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HomeMy WebLinkAboutordinance.council.018-87 ORDINANCE NO. /~ (Series of 1987) AN ORDINANCE AUTHORIZING THE ISSUANCE BY THE CITY OF ASPEN, COLORADO, OF ITS GENERAL OBLIGATION ELECTRIC BONDS (MAROON CREEK HYDROELECTRIC GENERATING PROJECT) SERIES 1987 IN THE PRINCIPAL AMOUNT OF $525,000, FOR THE PURPOSE OF PROVIDING FUNDS FOR THE ACQUISITION, CONSTRUCTION, IMPROVEMENT AND INSTALLATION OF CERTAIN HYDROELECTRIC GENERATING FACILITIES IN THE VICINITY OF THE T-LAZY 7 RANCH, TOGETHER WITH ALL NECESSARY INCIDENTAL AND APPURTENANT COSTS AND EXPENSES INCURRED IN CONNECTION THEREWITH; PRESCRIBING THE ~ FORM OF SAID BONDS; DESIGNATING THE BONDS AS QUALIFIED TAX-EXEMPT OBLIGATIONS; PROVIDING FOR THE SALE OF SAID BONDS; ESTABLISHING CERTAIN FUNDS WITH RESPECT THERETO; PROVIDING A PLEDGE OF THE FULL FAITH AND CREDIT OF THE CITY AS SECURITY FOR SAID BONDS; APPOINTING A PAYING AGENT FOR SAID BONDS; AND PROVIDING OTHER DETAILS IN CONNECTION WITH SAID BONDS. WHEREAS, the City of Aspen, in the County of Pitkin and State of Colorado (the "City"), is a municipal corporation _ duly organized and existing as a home rule city pursuant to Article XX of the Constitution of the State of Colorado and the Charter of the City (the "Charter"); and WHEREAS, a portion of Section 10.3 of the Charter provides in relevant part as follows: that securities issued for acquiring utilities and rights thereto, or acquiring, improving or extending any municipal utility system, or any combination of such purposes, may be issued without an election. ; and WHEREAS, a portion of Section 10.4 of the Charter provides in relevant part as follows: The city shall not become indebted for any purpose or in any manner in an amount which, including existing indebtedness, shall exceed twenty (20) percent of the assessed valuation of the taxable property within the city, as shown by the last preceding assessment for city purposes; provided, however, that in determining the limitation of the city's power to incur indebtedness there shall not be included bonds issued for the acquisition or extension of public utilities; ; and WHEREAS, the City Council (the "Council") of the City hereby determines that it is in the best interest of the City to finance the acquisition, construction, improvement and installation of a municipal utility system consisting of a hydroelectric generating facility in the vincinity of the T-Lazy 7 Ranch (the "Project"); and WHEREAS, the Council hereby determines to issue its "City of Aspen, Colorado, General Obligation Electric Bonds (Maroon Creek Hydroelectric Generating Project) Series 1987" (the "Bonds") in the aggregate principal amount of $525,000, in order to provide a portion of the funds necessary for the acquisition, construction, improvement and installation of the Project, together with all necessary incidental and -appurtenant costs and expenses incurred in connection therewith, the Bonds to be general obligations of the City and secured by the full faith and credit thereof; and WHEREAS, the Council hereby determines to sell the Bonds to Kirchner Moore & Company (the "Underwriter") as provided herein; and WHEREAS, it is now necessary by ordinance to authorize the issuance, sale and delivery of the Bonds, and to provide for the details of and the security for the Bonds; BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF ASPEN, COLORADO THAT: Section 1. In this Ordinance, the following words and phrases shall have the following meanings: "Bond Fund" means the Bond Fund established pursuant to Section 9 hereof. "Bond Proceeds Account" means the Bond Proceeds Account established pursuant to Section 9 hereof. "Bond Year" means the one-year period beginning on the date of the Bonds and ending the day before the first anniversary date of the date of the Bonds, and each one-year period thereafter. -2- "Bondowner" or "Owner" or "Owner of Bonds" means the person or persons in whose name or names a Bond shall be registered on the registration books of the City maintained by the Paying Agent. "Bonds" means "City of Aspen, Colorado, General Obligation Electric Bonds (Maroon Creek Hydroelectric Generating Project) Series 19~87.'' "Charter" means the Home Rule Charter of the City. "City" means the City of Aspen, Colorado. "Code" means the Internal Revenue Code of 1986, as amended. "Council" means the City Council of the City. "Governmental Obligations" means direct general obligations of, or obligations the payment of the principal of and interest on which are unconditionally guaranteed by, the United States of America. "Investment Instructions" means the letter of instructions provided to the City on the date of issue of the Bonds in accordance with Section 12 hereof. "Ordinance" means this Ordinance and any supplements hereto as may be adopted by the Council. "Paying Agent" means The Colorado National Bank of Denver, Denver, Colorado, which financial