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HomeMy WebLinkAbout07319ORDINANCE NO. 7319 AN ORDINANCE AUTHORIZING THE ISSUANCE BY THE CITY OF PUEBLO, COLORADO, OF ITS LIMITED TAX GENERAL OBLIGATION REFUNDING BONDS, SERIES 2005, IN AN AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED $9,000,000, FOR THE PURPOSE OF PROVIDING FUNDS TO REFUND CERTAIN OF THE CITY'S OUTSTANDING LIMITED TAX GENERAL OBLIGATION BONDS, SERIES 1996, AND PAYING CERTAIN COSTS AND EXPENSES ASSOCIATED WITH THE ISSUANCE OF SUCH BONDS; PRESCRIBING THE FORM OF SAID BONDS; PROVIDING FOR THE SALE OF SAID BONDS AND APPROVING AN ESCROW AGREEMENT AND A PAYING AGENCY AGREEMENT; PLEDGING CITY AD VALOREM PROPERTY TAXES, WITHOUT ANY INCREASE IN THE CURRENT RATE OF SUCH PROPERTY TAXES, TO THE REPAYMENT OF SAID BONDS; PROVIDING OTHER DETAILS IN CONNECTION WITH SAID BONDS; AND APPROVING THE FORM OF THE 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 and the home rule charter of the City (the "Charter "); and WHEREAS, the following question regarding the issuance of limited tax general obligation bonds was submitted to the electors of the City at the City's general municipal election on November 7, 1995, and was approved by a majority of those voting on the question: QUESTION NO. B - SHALL CITY OF PUEBLO, COLORADO DEBT BE INCREASED BY UP TO $12,850,000, WITH A REPAYMENT COST OF UP TO $22,000,000, FOR THE PURPOSE OF FINANCING THE CITY'S HISTORIC ARKANSAS RIVERWALK PROJECT, BY THE ISSUANCE AND PAYMENT OF LIMITED TAX GENERAL OBLIGATION BONDS IN A PRINCIPAL AMOUNT NOT TO EXCEED $12,850,000, AT AN AVERAGE INTEREST RATE NOT TO EXCEED 6.67% PER ANNUM AND WITH A FINAL MATURITY DATE NOT TO EXCEED 20 YEARS FROM THE DATE OF ISSUANCE, SAID BONDS TO BE ISSUED, DATED AND SOLD AT SUCH TIME OR TIMES AND IN SUCH MANNER AND TO CONTAIN SUCH TERMS, NOT INCONSISTENT HEREWITH, AS THE CITY COUNCIL MAY DETERMINE, SAID BONDS TO BE PAID FROM AVAILABLE CITY FUNDS, WITHOUT ANY INCREASE IN THE CURRENT RATE OF PROPERTY TAXES; AND, IN CONNECTION THEREWITH, SHALL THE CITY'S AD VALOREM PROPERTY TAXES BE PLEDGED, WITHOUT ANY INCREASE IN THE CURRENT RATE OF SAID TAXES, FOR THE PURPOSE OF PAYING, AND AN AMOUNT THEREOF SUFFICIENT BE APPLIED TO PAY, THE PRINCIPAL OF AND PREMIUM, IF ANY, AND INTEREST ON SAID BONDS WHEN DUE, AND SHALL THE CITY BE AUTHORIZED TO INCREASE ITS ANNUAL REVENUE AND SPENDING LIMIT UNDER ARTICLE X, SECTION 20 OF THE COLORADO CONSTITUTION BY $1,100,000 PER YEAR FOR DEBT SERVICE ON SAID BONDS AND FOR INVESTMENT INCOME ON THE BOND PROCEEDS AND ON THE DEBT SERVICE, ALL FOR THE TERM OF SAID BONDS? and WHEREAS, in accordance with the authority above granted and pursuant to Ordinance No. 6088, passed and adopted on second reading on May 13, 1996, the City issued its Limited Tax General Obligation Bonds, Series 1996 (the "Series 1996 Bonds "), in the principal amount of $12,850,000, of which $8,715,000 remains outstanding; and WHEREAS, the City has determined that it is in the best interests of the residents of the City, and the City therefore desires, to refund the Series 1996 Bonds maturing on June 1, 2011, and June 1, 2016, currently outstanding in the total principal amount of $8,130,000 (the "Refunded Bonds ") in advance of their maturity (the "Refunding "); and WHEREAS, Section 7 -24 of the Charter authorizes the City to issue refunding bonds without submitting the question of issuing such bonds to a vote of the electors of the City; and WHEREAS, Article X, Section 20 of the Colorado Constitution ( "TABOR "), in Section 4(b), authorizes governmental entities such as the City to refinance bonded debt at a lower interest rate without obtaining voter approval in advance of such refinancing; and WHEREAS, to implement the Refunding, the City deems it advisable and necessary for the City to issue its "City of Pueblo, Colorado, Limited Tax General Obligation Refunding Bonds, Series 2005" (the "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 City anticipates that its revenues will exceed its normal spending limit, as set pursuant to TABOR, although such excess revenues cannot be assured; and WHEREAS, the Bonds shall constitute limited tax general obligation bonds and shall be secured by available City funds, without any increase in the current rate of property taxes; 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 Ambac Assurance Corporation (the "Bond Insurer "); and WHEREAS, the City has determined that it is in the best interest of the residents of the City to sell the Bonds at a public sale, based upon competitive bids to be received electronically and publicly reviewed by the City's Agent; and WHEREAS, the Supplemental Public Securities Act, Section 2 of Article 57 of Title 11, Colorado Revised Statutes, as amended, provides an alternate authority for the issuance of the Bonds and the City is relying on that Act as well as the Charter for the authority to issue the Bonds; and WHEREAS, there have been presented to the City