HomeMy WebLinkAbout06963(SUBSTITUTED COPY)
4/11/2003
ORDINANCE NO. 6963
AN ORDINANCE RECOGNIZING AND CONFIRMING THE CITY OF PUEBLO, COLORADO'S
WASTEWATER SEWER ENTERPRISE AS AN ENTERPRISE; AUTHORIZING THE ISSUANCE
BY THE CITY'S SEWER ENTERPRISE OF A GOVERNMENTAL AGENCY BOND, SERIES 2003,
IN A MAXIMUM PRINCIPAL AMOUNT OF $8,500,000, FOR THE PURPOSES OF FINANCING
THE REPLACEMENT OF AN INTERCEPTOR SEWER LINE ALONG THE ARKANSAS RIVER,
TOGETHER WITH CONNECTING SEWER LINES AND A MAINTENANCE ROAD, PAYING THE
COSTS OF ISSUING THE SERIES 2003 BOND; PRESCRIBING THE FORM, TERMS AND
CONDITIONS OF THE SERIES 2003 BOND; PROVIDING FOR THE SALE OF THE
SERIES 2003 BOND; PROVIDING FOR THE APPLICATION OF THE NET PLEDGED
REVENUES OF THE SEWER ENTERPRISE TO PAY THE PRINCIPAL OF AND INTEREST AND
PREMIUM, IF ANY, ON THE SERIES 2003 BOND; AND PRESCRIBING OTHER DETAILS IN
CONNECTION THEREWITH
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 "State ") and the home rule charter of the City (the
"Charter"); and
WHEREAS, under the Charter, the City is possessed of all powers which are necessary,
requisite or proper for the government and administration of its local and municipal affairs, all
powers which are granted to home rule municipalities by the Colorado Constitution, and all rights
and powers that now or hereafter may be granted to municipalities by the laws of the State; and
WHEREAS, the City owns and operates a municipal sanitary sewer system, as more fully
defined herein (the "Sewer Enterprise "); and
WHEREAS, the legislative powers of the City are vested in a board of council members,
also known as the city council (the "City Council "), which also operates as the governing body of
the Sewer Enterprise; and
WHEREAS, the City Council, sitting as the governing body of the Sewer Enterprise, has
determined that it is necessary for the efficient and proper management of the Sewer Enterprise
and is in the best interest of the users of the Sewer Enterprise that there be authorized and issued
bonds of the Sewer Enterprise for the purpose of financing the replacement of an interceptor sewer
line along the Arkansas River, together with certain connecting sewer feeder lines, and the
construction of a maintenance road, and certain related renovations and upgrades (collectively, the
"Project") and for paying the costs of issuing such bonds; and
WHEREAS, the City Council has determined that it is in the best interest of the users of the
Sewer Enterprise that the payment of such bonds be secured by the Net Pledged Revenues (as
defined herein) of the Sewer Enterprise; and
WHEREAS, the City Council, acting by and through the Sewer Enterprise, issued
$11,100,000 aggregate principal amount of its Sewer Refunding Revenue Bonds, Series 1996, of
which $3,550,000 remains outstanding (the "Series 1996 Bonds "); and
WHEREAS, the Sewer Enterprise will defease the Series 1996 Bonds prior to issuing the
Series 2003 Bond (as defined herein); and
WHEREAS, except with respect to the Series 1996 Bonds, the City Council has never
pledged, nor in any way hypothecated, revenues derived and to be derived from the operation of
the Sewer Enterprise to the payment of any bonds or for any other purpose (excluding proceedings
authorizing the issuance of bonds which have heretofore been paid in full, or for which provision for
the payment in full has been made), and the Series 1996 Bonds will be defeased prior to the
issuance by the Sewer Enterprise of its new bond, with the result that the Net Pledged Revenues
may now be pledged lawfully and irrevocably for payment of the Series 2003 Bond herein
authorized and any Parity Lien Bonds (as defined herein); and
WHEREAS, to finance the estimated costs of the Project, the Sewer Enterprise has made
an application to the Colorado Water Resources and Power Development Authority (the
"Authority°), for a loan, which the Authority has conditionally accepted, and therefore the Sewer
Enterprise has determined to enter into a loan agreement (the "Loan Agreement") with the
Authority, pursuant to which the Authority shall loan the Sewer Enterprise an amount not to exceed
$8,500,000(the "Loan"); and
WHEREAS, the Sewer Enterprise's repayment obligations under the Loan Agreement shall
be evidenced by a Governmental Agency Bond, Series 2003 (the "Series 2003 Bond ") to be issued
by the Sewer Enterprise to the Authority, which shall be payable solely from and secured by a
pledge of and an irrevocable and nonexclusive lien on the Net Pledged Revenues of the Sewer
Enterprise; and
