covenanted to comply with such requirements. Bond Counsel has expressed no
opinion regarding other federal tax consequences arising with respect to the Bonds. Such interest is also
exempt from taxation by the State of Colorado, except inheritance, estate, and transfer taxes.
Notwithstanding Bond Counsel's opinion that interest on the Bonds is not a specific preference
item for purposes of the federal alternative minimum tax, such interest will be included in adjusted
current earnings of certain corporations, and such corporations are required to include in the calculation of
alternative minimum taxable income 75% of the excess of such corporation's adjusted current earnings
over its alternative minimum taxable income (determined without regard to such adjustment and prior to
reduction for certain net operating losses).
The accrual or receipt of interest on the Bonds may otherwise affect the federal income tax
liability of the owners of the Bonds. The extent of these other tax consequences will depend upon such
owner's particular tax status and other items of income or deduction. Bond Counsel has expressed no
opinion regarding any such consequences. Purchasers of the Bonds, particularly purchasers that are
corporations (including S corporations and foreign corporations operating branches in the United States),
property or casualty insurance companies, banks, thrifts or other financial institutions, certain recipients
of social security or railroad retirement benefits, taxpayers otherwise entitled to claim the earned income
credit, or taxpayers who may be deemed to have incurred or continued indebtedness to purchase or carry
tax- exempt obligations, should consult their tax advisors as to the tax consequences of purchasing or
owning the Bonds.
Bond Counsel is of the opinion that because the City has properly designated the Bonds as
"qualified tax - exempt obligations" within the meaning of Section 265(b)(3) of the Code, in the case of
certain banks, thrift institutions or other financial institutions owning the Bonds, a deduction is allowed
for 80% of that portion of such institutions' interest expense allocable to interest on the Bonds.
Changes in Federal Trzv Law. From time to time, there are legislative proposals in the Congress
that, if enacted, could alter or amend the federal tax matters referred to above or adversely affect the
market value of the Bonds. It cannot be predicted whether or in what form any such proposal might be
enacted or whether if enacted it would apply to bonds issued prior to enactment. Purchasers of the Bonds
should consult their tax advisors regarding any pending or proposed tax legislation. The opinions
expressed by Bond Counsel are based upon existing legislation as of the date of issuance and delivery of
the Bonds and Bond Counsel has expressed no opinion as of any date subsequent thereto or with respect
to any pending legislation.
02- 13172.0.1 29
APPENDIX A
Audited general purpose financial statements of the City
as of and for the year ended December 31, 1997
02- 13172.04 A -1
- ._ . I,
p
APPEtiDIX B
Undertaking to Provide Ongoing Disclosure
The following is a brief summary of certain provisions of the City's secondary market disclosure
undertaking, contained in the Bond Ordinance, and is qualified in its entirety by the provisions of the
undertaking. Copies of the Bond Ordinance may be obtained from the sources listed in
"INTRODUCTION- Additional Information."
The City has covenanted in the Bond Ordinance that beginning with the fiscal year ended
December 31, 1996, it will provide to each Nationally Recognized Municipal Securities Information
Repository ( "NRMSIR ") recognized by the Securities and Exchange Commission ( "SEC ") and to the
state information depository, if any (the "SID," and collectively with the NRMSIRs, the "Depositories "),
annual financial information and operating data of the type contained in this Official Statement, including
audited financial statements prepared in accordance with generally accepted accounting principles and
financial information and operating data set forth in this Official Statement under the captions: "CITY
FINANCIAL OPERATIONS- Historical General Fund Operations "; - "Budget Process" and "REVENUES
AVAILABLE FOR DEBT SERVICE." Such information may be provided by cross - reference to
documents previously provided to the Depositories or the SEC; provided, however, that if the document
so referenced is a final official statement, it must be available from the Municipal Securities Rulemaking
Board (the "MSRB "). The information covered by this undertaking will be provided annually to the
Depositories within 188 days of the close of the Issuer's fiscal year. The currently recognized NRMSIRs
are: JJ Kenny Information Systems, The Repository, 765 Broadway — 16 floor, New York, New York
10006 -2503; Thompson NRMSIR, Secondary Market Disclosure, 395 Hudson Street — 3` Floor, New
York, New York 10014 -3669; Bloomberg Municipal Repositories, Municipal Department, P.O. Box 840,
Princeton, NJ 08542 -0840; and DPC Data Inc., One Executive Drive, Fort Lee, New Jersey 07024. As of
the date of this Official Statement, no SID exists within the State.
