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HomeMy WebLinkAboutORDINANCE 15-22TOWN OF ESTES PARK, COLORADO ACTING BY AND THROUGH ITS WATER ACTIVITY ENTERPRISE ORDINANCE NO. -22 AN ORDINANCE OF THE TOWN OF ESTES PARK, COLORADO, ACTING BY AND THROUGH ITS WATER ACTIVITY ENTERPRISE, AUTHORIZING THE EXECUTION AND DELIVERY OF A CONSTRUCTION LOAN AGREEMENT AND A CONSTRUCTION LOAN NOTE, SERIES 2022A AND OTHER DOCUMENTS RELATED THERETO IN CONNECTION WITH REBUILDING AND IMPROVING THE WATER DISTRIBUTION SYSTEM OF THE FORMER PROSPECT MOUNTAIN WATER COMPANY; AND DECLARING AN EMERGENCY. WHEREAS, the Town of Estes Park, Colorado (the "Town") is a statutory town and political subdivision duly organized and existing pursuant to the constitution and laws of the State of Colorado; and WHEREAS, the Board of Trustees (the "Board") of the Town has formally established a Water Activity Enterprise (the "Enterprise") pursuant to Ordinance No. 08-99; and WHEREAS, the Town, acting by and through the Enterprise operates and maintains a municipal water system within the Town and surrounding areas for the distribution of treated water; and WHEREAS, such municipal water system has been and continues to be operated by the Enterprise as a government -owned business, which is authorized to issue its own revenue bonds and receives under 10% of annual revenue in grants from all Colorado state and local governments combined, and the Enterprise is determined to be an enterprise within the meaning of Article X, Section 20 of the Colorado Constitution; and WHEREAS, the Town, acting by and through the Enterprise, provided treated water to the Prospect Mountain Water Company, Inc. (the "Company") for years as a bulk water customer, and the Company distributed such water through its own distribution system (the "Prospect Mountain System") to property owners in the Company's service area; and WHEREAS, on April 22, 2015, the Company filed a Chapter 7 Bankruptcy petition under the United States Bankruptcy Code with the United States Bankruptcy Court for the District of Colorado, and a trustee (the "Bankruptcy Trustee") was appointed to manage the Company; and WHEREAS, on March 8, 2016, the Town and the Bankruptcy Trustee, acting for the Company, entered into an agreement for the Town to maintain and operate the Prospect Mountain System; and 4892-0122-8063.3 WHEREAS, the Prospect Mountain System has exceeded its useful life and needs to be replaced in order to provide improved water quality, water pressure and fire flow volume, and to meet Town standards and requirements for water distribution systems; and WHEREAS, on February 26, 2019, the Town, acting by and through the Enterprise, and the Bankruptcy Trustee, acting for the Company, entered into a Voluntary Water System Transfer Agreement for the transfer of the Prospect Mountain System to the Town in order for the Town, acting by and through the Enterprise, to undertake the rebuilding and improvement of the Prospect Mountain System to Town standards (the "Project"); and WHEREAS, in order to provide funds to pay a portion of the costs of the Project, the Board, acting as the governing body of the Enterprise, has determined to enter into a Construction Loan Agreement (the "Loan Agreement") with CoBank, ACB, as lender (the "Lender"), pursuant to which the Lender is to make an interim construction loan evidenced by the Construction Loan Note, Series 2022A (the "Series 2022A Note"), to be executed and delivered by the Town, acting by and through the Enterprise, in a principal amount equal to the amount drawn on the Series 2022A Note, but not to exceed $4,493,000.00, to be issued to the Lender in anticipation of the receipt of, and payable from, the proceeds of the USDA Direct Loan, as hereinafter defined (the "USDA Direct Loan Proceeds") and, if necessary, from the Net Revenues (defined below); and WHEREAS, the USDA Direct Loan Proceeds are expected to be received by the Town, acting by and through the Enterprise, upon completion of the Project pursuant to and in accordance with a Letter of Conditions provided by USDA-RD (as more particularly described in the Loan Agreement, the "Letter of Conditions"); and WHEREAS, the Series 2022A Note shall have a lien on the Net Revenues, and an exclusive first lien on the USDA Direct Loan Proceeds, all as described in the Loan Agreement; and WHEREAS, voter approval is not required under Article X, Section 20 of the Colorado Constitution for the execution of the Loan Agreement or the issuance of the Series 2022A Note; and WHEREAS, none of the members of the Board have any potential conflicting interests in connection with the execution and delivery of the