Council: (a) a proposed form of the Registration and Paying Agency Agreement dated as of July 1, 2005 (the "Paying Agency Agreement "), between the City and American National Bank, as Bond Registrar and Paying Agent (the "Paying Agent "); (b) a proposed form of the Escrow Agreement dated as of July 1, 2005 (the "Escrow Agreement "), between the Enterprise and American National Bank, as Escrow Agent (the "Escrow Agent "); (c) the Preliminary Official Statement dated June 3, 2005 (the "Preliminary Official Statement "); and (d) a proposed form of the final Official Statement (the "Official Statement "); BE IT ORDAINED BY THE CITY COUNCIL OF PUEBLO: Section 1. Definitions. In addition to terms otherwise defined herein, the following terms shall have the following meanings, as used herein: "Bond Fund' means the fund by that name created pursuant to Section 18 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 Insured" means Ambac Assurance Corporation, a Wisconsin - domiciled stock insurance company, and its successors and assigns. "Business Day' means any day other than (a) a Saturday or Sunday, and (b) a day on which banking institutions in the State of Colorado are authorized or obligated by law or executive order to be closed for business. "City' means the City of Pueblo, Colorado, and any successor. "City's Agent' means the Finance Director of the City or, in his absence, the City Manager. "Code" means the Internal Revenue Code of 1986, as amended, and any Regulations promulgated thereunder. "Dated Date" means the original issuance date of the Bonds, as established in the Sale Certificate. "Escrow Agent' means American National Bank, and any successor thereto. "Investment Instructions" means the Investment Instructions, dated the date of delivery of the Bonds, delivered by Kutak Rock LLP to the City, as the same may be superseded or amended. "Paying Agent' means American National Bank, Denver, Colorado, 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 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 (v) Resolution Funding Corp. ( REFCORP) Only the interest component of REFCORP strips which have been stripped by request to the Federal Reserve Bank of New York in book entry form are acceptable (vi) Farm Credit System consolidated systemwide bonds and notes. (d) Money market funds registered under the Federal Investment Company Act of 1940, whose shares are registered under the Federal Securities Act of 1933, and having a rating by Standard & Poor's ( "S &P ") of "AAAm -G "; "AAAm "; or "AAm." (e) Certificates of deposit secured at all times by collateral described in (a) or (b) above. Such certificates must be issued by commercial banks, savings and loan associations or mutual savings banks whose student loan obligations are rated "A -1 +" or better by S &P. The collateral must be held by a third party and the bondholders 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. (j) 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 "AY or better by Moody's and "A -1 +" or better by S &P. (k) Repurchase agreements provide for the transfer of securities from a dealer bank or securities firm (seller /borrower) to a municipal entity (buyer /lender), and the transfer of cash from a municipal entity to the dealer bank or securities firm with an agreement that the dealer bank or securities firm will repay the cash plus a yield to the municipal entity in exchange for the securities at a specified date. (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 (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 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. "Rebate Fund' means the fund by that name created pursuant to Section 20 hereof. "Refunded Bonds" means the Series 1996 Bonds maturing on and after June 1, 2007, which will be redeemed on June 1, 2006, pursuant to the Refunding. "Refunding" means the refunding and redemption of the Refunded Bonds. "Regular Record Date" means the fifteenth day of the month (whether or not a Business Day) prior to each interest payment date with respect to the Bonds. "Registered Owned" means 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. "Sale Certificate" means the certificate executed by the City's Agent under the authority delegated pursuant to this Ordinance, including but not limited to the Section hereof entitled "Bond Details ", which sets forth, among other things, the prices at which the Bonds will be sold, the Dated Date, and the interest rates and annual maturing principal for the Bonds. "Special Record Date" shall have the meaning ascribed to such term in Section 4(e) hereof. "Supplemental Public Securities AcF means the Colorado Supplemental Public Securities Act, Title 11, Article 57, Part 2, C.R.S., as amended. "Underwriter" means the underwriter chosen by the City's Agent as a result of the public bid, and set forth in the Sale Certificate. Section 2. General. Except to the extent inconsistent with this Ordinance, all