In addition, the City has covenanted to provide to the MSRB and to the SID, notice of the
occurrence of any of the following events with respect to the Bonds (if such event is material): (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 Bonds; (7) modifications to rights
of Bond Owners; (8) Bond calls; (9) defeasances; (10) release, substitution, or sale of property securing
repayment of the Bonds; or (1 1) rating changes.
The City also will provide notice in a timely manner to each NRMSIR or the MSRB and to the
SID if the City has failed to comply with its disclosure undertakings. The City has never failed to comply
in all material respects with any previous undertakings entered into in compliance with the Rule.
The continuing disclosure undertakings described above have been made for the benefit of the
registered owners of the Bonds, including beneficial owners of the Bonds. Unless otherwise required by
law, no Bondholder shall be entitled to damages for the Issuer's non - compliance with its undertakings;
however, Bondholders may enforce specific performance of the undertakings by any available judicial
proceeding. Under no circumstances will the failure of the City to perform the undertakings hereunder
constitute an Event of Default with respect to the Bonds as described in the Bond Ordinance.
The undertaking will be in effect from the date of delivery of the Bonds until the earlier of (i) the
date all principal and interest on the Bonds has been legally defeased pursuant to the terms of the Bond
Ordinance; (ii) the date that the Issuer shall no longer constitute an `obligated person" within the meaning
02- 13172.04 B -1
p
of the Rule; or (iii) the date on which those portions of the rule which require 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 Bonds.
The undertaking may be amended from time to time without the consent of the holders of the
bonds in compliance with the rule and any interpretive guidance related to the rule. The City shall cause
notice of such amendment to be provided to each Depository.
02- 13172.04
p
APPENDIX C
ECONOMIC AND DEMOGRAPHIC INFORMATION
The following information is provided to give prospective investors general information
concerning selected economic and demographic conditions existing in the area within which the City is
located. The statistics presented below have been obtained from the referenced sources and represent the
most current information available from such sources; however, certain of the information is released
only after a significant amount of time has passed since the most recent date of the reported data and
therefore, such information may not be indicative of economic and demographic conditions as they
currently exist or conditions which may be experienced in the near future. Further, the reported data has
not been adjusted to reflect economic trends, notably inflation. Finally, other economic and demographic
information not presented herein may be available concerning the area in which the City is located and
prospective investors may want to review such information prior to making their investment decision.
The following information is not to be relied upon as a representation or guarantee of the City or its
officers, entploj�ees, or advisors.
Population and Median Age. The following table sets forth population statistics for the
City, Pueblo County and Colorado.
Population
Source: U.S. Department of Commerce, Bureau of the Census 1950 -1990; 1997 estimates from
Colorado Division of Local Government
According to the United States Census Bureau, Pueblo's median age in 1980 was 29.9 years as
compared with 34.5 years in 1990. The State's median age for the same period increased from 28.6 in
1980 to 32.5 years in 1990, with the median age of the United States being 30 and 33 years in 1980 and
1990, respectively.
Income. The following tables set forth historical median household effective buying income, the
percentage of households by classification of effective buying income ( "EBI ") levels, and per capita
personal income. Pueblo's per capita income level over the five year period shown has consistently been
lower than the State levels.
