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HomeMy WebLinkAboutordinance.council.021-72 ORDINANCE NO. Series of 1972 AN ORDINANCE AUTHORIZING THE ISSUANCE OF REFUNDING AND ACQUISITION SALES TAX REVENUE BONDS, SERIES A AND B, OF THE CITY OF ASPEN, COLORADO, IN THE AGGREGATE PRINCIPAL AMOUNT OF $4,675,000, FOR THE PURPOSES OF REFUNDING VALID AND OUTSTANDING SALES TAX REVENUE BONDS OF SAID CITY AND ACQUIRING CERTAIN REAL PRO- PERTY COMMONLY KNOW~ AS THE "THO:4AS PROPERTY", AND ANY IMPROVEMENTS SITUATED THEREON; PP~E- SCRIBING THE FO~M OF SAID BONDS AND INTEREST COUPONS; PROVIDING FOR THE PAYMENT OF THE PRINCIPAL OF AND INTEREST ON SAID BONDS FROM THE REVENUES OF THE ONE PER CENT MUNICIPAL SA~F~TA~ AND FROM OTHER SALES TAX REVENUES; PRESCRIBING OTHER DETAILS IN CONNECTION THERE- WITH, PROVIDING THE USE, DISPOSITION AND HANDLING OF THE PROCEEDS OF SAID BONDS, INCLUDING THE CP~EATION OF CERTAIN FUNDS ~ND ACCOUNTS; AND DECLARING AN EMERGENCY. WHEREAS, by Ordinance No. 16, Series of 1970, as amended, the City Council has imposed a one percent (1%) municipal sales tax, the proceeds of which are to be used, among other purposes, for the acquisition of real property including open space,and WHEREAS, Section 10.5 of the Charter of the City of Aspen provides in part that the City may issue revenue bonds, without the requirement of an election, payable in whole or in part from the available proceeds of a municipal sales or use tax; and WHEREAS, the City Council has heretofore determined that it is necessary and in the best interest of the City and its inhabitants to acquire certain real property known as the "golf course area", and the improvements situated thereon, located adjacent to the City of Aspen and has acquired said property; and WHEREAS, in the process of acquisition of said golf course area the City did issue its Sales Tax Revenue Bonds, dated April 1, 1971, in the original principal amount of $3,700,000, of which issue there remains outstanding the principal amount of $3,660,000, being 732 bonds in the denomination of $5,000 each, numbered 9 to 740, inclusive, bearing interest on April 1st and October 1st, each year, and maturing on October 1st, as follows: - 11 - Amount ~aturity Interest Rate $ 45,000 1973 7% 50,000 1974 7% 55,000 1975 7% 60,000 1976 7% 65,000 1977 7% 70,000 1978 7% 175,000 1979 7% 200,000 1980 7% 225,000 1981 7% 250,000 1982 6.00% 275,000 1983 6.10% 300,000 1984 6.10% 325,000 1985 6.20% 350,000 1986 6.20% 375,000 1987 6.20% 400,000 1988 6.20% 440,000 1989 6.20% ; and WI{EREAS, bonds of said issue maturing on or after October 1, 1978, are redeemable at the option of ~he City on April 1, 1978, and on any interest payment date thereafter prior to maturity, in inverse numerical order, upon payment of par and accrued interest, plus a premium of 3% of principal; and WHEREAS, pursuant to Section 10.6 of the home rule City Charter of said City, and further pursuant to Chapter 125, Article 8, Colorado Revised Statutes 1963, as amended, the City Council, without the requirement of an election, may authorize by ordinance the issuance of refunding bonds for the purpose of refunding and providing for the payment of outstanding bonds of the City as the same mature, and may do so in advance of the maturity thereof by means of an escrow; and WHEP~EAS, the City may issue such refunding bonds in a principal amount exceeding the principal amount of the bonds to be refunded if the aggregate principal and interest costs of the refunding bonds do not exceed such unaccrued costs of the bonds to b~ refunded; and WHEREAS, the authorized purposes of said refunding authority include reducing interest costs or effecting other economies, and modifying or eliminating restrictive contractual limitations, appertaining to the issuance of additional bonds or any project relating thereto; and - 12 - WHEREAS, the City has heretofore determined to issue refunding bonds in the principal amount of $3,760,000 for the purpose of refunding, by means of an escrow, $3,660,000 of its Sales Tax Revenue Bonds referred to above, the aggregate principal and interest costs of which issues are as follows: AGGREGATE PRINCIPAL AND INTEREST COSTS (UNACCRUED AS OF DECEMBER 1, 1972) Refunding Bonds: $ Bonds to be Refunded: $ , thus producing an aggregate principal and interest savings (net) of $ ; and W}{EREAS, the City Council has further determined that it is necessary and in the best interests of the City and its inhabitants to acquire certain real property commonly known as the "Thomas Property", and any improvements thereon, located adjacent to the city of Aspen; and WHEREAS, the City Council has determined to issue its sales tax revenue bonds in the principal amount of $915,000 for the purpose of acquiring said real property referred to above, both the principal of and interest on said bonds to be payable from the proceeds of the one percent (1%) municipal sales tax, and if necessary, from the City share of the Pitkin County-wide sales tax; and WHEREAS, the City Council has accepted the proposal for the purchase of the combined $4,675,000 issue of said bonds to Kirchner, Moore & Company, Denver, Colorado; and WI{EREAS, the City Council has determined that it is necessary to authorize the issuance of said bonds, and to provide details in connection therewith, at the earliest possible date in order to meet the requirements of the contract for purchase of said property to be acquired; BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF ASPEN, COLORADO: Segtion 1. Bond Details - Both Series. That for the purpose of refunding and paying certain outstanding sales tax revenue bonds of the City and acquiring certain real property, known as the "Thomas Property" and any improvements situated thereon, located adjacent to the City of Aspen, as more particularly authorized by Section 10.5 and 10.6 of the Charter of said City, and by Chapter 125, Article 8, Colorado Revised Statutes 1963, as amended, there are hereby authorized a total of $4,675,000 of bonds of the City of Aspen, each to be designated as "Refunding and Acquisition Sales Tax Revenue Bond," and to be divided into two (2) series designated as "Series A" and"Series B". Both the principal of and the interest on all of said Series A and Series B Bonds shall be payable solely and only out of the proceeds of the municipal sales tax of one percent (1%), and, if necessary, from the City's share of the Pitkin County-wide sales tax, as more particularly set forth in this ordinance. Ail of said Bonds shall be dated December 1, 1972, shall be in the denomination of $5,000 each, and shall be payable to If the City shall redeem any part or all of said Series A or Series B Bonds prior to maturity, notice thereof shall be given by publication one time in a newspaper having general circulation in the City of Aspen, not less than thirty (30) days prior to the date of redemption. A copy of the notice shall be mailed to the original purchaser of the bonds at the time of publication. All of said Series A and Series B Bonds and the interest thereon shall be payable at the Bank of Aspen, in Aspen, Colorado. Section 2. Additional Bond Details - Series A (Refunding). Series A Bond shall be issued for such refunding purposes in the principal amount of $3,760,000, numbered 1 to 752, inclusive, shall bear interest from date to maturity at the rate of 6.25% per annum, evidenced by interest coupons thereto attached, said interest to be payable April 1, 1973, and semi-annually thereafter - 14 - on April 1st and October 1st each year, and said Bonds shall mature serially and semi-annually on April 1st and October 1st each year as follows: Amount Maturing April 1 October 1 Year of Maturity $ 15,000 $ 20,000~ 1973 20,00~ 25,000~ 1974 35,00~ 35,000f 1975 60,000- 55,000/ 1976 80,000~ 75,000/ 1977 100,000~ 95,000-- 1978 120,00~ 115,000-- 1979 145,00~ 140,O00w 1980 175,000. 170,000~ 1981 220,000 215,000--- 1982 240,000 235,000~ 1983 280,000 275,000 ~ 1984 320,000' 320,000/ 1985 175,00~ None 1986 Bonds of this issue and series maturing on or before April 1, 1979, shall not be redeemable in advance of their respective maturities. Such Bonds maturing on or after October 1, 1979, shall be redeemable prior to maturity at the option of the City on April 1, 1979, and on any interest payment date thereafter, in inverse numerical order, upon pa~vment of par and accrued interest, plus a premium of 3% of principal. Section 3. Additional Bond Details - Series B (Acouisition). Series B Bonds shall be issued for such property acquisition purposes in the principal amount of $915,000,numbered 1 to 183, inclusive, shall bear interest from date to maturity at the rate of 6.25% per annum, as evidenced by interest coupons thereto attached designated "A,, said interest to be payable April 1, 1973, and semi-annually thereafter on April 1st and October 1st each year, and said Bonds shall mature serially on April 1st and October 1st, as follows: Amount Maturity Year of April 1 October 1 maturity None $ 5,000 1975 to 1978, inclusive None 10,000 1979 to 1985, inclusive $190,000 380,000 1986 $255,000 None 1987 In addition to said "A" coupon interest hereinabove specified, all of said Series B Bonds shall bear additional interest, as evidenced by supplemental interest coupons designated "B", at the rate of 1.75% per annum for the period from January 1, 1973, to October 1, 1975, inclusive, said "B" coupon interest being payable April 1, 1973, and semi-annually thereafter on April 1st and October 1st each year during said period. Bonds of this issue and series maturing on or before October 1, 1978, shall not be redeemable prior to their respective maturities. Such Bonds maturing on or after October 1, 1979, shall be redeemable prior to maturity at the option of the City on April 1, 1979, and on any interest payment date thereafter, in inverse numerical order, upon payment of par and accrued interest, plus a premium of 3% of principal. Section 4. Form and Execution of Bonds and Interest Coupons -Both Series. All of said bonds shall be signed with the facsimile signature of the Mayor of the City, attested by the manual signature of the City