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HomeMy WebLinkAboutResolution No. 4523 RESOLUTION NO. :is2:1 A RESOLUTION OF THE CITY OF EUGENE, LANE COUNTY, OREGON, AUTHORIZING AN AMENDED STATE REVOLVING FUND LOAN AGREEMENT WITH THE DEPARTMENT OF ENVIRONMENTAL QUALITY OF THE STATE OF OREGON AND A SPECIAL ASSESSMENT BOND IN AN AGGREGATE PRINCIPAL AMOUNT OF NOT MORE THAN $3,000,000, AND AUTHORIZING A REDUCTION IN RESERVES FOR CERTAIN OUTSTANDING BONDS. THE CITY OF EUGENE, OREGON (THE "CITY") FINDS AS FOLLOWS: A. The City previously entered into a State Revolving Fund Loan Agreement with the State of Oregon Department of Environmental Quality (the "DEQ") dated November 22, 1995 and amended March 17, 1997 (the "Loan Agreement") to provide funds in the amount of $3,710,508 for the interim financing of the River Road/Santa Clara Sewer Improvement Project (Basins S, U and X) (the "Projects"). B. Resolution No. 4483 adopted by the Council on April 29, 1996, authorized the execution of the State Revolving Fund Loan Agreement and provided that the Loan Agreement could be substituted for a bond or other obligation provided that the terms related to the bond receive subsequent approval of the City Council. C. The DEQ has agreed to allow the City to reduce reserves on certain outstanding bonds held by the DEQ, and the reduction will benefit the City. D. It is now appropriate to authorize the amended loan agreement and special assessment bonds which will substitute for the existing Loan Agreement, and to authorize the reduction of reserves for outstanding bonds held by the DEQ. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Eugene, a municipal corporation of the State of Oregon, as follows: Section 1. Definitions. As used in this Resolution, the following words shall have the following meanings: "Administrative Increment" means the portion of the interest rate on Assessments which is designed to defray the City's administrative costs, and which is identified in writing as the Administrative Increment prior to issuance of a series of Bonds. "Assessments" means all paYments received by the City in connection with assessments, charges in lieu of assessments and connection charges (including property owner installment payments, property owner prepayments, and amounts received from collection or Page 1 Resolution foreclosure of delinquent property owner payments) which are levied or imposed for the Projects, and for which Bonds are issued. "Available Sewer Revenues" means the revenues of the City's sewer system which are deposited in the Local Operations Subfund and the Capital Operating Subfund of the City's Sewage Operations Fund and which remain after the payment of all operation, maintenance and debt service (other than Debt Service on the Bonds) expenses of the sewer system. "Bonds" means the "Special Assessment Bonds, 1997 Series U" which may be in the form of an amended loan agreement, a special assessment bond or another obligations which is satisfactory to DEQ, which will substitute for the Loan Agreement, and which are authorized by this Resolution. Oregon. "City" means the City of Eugene, Oregon, a municipal corporation of the State of "Code" means the Internal Revenue Code of 1986, as amended. "Council" means the governing body of the City. "Debt Service" means any principal, interest or premium payable on Bonds. "Default" means any event specified in Section 9.1 of this Resolution. hereof. "Fund" means the Special Assessment Bond Fund established pursuant to Section 2 "Owner" or "Bondowner" means the DEQ. hereof. "Reserve Account" means the Reserve Account established pursuant to Section 3 "Reserve Requirement" means seven and one half percent of the principal amount of all outstanding Bonds; however, if the Code in effect upon delivery of a series of Bonds will not permit sufficient proceeds to be added to the Reserve Account to make the balance in the Reserve Account equal to seven and one-half percent of the principal amount of all outstanding Bonds, then the Reserve Requirement in effect on issuance of the series of Bonds shall be the Reserve Requirement in effect immediately prior to their issuance, plus the lesser of: (a) 10 percent of the proceeds of the series of Bonds (as "proceeds" is defined in Section 148 of the Code); (b) maximum Annual Debt Service on the series of Bonds; or, (c) 125 percent of the average Annual Debt Service on the series of