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TC Ord. No. 1991-03ORDINANCE NO. 91- 3 AN ORDINANCE CONCERNING A HOUSING REVENUE BOND OF THE TOWN OF AVON, COLORADO (THE "TOWN"); AUTHORIZING THE ISSUANCE AND SALE OF THE TOWN'S HOUSING REVENUE BOND IN THE PRINCIPAL AMOUNT OF $1,460,000 FOR THE PURPOSES OF DEFRAYING THE COSTS OF THE ACQUISITION AND CONSTRUCTION OF AFFORDABLE HOUSING WITHIN THE TOWN; PROVIDING DETAILS CONCERNING THE BOND, ITS FORM, ITS SALE, AND FUNDS RELATING THERETO; PROVIDING FOR THE ALLOCATION OF FUNDS TO PAY THE PRINCIPAL OF AND INTEREST ON THE BOND; RATIFYING ACTION HERETOFORE TAKEN AND RELATING TO SUCH BOND; PROVIDING OTHER MATTERS RELATING THERETO; AND REPEALING ALL ORDINANCES IN CONFLICT HEREWITH. WHEREAS, the Town of Avon, Eagle County, Colorado (the "Town") is a municipal corporation duly organized and existing under the laws of the State of Colorado and in particular under the provisions of Article XX of the Constitution of the State of Colorado and the home rule charter of the Town (the "Charter"); and WHEREAS, Section 14.4 of the Charter provides, in pertinent part: "Section 14.4 Revenue Bonds. The Town, pursuant to ordinance, and without an election, may borrow money, issue bonds, or otherwise extend its credit for purchasing, constructing, condemning, otherwise acquiring, extending or improving a water, electric, gas or sewer system, or other public facility or income-producing project or for any other capital improvement; provided that the bonds or other obligations shall be made payable from the net revenues derived from the operation of such system, utility or other such project or capital improvement, and provided, further, that any two or more of such systems, utilities, projects or capital improvements may be combined, operated and maintained as joint municipal systems, utilities, projects or capital improvements, in which case such bonds or other obligations shall be made payable out of the net revenue derived from the operation of such joint systems, utilities or capital improvements. ; and WHEREAS, Section 14.5 of the Charter further provides: "Section 14.5 Funding of Revenue Bonds. In addition to the provisions of Section 14.4 relating to Revenue Bonds, the Town shall have the authority to issue revenue bonds payable from the revenue and income of the project, facility, or improvement to be constructed or installed with the proceeds of the bond issue, or payable in whole or in part from the available proceeds of a Town sales and/or use tax which may be imposed pursuant to this Charter. ; and WHEREAS, Section 14.7 of the Charter further provides in part: "Section 14.7 Limitation of Indebtedness. The aggregate amount of bonds or other evidences of indebtedness of the Town shall not exceed twenty-five percent (25%) of the assessed valuation of the taxable property within the Town as shown by the last preceding assessment for Town purposes; or the sum of $15,000,000.00, whichever amount shall be greater provided, however, in determining the amount of indebtedness, there shall not be included within the computation: (d) Securities payable from the revenues of an income- producing system, utility, project, or other capital improvements or from Town sales or use taxes. ; and WHEREAS, the Council has determined, and does hereby declare: A. it is desirable and to the best advantage of the Town to construct, otherwise acquire, equip, extend, improve, and develop certain affordable housing within the Town (the 'Project"), including, without limitation, all necessary improvements, land and easements for the Project and to pay a share of the costs incurred for the issuance of the Town's housing revenue bond in the principal amount of $1,460,000 (the "Bond," which term includes any bond issued in replacement of or in exchange therefor); B. the Bond shall be issued for the Project in the principal amount of $1,460,000; and C. all action preliminary to the authorization of the issuance of the Bond has been taken; and -2- WHEREAS, the Council has determined, and does hereby declare, that the proposal (the "Proposal") submitted by Chrysler Capital Public Finance Corp. (the "Purchaser") prior to the final passage of this ordinance for the purchase of the Bond is to the best advantage of the Town. NOW, THEREFORE, BE IT ORDAINED BY THE TOWN COUNCIL OF THE TOWN OF AVON, COLORADO: Section 1. Authority for this Ordinance. This ordinance is adopted by virtue of the Town's powers as a home rule municipality organized and operating pursuant to Article XX of the State Constitution and the Charter adopted thereunder and pursuant to its provisions. Pursuant to Article XX of the State Constitution and the Charter, all statutes of the State which might otherwise apply in connection with the Project and the Bond are hereby superseded. Section 2. Terms of Bond Sale. The Purchaser's offer to purchase the Bond as provided in the Proposal is hereby formally accepted, and the Bond shall be sold and delivered to the Purchaser in accordance therewith. Section 3. Authorization. For the purpose of providing funds to defray the costs of the Project (including costs of issuance of the Bond), the Council, on behalf of the Town and upon the credit thereof, shall issue its "Town of Avon, Colorado Housing Revenue Bond (Wildridge Affordable Housing