WHEREAS, Article X, Section 20 of the Colorado Constitution ( "Amendment One ") requires
that districts (as defined in Amendment One) not issue bonded debt without prior voter approval
unless the issuer is an "Enterprise" as defined in Amendment One; and
WHEREAS, the Sewer Enterprise constitutes a government -owned business authorized to
issue its own revenue bonds and receives under 10% of its annual revenue in grants from all
Colorado state and local governments, including without limitation the City, and therefore
constitutes an "Enterprise" within the meaning of Amendment One; and
WHEREAS, the City has the power as a home rule city under Article XX of the Colorado
Constitution and the Charter to issue the Series 2003 Bond; and
WHEREAS, Article 57 of Title 11, Colorado Revised Statutes (the "Supplemental Public
Securities Act") provides supplemental procedures for the issuance of bonds, and the City Council
has elected to have the provisions of the Supplemental Securities Act apply to the issuance of the
Series 2003 Bond; and
WHEREAS, there has been presented to the City Council at this meeting a proposed form
of the Loan Agreement; now, therefore
BE IT ORDAINED BY THE CITY COUNCIL OF PUEBLO
SECTION 1
General. Except to the extent inconsistent with this Ordinance, all action heretofore taken
by the City and the Sewer Enterprise and the officials thereof directed toward accomplishing the
Project and toward the issuance and sale of the Series 2003 Bond to the Authority is hereby
ratified, approved and confirmed. The City Council, after reviewing all pertinent information
pertaining to the municipal wastewater system, hereby again recognizes and confirms the status of
the wastewater system as an enterprise.
SECTION 2
Definitions. The definitions in this Section 2 and in the Recitals of this Ordinance are
applicable for all purposes of this Ordinance and of any supplement or amendment hereto, except
where the context by clear implication requires otherwise.
"Code" means the Internal Revenue Code of 1986, as amended, and all regulations
promulgated thereunder.
"Debt Service Account" means the Debt Service Account established pursuant to
Section 10 hereof.
"Gross Revenues" means all income and revenues derived directly or indirectly from the
operation and use of and otherwise pertaining to the Sewer Enterprise, or any part thereof,
whether resulting from repairs, enlargements, extensions, betterments or other improvements to
the Sewer Enterprise, or otherwise, including without limitation:
(a) All fees, rates and other charges for the use of the Sewer Enterprise, or for
any service rendered by the Sewer Enterprise in its operations, directly or
indirectly, the availability of any such service, or the sale or other disposal of
any commodities derived therefrom, but:
W excluding any moneys borrowed and used for the acquisition of
capital improvements;
(ii) excluding any moneys received as grants, appropriations or gifts
from the Federal government, the State or other sources, the use of which is limited
or restricted by the grantor or donor to the construction of capital improvements for
the Sewer Enterprise or for other purposes resulting in the general unavailability
thereof, except to the extent any such moneys shall be received as payments for the
use of the Sewer Enterprise, services rendered thereby, the availability of any such
service, or the disposal of any commodities therefrom;
(iii) excluding moneys held in any escrow or otherwise deposited by third
parties for extensions, modifications or upgrading of the sanitary sewer system;
(iv) excluding any money and securities, and interest and other gain from
investment of such money and from such securities in any refunding fund or escrow
account or similar account pledged to the payment of any bonds or other obligations
therein specified; and
(v) excluding connection fees deposited into the Sanitary Sewer
Collection System Improvement Fund and plant investment fees deposited into the
Treatment Plant Investment Fund;
(b) all income or other gain from any investment (except as set forth in (a)(iv)
above);
(c) all income and revenues derived from the operation of any other utility or
other income - producing facilities added to the Sewer Enterprise and to which the pledge
and lien herein provided are extended by ordinance adopted by the City Council or the
qualified electors of the City or by Charter amendment adopted by such electors; and
(d) any unrestricted cash and investments in the Revenue Account.