Bonds. "Resolution" means this Resolution. Page 2 Resolution J:\HWR\CITIES\EUGENE\GENERAL\SABURES.DOC Section 2. The Fund. 2.1. The Special Assessment Bond Fund (the "Fund") is hereby created. It shall contain a General Account and a Reserve Account. After deduction of the Administrative Increment, and except as provided in Section 3 and Section 5, the City shall deposit all Assessments into the General Account. As long as any Bonds remain issued and outstanding, money in the General Account shall be used solely for the purposes listed below, in the following order of priority: 2.1.1. To pay any Debt Service on Bonds which was not paid when due; 2.1.2. To pay scheduled Debt Service on Bonds; 2.1.3. To restore the balance in the Reserve Account to an amount equal to the Reserve Requirement; 2.1.4. To redeem Bond principal (and pay any associated interest and premiums) prior to maturity. Amounts in excess of the requirements described in Sections 2.1.1 through 2.1.3 (to the greatest integral multiple of $5,000) shall be used to redeem Bonds in accordance with Bond redemption provisions. 2.2. Earnings on amounts in the General Account shall be credited to the General Account. Any amounts remaining in the Fund after all Bonds have been paid shall be the property of the City. Section 3. Reserve Account. 3.1. Upon issuance of the Bonds, the City shall deposit into the Reserve Account an amount of Bond proceeds such that the balance in the Reserve Account is at least equal to the Reserve Requirement for the Bonds. The City shall maintain the balance in the Reserve Account from transfers under Section 2.1.3 of this Resolution. 3.2. Moneys required to be maintained in the Reserve Account shall be used only to pay principal of and interest on the Bonds, and only in the event that the balance in the General Account is insufficient. However, amounts in the Reserve Account which exceed the Reserve Requirement may be transferred to the General Account. 3.3. Earnings on the Reserve Account shall be credited to the General Account. Page 3 Resolution J:\HWR\CITIES\EUGENE\GENERAL\SABURES.DOC Section 4. Pledge of Available Sewer Revenues 4.1. The City hereby pledges the Available Sewer Revenues and the proceeds of revenue obligations described in Section 4.3 to pay the Bonds. Available Sewer Revenues shall be used to pay Bonds only if amounts in the Fund are insufficient. The pledge of the Available Sewer Revenues shall be on a parity with all obligations which the City has issued, or may issue in the future, to finance the River Road/Santa Clara Sewer Project and for which Available Sewer Revenues are pledged. The pledge of the Available Sewer Revenues shall be subordinate to all other outstanding and future revenue bonds, notes and other obligations of the City which are secured by its sewer revenues. 4.2. If the City pays Debt Service on the Bonds from Available Sewer Revenues under Section 4.1, the City may reimburse itself for that payment, without interest, from Assessments received by the City after the deposit, but only if the balance in the Reserve Account at the time of the reimbursement is at least equal to the Reserve Requirement. 4.3. The City hereby covenants with the Owners that it shall charge rates and fees in connection with its sewage treatment and collection facilities which generate Available Sewer Revenues sufficient to enable it to pay, when due, all costs of operation, maintenance, Debt Service, other contractual obligations, and any and all reasonable predictable payments which may be required under Section 4.1. In addition, the City covenants that it will use its best efforts to issue revenue obligations, payable solely from its net sewer revenues, in amounts sufficient to permit it to make, when due (or as soon thereafter as possible), any payments which are required by Section 4.1, for which the Available Sewer Revenues are not then sufficient. Section 5. Delinquent Assessments; Payments in Lieu of Foreclosure. 5.1. The City covenants with the owners of the Bonds to pursue property foreclosures to collect delinquent Assessments as rapidly as the law reasonably permits, and in accordance with the foreclosure policies which are no less strict than the foreclosure policies of the City which would apply to Basins S, U and X on the date this Resolution is adopted. However, the City may elect not to foreclose or to pursue foreclosures less rapidly than required by this Section, if the City: 5.1.1. identifies the Assessments to which the election applies; and 5.1.2. deposits into the Fund any payments associated with the Assessments to which the election applies and which are delinquent at the time the election is made, and continues to deposit into the Fund in a timely manner the amounts which would have been deposited into the Fund if such Assessments were not delinquent. 