02-13172.04 C -1
Percent
Percent
Percent
Year
City of Pueblo
Change
Pueblo County
Change
Colorad o
han e
1950
63,685
--
90,188
--
1,325,089
--
1960
91,181
43.2%
118,707
31.6%
1,753,947
32.4%
1970
97,774
7.2
118,238
(0.4)
2,207,259
25.9
1980
101,686
4.0
125,972
6.5
2,889,964
30.9
1990
98,640
(3.0)
123,051
(2.3)
3,294,394
14.0
1997
101,623
3.0
132,436
7.6
3,892,644
18.2
Source: U.S. Department of Commerce, Bureau of the Census 1950 -1990; 1997 estimates from
Colorado Division of Local Government
According to the United States Census Bureau, Pueblo's median age in 1980 was 29.9 years as
compared with 34.5 years in 1990. The State's median age for the same period increased from 28.6 in
1980 to 32.5 years in 1990, with the median age of the United States being 30 and 33 years in 1980 and
1990, respectively.
Income. The following tables set forth historical median household effective buying income, the
percentage of households by classification of effective buying income ( "EBI ") levels, and per capita
personal income. Pueblo's per capita income level over the five year period shown has consistently been
lower than the State levels.
02-13172.04 C -1
ir
Percent of Households by
Effective Buying Income Groups -1997
Median Household Effective Buying Income
$20,000-
$35,000-
$50,000 -
199 1994 1995'
1996
1997
City of Pueblo
$23,816 $25,447 $22,051
$23,045
$23,568
Pueblo County
24,900 26,684 23,098
24,137
24,594
Colorado
34,797 36,770 31,797
32,947
33,890
United States
35,056 37,070 32,238
33,482
34,618
"' The 1995 EBI
figures were based on money income rather than personal income which the prior years
figures had been based on, and are therefore not directly comparable to historical numbers.
22.5
Source: "Survey
of Buying Power," Sales & Marketing Management, 1994 -1998
Percent of Households by
Effective Buying Income Groups -1997
Source: "Survey of Buying Power," Sales & Marketing Management, 1998
Per Capita Personal Income
1992
Less than
$20,000-
$35,000-
$50,000 -
Pueblo County $15,658
S_0 000
$34,999
$49,999
and Ove r
City of Pueblo
42.6%
26.7%
15.4%
15.3%
Pueblo County
40.5
26.7
15.4
15.3
Colorado
27.7
24.0
18.5
29.8
United States
28.0
22.5
18.2
31.3
Source: "Survey of Buying Power," Sales & Marketing Management, 1998
Per Capita Personal Income
1992
1993
1994
1995
1996
Pueblo County $15,658
S16,414
S17,320
$18,674
$19,235
Colorado 20,969
21,991
23,138
24,517
25,740
United States 20,261
20,915
22,186
23,359
24,436
Source: Bureau of Economic Analysis; U.S. Department of Commerce
School Enrollment. The following table presents a five year history of school enrollment for
Pueblo County School District No. 60 and Pueblo County School District No. 70, the school districts
serving the City.
Fall School Enrollment
School District 1994 1995 1996 1997 1998
Pueblo County School District No. 70 4,749 5,160 5,524 6,087 6,255
Pueblo County School District No. 60 18,001 17,817 18,100 17,970 17,807
Sources: Colorado Department of Education 1994 -1997; and Pueblo County School Districts No. 60 and 70
for 1998
02- 13172.01 C -2
Housing Stock. According to the 1990 Census, Pueblo had a total of 50,383 households in 1990
compared to a total of 49,095 households in 1980, for a ten -year increase of 2.6 %. In 1990, the average
household size in Pueblo was 2.56 persons.
Building Permit Activity. Set forth in the following table is historical building permit activity for
new structures in the City of Pueblo, Colorado.
Building Permit Activity in the City of Pueblo
Non - Residential
Residential
Year
Pe rmit
Valuation
1993
148
$18,940,365
1994
184
19,490,848
1995
228
23,676,164
1996
304
36,032,263
1997
258
24,981,713
1998
180
16,256,972
Non - Residential
Permits
Valuation
36
$ 8,308,018
34
19,261,971
5,171
47,833,072
2,754
62,534,144
2,506
71,096,471
909
38,811,862
( ' ) As of June 30, 1998.