action heretofore taken by the City Council and the officers of the City directed toward accomplishing the Refunding and toward the issuance and sale of the Bonds to the Underwriter is hereby ratified, approved and confirmed. Section 3. Authorization of Bonds; Pledge of Ad Valorem Taxes. For the purpose of providing funds for the Refunding and paying all necessary incidental and appurtenant costs and expenses in connection therewith, the City shall issue its "Limited Tax General Obligation Refunding Bonds, Series 2005," in an aggregate principal amount not to exceed $9,000,000. The Bonds shall be limited tax general obligation bonds of the City, and the principal of and interest on the Bonds shall be payable from available City funds, without an increase in the current rate of property taxes, as more particularly hereinafter set forth. In addition, the City's ad valorem taxes are hereby pledged, without any increase in the current rate of such property taxes, for the purpose of paying the principal of and premium, if any, and interest on the Bonds when due. Section 4. Bond Details. (a) The Bonds shall be issued as fully registered bonds in the denominations of $5,000 and any integral multiple thereof. The Bonds shall be dated as of the Dated Date, and shall be numbered sequentially. (b) The Bonds 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 their Dated Date. Interest on the Bonds shall be payable on June 1 and December 1 of each year, commencing December 1, 2005. Interest on the Bonds shall be calculated on the basis of 360 -day year, assuming twelve 30 -day months. The net effective interest rate on the Bonds shall not exceed a maximum net effective interest rate of 4.25 %. (c) The Bonds shall mature on June 1 of the years and in the principal amounts, and shall bear interest at the rates per annum set forth in the Sale Certificate. The City Council hereby delegates to the City's Agent the authority to determine (i) the aggregate principal amount of the Bonds, which amount shall not exceed $9,000,000, (ii) the Dated Date, (iii) the price or prices at which the Bonds will be sold, (iv) the amount of principal of the Bonds maturing in any particular year, (v) as a result of a competitive bid with appropriate notice, and with the advice of the City's financial advisor, the Underwriter to whom the Bonds will be sold; provided that the winning bid must meet the parameters set forth in this Ordinance, and (vi) the rates of interest on the Bonds; provided however the rate of interest on the Bonds must be lower than the rate on the Refunded Bonds and the aggregate debt service on the Bonds, when compared to the aggregate debt service on the Refunded Bonds, must produce a present value savings to the City of not less than $1.00. (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 corporate trust office of the Paying Agent 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) The City hereby elects to apply all of the provisions of the Colorado Supplemental Public Securities Act, and 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 valuable consideration in full conformity with law, and in particular, but without limitation, the Supplemental Public Securities Act. Section 5. 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 Appendix A to 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 6. 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 9 herein upon receipt of the purchase price therefor. Section 7. 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's 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 issuing the new security, in which case the Paying Agent shall then authenticate the Bonds required for reissuance. Section 8. 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 9. Sale of the Bonds. The Bonds, when executed as provided by law, shall be delivered to the Underwriter named in the Sale Certificate. The Bonds shall be sold by means of a competitive bidding process authorized by a separate Resolution of the City Council, approved and adopted on May 23, 2005. Such sale of the Bonds is hereby found to be to the best advantage of the City and the process is hereby approved and ratified. The proceeds of the Bonds shall be used exclusively for payment of the cost of the Refunding and to pay all necessary incidental and appurtenant costs and expenses incurred in connection therewith. Neither the Underwriter nor any subsequent Registered Owner of any of the Bonds shall be responsible for the application or disposal of the proceeds derived from the sale of the Bonds by the City. 