Loan Agreement, the authorization, issuance or delivery of the Series 2022A Note, or the use of the proceeds thereof; and WHEREAS, the Board, acting as the governing body of the Enterprise, desires to authorize the issuance and sale of the Series 2022A Note and the execution of the Loan Agreement and other documents in connection therewith. BE IT HEREBY ORDAINED BY THE BOARD OF TRUSTEES OF THE TOWN OF ESTES PARK, COLORADO, ACTING AS THE GOVERNING BODY OF ITS WATER ACTIVITY ENTERPRISE: Section 1. Definitions. Capitalized terms used herein and not otherwise defined shall have the same meanings, respectively, as provided in the Loan Agreement. In addition, as used 2 4892-0122-8063.3 herein, the following capitalized terms shall have the respective meanings set forth below, unless the context indicates otherwise: "Authorized Officer" means the Mayor, the Mayor Pro Tem, the Town Administrator, the Finance Director of the Town, or the Director of Utilities of the Town or any other person designated as an Authorized Officer by ordinance or resolution of the Board and submitted to the Lender. "C.R.S." means the Colorado Revised Statutes, as amended and supplemented as of the date hereof. "Enabling Law" means Part 2 of Article 57 of Title 11, Colorado Revised Statutes, as amended; Part 4 of Article 35 of Title 31, Colorado Revised Statutes, as amended; Part 1 of Article 45.1 of Title 37, Colorado Revised Statutes, as amended, and all other laws of the State establishing the power of the Town to complete the financing contemplated by this Ordinance. "Final Terms Certificate" means a certificate of the Mayor, the Town Administrator, or the Finance Director of the Town, dated on or before the Closing Date, confirming the final details of the Series 2022A Note. "Ordinance" or "Note Ordinance" means this Ordinance, which authorizes the issuance of the Series 2022A Note and the execution and delivery of the Loan Agreement, including any amendments hereto. "Paying Agent" means the Treasurer of the Town, acting as the paying agent and registrar of the Series 2022A Note. "Payment Date" means the date or dates provided in the Final Terms Certificate. "USDA Direct Loan" means the future loan of funds by USDA-RD to the Town, acting by and through the Enterprise, to be made in a principal amount not to exceed the amount of such loan as provided in the Letter of Conditions. "USDA-RD" means the United States Department of Agriculture, acting through the United States Department of Agriculture -Rural Development, and its successors and assigns. Section 2. Authorization. Pursuant to and in accordance with the Enabling Law, the Town, acting by and through the Enterprise, shall enter into and deliver the Loan Agreement and execute and deliver the Series 2022A Note, and perform its obligations thereunder, in substantially the forms presented at this meeting with only such changes as are not inconsistent herewith and as are approved by the Town Attorney and bond counsel to the Town to effectuate the intentions of the parties or to comply with applicable law. The Series 2022A Note shall be sold to the Lender at a private sale, pursuant to the terms and subject to the conditions provided in the Loan Agreement. The Mayor or Mayor Pro Tem of the Town, acting as a member of the governing body of the Enterprise, is hereby authorized and directed to execute, and the Town Clerk or any deputy is authorized to authenticate and affix the seal of the Town to, the Loan Agreement and the 3 4892-0122-8063.3 Series 2022A Note, and further to execute and authenticate such other documents, instruments or certificates as are deemed necessary or desirable in connection therewith. Such documents are to be executed in substantially the form hereinabove approved, provided that such documents may be completed, corrected or revised as deemed necessary by the parties thereto in order to carry out the purposes of this Ordinance. The execution of any instrument by said officials shall be conclusive evidence of the approval by the Town, acting by and through the Enterprise, of such instrument in accordance with the terms of such instrument and this Ordinance. Section 3. Note Details. The Board hereby approves the Project and, for the purpose of providing interim financing for the Project, the Board, acting by and through the Enterprise, shall issue the Series 2022A Note to the Lender. The Series 2022A Note shall be substantially in the form and subject to the terms specified in the Loan Agreement and the Final Terms Certificate. All of the covenants, statements, representations and agreements contained in the Series 2022A Note and the Loan Agreement are hereby