Source: City of Pueblo Building Inspection Department
Foreclosure Activity. As set forth in the following table, there has been a significant decrease in
the number of foreclosures filed in Pueblo over the past five years.
History of Foreclosures in Pueblo County
( ' ) As of September 4, 1998.
Source: Pueblo County Public Trustee
Retail Sales. The retail trade sector employs a large portion of the City's work force and is
important to the area's economy. The following table sets forth retail sales figures as reported by the
State for Pueblo and Colorado.
02- 13172-04 C -3
Number of
Year
Foreclosures Filed
Percent Change
1993
142
--
1994
119
(16.2)%
1995
107
(10.1)
1996
133
24.3
1997
175
31.6
1998' �
172
--
( ' ) As of September 4, 1998.
Source: Pueblo County Public Trustee
Retail Sales. The retail trade sector employs a large portion of the City's work force and is
important to the area's economy. The following table sets forth retail sales figures as reported by the
State for Pueblo and Colorado.
02- 13172-04 C -3
Retail Sales
' through March 31, 1998.
Source: State of Colorado, Department of Revenue, Sales Tax Statistics, 1993 -1998
Employment. The following tables set forth employment statistics by industry and the most
recent historical labor force estimates for Pueblo.
Total Business Establishments and Employment - City and County of Pueblo
1996 Annual Averages
Percent
12 -Month Change
City as %
Year
City of Pueblo
Change
Pueblo County
of o n
1993
$1,456,700,855
--
$1,561,650,788
93.3%
1994
1,678,037,089
15.2%
1,803,600,158
93.0
1995
1,842,222,530
9.8
1,978,712,090
93.1
1996
1,897,071,122
3.0
2,054,254,244
92.3
1997
2,045,685,910
7.8
2,206,307,682
92.7
1998 11,
504,594,219
--
547,286,979
92.2
' through March 31, 1998.
Source: State of Colorado, Department of Revenue, Sales Tax Statistics, 1993 -1998
Employment. The following tables set forth employment statistics by industry and the most
recent historical labor force estimates for Pueblo.
Total Business Establishments and Employment - City and County of Pueblo
02- 13172.04 C -4
1996 Annual Averages
1997 Annual Averages
12 -Month Change
Average
Average
Average
Industrv
Units Employment
Units
Employmen
11aiLs
Employment
Agriculture, Forestry
& Fisheries
52 437
62
460
10
23
Mining
5 19
4
12
(1)
(7)
Construction
325 2,902
366
3,274
41
372
Manufacturing
107 4,987
110
5,075
3
88
Transportation,
Communication
Public Utilities
131 1,934
133
1,905
2
(29)
Wholesale Trade
138 1,338
142
1,411
4
73
Retail Trade
806 12,296
833
12,771
27
475
Finance, Insurance
& Real Estate
243 2,031
271
2,428
28
397
Services
1,025 14,184
1,053
15,161
28
977
Non- classifiable
-- --
--
--
--
--
Government
70 9.777
71
9.958
1
_lam
Total
2.903 49.908
3.046
52.456
L4 a
2.550
. .. Information provided
herein reflects only those employers who are subject to state unemployment
insurance law.
( ' ) Information suppressed in accordance with U.S. Department of Labor guidelines.
Source: State of Colorado, Division of Employment
and Training,
Colorado Employment and Wages
Covered by Unemployment Insurance
02- 13172.04 C -4
p
Unemployment rates have been decreasing since 1993 in Pueblo as well as throughout the State.
r
J
Labor Force Estimates
Pueblo County Colorado
( ' ) Estimates through May, 1998.