5.2. Amounts received by the City from the settlement or foreclosure of delinquent Assessments shall be applied in the following order of priority: 5.2.1. If the City has made deposits under Section 5.1.2 in connection with a Page 4 Resolution J:\HWR\CITIES\EUGENE\GENERAL\SABURES.DOC delinquent Assessment, amounts received by the City from the settlement or foreclosure of that Assessment shall be applied first to reimburse the City for such deposits without interest, but only if the foreclosure or settlement is made on commercially reasonable terms and in a manner consistent with the City's practice of foreclosing and settling assessments which secure the City's outstanding bancroft and limited tax improvement bonds. 5.2.2. The City shall deposit into the General Account an amount equal to the unpaid principal and accrued interest on the delinquent Assessment, reduced by the Administrative Increment in proportion to the amount received on settlement or foreclosure and any reimbursement to the City under this section; and 5.2.3. The balance shall be paid to the City to reimburse it for its administrative costs in carrying, settling and foreclosing the Assessments. Section 6. Pledge. The City hereby pledges the Assessments and amounts in the Fund to the payment of principal and interest on all Bonds. All Assessments shall be deposited in the Fund promptly, and shall be used only as provided by this Resolution. Section 7. Covenants. follows: The City hereby covenants, represents and agrees with the Owners of the Bonds as 7.1. That, to the extent the Assessments, the other amounts required by this Resolution to be deposited into the Fund, and the Available Sewer Revenues are sufficient, it will promptly cause the principal and interest on the Bonds to be paid as they become due. 7.2. That it will maintain complete books and records relating to the Assessments, the Fund and the Available Sewer Revenues, in accordance with generally accepted accounting principles, and will cause such books and records to be audited annually at the end of each fiscal year, and an audit report prepared and made part of the City's public records. 7.3. That it will not issue bonds or other obligations having a claim superior to or subordinate to the claim of the Bonds upon the Assessments or amounts deposited in the Fund or the Reserve Account under this Resolution. 7.4. That it will promptly deposit into the Fund all sums required to be so deposited by this Resolution. Page 5 Resolution J:\HWR\CITIES\EUGENE\GENERAL\SABURES.DOC Section 8. Amendment. 8.1. The City may amend this Resolution without the consent of the Owners, but only to provide additional security for Owners, to cure ambiguities, to correct defects, or to make any other change which, in the judgment of the City, does not materially and adversely affect the interests of the Owners. 8.2. The City may amend this Resolution for any other purpose, but only if: 8.2.1. the amendment is approved by Owners representing a majority in principal amount of the then outstanding Bonds; and, 8.2.2. the amendment does not extend the date for payment to an Owner, or reduce the amount payable to an Owner under the terms of any Bond, without the written consent of the Owner of the affected Bond. Section 9. Default and Remedies. 9.1. The occurrence of anyone or more of the following shall constitute an event of default under this Resolution: 9.1.1. Failure by the City to pay Debt Service on Bonds when due; or, 9.1.2. Failure by the City to observe and perform any covenant, condition or agreement on its part to be observed or performed under this Resolution or the Bonds for a period of 60 days after written notice to the City by the Owners of not less than twenty-five percent of the principal amount of outstanding Bonds specifying such failure and requesting that it be remedied; provided, however, that if the failure stated in the notice cannot be corrected within the sixty day period, it shall not constitute an event of default if corrective action is instituted by the City within the sixty day period and diligently pursued until the failure is corrected. 