C153701 PIF Contract

• Contract/PO #: C153701
• Contractor Name: Fort Morgan, City of
• Contract Type: Loan
• Loan Projects - Doc Type: Contract Documents

• .
acting by and through the Southern Water Supply Project Water Activity Enterprise ("1998
Allotment Contract").
E. Pursuant to the ORIGINAL CONTRACT, the BORROWER pledged revenues from water rates,
fees and other charges levied and collected by the BORROWER ("water system revenues") to
repay this loan, with the lien created by said pledge of revenues on a parity with the lien of
the Colorado Water Resources and Power Development Authority, evidenced by the
BORROWER'S Water Revenue Refunding and Improvement Bond, Series 1994.
F. To obtain financing to continue with the PROJECT, the BORROWER requested the STATE'S
consent to the issuance of the City of Fort Morgan, Colorado, Water Works and Distribution
Enterprise Water Revenue Bonds, Series 1997 ("1997 Bonds") to cover PROJECT costs
while the BORROWER applies for and finalizes loans from various state and federal lenders,
on a parity with the STATE'S lien on the water system revenues.
G. At its July 21, 1997 meeting, the CWCB authorized the CWCB Director to consent to the
parity request provided that the BORROWER is in substantial compliance with the ORIGINAL
CONTRACT, has provided a parity certificate issued by a CPA ce .fyi g that the BORROWER'S
rate schedule will generate revenues in an amount sufficien r4 operating and
maintenance expenses, to make deposits to all required re .'_' t • - d to make all
payments on both existing and proposed bonds, and • -fined a le` • credit backing
the 1997 Bonds from a commercial bank acceptable r ' , A .
H. At its November 1997 meeting, the CWCB authorized the C k , 1 r to I o execute a
Consent to Issuance of Parity Bonds by which the CWCB would conse • :.e issuance,
on a parity with the CWCB's existing lien on the BORROWER'S water system revenues, of the
1997 Bonds and additional parity bonds issued to the Colorado Water Resources and
Power Development Authority, CWCB and the United States Department of Agriculture-
Rural Development for financing phase 3 of the PROJECT, and by which the CWCB would
consent to the BORROWER'S execution and delivery of a reimbursement agreement with
State Street Bank and Trust Company ("State Street Bank") concerning the letter of credit
backing the 1997 Bonds ("Reimbursement Agreement"). The CWCB conditioned its
consent on the BORROWER meeting the conditions established in July set forth above and
on the Fort Morgan City Council adopting an ordinance raising water rates for 1998 and
establishing a schedule for further raising water rates in 1999 and 2000.
I. The BORROWER is in substantial compliance with the ORIGINAL CONTRACT, has submitted the
required parity certificate to the STATE ("Coverage Certificate"), and has obtained a letter of
credit backing the 1997 Bonds from State Street Bank. The BORROWER and State Street
Bank entered into the Reimbursement Agreement, which is incorporated herein by
reference, on December 16, 1997. The Reimbursement Agreement provides, in pertinent
part, that, if the BORROWER does not reimburse State Street Bank for all drawings on the
letter of credit when due, State Street Bank shall hold a lien on the BORROWER'S water
system revenues on a parity with the STATE'S lien on said revenues. On November 18,
1997, the Fort Morgan City Council adopted an ordinance raising water rates for 1998 and
establishing a schedule for further raising water rates in 1999 and 2000.
J. Based on its review of the Coverage Certificate, and of documents relating to issuance of
the 1997 Bonds, including, but not limited to,the Reimbursement Agreement, the Official
Statement for the 1997 Bonds, dated November 21, 1997 ("Official Statement"), and the
Trust Indenture dated December 16, 1997 between City of Fort Morgan, Colorado, Water
City of Fort Morgan, Colorado&City of Fort Morgan,
Colorado,Water Works and Distribution Enterprise Page 2 of 5