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HomeMy WebLinkAboutORDINANCE 14-25TOWN OF ESTES PARK, COLORADO, ACTING BY AND THROUGH ITS WATER ACTIVITY ENTERPRISE ORDINANCE NO. 14-25 AN ORDINANCE OF THE TOWN OF ESTES PARK, COLORADO, ACTING BY AND THROUGH ITS WATER ACTIVITY ENTERPRISE, AUTHORIZING THE EXECUTION AND DELIVERY OF A FIRST AMENDMENT TO CONSTRUCTION LOAN AGREEMENT AND AN AMENDED 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 statutoiy 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 govemment-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, following the bankruptcy of the Company, 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, entered into a Construction Loan Agreement (the "Loan Agreement") with CoBank, ACB, as lender (the "Lender"), pursuant to which the Lender 4926-2677-1026.3 "USDA-RD" means the United States Department of Agriculture, acting through the United States Department ofAgriculture-Rural Development, and its successors and assigns. Section 2. Authorization. The Town, acting by and through the Enterprise, shall enter into and deliver the First Amendment to Loan Agreement and the Amended Series 2022A Note in substantially the forms on file with the Town Clerk at this meeting, and perform its obligations thereunder. 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 attest and affix the seal of the Town to, the First Amendment to Loan Agreement and the Amended Series 2022A Note with the amended Maturity Date. The Town Treasurer is hereby authorized and directed to authenticate the Amended Series 2022A Note with the amended Maturity Date. Such Authorized Officers are further authorized and directed to execute such other documents, instruments or certificates as are deemed necessary or desirable in connection therewith. 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 Town, acting by and through the Enterprise, shall deliver the Amended Series 2022A Note to the Lender in exchange for the Existing Series 2022A Note previously issued to the Lender. The Amended Series 2022A Note shall remain in an aggregate principal amount of $4,493,000.00, shall remain as originally dated, shall bear interest at a variable rate as originally provided in the Loan Agreement, and shall mature not later than the amended Maturity Date provided in the Loan Agreement, or earlier if the Amended 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. Section 4. 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 of Article X, Section 20 of the Colorado Constitution, and the meaning of Title 37, Article 45.1,C.R.S. Section 5. Amendment of Ordinance. The Town shall not amend this Ordinance without the consent of the Lender. Section 6. Authorization To Execute Documents. The Authorized Officers shall and are hereby authorized and directed to take all actions necessaiy 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 4926-2677-1026.3 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. 4926-2677-1026.3 INTRODUCED, READ BY TITLE, APPROVED AND ADOPTED BY THE AFFIRMATIVE VOTE OF _^_ MEMBERS OF THE BOARD OF TRUSTEES OF THE TOWN OF ESTES PARK, COLORADO, ACTING AS THE GOVERNING BODY OF ITS WATER ACTIVITY ENTERPRISE, THIS 22ND DAY OF JULY 2025. Mayor ATTEST: iy"*^A-"'A^ -' ^->~^ • ° ° - (- ^^^-^ ^pwn Clerku"""""" I hereby certify that the above Ordinance was introduced at a regular meeting of the Board of Trustees on the ZZ *>^^ day of ^ o i*-^ . 2025 and published by title in a newspaper of general circulation in the Town ofEstes Park, Colorado, on the Z^_8ay of ^ o LAJ 2025, all as required by the Statutes of the State of Colorado. ^.^00, Towiy^erk APPROVED AS TO FORM: By. Daniel E. Kramer, Town Attorney By (yLt.^-1^''-^' '^'•K^^J- Richard L. Buddin, Bond Counsel 4926-2677-1026.3 FIRST AMENDMENT TO CONSTRUCTION LOAN AGREEMENT AND CONSTRUCTION LOAN NOTE, SERIES 2022A THIS FIRST AMENDMENT TO CONSTRUCTION LOAN AGREEMENT AND CONSTRUCTION LOAN NOTE, SERIES 2022A (this "First Amendment"), is made and entered into as of July ^"2025 (the "Effective Date"), by and between the TOWN OF ESTES PARK, COLORADO (the "Town"), ACTING BY AND THROUGH ITS WATER ACTIVITY ENTERPRISE (the "Enterprise"), and COBANK, ACB (the "Lender"). WHEREAS, 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 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 has been 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, following the bankruptcy of the Company, 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, entered into a Construction Loan Agreement (the "Loan Agreement") with the Lender, pursuant to which the Lender made an interim construction loan evidenced by the existing Construction Loan Note, Series 2022A (the "Existing Series 2022A Note"), which was executed and delivered by the Town, acting by and through the Enterprise, in a principal amount of $4,493,000.00; and WHEREAS, voter approval was not required under Article X, Section 20 of the Colorado Constitution for the execution of the Loan Agreement or the issuance of the Existing Series 2022A Note; and 4918-4379-5539.2 WHEREAS, the