institution has been appointed by the City as Paying Agent for the Bonds, and any successor or additional paying agents with respect thereto. "Project" means the acquisition, construction, improvement and installation of a municipal utility system consisting of a hydroelectric generating facility in the vicinity of the T-Lazy 7 Ranch. "Rebate Fund" means the Rebate Fund established pursuant to Section 12 hereof. "Rebate Income Account" means the Rebate Income Account established pursuant to Section 12 hereof. "Rebate Principal Account" means the Rebate Principal Account established pursuant to Section 12 hereof. -3- "Record Date" means the 15th day of the month prior to interest payment date with respect to the Bonds. "Underwriter" means Kirchner Moore & Company. Section 2. For the purpose of providing funds to finance the Project, together with all necessary incidental appurtenant costs and expenses incurred in connection therewith, the City shall issue the Bonds in the aggregate principal amount of $525,000. The principal of, premium, if and interest on the Bonds shall be payable from and secured by a pledge of the full faith and credit of the City, more particularly hereinafter set forth. Section 3. The Bonds shall be issued as fully registered bonds without coupons in the denomination of or any integral multiple thereof. The Bonds shall be as of August 1, 1987 and shall bear interest payable semiannually from their date or such later date as to which interest has been paid on each May 1 and November 1, commencing November 1, 1987. The Bonds shall bear interest at the rates (per annum), in the principal amounts and mature in the years specified as follows: Maturity (November 1) Principal Amount Interest Rate 1988 $25,000 1989 25,000 ~-. 1990 25,000 1991 25,000 1992 30,000 S, 90 1993 30,000 1994 30,000 1995 35,000 1996 35,000 ~,~--~ 1997 40,000 1998 40,000 1999 ~~O,~ 2000 45,000 2001 50,000 7,~0 2002 ~5,009 ~--O, The principal of, premium, if any, and interest on the shall be payable in lawful money of the United States America. The principal of and premium, if any, on the are payable at the principal corporate trust office of Paying Agent in Denver, Colorado. Interest on any Bond -4- is payable by check or draft of the Paying Agent mailed on the interest payment date to the Owner thereof at his or her address as it appears on the registration books of the City or at such other address as is furnished to the Paying Agent in writing by such Owner as of the Record Date. If any Bond shall remain unpaid upon presentation at maturity, interest shall continue to accrue until paid at the rate designated in the Bond. Section 4. The Paying Agent is hereby appointed bond registrar for the City for purposes of the Bonds, and the City hereby approves the execution and delivery of a paying agency agreement to be in form and substance satisfactory to the City Attorney of the City. The Mayor is hereby authorized and directed to execute and deliver the paying agency agreement, and the City Clerk is hereby authorized and directed to attest the paying agency agreement and affix the seal of the City thereto. The Paying Agent shall maintain on behalf of the City books for the purpose of registration and transfer of Bonds, and such books shall specify the persons entitled to the Bonds and the rights evidenced thereby, and all transfers of Bonds and the rights evidenced thereby. Bonds may be transferred or exchanged without cost, except for any tax or governmental charge required to be paid with respect to such transfer or exchange and any cost of printing bonds in connection therewith, at the principal corporate trust office of the Paying Agent. Bonds may be exchanged for _ a like aggregate principal amount of Bonds of other authorized denominations of the same maturity and interest rate. Upon surrender for transfer of any Bond, duly endorsed for transfer or accompanied by an assignment duly executed by the Owner or his or her attorneys duly authorized in writing, the City shall execute and the Paying Agent shall authenticate and deliver in the name of the transferee or transferees a new Bond or Bonds of the same maturity and interest rate for a like aggregate principal amount. The person in whose name any Bond shall be registered shall be deemed and regarded as the absolute Owner thereof for all purposes. Section 5. The Bonds maturing on and after November 1, 1995 shall be subject to redemption, at the option of the City, in whole or in part, and if in part, in inverse order of maturities and by lot within a maturity, on November 1, 1994, and on any May 1 or November 1 thereafter, at a redemption price of 101~ of the principal amount thereof plus accrued interest to the redemption date. -5- Notice of any redemption shall be given by the Paying Agent in the name of the City by sending a copy of such notice by certified or registered first-class, postage prepaid mail, at least thirty (30) days prior to the redemption date, to the Owners of each of the Bonds being redeemed. Such notice shall specify the number or numbers of the Bonds to be redeemed and their redemption date. If any of the Bonds shall have been duly called for redemption and if on or before the redemption date there shall have been deposited with the Paying Agent into the Bond Fund funds sufficient to pay the redemption price of such Bonds at the redemption date, then said Bonds shall become due and payable at such redemption date, and from and after such date interest will cease to accrue thereon. Any Bonds redeemed prior to their maturity shall not be reissued and shall be cancelled in the same manner as Bonds paid at or after maturity. Section 6. The Bonds shall be executed in the name and on behalf of the City with the manual or facsimile signature of the Mayor or Mayor Pro Tem, shall bear a manual or facsimile of the seal of the City and shall be attested by the manual or facsimile signature of the City Clerk or Deputy or Assistant City Clerk. Should any officer whose manual or facsimile signature appears on the Bonds cease to be such officer before delivery of any Bond, such manual or facsimile signature shall nevertheless be valid and sufficient for all purposes. The Mayor and the City Clerk are hereby authorized and directed to prepare and to execute the Bonds in accordance with the requirements of this Ordinance. When the Bonds have been duly executed, the officers of the City are authorized to, and shall, deliver the Bonds to the Paying Agent for authentication. No Bond shall be secured by this Ordinance or entitled to the benefit hereof, or shall be valid or obligatory for any purpose, unless the certificate of authentication of the Paying Agent, in substantially the form set forth in this Ordinance, has been duly executed by the Paying Agent. Such certificate of the Paying Agent upon any Bond shall be conclusive evidence and the only competent evidence that such Bond has been authenticated and delivered hereunder. The Paying Agent's certificate of authentication shall be deemed to have been duly executed by it if manually signed by an authorized signatory of the Paying Agent, but it shall not be necessary that the same signatory sign the certificate of authentication on all of the Bonds issued hereunder. Upon the authentication of the Bonds, the Paying Agent shall deliver the same to the Underwriter or its designees as -6- directed by the City as hereinafter provided. Prior to the delivery by the Paying Agent of the Bonds, there shall be filed with the Paying Agent the following: (a) A certified copy of this Ordinance. (b) A request and authorization to the Paying Agent on behalf of the City and signed by the Mayor to authenticate and deliver the Bonds to the Underwriter upon payment to the City of a sum specified in such request and authorization plus accrued interest thereon to the date of delivery. The proceeds of such payment shall be paid over to the City and deposited as provided in this Ordinance. (c) A policy of municipal bond insurance insuring the payment of the principal of and interest on the Bonds, when due, issued by Municipal Bond Investors Assurance Corporation. If any outstanding Bond shall become mutilated, lost, stolen or destroyed, the City shall execute a new Bond of like maturity, interest rate and denomination to that mutilated, lost, stolen or destroyed, provided that, in the case of any mutilated Bond, such mutilated Bond shall first be surrendered to the City, and in the case of any lost, stolen or destroyed Bond, there shall be first furnished to the City evidence of such loss, theft or destruction satisfactory to the City, together with an indemnity satisfactory to the City. In the event any such Bond shall have matured, instead of issuing a duplicate Bond, the City may pay the same without surrender thereof, making such requirements as its deems fit for its protection, including a lost instrument bond. The City may charge the Owner of such Bond with its reasonable fees and expenses in this connection. Section 7. The Bonds shall be substantially in the form hereinafter set forth, with such variations, omissions and insertions as are permitted or required by this Ordinance. -7- (Form of Bond) [FRONT OF BOND] UNITED STATES OF AMERICA STATE OF COLORADO COUNTY OF PITKIN CITY OF ASPEN GENERAL OBLIGATION ELECTRIC BOND (MAROON CREEK HYDROELECTRIC GENERATING PROJECT) SERIES 1987 No. R $ INTEREST RATE: MATURITY DATE: ORIGINAL ISSUE DATE: CUSIP: August 1, 1987 REGISTERED OWNER: PRINCIPAL SUM: DOLLARS The CITY OF ASPEN, in the County of Pitkin and State of Colorado (the "City"), for value received, hereby promises to pay to the order of the Registered Owner named above, or registered assigns, on the Maturity Date stated above, the _ Principal Sum stated above, with interest thereon from the Original Issue Date stated above or such later date as to which