Project) Series 1991" in the principal amount of $1,460,000. The principal of and interest on the Bond shall be payable from the Special Funds, as defined in the Loan Agreement dated as of April 1, 1991 between the Town and the Purchaser (the "Loan Agreement"). Section 4. Bond Details. The Bond shall be issued in fully registered form, numbered in such manner as shall be determined by the Town Clerk of the Town as the registrar and paying agent for the Bond, or any successor registrar and paying agent (the "Registrar" or the "Paying Agent"). The Bond shall be dated, shall bear interest, shall mature, and shall be prepayable as provided in the Loan Agreement. Payment of interest on the Bond shall be made to the registered owner thereof by the Paying Agent in immediately available funds, on or before each interest payment date (or, if such interest payment date is not a business day, on the next succeeding business day). -3- Section 5. A. Prior Redemption. The Bond is subject to prepayment and redemption prior to maturity as provided in the Loan Agreement. Prepayments and partial redemptions shall be noted on the Bond by the Purchaser. Section 6. Execution and Authentication. The Bond shall be executed in the name of the Town by the manual signature of the Mayor, shall be sealed with the seal of the Town, and shall be attested by the manual signature of the Town Clerk. Any Bond bearing the signatures of the officers in office at the time of the signing thereof shall be the valid and binding obligation of the Town, notwithstanding that before the delivery of the Bond or before the reissuance of the Bond upon transfer or exchange, any or all of the persons whose signatures appear on the Bond shall have ceased to fill their respective offices. No Bond shall be valid or obligatory for any purpose unless the certificate of authentication, substantially in the form provided in the Loan Agreement, has been duly manually executed by the Registrar. The Registrar's certificate of authentication shall be deemed to have been duly executed by it if manually signed by an authorized representative of the Registrar, but it shall not he necessary that the same representative sign the certificate of authentication on all of the Bond issued hereunder. By authenticating the Bond initially delivered pursuant to this ordinance, the Registrar shall be deemed to have assented to the provisions of this ordinance. Section 7. Registration, Transfer and Exchange of Bond. A. Records for the registration and transfer of the Bond shall be kept by the Registrar. The Registrar may impose reasonable charges in connection with exchanges or transfers of a Bond, which charges (as well as any tax or other governmental charge required to be paid with respect to such transfer) shall be paid by the registered owner requesting such exchange or transfer. B. If the Bond shall be lost, stolen, destroyed, or mutilated, the Registrar may, upon receipt of such evidence, information, or indemnity relating thereto as it and the Town may reasonably require, authenticate and deliver a replacement Bond of a like principal amount and of the same maturity bearing a number not previously assigned. If such lost, stolen, destroyed, or mutilated Bond shall have matured or is about to become due and payable, the Registrar may direct that the Paving Agent pay such Bond in lieu of replacement. -4- C. The officers of the Town are authorized to deliver to the Registrar fully executed but unauthenticated Bonds in such quantities as may be convenient to be held in the custody of the Registrar pending use as herein provided. D. Whenever the Bond shall be surrendered to the Paying Agent upon payment thereof, or to the Registrar for transfer, exchange or replacement as provided herein, such Bond shall be promptly cancelled by the Paying Agent or Registrar, and counterparts of a certificate of such cancellation shall be furnished by the Paying Agent or Registrar to the Town. Section S. Ne,otiability. Subject to the registration provisions hereof, the Bond shall be fully negotiable and shall have all the qualities of negotiable paper, and the registered owner or owners thereof shall possess all rights enjoyed by the holders of negotiable instruments under the provisions of the Uniform Commercial Code. Section 9. No Debt Created. The Bond, the interest thereon, the Loan Agreement, the Deed of Trust, Security Agreement and Fixture Financing Statement dated as of April 1, 1991 given by the Town to the public trustee of Eagle County for the benefit of the Purchaser (the "Deed of Trust"), and the other agreements referred to therein do not and shall never constitute a deht or indebtedness of the Town or any other governmental entity within the meaning of any constitutional, Charter or statutory provision. Section 10. Form of Bond. Authentication Certificate and Assignment. The Bond, the Registrar's certificate of authentication and the assignment form shall be in the forms provided in the Loan Agreement. Section 11. Deliverv of Bond. When the Bond has been duly executed and authenticated, it shall be delivered to the Purchaser on receipt by the Town (by deposit with the Escrow Agent named in the Escrow Agreement dated as of April 1, 1991 (the "Escrow Agreement") among the Town, the Purchaser and the Escrow Agent, for credit as provided