Existing Series 2022ANote was expected to be repaid to the Lender from the proceeds of a Direct Loan (the "USDA Direct Loan Proceeds") to the Town, acting by and through the Enterprise, from the United States Department of Agriculture, acting through the United States Department ofAgriculture-Rural Development ("USDA"); and WHEREAS, the Existing Series 2022ANote matures on August 1, 2025, and the USDA Direct Loan Proceeds will not be available to repay the Existing Series 2022A Note on or before such maturity date; and WHEREAS, the Lender and the Town, acting by and through the Enterprise, have agreed to extend the maturity date of the Existing Series 2022ANote; and WHEREAS, the Town, acting by and through the Enterprise, and the Lender desire to extend the maturity date of the Existing Series 2022ANote by amending the Loan Agreement and the Existing Series 2022A Note as set forth in this First Amendment and exchanging the Existing Series 2022ANote for an amended Series 2022ANote (the "Amended Series 2022ANote"); and WHEREAS, voter approval is not required for the execution and delivery of this First Amendment and the Amended Series 2022A Note. NOW THEREFORE, in consideration of the foregoing and other good and valuable consideration, the parties hereto agree as follows: Section 1. Definitions. Capitalized terms used herein and not otherwise defined shall have the same meanings, respectively, as provided in the Loan Agreement. Section 2. Amendment of Maturity Date Definition in Section 1.01 of Loan Agreement. The definition of Maturity Date in Section 1.01 of the Loan Agreement is hereby amended and restated as follows: " 'Maturity Date'' means, with respect to the Series 2022ANote, the final scheduled maturity of principal of the Loan, i.e., February 1, 2026 or such later date as approved by the Lender in its discretion pursuant to a request for extension submitted to the Lender by the Borrower. Any extension of the Maturity Date must be requested by the Borrower to the Lender prior to the Maturity Date and shall be subject to an opinion of Bond Counsel to the effect that such extension will not cause interest on the Series 2022A Note to be included in gross income for federal income tax purposes. The jMaturity Date shall not exceed the estimated life of the Project, but in no event beyond 40 years from the date of the Series 2022ANote." Section 3. Amendment of Final Principal Payment Date in Exhibit A of the Loan Agreement. The form of the Existing Series 2022A Note, attached to the Loan Agreement as Exhibit A, is hereby amended to replace the original Final Principal Payment Date of August 1, 2025 with the amended Final Principal Payment Date of February 1 , 2026 and to make conforming amendments therein, and the Town, acting by and through the Enterprise, shall issue to the Lender the Amended Series 2022A Note in substantially the form attached hereto as Exhibit A. 4918-4379-5539.2 Section 4. Lender Consent. The Lender hereby acknowledges and consents to this First Amendment in accordance with the requirements of Section 7.21 of the Loan Agreement and waives any notice or other requirements related thereto. Section 5. Delivery of Amended Series 2022A Note. The Town, acting by and through the Enterprise, shall deliver to the Lender a fully executed and authenticated Amended Series 2022A Note with the amended Final Principal Payment Date as shown on Exhibit A hereto, in exchange for the Existing Series 2022A Note originally delivered to the Lender. The Existing Series 2022A Note shall be returned to the Town or its bond counsel promptly following the delivery of the Amended Series 2022A Note to the Lender. Section 6. Conditions Precedent to this First Amendment. The agreement of the Lender to enter into this First Amendment is subject to the conditions precedent that the Lender shall have received or waived the requirement for the following, in form and substance satisfactory to the Lender: (a) this First Amendment, properly executed by the Town, acting by and through the Enterprise, and by the Lender; (b) the Amended Series 2022A Note, properly executed and authenticated by the Town, acting by and through the Enterprise; (c) an executed copy of the ordinance of Town, acting by and through the Enterprise, authorizing the execution, deliveiy and performance of this First Amendment and the issuance of the Amended Series 2022ANote; (d) an opinion of Bond Counsel to the effect that the extension of the maturity date of the Loan, as provided in the Amended Series 2022A Note, will not cause interest on the Existing Series 2022ANote or the Amended Series 2022ANote to be includable in gross income for federal income tax purposes; and (e) any other documents or items required by the Lender. Section 7. Effective Date. This First Amendment shall be effective from and after the Effective Date stated above. Section 8. Original Loan Agreement in Full Force and Effect. The original Loan Agreement, as amended hereby, shall be and remain in fall force and effect in accordance with its terms and hereby is ratified and confirmed in all respects. Section 9. Counterparts. This First Amendment may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. Section 10. Agreement to Pay Costs. The Town, acting by and through the Enterprise, hereby agrees to pay, or cause to be paid, all costs associated with the preparation, review, and delivery of this First Amendment, including the fees and expenses of counsel to Lender. 