interest has been paid at the Interest Rate per annum stated above, payable on November 1, 1987, and semiannually thereafter on the 1st day of May and the 1st day of November of each year, the principal of and premium, if any, on this Bond being payable at the principal corporate trust office of The Colorado National Bank of Denver, in Denver, Colorado, as Paying Agent, or its successor (the "Paying Agent"), and the interest hereon to be paid to such person as is the Registered Owner hereof as of the close of business at the principal corporate trust office of the Paying Agent on the Record Date by check or draft of the Paying Agent mailed on the interest payment date to said Registered Owner. The Record Date is the 15th day of the month (whether or not a business day) preceding any interest payment date. All payment of the principal of, premium, if any, and interest on this Bond shall be made in lawful money of the United States of America. REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THIS BOND SET FORTH ON THE REVERSE HEREOF WHICH SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS THOUGH FULLY SET FORTH HEREIN. -8- This Bond shall not be entitled to any benefit under the Ordinance, or become valid or obligatory for any purpose, until the Paying Agent shall have signed the certificate of authentication hereon. This Bond is a "Qualified Tax-Exempt Obligation" within the meaning of Section 265 of the Internal Revenue Code of 1986, as amended. IN WITNESS WHEREOF, the City of Aspen, Colorado, has caused this Bond to be signed with the manual or facsimile signature of its Mayor, sealed with the impression of its seal or a facsimile thereof, and attested with the manual or facsimile signature of its City Clerk. [SEAL] CITY OF ASPEN, COLORADO By Attest: Mayor By City Clerk (Form of Paying Agent's Certificate of Authentication) Date of Authentication: This is one of the Bonds described in the Ordinance described herein. THE COLORADO NATIONAL BANK OF DENVER, as Paying Agent By (Manual Signature) Authorized Officer (End of Form of Paying Agent's Certificate of Authentication) [BACK OF BOND] This Bond is one of a duly authorized series of Bonds designated "City of Aspen, Colorado, General Obligation Electric Bonds (Maroon Creek Hydroelectric Generating -9- Project) Series 1987" (the "Bonds"), limited in aggregate principal amount to $525,000, issued under and pursuant to the Constitution and laws of the State of Colorado, the home rule charter of the City of Aspen, Colorado, and an ordinance duly adopted by the City Council of the City (the "Ordinance") prior to the issuance hereof. The Bonds are being issued by the City for the purpose of providing funds for the acquisition, construction, improvement and installation of a hydroelectric generating facility in the vicinity of the T-Lazy 7 Ranch and for payment of all necessary incidental and appurtenant costs and expenses incurred in connection therewith. The principal of, premium, if any, and interest on the Bonds, including this Bond, shall be payable from and secured by a pledge of the full faith and credit of the City. The Bonds are issuable solely in the form of fully registered bonds, without coupons, in the denomination of $5,000 or any integral multiple thereof. This Bond may be transferred or exchanged at the principal corporate trust office of the Paying Agent in Denver, Colorado, but only in the manner, subject to the limitations and upon payment of the charges provided in the Ordinance (including any tax or governmental charge required to be paid with respect thereto and any cost of printing bonds in connection therewith), and upon surrender and cancellation of this Bond. Upon surrender _ for any transfer, duly endorsed for transfer or accompanied by an assignment duly executed by the Registered Owner hereof or his or her attorneys duly authorized in writing, a new registered Bond or Bonds of the same maturity and interest rate and of authorized denomination or denominations ($5,000 and integral multiples thereof) for the same aggregate principal amount will be issued to the transferee in exchange therefor. In addition, this Bond may be exchanged for a like aggregate principal amount of Bonds of other authorized denominations of the same maturity and interest rate. The City and the Paying Agent may deem and treat the Registered Owner hereof as the absolute owner hereof (whether or not payment on this Bond shall be overdue) for the purpose of receiving payment of or on account of principal hereof, premium, if any, and interest due hereon and for all other purposes, and neither the City nor the Paying Agent shall be affected by any notice to the contrary. The Bonds maturing on and after November 1, 1995 are subject to redemption, at the option of the City, in whole or in part, and if in part, in inverse order of maturities and by lot within a maturity, on November 1, 1994, and on any May 1 or November 1 