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. Section 10. Securities Depository. (a) 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 Section 3(i) hereof, any other securities depository which agrees 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. (b) 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." (c) 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 (d) 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. (d) 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 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 (b) 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 (b), (c) and (d) 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 (d) 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. (e) 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 form. Section 11. 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. Section 12. Redemption. The Bonds are not subject to redemption prior to their maturities. Section 13. Bond Insurance Policy. So long as the Bond Insurance Policy shall be in full force and effect, the City and the Paying Agent shall comply with the following provisions: (a) At least one (1) business day prior to all interest payment dates the Paying Agent will determine whether there will be sufficient funds in the funds and accounts to pay the principal of or interest on the Bonds on such interest payment date. If the Paying Agent determines that there will be insufficient funds in such funds or accounts, the Paying Agent shall so notify the Bond Insurer. Such notice shall specify the amount of the anticipated deficiency, the Bonds to which such deficiency is applicable and whether such Bonds will be deficient as to principal or interest, or both. If the Paying Agent has not so notified the Bond Insurer at least one (1) business day prior to an interest payment date, the Bond Insurer will make payments of principal or interest due on the Bonds on or before the first (1st) business day next following the date on which the Bond Insurer shall have received notice of nonpayment from the Paying Agent. (b) The Paying Agent shall, after giving notice to the Bond Insurer as provided in (a) above, make available to the Bond Insurer and, at the Bond Insurer's direction, to The Bank of New York, as insurance trustee for the Bond Insurer or any successor insurance trustee (the "Insurance Trustee "), the registration books of the City maintained by the Paying Agent and all records relating to the funds and accounts maintained under this Ordinance. (c) The Paying Agent shall provide the Bond Insurer and the Insurance Trustee with a list of registered owners of Bonds entitled to receive principal or interest payments from the Bond Insurer under the terms of the Bond Insurance Policy, and shall make arrangements with the Insurance Trustee (i) to mail checks or drafts to the registered owners of Bonds entitled to receive full or partial interest payments from the Bond Insurer and (ii) to pay principal upon Bonds surrendered to the Insurance Trustee by the registered owners of Bonds entitled to receive full or partial principal payments from the Bond Insurer. (d) The Paying Agent shall, at the time it provides notice to the Bond Insurer pursuant to (a) above, notify registered owners of Bonds entitled to receive the payment of principal or interest thereon from the Bond Insurer (i) as to the fact of such entitlement, (ii) that the Bond Insurer will remit to them all or a part of the interest payments next coming due upon proof of Registered Owner entitlement to interest payments and delivery to the Insurance Trustee, in form satisfactory to the Insurance Trustee, of an appropriate assignment of the registered owner's right to payment, (iii) that should they be entitled to receive full payment of principal from the Bond Insurer, they must surrender their Bonds (along with an appropriate instrument of assignment in form satisfactory to the Insurance Trustee to permit ownership of such Bonds to be registered in the name of the Bond Insurer) for payment to the Insurance Trustee, and not the Paying Agent and (iv) that should they be entitled to receive partial payment of principal from the Bond Insurer, they must surrender their Bonds for payment thereon first to the Paying Agent who shall note on such Bonds the portion of the principal paid by the Paying Agent, and then, along with an appropriate instrument of assignment in form satisfactory to the Insurance Trustee, to the Insurance Trustee, which will then pay the unpaid portion of principal. (e) In the event that the Paying Agent has notice that any payment of principal of or interest on a Bond which has become due for payment and which is made to a Registered Owner by or on behalf of the City has been deemed a preferential transfer and theretofore recovered from its registered owner pursuant to the United States Bankruptcy Code by a trustee in bankruptcy in accordance with the final, nonappealable order of a court having competent jurisdiction, the Paying Agent shall, at the time the Bond Insurer is notified pursuant to (a) above, notify all registered owners that in the event that any registered owner's payment is so recovered, such registered owner will be entitled to payment from the Bond Insurer to the extent of such recovery if sufficient funds are not otherwise