"Net Pledged Revenues" means the Gross Revenues of the Sewer Enterprise remaining
after the payment of the Operation and Maintenance Expenses of the Sewer Enterprise.
"Operation and Maintenance Expenses" or any phrase of similar import, means all
reasonable and necessary current expenses of the Sewer Enterprise, paid or accrued, for
operating and maintaining the Sewer Enterprise or any component division or other part thereof, or
of any other designated facilities in connection with which such term is used; and the term
includes, without limitation:
(a) engineering, auditing, reporting, legal and other overhead expenses directly
related and reasonably allocable to the administration, operation and maintenance of the
Sewer Enterprise;
(b) fidelity bond premiums and property and liability insurance premiums
pertaining to the Sewer Enterprise, or a reasonably allocable share of a premium of any
blanket bond or policy pertaining to the Sewer Enterprise;
(c) payments to pension, retirement, health and hospitalization funds, other
insurance, and to any self - insurance fund as insurance premiums not in excess of such
premiums which would otherwise be required for such insurance;
(d) any assessments, excise taxes or other charges which may be lawfully
imposed on the City, the Sewer Enterprise, the revenues therefrom, or the City income from
or operations of any properties under its control and pertaining to the Sewer Enterprise, or
any privilege in connection with the Sewer Enterprise or this operation (but no payments
made in lieu of taxes or any general ad valorem taxes);
(e) the reasonable charges of any paying agent and any other depository bank
pertaining to any Parity Lien Bonds and any other securities payable from the Net Pledged
Revenues or otherwise pertaining to the Sewer Enterprise, except to the extent paid from
the proceeds of any Parity Lien Bonds or other such securities;
(f) contractual services, professional services, salaries, other administrative
expenses, and costs of materials, supplies, repairs and labor, pertaining to the Sewer
Enterprise or to the issuance of any Parity Lien Bonds or any other securities relating to the
Sewer Enterprise, including, without limitation, the expenses and compensation of any
trustee, receiver, or other fiduciary, except to the extent paid from the proceeds of any
Parity Lien Bonds or other such securities;
(g) the costs incurred by the Sewer Enterprise in the collection and any refunds
of all or any part of the Gross Revenues;
(h) any costs of utility services furnished to the Sewer Enterprise by the City or
otherwise; and
(i) all other administrative, general and commercial expenses pertaining to the
Sewer Enterprise, but
(i) excluding any allowance for depreciation;
(ii) excluding any costs of extensions, enlargements, betterments and
other improvements (or any combination thereof);
(iii) excluding any reserves for major capital replacements (other than
normal repairs);
(iv) excluding any reserves for operation, maintenance or repair of the
Sewer Enterprise;
(v) excluding any allowance for the redemption of any bond or other
security evidencing a loan, or the payment of any interest thereon, or any prior
redemption premium due in connection therewith, or any reserve therefor; and
(vi) excluding any liabilities incurred in the acquisition or improvement of
any properties comprising any project or any existing facilities (or any combination
thereof) pertaining to the Sewer Enterprise.