thereafter, at a redemption price of 101~ of the principal amount thereof plus accrued interest to the redemption date. -10- Redemption shall be made upon not less than thirty (30) days prior notice by sending a copy of such notice by certified or registered first-class, postage prepaid mail at least thirty (30) days prior to the redemption date specified in such notice to the Registered Owners of each of the Bonds being redeemed. Such notice shall specify the number or numbers of the Bonds so to be redeemed and the redemption date. If this Bond shall have been duly called for redemption, and if on or before the redemption date there shall have been deposited with the Paying Agent funds sufficient to pay the redemption price of this Bond at the redemption date, then this Bond shall become due and payable at such redemption date, and interest hereon shall cease to accrue. It is hereby certified, recited and declared that all conditions and acts required to be performed precedent to and in the adoption of the Ordinance, and the issuance of this Bond, have been performed in due time, form and manner as required by law; and that the issuance of this Bond and the series of which it forms a part does not exceed or violate any constitutional, statutory or home rule charter limitation or requirement applicable hereto. -11- [Form of Assignment] ASSIGNMENT FOR VALUE RECEIVED the undersigned transfers unto (Tax Identification or Social Security No. ) this Bond of the City of Aspen, Colorado, and does hereby irrevocably constitute and appoint , Attorney to transfer this Bond on the books kept for the registration thereof, with full power of substitution in the premises. Dated: NOTICE: The signature to this assignment must correspond with the name as it appears upon the face of the within Bond in every particular,'without alteration or enlargement or any change whatever. [Form of Bond Counsel Opinion to be inserted here] [Insert Statement of Insurance] (End of Form of Bond) Section 8. The Bonds, when executed as provided by law, shall be delivered to the Underwriter upon receipt of $57~-00.~, plus accrued interest from August 1, 1987 to the date of delivery thereof. Such sale of the Bonds is hereby found to be to the best advantage of the City and is hereby approved. The proceeds of the Bonds shall be used exclusively for payment of the cost of the Project and all necessary incidental and appurtenant costs and expenses incurred in connection therewith and for payment of the costs of issuing the Bonds. Neither the Underwriter nor the subsequent Owner or Owners of any of the Bonds shall be responsible for the application or disposal of the funds derived from the sale thereof by the City or any of its officers. The issuance of the Bonds by the City shall constitute a warranty by and on behalf of the City, for the benefit of each and every Owner of the Bonds, that the Bonds have been issued for a valuable consideration in full conformity with law. -12- The Preliminary Official Statement dated July 21, 1987 relating to the Bonds is hereby approved and the use thereof by the Underwriter is hereby ratified and confirmed. The Mayor is authorized and directed to execute and deliver a final Official Statement in substantially the form of the Preliminary Official Statement. Section 9. The "City of Aspen, Colorado, General Obligation Electric Bonds (Maroon Creek Hydroelectric Generating Project) Series 1987 Bond Fund" is hereby created by the City and ordered established and held by the Paying Agent as a trust fund for the benefit of the Owners of the Bonds. The "City of Aspen, Colorado, General Obligation Electric Bonds (Maroon Creek Hydroelectric Generating Project) Series 1987 Bond Proceeds Account" is hereby created by and established with the City. Upon the issuance, sale and delivery of the Bonds, the accrued interest on the Bonds from August 1, 1987 to the date of delivery of and payment for the Bonds shall be deposited into the Bond Fund. The remaining proceeds from the sale of the Bonds will be deposited into the Bond Proceeds Account. In addition, there shall be deposited by the City into the Bond Fund at least fifteen days prior to each principal and interest payment date, sums sufficient to pay the principal of, premium, if any, and interest on the Bonds when due. The Paying Agent shall use moneys in the Bond Fund solely for the purpose of paying the principal, premium, if any, and interest on the Bonds when due. Moneys on deposit in the Bond Proceeds Account will be used by the City solely for payment of the cost of the Project and all necessary incidental and appurtenant costs and expenses incurred in connection therewith and for payment of the costs of issuing the Bonds. Section 10. The full faith and credit of the City are hereby pledged as security for the payment of the principal of, premium, if any, and interest on the Bonds. Section 11. In furtherance of said pledge of the full