4918-4379-5539.2 Section 11. Further Assurances. The parties hereto hereby agree that they will, from time to time, execute, acknowledge, and deliver, or cause to be executed, acknowledged, and delivered, such further acts, instruments, conveyances, transfers, and assurances, as either of them reasonably deems necessaiy or advisable for the implementation, correction, confirmation, or perfection of this First Amendment and any rights of such party as contemplated hereunder. 4918-4379-5539.2 IN WITNESS WHEREOF, the Town, acting by and through the Enterprise, and the Lender have caused this First Amendment to be duly executed and attested, all as of the day and year first above written. [S ®ss UJ^^^"<'"<s<»»»tw ?/ Attested: TOWN OF ESTES PARK, COLORADO, ACTING BY AND THROUGH ITS WATER ACTIVITY ENTERPRISE By Mayor -» \^^>f"'> ^ 00 . .- iwn Clerk COBANK, ACB, as Lender By_ Authorized Representative APPROVED AS TO FORM: By:_ Daniel E. Kramer, Town Attorney / '. ;? • By; ^••t't^'i^t! ,/^ii^- Richard L. Buddin, Bond Counsel 4918-4379-5539.2 EXHIBIT A FORM OF SEMES 2022A NOTE THIS SERIES 2022A NOTE WAS ISSUED AS AN EXEMPT SECURITY OR IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED. UNDER NO CIRCUMSTANCES SHALL THIS SEMES 2022A NOTE BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED OR DISPOSED OF EXCEPT IN THE MANNER PROVIDED IN SECTION 7.12 OF THE AGREEMENT AND THE NOTE ORDINANCE PURSUANT TO WHICH IT WAS ISSUED AND IN COMPLIANCE WITH APPLICABLE STATE AND FEDERAL SECURITIES LAWS. ANY TRANSFER OR PURPORTED TRANSFER IN VIOLATION OF SUCH SECTIONS OR SUCH LAWS SHALL BE VOID AND OF NO EFFECT. UNITED STATES OFAMEMCA STATE OF COLORADO COUNTY OF LARIMER TOWN OF ESTES PARK, COLORADO, ACTING BY AND THROUGH ITS WATER ACTIVITY ENTERPRISE CONSTRUCTION LOAN NOTE (PROSPECT MOUNTAIN WATER DISTMBUTION PROJECT) SERIES 2022A No. 00138635T01 Not to Exceed $4,493,000.00 Interest Rate Final Principal Payment Date Dated Date Variable February 1,2026 October 11,2022 REGISTERED OWNER: COBANK, ACB PRINCIPAL SUM: NOT TO EXCEED FOUR MILLION FOUR HUNDRED NINETY-THREE THOUSAND DOLLARS The Town ofEstes Park, Colorado, acting by and through its Water Activity Enterprise (the "Borrower"), for value received, hereby promises to pay, in lawful money of the United States of America, to the Registered Owner specified above (the "Lender") or registered assigns, on the final principal payment date specified above (the "Maturity Date"), unless the maturity of this Series 2022A Note is extended by the Lender or unless this Series 2022A Note shall be prepaid and payment of the prepayment price made or provided for, but solely from the sources hereinafter 4918-4379-5539.2 identified, the Principal Sum specified above (or so much thereof as has been advanced by the Lender (the "Principal Balance")) and to pay interest on such Principal Balance in like manner, but solely from the sources hereinafter identified, at the interest rate equal to the Benchmark (initially, the Daily Simple SOFR Rate) (both as defined in the Agreement defined hereinafter) payable on the Payment Date. As used herein, the term "Payment Date" means (a) February 1 and August 1 of each year for the payment of interest on this Series 2022A Note in arrears, commencing February 1, 2023 and including the Maturity Date (or earlier, if this Series 2022A Note shall be prepaid pursuant to the terms of the Agreement) and (b) the Maturity Date and any other date on which the principal of this Series 2022ANote or any portion thereof is required to be repaid or prepaid under the terms of the Agreement. This Series 2022ANote shall bear interest at a variable interest rate, calculated as provided in the Agreement (as defined hereinafter) on the actual number of days this Series 2022A Note is Outstanding on the basis of a year consisting of 360 days, through and including the Maturity Date. The Maturity Date may (at the sole discretion of the Lender) be extended as provided in the Agreement (as defined hereinafter). Interest payments hereon shall be made to the Registered Owner hereof appearing on the registration books of the Borrower maintained by the Town Treasurer as note registrar (the "Note Registrar") by check or draft or at the request of the Registered Owner, by wire transfer or automated clearing house (ACH) payment to a bank account number maintained by such Registered Owner in the United States of America and designated in written instructions given to the Note Registrar at least fifteen (15) days prior to a Payment Date. This Series 2022A Note is issued by the Borrower in anticipation of the receipt of the USDA Direct Loan (as defined in the Agreement) to be received