available, and the Paying Agent shall furnish to the Bond Insurer its records evidencing the payments of principal of and interest on the Bonds which have been made by the Paying Agent and subsequently recovered from registered owners and the dates on which such payments were made. (fl In addition to those rights granted the Bond Insurer under this Ordinance, the Bond Insurer shall, to the extent it makes payment of principal of or interest on Bonds, become subrogated to the rights of the recipients of such payments in accordance with the terms of the Bond Insurance Policy, and to evidence such subrogation (i) in the case of subrogation as to claims for past due interest, the Paying Agent shall note the Bond Insurer's rights as subrogee on the registration books of the City maintained by the Paying Agent upon receipt from the Bond Insurer of proof of the payment of interest thereon to the registered owners of the Bonds, and (ii) in the case of subrogation as to claims for past due principal, the Paying Agent shall note the Bond Insurer's rights as subrogee on the registration books of the City maintained by the Paying Agent upon surrender of the Bonds by the registered owners thereof together with proof of the payment of principal thereof. To the extent that this Ordinance confers upon or gives or grants to the Bond Insurer any right, remedy or claim under or by reason of this Ordinance, the Bond Insurer is hereby explicitly recognized as being a third -party beneficiary hereunder any may enforce any such right, remedy or claim conferred, given or granted hereunder. The following notices shall be sent to the Bond Insurer to the attention of the Surveillance Department: (a) While the Bond Insurance Policy is in effect, the City shall furnish to the Bond Insurer, upon request, the following: Mr. (i) a copy of any financial statement, audit and /or annual report of the City; (ii) such additional information it may reasonably request. Upon request, such information shall be delivered at the City's expense to the attention of the Surveillance Department, unless otherwise indicated. Office: (b) A copy of any notice to be given to the registered owners of the Bonds, including, without limitation, notice of any redemption of or defeasance of Bonds, and any certificate rendered pursuant to this Ordinance relating to the security for the Bonds, at not cost to the Bond Insurer. (c) To the extent that the City has entered into a continuing disclosure agreement with respect to the Bonds, the Bond Insurer shall be included as party to be notified. The following notices shall be sent to the Bond Insurer to the attention of the General Counsel (a) The City shall notify the Bond Insurer of any failure of the City to provide relevant notices, certificates, etc. (b) Notwithstanding any other provisions of this Ordinance, the City shall immediately notify the Bond Insurer if at any time there are insufficient moneys to make any payments of principal and /or interest as required and immediately upon the occurrence of any event of default hereunder. The City will permit the Bond Insurer to discuss the affairs, finances and accounts of the City or any information the Bond Insurer may reasonably request regarding the security for the Bonds with appropriate officers of the Bonds. The City will permit the Bond Insurer to have access to and make copies of all books and records relating to the Bonds at any reasonable time. Unless otherwise provided in this Section, the Bond Insurer's consent shall be required in lieu of Registered Owner consent, when required, for the following purposes: (i) execution and delivery of any supplemental ordinance or any amendment, supplement or change to or modification of the Ordinance; (ii) removal of the Paying Agent and selection and appointment of any successor paying agent; and (iii) initiation or approval of any action not described in (i) or (ii) above which requires Registered Owner consent. Section 14. Official Statement. The Preliminary Official Statement relating to the Bonds is hereby approved and the use thereof by the Underwriter 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, within seven Business Days from the date of execution of the Sale Certificate. Section 15. Security for the Bonds. The Bonds constitute limited tax general obligations of the City, payable from all available City funds, without any increase in the current rate of property taxes and secured by a pledge of the City ad valorem property taxes, without any increase in the current rate of such property taxes; thus, if the funds available to the City at any time are insufficient to pay the principal of, premium, if any, or interest on the Bonds, the City is not authorized to levy additional ad valorem property taxes to make such payments without prior voter approval by a majority of the electorate of the City voting on such a ballot issue pursuant to the Charter and Colorado law. It shall be the duty of