faith and credit of the City, it is hereby irrevocably covenanted and agreed that if at any time while any of the Bonds remain outstanding, the payments required to be made into the Bond Fund pursuant to Section 9 hereof are not made in strict accordance with the terms thereof, the Council shall promptly pass and adopt supplementary or emergency appropriation ordinances or resolutions and make such allocations and deposits of moneys from general funds of the City to the Bond Fund as are necessary to bring the amount on deposit in the Bond Fund to the level at which it would have -13- been had the City strictly complied with the provisions of said Section 9. Said actions shall be initiated at the first regular or special meeting of the Council subsequent to such event and completed as promptly as possible. Thereafter, said appropriations, allocations and deposits shall continue to be made in such amounts and with sufficient frequency to assure that the sums of money required to be deposited into the Bond Fund, together with other moneys on deposit in the Bond Fund, shall be sufficient to pay the principal of, premium, if any, and interest on the Bonds when due. Section 12. There is hereby created and established with the City a separate fund to be designated the "City of Aspen, Colorado, General Obligation Electric Bonds (Maroon Creek Hydroelectric Generating Project) Series 1987 Rebate Fund," which shall be expended in accordance with the provisions hereof and the Investment Instructions, and there is further established within said Rebate Fund the Rebate Principal Account and the Rebate Income Account. The City shall make deposits and disbursements from the Rebate Fund in accordance with the Investment Instructions, shall inve~t the Rebate Fund pursuant to said Investment Instructions and shall deposit income from said investments immediately upon receipt thereof in the Rebate Income Account, all as set forth in the Investment Instructions. The City shall employ, at its expense, a person or firm with recognized expertise in the area of rebate calculations, which person or firm shall make the calculations, deposits, disbursements and investments as may be required by the immediately preceding sentence. The Investment Instructions may be superseded or amended by new Investment Instructions drafted by, and accompanied by an opinion of, nationally recognized bond counsel addressed to the City to the effect that the use of said new Investment Instructions will not cause the interest on the Bonds to become includible in gross income for the purposes of federal income taxation. The City shall annually make the rebate deposit described in the Investment Instructions. Records of the determinations required by this Section 12 and the Investment Instructions shall be retained by the City until six (6) years after the final retirement of the Bonds. The City hereby elects, pursuant to Section 148(f)(4) of the Code, to have investment earnings in the Bond Fund commingled with earnings on the other funds and accounts established pursuant to this Ordinance for purposes of the rebate calculations of the Code. -14- Not later than thirty (30) days after the end of the fifth Bond Year and every five (5) years thereafter, the City shall pay to the United States of America ninety percent (90~) of the amount required to be on deposit in the Rebate Principal Account as of such payment date and one hundred percent (10OK) of the amount on deposit in the Rebate Income Account as of such payment date. Not later than sixty (60) days after the final retirement of the Bonds, the City shall pay to the United States of America one hundred percent (100K) of the balance remaining in the Rebate Principal Account and the Rebate Income Account. Each payment required to be paid to the United States of America pursuant to this Section 12 shall be filed with the Internal Revenue Service Center, Philadelphia, Pennsylvania 19255. Each payment shall be accompanied by a copy of the Internal Revenue Form 8038-G originally filed with respect to the Bonds and a statement summarizing the determination of the amount to be paid to the United States of America. Section 13. Any moneys on deposit in the Bond Fund shall be invested only in obligations, securities or instruments which are legal investments for funds of the City. All earnings, income, profits and losses shall be credited thereto. The City covenants that it shall not use or permit the use of any proceeds of the Bonds or any other funds of the City from whatever source derived, directly or indirectly, to acquire any securities or obligations and shall not take or permit to be taken any other action or actions, which would cause any of the Bonds to be an "arbitrage bond" within the meaning of Section 148 of the Code, or would otherwise cause the interest on the Bonds to be includible in gross income for federal income tax purposes. The City covenants that