approved and adopted as the covenants, statements, representations and agreements of the Town, acting by and through the Enterprise. The Series 2022A Note shall be issued in an aggregate principal amount not to exceed $4,493,000.00 and dated as provided in the Loan Agreement and the Final Terms Certificate. The Series 2022A Note shall bear interest at a variable rate as provided in the Loan Agreement, payable on each Payment Date, and shall mature not later than the Maturity Date provided in the Loan Agreement, or earlier if the Series 2022A Note is prepaid in full pursuant to the Loan Agreement and may be made subject to prepayment with or without prepayment penalty, as provided by the Loan Agreement and the Final Terms Certificate. A maximum net effective interest rate need not be specified herein because the Lender has represented to the Town that it is an institution of the Farm Credit System within the meaning of Chapter 23 of Title 12 of the U.S. Code. Accordingly, if CoBank, ACB, is the lender of the loan represented by the Series 2022A Note, the interest rate on the Series 2022A Note shall be subject to the provisions of 12 U.S.C. 2205 and shall not be subject to any interest rate limitation imposed by the constitution or laws of the State of Colorado or this Ordinance. All other details regarding the Series 2022A Note, not inconsistent herewith, shall be determined and certified by the Final Terms Certificate. Section 4. Transfer and Exchange; Transfer Restrictions. Neither the rights or obligations of the Town, acting by and through the Enterprise, under the Loan Agreement nor any interest therein may be assigned or delegated by the Town without the prior written consent of the Lender. The Series 2022A Note may be transferred or exchanged at the principal office of the Paying Agent or at such other location designated by the Paying Agent for such purpose, in whole or in part, for a Series 2022A Note or Notes in a like principal amount of the same Maturity Date and interest rate, upon payment by the transferee of any tax or governmental charge required to be paid with respect to such transfer or exchange. Upon surrender for transfer of the Series 2022A Note, duly endorsed for transfer or accompanied by an assignment duly executed by the Owner or his or her attorney duly authorized in writing, the Town, acting by and through the Enterprise, shall execute and the Paying Agent shall authenticate and deliver in the name of the transferee a new Series 2022A Note. The transferring Owner shall pay any reasonable costs of the Town, acting by and through the Enterprise, incurred in connection with the transfer of the Series 2022A Note. 4 4892-0122-8063.3 Notwithstanding the procedure described in the immediately preceding paragraph and except as expressly permitted by the Loan Agreement, neither the Series 2022A Note nor any interest therein shall be transferred by the Lender or any subsequent Owner unless the transferee is a Qualified Institutional Buyer or Accredited Investor within the meaning of Regulation D under the Securities Act of 1933 and the transferee delivers to the Town a lender letter in substantially the form set forth in Exhibit C to the Loan Agreement. Any transfer or purported transfer of any interest in the Series 2022A Note in violation of the foregoing shall be void and the Town shall have no obligation to recognize the ownership interest of, take any action on behalf of or make any payment to, the transferee or purported transferee. Section 5. Source of Payment. The Series 2022A Note shall be a special, limited obligation of the Town, acting by and through the Enterprise, payable solely out of the proceeds of the Series 2022A Note, the Net Revenues allocated as provided in Section 4.09 of the Loan Agreement, USDA Direct Loan Proceeds and all amounts held in any Fund or Account established by the Loan Agreement (except the Rebate Fund), including investments thereof, and shall never constitute a general obligation of the Town, and the full faith and credit of the Town is not pledged therefor. The creation, perfection, enforcement and priority of the pledge of the Net Revenues and the USDA Direct Loan Proceeds to secure or pay the Series 2022A Note shall be governed by Section 11-57-208 of the hereinafter defined Supplemental Public Securities Act, and by this Ordinance. The Net Revenues and the USDA Direct Loan Proceeds pledged for the payment of the Series 2022A Note, as received by or otherwise credited to the Town, acting by and through the Enterprise, shall immediately be subject to the lien and pledge of the Loan Agreement and this Ordinance without any physical delivery, filing