C150004 Contract - Laserfiche WebLink

Home Browse Search

7. The CITY, acting by and through the BORROWER, entered into three Allotment Contracts with the Northern Colorado Water Conservancy District ("District"), acting by and through the Southern Water Supply Project Water Activity Enterprise, under which, in return for paying its proportionate share of the Carter Lake to Broomfieid Pipeline, the Fort Lupton/Hudson Pipeline and the Morgan Pipeline construction costs, the CITY/BoRROWER is entitled to use a certain proportion of the capacity of said Pipelines to deliver water to the CITY's/BoRROWER'S facilities, and to assign, transfer or lease any part of the CITY's/BoRROWER'S allotment of capacity in said Pipelines. The three Allotment Contracts, dated January 14,1994, August 4,1995 and July 14,1998, are incorporated herein by reference, and are hereinafter collectively referred to as the "Allotment Contracts." The CITY'S and BORROWER'S rights under the Allotment Contracts are hereinafter collectively referred to herein as "Allotment Contract Rights." 8. The STATE has reviewed a feasibility study report on the Morgan Pipeline compiled by Gronning Engineering, which is incorporated herein by reference, and, based upon the feasibility reports, the STATE determined the PROJECT to be technically and financially feasible. 9. At its November 1997 meeting, the CWCB approved a loan to the BORROWER in the amount of up to Eight Million Dollars ($8,000,000) at an interest rate of 4% per annum for a term of thirty (30) years, to refinance a portion of the variable rate bonds used to finance PROJECT costs. The CWCB conditioned the loan approval on the City of Fort Morgan City Council adopting a schedule of rate increases that will be adequate to pay the costs of all debt service incurred and for system operation and maintenance for the PROJECT. 10. On November 18, 1997, the City of Fort Morgan City Council adopted an ordinance, incorporated herein by reference, raising water rates for 1998 and establishing a schedule for further raising water rates in 1999 and 2000. 11.ln December 1997, the BORROWER issued the City of Fort Morgan, Colorado, Water Works and Distribution Enterprise Water Revenue Bonds, Series 1997 ("1997 Bonds") to cover PROJECT costs pending the CITY's/BoRROWER'S applications for and finalization of loans from various state and federal lenders, including the Colorado Water Resources and Power Development Authority ("CWRPDA") and the United States Department of Agriculture- Rural Development ("RD"). The parties acknowledge that this loan, the BORROWER'S 1995 loan from the STATE, the BORROWER'S Water Revenue Refunding and Improvement Bond, Series 1994, the 1997 Bonds, the BORROWER'S obligations under a Reimbursement Agreement with State Street Bank dated December 16, 1997 entered into in connection with the issuance of the 1997 Bonds, and the BORROWER'S loans from the CWRPDA and RD to finance the PROJECT all shall have a parity lien on the BORROWER'S water system revenues. 12. Pursuant to 1998 Colo. Sess. Laws, Ch. 175, Sections 1(1)(g) and Section 1 (2)(b), the Colorado General Assembly authorized the CWCB to Joan to the CITY or the BORROWER $4,000,000 from the CWCB Construction Fund and $4,000,000 from the Severance Tax Trust Fund Perpetual Base Account at an interest rate of 4% per annum for a term of thirty (30) years for refinancing PROJECT costs. 13. The STATE understands that the repayment of the funds loaned, including interest thereon, will come from revenues pledged for the repayment thereof from water system revenues and that this obligation does not constitute a debt or multiple-fiscal year financiai obligation of the CITY within the meaning of any constitutional or statutory limitations. City of Fort Morgan, Colorado &" City of Fort Morgan, Colorado, Waler Works and Distribution Enterprise Page 2 of 13