it shall at all times do and perform all acts and things permitted by law and which are necessary or desirable in order to assure that interest paid by the City on the Bonds shall, for purposes of federal income taxation, not be includible in gross income under the Code or any other valid provision of law. In particular, but without limitation, the City further represents, warrants and covenants to comply with the following restrictions of the Code, unless it receives an opinion of nationally recognized bond counsel stating that such compliance is not necessary: (a) Gross proceeds of the Bonds will not be used in a manner which will cause the Bonds to be considered "private activity bonds" within the meaning of the Code. -15- (b) The Bonds are not and shall not become directly or indirectly "federally guaranteed." (c) The City shall timely file Internal Revenue Form 8038-G which shall contain the information required to be filed pursuant to Section 149(e) of the Code. (d) The City shall comply with the Investment Instructions delivered to it on the date of issue of the Bonds with respect to the application and investment of Bond proceeds, subject to Section 12 hereof. The City represents that it reasonably anticipates to issue (or has issued), together with governmental entities which derive their issuing authority from the City or are subject to substantial control by the City, not more than an aggregate total of $10,000,000 of governmental or qualified section 501(c)(3) organization bonds (as defined in the Code) during calendar year 1987. The City recognizes that governmental bonds include tax-exempt obligations such as notes, leases, loans and warrants. The City hereby designates the Bonds as qualified tax-exempt obligations within the meaning of Section 265 of the Code allowing banks, thrift institutions and other financial institutions to avoid the loss of 100K of any otherwise available interest deduction in direct proportion to such institutions' tax-exempt holdings. _ Section 14. The Bonds may be refunded at the discretion and by action of the Council, subject to provisions concerning their payment and any other contractual limitations set forth in this Ordinance, as authorized and permitted by the Charter. A Bond shall not be deemed to be outstanding hereunder if it shall have been paid and cancelled or if cash funds or Governmental Obligations shall have been deposited in trust with an escrow agent for the payment thereof (whether upon or prior to the maturity of any such Bond). In computing the amount of the deposit described above, the City may include interest to be earned on the Governmental Obligations. Section 15. The City hereby appoints The Colorado National Bank of Denver, in Denver, Colorado, as the Paying Agent and bond registrar for the Bonds. The City shall transfer to the Paying Agent, for deposit into the Bond Fund, in immediately available funds, such amounts as are required to pay the principal of, premium, if any, and interest on the Bonds as and when the same become due. -16- Section 16. The officers of the City are 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 printing of the Bonds and the execution of such certificates may be required by the Underwriter relating to, but not limited to, the signing of the Bonds, the use of the proceeds thereof, the tenure and identity of the municipal officials, the receipt of the Bonds' purchase price, and the absence of litigation, pending or threatened, if in accordance with the facts, affecting the validity thereof. Section 17. If any provision of this Ordinance shall be held or deemed to be or shall, in fact, be illegal, inoperative or unenforceable, the same shall not affect any other provision or provisions hereof or render the same invalid, inoperative or unenforceable to any extent whatever. Section 18. This Ordinance will be governed by and construed in accordance with the laws of the State of Colorado. Section 19. All ordinances or resolutions, or parts thereof, in conflict with this Ordinance are hereby repealed. This repealer shall not be construed to revive any ordinance or part of any ordinance heretofore repealed. After the Bonds have been issued, this Ordinance shall be and _ remain irrepealable until the Bonds and the interest thereon shall be fully paid, satisfied and discharged in the manner herein provided, or sufficient provision shall have been made for such payment, satisfaction and discharge such that no Bonds are deemed to be outstanding hereunder. Section 20. A public hearing on this Ordinance shall be held on the 27th day of July 1987, at .m. in the City Council Chambers, Aspen City Hall, Aspen, Colorado. -17- INTRODUCED, READ AND ORDERED published as provided by law by the City Council of the City of Aspen on the 27th~ay of April 1987 ~ . · [SEAL] By , Mayor Attest: City C1 FINALLY adopted, passed and approved this 27th day of [SEAL] By Mayor Attest: City Cl~ '~-- -18-