or further act. Except as expressly provided in the Loan Agreement, the lien of such pledge of the Net Revenues and the USDA Direct Loan Proceeds for payment of the Series 2022A Note and the obligation to perform the contractual provisions made herein and in the Loan Agreement shall have priority over any or all other obligations and liabilities of the Town, acting by and through the 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 Town, acting by and through the Enterprise, irrespective of whether such persons have notice of such liens. Section 6. Application of the Supplemental Public Securities Act; Final Terms Certificate. The Town, acting by and through the Enterprise, hereby elects to apply the provisions of Title 11, Article 57, Part 2, C.R.S. (the "Supplemental Public Securities Act"), to the Series 2022A Note to the extent not inconsistent with the express provisions of this Ordinance. Pursuant to the Supplemental Public Securities Act, there is hereby delegated to the Mayor, the Town Administrator or the Finance Director of the Town the authority to confirm, by the Final Terms Certificate, the final terms of the Series 2022A Note within the parameters authorized by this Ordinance, including but not limited to: (a) the selection of the Lender and the acceptance of any term sheet provided by the Lender; (b) interest rate or rates (including any variable rate of interest and spread applicable thereto) of the Series 2022A Note; (c) the conditions on which and the price at which the Series 2022A Note may be redeemed before maturity; (d) the price at which the Series 2022A Note will be sold; (e) the final principal amount of the Series 2022A Note and the denomination of the Series 2022A Note; (f) the final amortization schedule for the Series 2022A Note; and (g) the Maturity Date and principal and interest payment dates. 5 4892-0122-8063.3 Section 7. Enterprise Status. The Board hereby determines that the Enterprise is an "enterprise" within the meaning of Article X, Section 20 of the Colorado Constitution. The Town has and will continue to use its best efforts to maintain the System as an "enterprise" within the meaning Article X, Section 20 of the Colorado Constitution, and the meaning of Title 37, Article 45.1, C.R.S. Section 8. Amendment of Ordinance. After the Series 2022A Note is issued, the Town shall not amend this Ordinance except as provided in the Loan Agreement. Section 9. Authorization To Execute Documents. The Authorized Officers shall and are hereby authorized and directed to take all actions necessary or appropriate to effectuate the provisions of this Ordinance, including, but not limited to, the execution of such documents, certificates and affidavits as may be reasonably required by the Lender or bond counsel to the Town. The execution by any Authorized Officer of any document authorized herein shall be conclusive proof of the approval by the Town of the terms thereof. The Town Clerk or any deputy is hereby authorized and directed to attest, as necessary, all signatures and acts of the Mayor or any official of the Board or the Town in connection with the matters authorized by this Ordinance, and to place the seal of the Town, as necessary, on the documents authorized and approved by this Ordinance and all other additional certificates, documents and other papers associated with the transactions and other matters authorized by this Ordinance. The Mayor, Mayor Pro Tem, the Town Administrator, the Finance Director of the Town and all other officials, employees and agents of the Board or the Town are hereby authorized to execute and deliver for and on behalf of the Town or the Enterprise any and all additional certificates, documents and other papers in connection with the transactions contemplated by this Ordinance, and to perform all other acts that they may deem necessary or appropriate in order to implement and carry out the transactions and other matters authorized or contemplated by this Ordinance. The Authorized Officers identified in Section 1 hereof are each hereby determined to each be an Authorized Officer for the purpose of performing acts or executing documents relating to the Series 2022A Note and the Loan Agreement and the loan evidenced by such documents. Section 10. Costs and Expenses. All costs and expenses incurred in connection with the issuance and payment of the Series 2022A Note shall be paid either from the proceeds of the Series 2022A Note or from legally available moneys of the Town, acting by and through the Enterprise, if any, or from a combination thereof, and such moneys are hereby appropriated for that purpose. Section 11. No Recourse Against Officers and Agents. Pursuant to Section 11-57-209, C.R.S., if a member of the Board, or any officer or agent of the Town, acts in good faith, no civil recourse shall be available against such member, officer or agent for payment of the principal of or interest on the Series 2022A Note. Such recourse shall not be available either directly or indirectly through the Town, or otherwise, whether by virtue of any constitution, statute, rule of law, enforcement of penalty, or otherwise. By the acceptance of the Series 2022A Note and as a part of the consideration for its sale or purchase, any person purchasing or selling such Series 2022A Note specifically waives any such recourse. 