Source: State of Colorado, Division of Employment and Training, Labor Market Information, Colorado
Labor Force Review
The following table sets forth selected major employers in the Pueblo area. No independent
investigation has been made of and there can be no representation as to the stability or financial condition
of the entities listed below, or the likelihood that they will maintain their status as major employers in the
Pueblo area.
Selected Major Employers in the Pueblo Area - 1997
Pueblo School District No. 60
Matrixr Marketing, Inc.
Park�'iew Episcopal Medical Center
St. Mary Corwin Regional Medical Center
CF & I Steel, L.P.
Colorado Institute of Mental Health
Trane Company
Pueblo County
Pueblo School District No. 70
City of Pueblo
Estimated
Number of
Product or Service Employees
Public education
Labor
Percent
Labor
Percent
Year
Force
Unemployed
Force
Unemployed
1993
52,877
8.3%
1,900,187
5.3%
1994
54,837
5.8
2,001,491
4.2
1995
56,948
6.0
2,087,518
4.2
1996
57,153
6.0
2,098,971
4.2
1997
59,614
4.7
2,158,169
3.3
1998
62,743
6.3
2,202,980
4.0
( ' ) Estimates through May, 1998.
Source: State of Colorado, Division of Employment and Training, Labor Market Information, Colorado
Labor Force Review
The following table sets forth selected major employers in the Pueblo area. No independent
investigation has been made of and there can be no representation as to the stability or financial condition
of the entities listed below, or the likelihood that they will maintain their status as major employers in the
Pueblo area.
Selected Major Employers in the Pueblo Area - 1997
Pueblo School District No. 60
Matrixr Marketing, Inc.
Park�'iew Episcopal Medical Center
St. Mary Corwin Regional Medical Center
CF & I Steel, L.P.
Colorado Institute of Mental Health
Trane Company
Pueblo County
Pueblo School District No. 70
City of Pueblo
Estimated
Number of
Product or Service Employees
Public education
2,191
Telemarketing
1,900
Medical and health care
1,474
Medical and health care
1,350
Steel, wire, pipe and rails
1,273
Public mental health care
1,250
Manufacturing
900
County government
875
Public education
769
City government
692
Source: Pueblo Chamber of Commerce, 1997 Coni nanny Profile
02- 13172.04
C -5
p
* * * * * * * * * * * * * * ** *B S tats * * * * * * * * * * * * * * * * * * * * * **
Box Number: 1 on Page: 1; Filename: None; Content Type: Text; Text Angle: 1; Width: 0.55; Height:
10.1966666666667.
THIS PRELIMINARY OFFICIAL STATEMENT AND THE INFORMATION CONTAINED HEREIN ARE SUBJECT TO COMPLETION
OR AMENDMENT. These securities may not be sold, nor may offers to buy be accepted, prior to the time the Official Statement is delivered in
final form. Under no circumstances shall this Preliminary Official Statement constitute an offer to sell or the solicitation of an offer to buy, nor
shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of such jurisdiction.
02- 13172.04
P
An extra section break has been inserted above this paragraph. Do not delete this section
break if you plan to add text after the Table of Contents /Authorities. Deleting this break will
cause Table of Contents /Authorities headers and footers to appear on any pages following the
Table of Contents /Authorities.
02- 13172.04
(
F ) V. ca 1
PAYING AGENCY AGREEMENT Q / 1998
THIS PAYING AGENCY AGREEMENT, dated as of October 15, 1998 n s Paying
Agency Agreement "), governs the appointment by the CITY OF PUEBLO, COLORADO (the
"City ") of THE BANK OF CHERRY CREEK, N.A., a national banking association duly
organized and existing under the laws of the United States of America, as paying agent, registrar
and authenticating agent (the "Paying Agent ") for the City's $7,100,000 General Obligation
Refunding Bonds, Series 1998 (the "Bonds ") issued pursuant to Ordinance No. 6348 (the
"Ordinance ") of the City.