by the Borrower and in conformity with ordinances of the Borrower (collectively, the "Note Ordinance") and a Construction Loan Agreement dated as of October 11, 2022, as amended by the First Amendment to Construction Loan Agreement dated July ZZU^025 (together, the "Agreement"), by and between the Borrower and the Lender, and reference is hereby made to the Note Ordinance and the Agreement for a more complete statement as to the source of payment of the Series 2022A Note and the rights of the Lender as Owner of the Series 2022ANote. The proceeds of the Series 2022ANote will be used to: (i) finance the rebuilding and upgrading of the water distribution system of the former Prospect Mountain Water Company to Town standards by the Borrower (the "Project"); (ii) fund capitalized interest, if any; and (iii) pay the costs of issuance of this Series 2022A Note, each to the extent approved in writing by USDA-RD. This Series 2022A Note, including the interest hereon, is a limited obligation of the Borrower payable solely from the future proceeds of the USDA Direct Loan, the Net Revenues and any other legally available moneys of the Borrower authorized for such use under the Agreement. This Series 2022A Note and the interest hereon are not payable in any manner by taxation and do not constitute a debt of the Town ofEstes Park, Colorado (the "Town"), within the meaning of any constitutional or statutory provision. Reference is hereby made to the Agreement for a description of the rights, duties and obligations of the Borrower, the Town, the Lender, the Owner of this Series 2022ANote, the terms upon which this Series 2022A Note is sold and the terms and conditions upon which this Series 2022A Note will be paid at or prior to maturity, or will be deemed to be paid upon the A-2 4918-4379-5539.2 making of provision for payment. Any capitalized term used in this Series 2022A Note but not defined in this Series 2022A Note is used with the meaning set forth in the Agreement. This Series 2022ANote may only be transferred or exchanged at the principal office of the Note Registrar and only as provided in the Note Ordinance and the Agreement. The transferring Owner shall pay any reasonable costs of the Borrower incurred in connection with the transfer of this Series 2022ANote. This Series 2022ANote shall not be valid or become obligatory for any purpose or be entitled to the security or benefit of the Note Ordinance until the Certificate of Authentication hereon shall have been signed by the Note Registrar. This Series 2022A Note is issued pursuant to the Supplemental Public Securities Act, Part 2 of Article 57 of Title 11, C.R.S., and such recital shall be conclusive evidence of the validity and the regularity of issuance of this Series 2022A Note after its delivery for value. It is hereby certified and recited that all acts, conditions and things required by the laws and Constitution of the State of Colorado, to exist, to be done or to be performed precedent to the lawful issue of this Series 2022ANote do exist and have been done and performed in regular and due form, time and manner. IN WITNESS WHEREOF, the Town of Estes Park, Colorado, acting by and through its Water Activity Enterprise, has caused this Series 2022A Note to be executed with the duly authorized manual signature of the Mayor, to be sealed with the seal of the Town or a facsimile thereof and to be attested by the manual signature of the Town Clerk, all as of the Dated Date set out above. TOWN OF ESTES PARK, COLORADO, ^i^r "EST^V ACTING BY AND THROUGH ITS WATER ^A^:>"":'-':>-?'A»\ ACTIVITY ENTERPRISEj?/^>'" -A. "\-?&\?^yr A ^\ s u^S^ By-T^is^"co%!^""••iHS!m^vr Attest: ,)wn Clerk A-3 4918-4379-5539.2 CERTIFICATE OF AUTHENTICATION This is the Series 2022ANote delivered pursuant to the Note Ordinance mentioned within. Date of Authentication: Um\u, ^L^L __ , 2023 Town Treasurer, as Note Registrar By: <-W1W\M/ (/^M-^,Y\^/^,1 The following abbreviations, when used in the inscription on the face of this Series 2022A Note, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM - as tenants in common, TEN ENT - as tenants by the entireties, JT TEN - as joint tenants with right of survivorship and not as tenants in common. UNIF TRANS MIN ACT Under Uniform Transfers to Minors Act (OUST) (MINOR) (STATE) Custodian Additional abbreviations may also be used though not in the above list. A-4 4918-4379-5539.2 FORM OF ASSIGNMENT FOR VALUE RECEIVED the undersigned hereby sells, assigns, and transfers unto the within Series 2022A Note and all rights thereunder, and hereby irrevocably constitutes and appoints _ attorney to transfer the within Series 2022ANote on the books kept for registration thereof, with full power of substitution in the premises. Dated: NOTICE: The signature to this Assignment must correspond with the name as it appears upon the face of the within Series 2022ANote in every particular, without alteration or any change whatever. Signature: PLEASE INSERT TAX IDENTIFICATION OR SOCIAL SECURITY NUMBER OR OTHER IDENTIFYING NUMBER OF ASSIGNEE A-5 4918-4379-5539.2