6 4892-0122-8063.3 Section 12. Limitation of Actions. The Board elects to apply all of the provisions of the Supplemental Public Securities Act to the execution of the Loan Agreement and to the issuance of the Series 2022A Note. Pursuant Section 11-57-212, Colorado Revised Statutes, no action or proceeding concerning the issuance of the Series 2022A Note shall be maintained against the Town unless commenced within 30 days after the date of passage of this Ordinance. Section 13. Ratification of Prior Actions. All actions heretofore taken (not inconsistent with the provisions of this Ordinance) by the Board or by the officers and employees of the Town directed toward the undertaking of the Project and the issuance of the Series 2022A Note for the purposes herein set forth are hereby ratified, approved and confirmed. Section 14. Headings. The headings of the various sections and paragraphs in this Ordinance have been inserted solely for the convenience of the reader, are not a part of this Ordinance, and shall not be used in any manner to interpret this Ordinance. Section 15. Ordinance Irrepealable. After the Series 2022A Note has been issued, this Ordinance shall constitute a contract between the Owner of the Series 2022A Note and the Town, acting by and through the Enterprise, and shall be and remain irrepealable until the Series 2022A Note and the interest accruing thereon shall have been fully paid, satisfied, and discharged, as herein provided. Section 16. Severability. It is hereby expressly declared that all provisions hereof and their application are intended to be and are severable. In order to implement such intent, if any provision hereof or the application thereof is determined by a court or administrative body to be invalid or unenforceable, in whole or in part, such determination shall not affect, impair or invalidate any other provision hereof or the application of the provision in question to any other situation; and if any provision hereof or the application thereof is determined by a court or administrative body to be valid or enforceable only if its application is limited, its application shall be limited as required to most fully implement its purpose. Section 17. Repealer. All orders, bylaws, resolutions and ordinances of the Town, or parts thereof, inconsistent or in conflict with this Ordinance are hereby repealed to the extent only of such inconsistency or conflict. Section 18. Recording and Authentication. This Ordinance, immediately upon its passage, shall be recorded in the Town book of Ordinances kept for this purpose, and shall be authenticated by the signatures of the Mayor and the Town Clerk. Section 19. Emergency Declaration. The Board hereby declares that, because the bid of the contractor for the Project must be accepted by the Town, acting by and through the Enterprise, by a date that is less than thirty days after the date hereof and the Project cannot be commenced until the contractor's bid for the Project is accepted, an emergency exists. The Board hereby further declares that, due to such emergency, this Ordinance is necessary to the immediate preservation of the public peace, welfare, health and safety of the residents of the Town and is being adopted as an emergency ordinance. 7 4892-0122-8063.3 INTRODUCED, READ BY TITLE, APPROVED AND ADOPTED BY THE AFFIRMATIVE VOTE OF (,S) MEMBERS OF THE BOARD OF TRUSTEES OF THE TOWN OF ESTES PARK, COLORADO, ACTING AS THE GOVERNING BODY OF ITS WATER ACTIVITY ENTERPRISE THIS 29TH DAY OF SEPTEMBER 2022. By ATTEST: I hereby certify that the above Ordinance was introduced at a special meeting of the Board of Trustees on the "n"1 day of SR,ryt: bt, 2022 and published by title in a newspaper of general circulation in the Town of Estes Park, Colorado, on —144' the day of (3-00,E.LL , 2022, all as required by the Statutes of the State of Colorado. APPROVED AS TO FORM: By Daniel E. Kramer, Town Attorney By Richard L. Buddin, Bond Counsel 'Town Clerk 8 4892-0122-8063.3