9.2. Upon the occurrence of an event of default, the Bondowners may exercise any remedy available at law or in equity; however, no Bond may be accelerated unless all outstanding Bonds are declared immediately due and payable, and all outstanding Bonds may be declared immediately due and payable only upon demand of the Owners of not less than twenty-five percent of the principal amount of the Bonds which are then outstanding. 9.3. No remedy herein conferred upon or reserved to Bondowners is intended to be exclusive, and every such remedy shall be cumulative and shall be in addition to every and any other remedy available under this Resolution or now or hereafter existing at law or in equity. No delay or omission in the exercise of any right or power occurring upon any default shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient. To entitle Bondowners to exercise any remedy under this Resolution, it shall not be necessary to give any other notice than such notice as may Page 6 Resolution J:\HWR\CITIES\EUGENE\GENERAL\SABURES.DOC be required in this Section 9.1.2. or by law. 9.4. Any moneys collected by or on behalf of Bondowners after an event of default has occurred shall be deposited in the General Account and applied as provided in this Resolution. Section 10. Defeasance. The lien of any Bonds upon the Assessments; the Available Sewer Revenues and any amounts in the Fund may be defeased, and those Bonds shall be deemed paid, if the City places in irrevocable escrow noncallable, direct obligations of, or obligations guaranteed by, the United States which are calculated to be sufficient, without reinvestment, to pay principal, interest and any premium on those Bonds as they become due, either at maturity or on prior redemption. Section 11. Amended Loan Agreement and Bonds Authorized. The City is hereby authorized to enter into an amended Loan Agreement with the DEQ and to issue and deliver the Bonds. The total principal amount of the Bonds shall not exceed Three Million Dollars ($3,000,000). The Bonds shall be in substantially the form of prior special assessment bonds which the City has previously sold to the DEQ, with such changes as the City Manager may approve. The City Manager or the designee of the City Manager (the "City Official") without further action by the City Council shall: 11.1. Establish the terms under which the Bonds will be sold to the DEQ, enter into an amended Loan Agreement with the DEQ and issue and deliver the Bonds; 11.2. Establish the final principal amount, maturity schedule, interest rates, redemption provisions and other terms of the Bonds, consistent with the limitations established by this Resolution; 11.3. Report the results of the sale of the Bonds to the Council; and, 11.4. Execute and deliver any certificates or other documents, and take any other action which is desirable in order to issue, sell and deliver the Bonds in accordance with this Resolution. Section 12. Tax Exemption. 12.1. The City covenants for the benefit of the Owners of the Bonds to comply with all provisions of the Code which are required for Interest on the Bonds to be excludable from gross income under the Code. The City makes the following specific covenants: 12.2. The City will not take any action or omit any action if it would cause the Bonds to become "arbitrage bonds" under Section 148 of the Code, and shall pay all penalties and rebates to the United States which are required by Section 148(f) of the Code. Page 7 Resolution J:\HWR\CITIES\EUGENE\GENERAL\SABURES.DOC 12.3. The City shall operate the facilities financed with the Bonds, and use the proceeds of the Bonds, so that the Bonds are not "private activity bonds" within the meaning of Section 141 of the Code. Section 13. Reduction of Reserves. The City Manager or the designee of the City Manager (the "City Official") without further action by the City Council, may reduce the reserves for the City's Special Assessment Bonds, 1994 Series J, 1995 Series M and 1996 Series P, and enter into any agreements and execute any documents which are required to effect that reduction. II.-~ ADOPTED by the City Council of the City.ofEugene, Lane County, Oregon on the .zr day of ~ ~ 1997. City of Eugene Lane County, Oregon fl ~ e-- City Recorder " 117/ Page 8 Resolution J:\HWR\CITIES\EUGENE\GENERAL\SABURES.DOC