the City Council annually, at the time and in the manner provided by law for levying other taxes, to take such action as is necessary with reference to the levy and collection of such taxes to provide for the prompt payment of the principal of and interest on the Bonds, and the City Council shall require the officers of and for the City to levy, extend and collect such taxes in the manner provided by law for the purpose of providing funds for the payment of the principal of and interest on the Bonds promptly as the same respectively become due. The Director of Finance is hereby authorized and directed to pay or cause to be paid the interest on the Bonds as the same falls due and the principal of the Bonds at their respective maturities, without further warrant or order. Section 16. Disposition of the Bond Proceeds. The Bond proceeds shall be used as follows: (a) accrued interest, if any, shall be credited to the Bond Fund; (b) an amount shall be deposited into the Escrow Account, as provided in the Escrow Agreement, which shall be sufficient to accomplish the Refunding. This amount shall be set forth in the Sale Certificate, and shall be verified by the report of a certified public accountant; and (c) the balance of the proceeds of the Bonds, in an amount set forth in the Sale Certificate, shall be wired to the City to be used to pay the costs of issuing the Bonds. Section 17. 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 18. Bond Fund. There is hereby created and established by the City, a separate special fund of the City to be designated the "Limited Tax General Obligation Refunding Bonds, Series 2005 Bond Fund ". The City shall credit to the Bond Fund at least three Business Days prior to each interest payment date an amount equal to the principal of and interest on the Bonds coming due on such date. Moneys credited to the Bond Fund shall be used solely for the payment of the principal of, premium, if any, and interest on the Bonds. Section 19. Covenant Upon Deficiency in Bond Fund. In furtherance of the pledge of City's ad valorem property taxes, without any increase in the current rate of such property taxes, to the repayment of the Bonds, it is hereby irrevocably covenanted and agreed that in the event that at any time while any of the Bonds remain outstanding the payments required to be made from the Bond Fund are not made in strict accordance with the terms thereof (unless other moneys sufficient to pay the principal of and interest on the Bonds when due shall be on deposit in the Bond Fund), the City Council shall promptly transfer moneys in an amount sufficient to pay the principal of and interest on the Bonds from the general funds of the City to the Bond Fund from moneys previously appropriated, and shall promptly pass and adopt supplemental or emergency appropriation ordinances or resolutions and make such allocations and deposits of moneys from general funds of the City to the Bond Fund. Thereafter said appropriations, allocations and deposits shall continue to be made in such amounts and with sufficient frequency to assure that the sums of money required to be deposited in the Bond Fund, together with other moneys on deposit in the Bond Fund, shall be sufficient to pay the principal of and interest on the Bonds when due. Section 20. Rebate Fund. There is hereby created and ordered established with the Paying Agent, a trust fund to be designated the "Limited Tax General Obligation Refunding Bonds, Series 2005 Rebate Fund ". The City shall make deposits to and request disbursements from the Rebate Fund, and shall direct investments of moneys in the Rebate Fund, in accordance with the Tax Compliance Certificate and the Investment Instructions. Income from said investments shall immediately upon receipt thereof be deposited in the Rebate Fund, all as set forth in the Investment Instructions. The City shall employ, at its own expense, a firm of independent certified public accountants or other recognized experts in the field, which firm shall make the calculations, deposits, disbursements and investments as may be required by the immediately preceding sentence. The City shall attach the report of such firm to any direction given by the City to the Paying Agent in connection with this Section. The Tax Compliance Certificate and the Investment Instructions may be superseded or amended by a new Tax Compliance Certificate and /or new Investment Instructions drafted by, and accompanied by, an opinion of nationally recognized bond counsel addressed to the City and the Paying Agent to the effect that the use of said new Tax Compliance Certificate and /or Investment Instructions will not cause the interest on the Bonds to become taxable to the recipients thereof. The City shall make the rebate deposit described in the Investment Instructions at the time set forth in the Investment Instructions. If a withdrawal from the Rebate Fund is permitted as a result of a computation and report