in the Escrow Agreement) of the agreed purchase price. The funds realized from the sale of the Bond shall be applied solely for the purposes set forth in the Loan Agreement and the Escrow Agreement and for no other purposes. Neither the Purchaser nor any subsequent registered owner shall be responsible for the application or disposal by the Town, or any of its officers, of any of the funds derived from the sale of the Bond. -5- W Section 12. Disposition of Bond Proceeds. The proceeds of the Bond shall be deposited immediately upon receipt as provided in the Escrow Agreement. Section 13. Payment of Principal and Interest. The principal and interest to become due on the Bond shall be paid only from Special Funds (as defined in the Loan Agreement) of the Town. Section 14. Covenants with Bondholder. A. The Town covenants for the benefit of the registered owner of the Bond that it will not take any action or omit to take any action with respect to the Bond, the proceeds of the Bond, any other funds of the Town, or the facilities financed with the proceeds of the Bond if such action or omission (i) would cause the interest on the Bond to lose its exclusion from gross income for federal income tax purposes under Section 103 of the Internal Revenue Code of 1986, as in effect on the date of delivery of the Bond (the "Code"), (ii) would cause the interest on the Bond to lose its exclusion from gross income for federal income tax purposes under Section 55(b)(2) of the Code, except to the extent such interest is required to be included in the adjusted current earnings adjustment applicable to corporations under Section 56 of the Code in calculating corporate alternative minimum taxable income, or (iii) would cause interest on the Bond to lose the exclusion from Colorado taxable income or Colorado alternative minimum taxable income under present Colorado law. The foregoing covenant shall remain in full force and effect notwithstanding the payment in full or defeasance of the Bond until the date on which all obligations of the Town in fulfilling the above covenant under the Code and State law have been met. B. The Town further covenants for the benefit of the Purchaser and any subsequent registered owner of the Bond that the Town will annually prepare or cause to he prepared a budget and an audit report, and will annually file or cause to be filed with the appropriate agency of the State of Colorado a copy of its adopted budget, its appropriation ordinance and its audit report, all in accordance with the then applicable laws of the State of Colorado. C. The Town hereby determines that neither the Town nor any entity subordinate thereto reasonably anticipates issuing more than $10,000,000 face amount of bonds or any other similar obligations during calendar year 1991. For the purpose of -6- Section 265(b)(3)(B) of the Code, the Town hereby designates the Bond as a qualified tax- exempt obligation. Section 15. Investment of Funds. Any moneys in any fund or account necessitated by this ordinance may be deposited, invested or reinvested in any manner permitted by the Escrow Agreement. Section 16. Successor Registrar or Paving Agent. If the Registrar or Paying Agent initially appointed hereunder shall resign, or if the Town shall reasonably determine to remove the Registrar or Paying Agent because the Registrar or Paying Agent is incapable of fulfilling its duties hereunder, the Town may, upon notice mailed to the registered owner of the Bond at the address last shown on the registration records, appoint a successor Registrar or Paying Agent. No resignation or removal of the Registrar or Paying Agent may take effect until a successor is appointed by the Town. Every such successor Paying Agent shall be a bank or trust company having a shareholders' equity (e.g., capital stock, surplus and undivided profits), however denominated, not less than $10,000,000. Section 17. Defcasance. When the principal and interest due in connection with the Bond have been duly paid, all obligations hereunder with respect to such Bond shall be discharged, and such Bond shell no longer be deemed to be outstanding for any purpose of this ordinance. Payment of such Bond or any portion thereof shall be deemed made when the Town has placed in cscro%v with a commercial bank exercising trust powers an amount sufficient (including the known minimum yield from Federal Securities, as defined below, in which such amount may be wholly or in part initially invested) to meet all requirements of principal and interest on such Bond as the same becomes due to maturity or to any redemption date as of which the Town shall have exercised or obligated itself to exercise its prior redemption option and have given irrevocable instructions to the Registrar to give notice of redemption to the holder of any such Bond. The Federal Securities shall become due or be callable at the option of the holder at or prior to the respective times on which the proceeds thereof shall be needed, in accordance with a schedule agreed upon between the Town and such bank at the time of creation of the escrow. Federal Securities within the meaning of' this section shall include only direct obligations of, or obligations the timely payment of the principal of and interest on which are fully and unconditionally guaranteed -7- by, the