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<br /><- <br /> <br />. <br /> <br />. <br /> <br />Mr, Chuck Lile <br />October 18, 1993 <br />Page 2 <br /> <br />tax for the purposes of paying the debt authorized <br />herein, which pledge shall be subject to the prior Paving <br />Bond pledge. The $10,500.00 pledge created herein shall <br />be made to the Irrigation System Improvement Fund (herein <br />created) for the purpose of paying the payment obligation <br />of principal and inte~est on the loan from the Colorado <br />Water Conservation Board, as fully described in paragraph <br />2 herein. The pledge created herein shall begin in <br />fiscal year 1993, and shall continue in each year <br />thereafter until the Colorado Water Conservation Board <br />loan is paid in full. <br /> <br />This pledge recognized the prior pledge of the Town's <br />sales tax revenue to pay the Outstanding Bonds of the Town, <br />However, it did not contemplate the refunding of such bonds. When <br />such refunding occurs, Ordinance 103 and the "paving Bonds" <br />authorized thereunder will be defeased. Our concern is that after A <br />such defeasance, the sales tax pledge made in 1992 to th&~oard , <br />will jump ahead of the sales t<lX pledge we need to make to the . <br />proposed Series 1993 refunding bonds. It is necessary for the <br />proposed Series 1993 refunding bonds to retain a first lien on the <br />sales tax revenue in order for such bonds to be marketable at <br />reasonable interest rates. <br /> <br />Consequently, on behalf of the Town, we would like to <br />request that the Board agree to an amendment to the Contract and <br />Ordinance No. 133 specifically allowing the proposed Series 1993 <br />refunding bonds to retain a first lien on the sales tax revenues of <br />the Town. <br /> <br />We believe that such a position by the Board is warranted <br />for two reasons. First, the Board is not being asked to give up <br />anything that it negotiated in the 1992 Contract. The language set <br />forth above concerning the priority of the sales tax lien clearly <br />evidences an intent to subordinate the lien position of the Board <br />to the lien held by the Outstanding Bonds. The proposed Series <br />1993 refunding bonds are merely a replacement of these Outstanding <br />Bonds. Second, and more impor1:antly, the proposed Series 1993 <br />refunding bonds are being issued to reduce the Town's debt service <br />requirements on the Outstanding Bonds and save money. The result <br />of such savings will be that more sales taxes will be available to <br />meet the Town's obligations to the Board under the Contract after <br />