1. The Paying Agent shall act as agent of the City for the limited purpose of being
paying agent, registrar and authenticating agent for the Bonds and shall not in such capacities be
a trustee or other fiduciary for the registered owners of the Bonds. The Paying Agent, and its
officers, directors and employees, may become the registered owner or registered owners of, or
acquire any interest in, any Bonds with the same rights that it or they would have if it were not
the paying agent, registrar and authenticating agent hereunder, may engage or be interested in
any financial or other transactions with the City or any agents thereof, and may act on, or as
depositary, trustee or agent for, any committee or body of registered owners of the Bonds or
other obligations of the City or any agents thereof, as freely as if it were not the paying agent,
registrar and authenticating agent hereunder.
2. On or prior to each date established for payment of principal, interest or premium,
if any, on the Bonds (a "Due Date "), the City shall furnish funds to the Paying Agent in amounts
sufficient to pay all amounts due. The Paying Agent shall have no duty to collect, or notify the
City of, amounts due on the Bonds. The Paying Agent shall have no duty to make any payments
prior to any Due Date nor until fiends necessary to cover all payments due on the Due Date have
been deposited with it. The Paying Agent shall never be required to advance its own funds for
any payments in connection with the Bonds.
3. The Paying Agent shall not be obligated to segregate the funds held as paying
agent or registrar unless otherwise required by law, and shall not be liable for payment of interest
on any funds held in its capacity as paying agent or registrar. ,
4. The City shall furnish the Paying Agent with a sufficient supply of blank Bonds
and from time to time shall renew such supply when necessary upon the request of the Paying
Agent. Blank Bonds shall be signed by authorized officers of the City and shall bear the seal of
the City, or shall bear, to the extent permitted by law, the facsimile signature of such officers and
the facsimile of said seal.
5. The Paying Agent agrees to act as Paying Agent under and as described in the
Ordinance. The Paying Agent shall perform all duties required of it under the Ordinance as
Paying Agent, including its duties as paying agent, registrar and authenticating agent thereunder.
6. The Paying Agent shall make payment, exchange or registration of transfer
(collectively "Transfer ") of Bonds in accordance with the Ordinance. The Paying Agent reserves
the right to refuse to Transfer Bonds until it is satisfied that the endorsement on the Bond is valid
02-13431.02
and genuine, and for that purpose it may require a guarantee of signature by a firm having
membership in a Medallion Signature Program. The Paying Agent also reserves the right to
refuse to Transfer Bonds until it is satisfied that the requested Transfer is legally authorized, and
it shall incur no liability to the City for any liabilities arising from the refusal in good faith to
make a Transfer, which it, in its judgment, deems improper or unauthorized. The Paying Agent
assumes no responsibility for determining whether or to what extent any Transfer made by it or
other action taken by it may have a bearing on any exemption from the registration requirements
of the Securities Act of 1933 as amended or any similar statute.
7. The Paying Agent shall issue new or duplicate Bonds in lieu of or on account of
Bonds represented to have been lost, apparently destroyed or wrongfully taken, in accordance
with the Ordinance.
8. The Paying Agent may Transfer Bonds registered in the name of or belonging to a
deceased person without requiring the person requesting such Transfer to obtain letters of
administration, letters testamentary, or instruments of assignment from the executors or
administrators of the deceased, or other legal documents generally required, upon receiving
indemnity satisfactory to the Paying Agent; and the Paying Agent is authorized to procure from
a bonding company of its choice a blanket bond covering the transfer of securities without
probate or administration running in favor of said Paying Agent, the City, and any other agents
of the City, and to perform all acts necessary or desirable to assure that the Paying Agent and the
City and other agents of the City will be indemnified on account of any such Transfer.
9. The Paying Agent shall treat the person in whose name any Bond is registered as
the absolute owner of such Bond for the purpose of receiving payment of principal of and
interest on such Bond and for all other purposes whatsoever, whether or not such Bond be
overdue, and the Paying Agent shall not be affected by any notice to the contrary.