"Outstanding" means, when used with reference to bonds as of any particular date, all
bonds payable from the Net Pledged Revenues of the Sewer Enterprise in any manner theretofore
and thereupon being executed and delivered:
(a) except any bond canceled by the Sewer Enterprise, by the Paying Agent, or
otherwise on the Sewer Enterprise's behalf, at or before said date;
(b) except any bond for the payment or the redemption of which moneys at least
equal to the principal amount of, any prior redemption premium due in connection with, and
the interest on the bond to the date of maturity or the prior redemption date, shall have
theretofore been deposited with a commercial bank in escrow or in trust for that purpose, as
provided in Section 13 hereof; and
(c) except any bond in lieu of or in substitution for which another bond shall
have been executed and delivered pursuant to this Ordinance.
"Parity Lien Bonds° means the Series 2003 Bond and all other bonds or other obligations
payable from Net Pledged Revenues on a parity with the Series 2003 Bond.
"Revenue Account means the Revenue Account established pursuant to Section 10
hereof.
,, State" means the State of Colorado.
"Sewer Enterprise" means the City's municipal sanitary sewer system, consisting of all
properties, real, personal, mixed or otherwise, now owned or hereafter acquired by the City,
through purchase, construction or otherwise, and used in connection with the Sewer Enterprise of
the City, and in any way pertaining thereto, whether or not located within or without or both within
and without the boundaries of the City; and such defined term includes any other utility or other
income- producing facilities added to the Sewer Enterprise and to which the lien and pledge herein
provided or provided in the Loan Agreement are extended by ordinance adopted by the City
Council or the qualified electors of the City or by Charter amendment adopted by such electors.
SECTION 3
Issuance of Series 2003 Bond. For the purpose of providing moneys with which to
finance the Project and pay the costs of issuance of the Series 2003 Bond, the Sewer Enterprise
shall issue its Series 2003 Bond in an aggregate principal amount not to exceed $8,500,000. The
Series 2003 Bond shall be payable as to both principal and interest solely out of Net Pledged
Revenues derived from the operation and use of the Sewer Enterprise.
SECTION 4
Series 2003 Bond Details.
(a) The Series 2003 Bond shall be dated and shall be subject to repayment in
the amounts and on the dates, and shall be subject to prior redemption as set forth in the
Loan Agreement and the Series 2003 Bond. The maximum net effective interest rate
authorized for the Series 2003 Bond is 6.00% per annum (or in the event that a late charge
is imposed pursuant to Section 3.03 of the Loan Agreement, a maximum net effective
interest rate equal to the greater of 12.0% per annum or the prime rate plus 0.5 %, not to
exceed the maximum rate permitted by law), and the actual net effective interest rate of the
Series 2003 Bond shall not exceed such rate. The final principal amount, Series 2003
Bond interest rate, effective Series 2003 Bond yield, and payment schedule for the Series
2003 Bond shall be set forth in a certificate to be executed on behalf of the Sewer
Enterprise by the President or Vice President of the City Council, as the Sewer Enterprise's
Agent. The President or Vice President shall execute and deliver the Series 2003 Bond to
the Authority as evidence of the Loan Repayments (as defined in the Loan Agreement).
The actual Loan Repayments are (or will be) attached to the Loan Agreement and shall be
an integral part of this Ordinance. The Series 2003 Bond shall be substantially in the form
set forth as Exhibit D to the Loan Agreement.
(b) The Series 2003 Bond shall not constitute a debt or other indebtedness or
multi - fiscal year direct or indirect debt or other financial obligation of the City within the
meaning of any constitution, charter or statutory provision or limitation; the Series 2003
Bond shall not be payable from the proceeds of general property taxes; and the Series
2003 Bond shall not be considered or held to be general obligations of the City. The Series
2003 Bond is a special revenue obligation of the Sewer Enterprise, payable and collectible
solely out of and secured by a pledge of the Net Pledged Revenues from the Sewer
Enterprise.
SECTION 5
Delivery of Series 2003 Bond. Upon the execution of the Series 2003 Bond, the Sewer
Enterprise shall deliver it to the Authority against payment of the purchase price. The proceeds of
the Series 2003 Bond shall be used exclusively for payment of the cost of the Project and the costs
of issuing the Series 2003 Bond.