United States, and which are not callable prior to their scheduled maturities by the issuer thereof, or interest in such obligations. In the event that there is a defeasance of only part of the Bond, the Paying Agent shall, if requested by the Town, institute a system to preserve the identity of the portion of the Bond so defeased, regardless of changes in Bond numbers attributable to transfers and exchanges of the Bond. Section 18. Delectation of Powers. The officers of the Town are hereby authorized and directed to take all action necessary or appropriate to effectuate the provisions of this ordinance, including, without limiting the generality of the foregoing, the preparation of the Bond, the entering into and execution of the Escrow Agreement, the Loan Agreement, the Deed of Trust, and the other agreements and documents referred to in the Loan Agreement, the execution of such certificates as may be required by the Purchaser relating to the execution of the Bond, the tenure and identity of the Town officials, the delivery of the Bond and receipt of the purchase price and the absence of litigation, pending or threatened, if in accordance with the facts, affecting the validity thereof and the absence and existence of factors affecting the exclusion of interest on the Bond from gross income for federal income tax purposes. Section 19. Ratification. All action heretofore taken (not inconsistent with the provisions of this ordinance) by the Council, the officers of the Town and otherwise taken by the Town directed toward the Project and the sale and delivery of the Bond for such purpose hereby is ratified, approved and confirmed. Section 20. Approval of Loan Agreement, Deed of Trust and Escrow Agreement. The Dorms, terms and provisions of the Loan Agreement, the Deed of Trust and the Escrow Agreement hereby are approved and the Town shall enter into and perform its obligations under the Loan Agreement, the Deed of Trust and the Escrow Agreement in substantially the forms of such documents presented to the Council at this meeting, with only such changes therein as are approved by the Mayor (the Mayor's execution thereof to be conclusive evidence of his approval thereof); and the Mayor is hereby authorized and directed to execute and deliver the Loan Agreement, the Deed of Trust, the Escrow Agreement, and the other documents contemplated thereby and the Clerk is hereby authorized and directed -8- to affix the Town seal to the Loan Agreement, the Deed of Trust, the Escrow Agreement, and the other documents contemplated thereby and to attest the same. Section 21. Repealer. All bylaws, orders, resolutions and ordinances, or parts thereof, inconsistent herewith are hereby repealed to the extent only of such inconsistency. This repealer shall not be construed to revive any such by-law, order, resolution or ordinance, or part thereof, heretofore repealed. Section 22. Severability. If any section, subsection, paragraph, clause, or other provision of this ordinance for any reason is invalid or unenforceable, the invalidity or unenforceability of such section, subsection, paragraph, clause, or other provision shall not affect anv of the remaining provisions of this ordinance. Section 23. Ordinance Irrepealable. After the Bond is issued, this ordinance shall constitute an irrevocable contract between the Town and the registered owner of the Bond and this ordinance shall be and shall remain irrepealable until the Bond shall be fully paid, canceled and discharged. Section 24. Notice of Hearine. The Council will hold a public hearing on the ordinance at a meeting of the Council to be held at the Town Hall in the Town, on March 26, 1991, being not earlier than seven days after the first publication of the ordinance, at the hour of 7:30 p.m. Section 25. Disposition of Ordinance. This ordinance, as adopted by the Council, shall be numbered and recorded by the Town Clerk on the official records of the Town. -9- Section 26. Effective Date. This ordinance shall be in full force and effect seven (7) days after its publication by posting following final passage, adoption and approval. INTRODUCED, PASSED AND APPROVED ON FIRST READING ON March 12. 1991. (SEAL) ttes l To Clerk FINALLY PASSED, ADOPTED AND APPROVE , AS AMENDED, ON March 1991. (SEAL) tte' : , T n Clcrk Mayor -10- STATE OF COLORADO ) COUNTY OF EAGLE ) SS TOWN OF AVON ) NOTICE IS HEREBY GIVEN OF A PUBLIC HEARING BEFORE THE TOWN COUNCIL OF THE TOWN OF AVON, COLORADO, AT 7:30 P.M. ON THE 26TH DAY OF MARCH, 1991, AT THE TOWN HALL FOR THE PURPOSE OF CONSIDERING THE ADOPTION OF ORDINANCE NO. 91-3, SERIES OF 1991: A BOND.ORDINANCE FOR FUNDING THE WILDRIDGE HOUSING PROJECT IN THE AMOUNT OF $1,460,000. A copy of said Ordinance is attached hereto, and is also on file at the office of the Town Clerk, and may be inspected during regular business hours. Following this hearing the Council may consider final passage of this ordinance. This notice is given and published by order of the Town Council of the Town of Avon, Colorado. Dated this 26th day of March, 1991. BY O~YI~VON, CO atricia j. poyle, 'luow4 cie POSTED AT THE FOLLOWING PUBLIC PLACES WITHIN THE TOWN OF AVON ON MARCH 13, 1991: THE AVON POST OFFICE IN THE MAIN LOBBY THE CITY MARKET IN THE MAIN LOBBY THE COASTAL MART, INC.; and THE AVON MUNICIPAL BUILDING IN THE MAIN LOBBY