Laserfiche WebLink
<br />\ <br /> <br />.' <br /> <br />option 2 - A reserve fund, endowed by the City purchasing a bond issued by the Water <br />Enterprise, could be pledged as additional security. The money received for the bond <br />would be put into a reserve. An amount for the reserve might be 10% of the loan, say <br />$550,000. <br /> <br />option 3 - Prior to executing the contract, require the City to hold an election to poll the <br />voters of whether to allow the City to pledge CST shares as collateral. If the issue is <br />approved, it would allow the City to offer the CST shares as collateral for the Water <br />Enterprise's loan. If not approved, we wouldn't be able to lend the $5.5M for the SWSP. <br /> <br />Option 4 - As a condition of the contract, require the City to hold an election asking the <br />voters to approve use of City's CST shares as collateral for Water Enterprise's loan. <The <br />contract would be signed right away, with the condition of an election subsequent to <br />signing,) If the voters don't approve using the CST shares, then there would be no further <br />security requirements--the loan contract would have only the pledge of revenues and <br />Allotment contract. If the voters approved, then the shares could be pledged by the City <br />to further secure the loan contract. <br /> <br />RECOMMENDATION <br /> <br />The financial and economic analysis of Fort Morgan's participation in the SWSP indicates <br />that security consisting of a pledge of revenues and Fort Morgan's interest in the <br />Allotment contract is adequate security to assure repayment of the authorized loan funds. <br /> <br />The CWCS staff recommends Option 1 - the same security for all SWSP loans: pledge of <br />revenues and interest in Fort Morgan's Allotment contract. <br />