SECTION 6
The Loan Agreement. The form of Loan Agreement presented at this meeting has been
reviewed and discussed by the City Council, the Sewer Enterprise's attorney and staff members in
attendance. The President or Vice President of the City Council and the City Clerk are hereby
authorized and directed to execute and deliver the Loan Agreement on behalf of the Sewer
Enterprise with whatever changes are approved by the Sewer Enterprise's attorney and the
President or Vice President; provided, that such changes shall not violate any of the provisions or
conditions of this Ordinance. The execution by the President or Vice President and City Clerk of
the Loan Agreement shall be deemed to show approval of any changes. After execution of the
Loan Agreement, the Sewer Enterprise shall perform its obligations under the Loan Agreement in a
timely fashion.
SECTION 7
Pledge and Application of Net Pledged Revenues.
(a) The Sewer Enterprise hereby irrevocably (but not exclusively) pledges the
Net Pledged Revenues of the Sewer Enterprise to pay the principal of and interest on the
Series 2003 Bond. The Sewer Enterprise hereby agrees to fix annually and to maintain
rates and charges for wastewater services furnished by the Sewer Enterprise which,
together with moneys on hand and available therefor, will be sufficient to pay operation and
maintenance expenses of the Sewer Enterprise and the principal of, premium, if any, and
interest on all Parity Lien Bonds, including the Series 2003 Bond, and other obligations of
the Sewer Enterprise, as they respectively become due, including the requirements of the
Loan Agreement.
(b) The Sewer Enterprise agrees to apply the Net Pledged Revenues monthly
as set forth in Section 11 hereof and in the Loan Agreement.
(c) The creation, perfection, enforcement and priority of the pledge of the Net
Pledged Revenues to secure and pay the Series 2003 Bond and any other Parity Lien
Bonds as provided herein shall be governed by Section 11 -57 -208 of the Supplemental
Public Securities Act and this Ordinance. The revenues pledged for the payment of the
Series 2003 Bond and any other Parity Lien Bonds, as received by or otherwise credited to
the Sewer Enterprise, shall immediately be subject to the lien of such pledge without any
physical delivery, filing or further act. The lien of such pledge on the revenues pledged for
payment of the Series 2003 Bond and any other Parity Lien Bonds and the obligation to
perform the contractual provisions made herein shall have priority over any or all other
obligations and liabilities of the Sewer Enterprise. The lien of such pledge shall be valid,
binding and enforceable as against all persons having claims of any kind in tort, contract, or
otherwise against the Sewer Enterprise and the City irrespective of whether such persons
have notice of such liens.
SECTION 8
Covenants. The Sewer Enterprise hereby additionally irrevocably covenants and agrees
with each and every Registered Owner of the Series 2003 Bond that so long as the Series 2003
Bond remains Outstanding:
(a) The Sewer Enterprise has maintained and shall continue to maintain itself as
an "enterprise" within the meaning of Article X, Section 20 of the Colorado Constitution for
the Sewer Enterprise's 2003 fiscal year. Specifically, but not by way of limitation, the Sewer
Enterprise covenants and agrees that it shall not receive 10% or more of its annual revenue
in grants from all Colorado state and local governments combined during its 2003 fiscal
year. Further, the Sewer Enterprise shall use its best efforts to maintain itself as an
"enterprise" within the meaning of Article X, Section 20 of the Colorado Constitution during
the term of the Series 2003 Bond.
(b) The issuance of the Series 2003 Bond and the financing of the Project, and
all procedures undertaken incident thereto, are in full compliance and conformity with all
presently applicable requirements, provisions and limitations prescribed by the Constitution
and laws of the State and the Charter.
SECTION 9
Disposition of Proceeds from Loan; Authorization of Project. The proceeds of the
Loan shall be applied only to pay the costs and expenses of the Project which are permitted
pursuant to the terms of the Loan Agreement and § 31- 35- 403(2), C.R.S., including without
limitation the reimbursement of funds which may have been previously advanced for such purpose.