by the rebate analyst, the amount withdrawn shall be deposited into the Bond Fund. Record of the determinations required by this Section and the Investment Instructions must be retained by the City until six (6) years after the final retirement of the Bonds. Not later than 30 days after the end of the fifth Bond Year (as defined in the Investment Instructions) and every five years thereafter, the City shall direct the Paying Agent to withdraw from the Rebate Fund and to pay to the United States 90% of the amount on deposit in the Rebate Fund. Not later than 60 days after the final retirement of the Bonds, the Paying Agent without further direction shall pay to the United States 100% of the balance remaining in the Rebate Fund. Each payment required to be paid to the United States pursuant to this Section shall be filed with the Internal Revenue Service Center, Philadelphia, Pennsylvania 19255. Each payment shall be accompanied by Internal Revenue Form 8038 -T, prepared by or at the direction of the City and, if required, a statement summarizing the determination of the amount to be paid to the United States. Section 21. Additional 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: (i) Gross proceeds of the Bonds shall not be used 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 22. Defeasance. The Bonds may be refunded 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. Notwithstanding anything herein to the contrary, in the event that the principal and /or interest due on the Bonds shall be paid by the Bond Insurer pursuant to the Bond Insurance Policy, the Bonds shall remain Outstanding for all purposes, not be defeased or otherwise satisfied and not be considered paid by the City, and the assignment and pledge of the trust estate and all covenants, agreements and other obligations of the City to the registered owners shall continue to exist and shall run to the benefit of the Bond Insurer, and the Bond Insurer shall be subrogated to the rights of such registered owners. The Bond Insurer will allow the following obligations to be used as permitted investments for defeasance purposes in refunding escrow accounts: (a) Cash (insured at all time by the Federal Deposit Insurance Corporation); (b) Direct obligations of the United States of America; or (c) Senior debt obligations of other Government Sponsored Agencies approved by the Bond Insurer. Section 23. Escrow Agent; Approval of Escrow Agreement. The City hereby appoints American National Bank, Denver, Colorado, as escrow agent under the Escrow Agreement for the purpose of the Refunding, and the City hereby approves the execution and delivery of the Escrow Agreement, in substantially the form presented to the City Council, with such revisions as may be approved by the City's Agent and the City Attorney. The President or the Vice President of the City Council is hereby authorized and directed to execute and deliver the Escrow Agreement in substantially the form approved, but with such changes therein as shall be deemed necessary or desirable by the officer executing the same, such execution to conclusively show the approval of any revisions to the form of the Escrow Agreement. Section 24. Paying Agent; Approval of Paying Agency Agreement. The City hereby appoints American National Bank, Denver, Colorado, as Paying Agent for the Bonds. 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 is 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 officer executing the same, such execution to conclusively show the approval of any revisions to the form hereby approved. Section 25. 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 26. 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, except that the City chooses to apply the provisions of the Colorado Supplemental Public Securities Act to the Bonds, as set forth above in this Ordinance. Section 27. Continuing Disclosure Undertaking. The City hereby approves and adopts the form of the Continuing Disclosure Undertaking contained in the Official Statement, and the President or Vice President of the City Council is hereby authorized and directed to execute and deliver the Continuing Disclosure Undertaking on behalf of the City. Section 28. 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 subsections (a), (b) and (c) of this Section, 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 29. Remedies for Defaults. Upon the happening and continuance of any of the Events of Default as provided in Section 28 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 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. Any reorganization or liquidation plan with respect to the City must be acceptable to the Bond Insurer. In the event of any reorganization or liquidation, the Bond Insurer shall have the right to vote on behalf of all Registered Owners who hold Bond Insurer - insured Bonds absent a default by the Bond Insurer under the applicable Bond Insurance Policy insuring such Bonds. Anything in this Ordinance to the contrary notwithstanding, upon the occurrence and continuance of an event of default as defined herein, the Bond Insurer shall be entitled to control and direct the enforcement of all rights and remedies granted to the Registered Owners or the Paying Agent for the benefit of the Registered Owners under this Ordinance. Section 30. 