10. Unless otherwise instructed, the Paying Agent shall destroy cancelled Bonds any
time after payment and shall furnish to the City periodic destruction certificates.
11. In the event the City receives any notice or order which limits or prohibits dealing
in the securities for which the Paying Agent is paying agent, registrar or authenticating agent, it
shall immediately notify the Paying Agent of such notice or order and give a copy thereof to the
Paying Agent.
12. The Paying Agent shall withhold any and all amounts from principal and interest
due registered owners of the Bonds as it may be required from time to time by any government
regulations and shall prepare and file any necessary information returns with respect to all
principal and interest payments.
13. The Paying Agent shall be entitled to payments from the City of its fees and
actual expenses for acting as paying agent, registrar and authenticating agent in accordance with
the fee schedule attached hereto and thereafter as shall be agreed to by the City and the Paying
Agent. All such fees and actual expenses shall be paid notwithstanding that the Bonds have been
refunded or otherwise refinanced at the time the payment is due, so long as the Bonds shall not
02- 13431.02 2
have actually been paid. The Paying Agent shall not have a lien on any funds deposited with it
as paying agent for payment of its fees.
14. The Paying Agent shall not be liable for action taken, in good faith, in reliance
upon advice from legal counsel and may rely and act upon signatures and documents which it
believes to be genuine, without liability. The Paying Agent shall be liable only for its own
negligence, gross negligence or willful misconduct.
15. The Paying Agent may execute and exercise any of the rights or powers hereby
vested in it or perform any duty hereunder either itself or by or through its attorneys, agents or
employees, and the Paying Agent shall not be answerable or accountable for any act, default,
neglect or misconduct (except as a result of gross negligence or willful misconduct) of any such
attorneys, agents or employees or for any loss to the City resulting therefrom, provided
reasonable care shall have been exercised in the selection and continued employment thereof.
16. In the event of any conflict between this Paying Agency Agreement and the duties
of the Paying Agent under the Ordinance, the provisions of the Ordinance shall control.
17. In any circumstances not covered specifically by the Ordinance or this Paying
Agency Agreement, the Paying Agent shall act in accordance with its normal procedures in such
matters, subject to the provisions of Section 14 hereof.
18. The Paying Agent may resign as paying agent, registrar and authenticating agent,
or may be removed as such by the City on thirty days' prior written notice. In case of resignation
the Paying Agent, or in the case of removal the City, shall pay for all costs and expenses relating
thereto, including costs of giving notices and costs of forwarding or returning funds, Bonds or
other documents. In such case, the Paying Agent shall promptly present a final statement to the
City, and shall forward all records, funds, Bonds and other documents relating thereto to the
successor Paying Agent.
19. After one year from the earlier of the final maturity date of the Bonds or the
redemption date of the last outstanding Bond, the Paying Agent shall return any unclaimed funds
relating to the Bonds to the City and thereafter all of its obligation and duties with respect to the
Bonds shall cease and the Paying Agent shall destroy all Bonds in accordance with its customary
practices.
20. The terms and conditions of this Paying Agency Agreement may be amended
only by written agreement between the City and the Paying Agent.
21. The ,City shall furnish or cause to be furnished to the Paying Agent an original
copy of each document relating to the Bonds which is reasonably requested by the Paying Agent.
22. This Paying Agency Agreement is executed in the State of Colorado and shall be
construed and enforced in accordance with the laws of the State of Colorado.
[Remainder of page intentionally left blank]
02- 13431.02 3
IN WITNESS WHEREOF, the parties hereto have caused this Paying Agency Agreement
to be executed and delivered by their respective officers thereunto duly authorized as of the date
first above written.
[SEAL]
ATTEST:
By
City Clerk
[SEAL]
ATTEST:
By
Title
CITY OF PUEBLO, COLORADO
LOM
President of the City Council
THE BANK OF CHERRY CREEK, N.A., as
Paying Agent
By—
Title
02- 13431.02 4