The Project is hereby authorized and approved, and the appropriate officers and employees
of the Sewer Enterprise are hereby authorized and directed to take all actions necessary for the
acquisition, construction, reconstruction, improvement, betterment or extension of the Project from
the proceeds of the Series 2003 Bond and, to the extent necessary, from any other legally
available moneys of the Sewer Enterprise. It is hereby determined by the Sewer Enterprise that
the Series 2003 Bond matures at such time not exceeding the estimated life of the Project.
SECTION 10.
Establishment of Revenue Account and Debt Service Account.
(a) The Sewer Enterprise hereby establishes the "Sewer Enterprise of Pueblo,
Colorado, Sewer Revenue Account" (the "Revenue Account"), which will be used for the
collection of the Gross Revenues of the Sewer Enterprise, as set forth in Section 11 hereof
and the Loan Agreement.
(b) The Sewer Enterprise hereby establishes the "Sewer Enterprise of Pueblo,
Colorado, Sewer Revenue Debt Service Account" (the "Debt Service Account'), which will
be used for the payment of the principal of, premium, if any, and interest on the Series 2003
Bond and on all Parity Lien Bonds, as set forth in Section 11 hereof and the Loan
Agreement.
(c) Any investment income earned on amounts designated in the Revenue
Account or the Debt Service Account will be credited to the Revenue Account or the Debt
Service Account, respectively.
SECTION 11
Application of Gross Revenues. So long as the Series 2003 Bond shall remain
outstanding, all Gross Revenues, as they are received, shall be deposited into the Revenue
Account, and the Gross Revenues are hereby appropriated for such purpose. Moneys on deposit
in the Revenue Account shall be transferred from the Revenue Account and applied to the
following purposes and in the following order of priority:
(a) First, there shall be maintained in the Revenue Account amounts sufficient to
pay Operation and Maintenance Expenses of the Sewer Enterprise promptly as they
become due and payable;
(b) Second, there shall be credited to the Debt Service Account on the twentieth
(20th) day of each month, (i) beginning June 20, 2003, an amount which, together with any
moneys therein and available therefor, is equal to one -third of the interest maturing on the
then Outstanding Parity Lien Bonds (including the Series 2003 Bond) on September 1,
2003, and (ii) beginning September 20, 2003, (A) one -sixth (1/6) of the interest maturing on
the then Outstanding Parity Lien Bonds (including the Series 2003 Bond) on the next March
1 or September 1, and (B) one - twelfth (1/12) of the principal of the then Outstanding Parity
Bonds (including the Series 2003 Bond) maturing on the next September 1; and
(c) Third, monthly after the deposits of Revenue described above, there shall be
paid to the Sewer Enterprise the amount remaining in the Revenue Account, to be used in
any lawful manner by the Sewer Enterprise.
The moneys in the Debt Service Account shall be used solely for the purpose of
paying the principal of and interest on the then Outstanding Parity Lien Bonds (including the
Series 2003 Bond). The Sewer Enterprise shall forward to the Authority on or prior to each
principal or interest payment date on the Series 2003 Bond, in immediately available funds,
amounts sufficient to pay debt service on the Series 2003 Bond on each such date.
Concurrently with (in the case of Parity Lien Bonds) or subsequent to (in the case of
subordinate lien obligations) the payments required by paragraph (b) of this Section, any
remaining amounts in the Revenue Account shall be used by the Sewer Enterprise for the
payment of principal of and interest on any additional obligations hereafter authorized to be
issued and payable from the Net Pledged Revenues, including reasonable reserves
therefor, as the same accrue.
SECTION 12
Tax Covenants of Sewer Enterprise. The Sewer Enterprise, having been fully informed
of and having considered all the pertinent facts and circumstances, does hereby find, determine
and declare that:
(a) the Sewer Enterprise covenants that it will make no use of the proceeds of
the Series 2003 Bond at any time during the term thereof which, if such use had been
reasonably expected on the date the Series 2003 Bond are issued, would have caused the
Series 2003 Bond to be "arbitrage bonds" within the meaning of Section 148 of the Code;
and
(b) the Sewer Enterprise covenants that the gross proceeds of the Series 2003
Bond shall not be used in a manner which will cause the Series 2003 Bond to be
considered a "private activity bond" within the meaning of Section 141 of the Code.