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 consideration 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 Owners. This Ordinance may be amended or supplemented for any other reason by ordinance adopted by the City Council in accordance with law, without receipt by the City of any additional consideration, but with the written consent of the Bond Insurer and the Registered Owners of seventy -five percent (75 %) in aggregate 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; PL (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 31. Further Action. The officers of the City are hereby authorized and directed to take all other action necessary or appropriate, on behalf of the City, to effectuate the provisions of this Ordinance, including the printing of the Bonds and the execution of such certificates as may reasonably be required by bond counsel. The President or Vice President of the City Council is hereby specifically authorized and directed to execute a 'Tax Compliance Certificate" on behalf of the City in connection with the Bonds. Section 32. 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 33. Governing Law. This Ordinance will be governed by and construed in accordance with the laws of the State of Colorado. Section 34. 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 35. 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. Section 36. 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 against any past, present or future officer, employee or agent of the City, or of any successor public corporation, as such, either directly or through the City or any successor public corporation, under any rule of law or equity, statute or constitution or by the enforcement of any assessment or penalty or otherwise, and all such liability of any such officers, employees or agents as such is hereby expressly waived and released as a condition of and consideration for the passage of this Ordinance and the issuance of the Bonds. INTRODUCED AND PRESENTED FOR A FIRST TIME ON MAY 23, 2005, ORDERED PUBLISHED BY TITLE ONLY, PRESENTED A SECOND TIME AND FINALLY PASSED AND ADOPTED ON JUNE 13, 2005. INTRODUCED May 23, 2005 BY Michael Occhiato Councilperson APPROVED: PRES1DENT 9F CITY CPWCIL ATTESTED BY: CITY CLERK PASSED AND APPROVED June 13, 2005 N 0. 1 �. m - lw� Background Paper for Proposed ORDINANCE oAd 7' ?3i9 AGENDA ITEM --0- DATE: May 23, 2005 DEPARTMENT: FINANCE DEPARTMENT, ROBERT F. HAIN CPA TITLE AN ORDINANCE AUTHORIZING THE ISSUANCE BY THE CITY OF PUEBLO, COLORADO, OF ITS LIMITED TAX GENERAL OBLIGATION REFUNDING BONDS, SERIES 2005, IN AN AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED $9,000,000, FOR THE PURPOSE OF PROVIDING FUNDS TO REFUND CERTAIN OF THE CITY'S OUTSTANDING LIMITED TAX GENERAL OBLIGATION BONDS, SERIES 1996, AND PAYING CERTAIN COSTS AND EXPENSES ASSOCIATED WITH THE ISSUANCE OF SUCH BONDS; PRESCRIBING THE FORM OF SAID BONDS; PROVIDING FOR THE SALE OF SAID BONDS AND APPROVING AN ESCROW AGREEMENT AND A PAYING AGENCY AGREEMENT; PLEDGING CITY AD VALOREM PROPERTY TAXES, WITHOUT ANY INCREASE IN THE CURRENT RATE OF SUCH PROPERTY TAXES, TO THE REPAYMENT OF SAID BONDS; PROVIDING OTHER DETAILS IN CONNECTION WITH SAID BONDS; AND APPROVING THE FORM OF THE OFFICIAL STATEMENT. ISSUE Should the City Council authorize the issuance of Limited Tax General Obligation Bonds to refund certain Limited Tax General Obligation Bonds issued in 1996 for the construction of the Historic Arkansas River Project, and for other costs associated with the issuance of the new bonds. RECOMMENDATION Approval of ordinance BACKGROUND In 1996 the City issued $12,850,000 of Limited Tax General Obligation Bonds. The anticipation at the time was that the debt service on these bonds would be paid from revenues received by the City in excess of the TABOR limit. It turned out that in the last nine years, only once the City had excess revenues to use. The debt service in the other eight years has come directly out of General Fund Reserves. Due to economic conditions and the expiration of the no call provision on the original bonds in 2006, it is felt that it would be a good time to redeem and defease all bonds in this series maturing after 2006. FINANCIAL IMPACT Using current market conditions, it is calculated that the City General Fund could anticipate a savings of about $80,000 per year by refunding these bonds through 2016. Due to unknown circumstances with TABOR restrictions, use of these savings could require voter approval. The remaining debt service payments will remain exempt from the excess revenue provisions.