SECTION 13
Defeasance. When the Series 2003 Bond and interest thereon have been duly paid, the
pledge and lien and all obligations hereunder shall thereby be discharged as to the Series 2003
Bond, and the Series 2003 Bond shall no longer be deemed to be Outstanding within the meaning
of this Ordinance. There shall be deemed to be such due payment when the Sewer Enterprise has
placed in escrow and in trust with a commercial bank located within or without the State and
exercising trust powers, an amount sufficient (including the known minimum yield from Federal
Securities in which such amount may be initially invested) to make all payments of principal of and
interest on the Series 2003 Bond as the same becomes due. The Federal Securities shall become
due prior to the respective times on which the proceeds thereof shall be needed, in accordance
with a schedule established and agreed upon between the Sewer Enterprise and the bank at the
time of the creation of the escrow, or the Federal Securities shall be subject to the redemption at
the option of the holders thereof to assure such availability as so needed to meet such schedule.
"Federal Securities" within the meaning of this Section shall include only direct obligations of, or
obligations the principal of and interest on which are unconditionally guaranteed by, the Untied
States of America and which are not callable before maturity by the issuer of such obligations.
SECTION 14
Additional Obligations. So long as the Series 2003 Bond is Outstanding:
(a) Limitations Upon issuance of Parity Lien Bonds. Nothing in this Ordinance shall
be construed to prevent the issuance by the Sewer Enterprise of additional obligations
(including refunding obligations) payable in whole or in part from the Net Pledged Revenues
(or any designated part thereof) and constituting a lien thereon on a parity with, but not prior
or superior to, the lien of the Series 2003 Bond; provided, however, that before any such
additional Parity Lien Bonds are authorized or actually issued:
(i) The Sewer Enterprise is then current in all payments required to have been
accumulated in the Debt Service Account, and has made all payments required on the
Series 2003 Bond and any Outstanding Parity Lien Bonds.
(ii) The revenues derived from the entire Net Pledged Revenues for the twelve
consecutive calendar months immediately preceding the month of issuance of such
additional Parity Lien Bonds shall have been sufficient to pay an amount equal to (A) one
hundred and ten percent (110 %) of the combined maximum annual principal and interest
requirements on the then Outstanding Series 2003 Bond, any then Outstanding Parity Lien
Bonds theretofore issued, and the Parity Lien Bonds then proposed to be issued, and (B)
one hundred percent (100 %) of the maximum annual principal and interest requirements on
all other indebtedness of the Sewer Enterprise payable from the Net Pledged Revenues. In
determining the amount of such Net Pledged Revenues, the Net Pledged Revenues shall
be adjusted if any new rates, fees and charges have been established for the Sewer
Enterprise prior to the issuance of the Parity Lien Bonds to be issued, in which case the Net
Pledged Revenues shall be adjusted by applying such new rates, fees and charges to
customer billings for such twelve month period as if such rates, fees and charges had been
in effect during the whole of such twelve month period.
(b) Certificate of Net Pledged Revenues. A written certification by a certified public
accountant who is not a regular salaried employee of the City or the Sewer Enterprise that such
Net Pledged Revenues are sufficient to pay the amounts required by paragraph (a)(ii) of this
Section shall be conclusively presumed to be accurate in determining the right of the Sewer
Enterprise to authorize, issue, sell and deliver such additional Parity Lien Bonds.
(c) Subordinate Obligations Permitted. Nothing in this Ordinance shall be construed
to prevent the issuance by the Sewer Enterprise of additional obligations (including refunding
obligations) payable from the Net Pledged Revenues (or any designated part thereof) and having a
lien thereon subordinate or junior to the lien of the Series 2003 Bond; provided, however, that no
such subordinate obligations shall be issued unless for any 12 consecutive months out of the 18
months prior to the month in which such subordinate obligations are to be issued, Net Pledged
Revenues for the Sewer Enterprise were at least one hundred percent (100 %) of the maximum
annual debt service on all the then Outstanding Sewer Enterprise indebtedness and the
subordinate obligations proposed to be issued.
(d) Superior Obligations Prohibited. Nothing in this Ordinance shall be construed to
permit the Sewer Enterprise to issue additional obligations (including refunding obligations)
payable from the Net Pledged Revenues (or any designated part thereof) having a lien thereon
prior and superior to the lien of the Series 2003 Bond.
SECTION 15
General Authorization. The President or the Vice President of the City Council and the
City Clerk shall, and they are hereby authorized and directed to take all necessary or appropriate
actions and to execute and deliver all other agreements, certificates and documents as may be
necessary or desirable to effectuate the provisions of this Ordinance and to comply with the
requirements of law. Pursuant to Exhibit B of the Loan Agreement, the Wastewater Director and
the Assistant City Manager for Finance are hereby designated as the Authorized Officers (as
defined in the Loan Agreement) for the purpose of performing any act or executing any document
relating to the Series 2003 Bond or the Loan Agreement. A copy of this Ordinance shall be
furnished to the Authority as evidence of such designation.
In addition, the appropriate officers and employees of the Sewer Enterprise and the City are
hereby authorized and directed to furnish and supply information concerning the Sewer Enterprise
and the City to the Authority for use in the preparation of an official statement to be sued to market
the Authority's bonds.
SECTION 16
Exercise of Home Rule Power. Pursuant to Article XX of the State Constitution and the
Charter, the City and the Sewer Enterprise hereby determine and declare the issuance of the
Series 2003 Bond to be a local matter, and therefore all statutes of the State which might otherwise
apply in connection with the issuance of the Series 2003 Bond are hereby superseded.
SECTION 17
Severability. If any one or more sections or parts of this Ordinance shall be adjudged
unenforceable or invalid, such judgment shall not affect, impair or invalidate the remaining
provisions of this Ordinance, it being the intention that the various provisions hereof are severable.
SECTION 18
Repealer. All ordinances, resolutions or parts thereof in conflict with this Ordinance are
hereby repealed to the extent of such conflict.
SECTION 19
Ordinance Irrepealable. This Ordinance is, and shall constitute, a legislative measure of
the City Council, sitting as the governing body of the Sewer Enterprise, and after the Series 2003
Bond hereby authorized is issued and sold and is Outstanding, this Ordinance shall constitute a
contract between the Sewer Enterprise and the Registered Owner of the Series 2003 Bond, and
shall be and remain irrepealable until the Series 2003 Bond, and the interest accruing thereon,
shall have been fully paid, satisfied and discharged.
SECTION 20
Recordation and Publication. This Ordinance, immediately on its passage, shall be
recorded in the records of the City Clerk and the Sewer Enterprise kept for that purpose.
SECTION 21
Limited Recourse. No recourse shall be had for the payment of the principal of or interest
on any of the Series 2003 Bond or for any claim based thereon or upon any obligation, covenant or
agreement contained in this Ordinance against any past, present or future officer, employee or
agent of the City or the Sewer Enterprise, or of any successor public corporation, as such, either
directly or through the City or the Sewer Enterprise or any successor public corporation, under any
rule of law or equity, statute or constitution or by the enforcement of any assessment or penalty or
otherwise, and all such liability of any such officers, employees or agents as such is hereby
expressly waived and released as a condition of and consideration for the passage of this
Ordinance, and the issuance of the Series 2003 Bond.
SECTION 22
Effective Date. This Ordinance shall take effect on April 14, 2003, upon its final passage
and approval.
SECTION 23
Public Hearing. A public hearing on this Ordinance shall be held on Monday, April 14,
2003, at 7:00 p.m., in the City Council Chambers, One City Hall Place, Pueblo, Colorado.
INTRODUCED March 24 2003
By AI Gurule
Councilperson
APPROVED:
President of City Council
ATTEST:
City
PASSED AND APPROVED: April 14 2003