Clerk, countersigned with the facsimile signature of the Director of Finance, sealed with a manual impression of the official seal of the City, and the interest coupons to be signed with the facsimile signature of the Director of Finance. When issued as aforesaid as part of said bonds, such interest coupons shall be the binding obligations of the City according to their import. Each of said Bonds shall recite that the same is issued under the authority of the Charter of the City of Aspen and under the further authority of Chapter 125, Article 8, Colorado Revised Statutes 1963, as amended. Pursuant to said latter authority, such recital shall conclusively impart full compliance with all the provisions of said statute, and all such securities issued con- taining such recitals shall be incontestable for any cause what- - 16 - soever after their delivery for value. Should.any officer whose manual or facsimile signature appears on said bonds or the coupons attached thereto cease to be such officer before delivery of the bonds to the purchaser, such manual or facsimile signature shall nevertheless be valid and sufficient for all purposes. Said Bonds and the interest coupons attached or appertaining thereto shall be in substantially the following form: - 17 - STATE OF COLORADO (Form of Bond) UNITED STATES OF AMERICA COUNTY OF PITKIN CITY OF ASPEN REFUNDING AND ACQUISITION SALES TAX REVENUE BOND A Series B NO. $5,000 The City of Aspen, in the County of Pitkin and State of Colorado, for value received, hereby promises to pay to the bearer hereof, out of the special fund hereinafter designated, but not otherwise, the sum of FIV~ THOUSA/~D DOLLARS in lawful money of the United States of America, on the lst day April, of October, 19__, with interest thereon from date to maturity at the rate of Six and Twenty-five Hundredths per centum (6.25%) per annum,* said interest being payable on April 1, 1973, and semi- annually thereafter on the 1st day of April and the 1st day of October each year, both principal and interest being payable at the Bank of Aspen, in Aspen, Colorado, upon presentation and surrender of said interest coupons and this Bond as they severally become due. Bonds of this issue and series maturing on or before 1, 197__ , shall not be redeemable prior to their respective maturity dates. Bonds maturing on or after October 1, 1979, shall be redeemable prior to maturity at the option of the City on April 1, 1979, and on any interest payment date there- after, in inverse numerical order, upon payment of par and accrued interest, plus a premium of 3% of principal. *(In all Series B Bonds at this point insert the phrase "as evidenced by interest coupons designated "A", and additional interest at the rate of one and seventy-five hundredths per centum (1.75%) per annum for the period from January 1, 1973, to October 1, 1975, inclusive, as evidenced by supplemental interest coupons designated "B", ** (Insert date of April 1, 1979 for Series A Bonds - Insert October 1, 1978 date for Series B Bonds) - 18 - This Bond is issued by the City of Aspen, Colorado, for the purpose of *** paying, redeeming and refunding certain valid, lawful and outstanding Sales Tax Revenue Bonds of said City of Aspen,**~ under the authority of and in full conformity with the home rule city Charter of said City, and the Constitution and Laws of the State of Colorado, more particularly being Chapter 125, Article 8, C.R.S 1963, as amended, and pursuant an ordinance of the City duly passed and adopted prior to the issuance of this Bond. The principal of and the interest on bonds of the issue and series of which this is one are payable solely out of and, together with the Refunding and Acquisition Sales Tax Revenue Bonds, Series , of said City, constitute a first and prior lien (but not ~ecessarily an exclusive first lien) on the Sales Tax Revenue Fund, 1972, created by and designated in the Ordinance, referred to above, authorizing the issuance of this Bond. This Bond does not constitute a debt of the City of Aspen within the meaning of any constitutional, statutory or charter limitation or provision. It is hereby certified, recited and warranted that for the payment of this Bond, the City of Aspen has created and will maintain said special fund referred to above, and will deposit therein, out of the revenues of a one per cent municipal sales tax, and, if necessary, from the City share of the Pitkin County-wide sales tax, the amounts and revenue specified in said Ordinance, and out of said Fund, and as an irrevocable charge thereon, will pay this Bond and the interest hereon, in the manner provided by said Ordinance. It is further recited and certified that all require- ments of law and all conditions precedent have been fully com- ***(In the Series B Bonds substitute the following for the phrase included between the triple asterisks: "acquiring certain real property, commonly known as the "Thomas Property", and any improvements thereon, located adjacent to the City,".) - 19 - plied with by the proper officers of the City in the issuance of this Bond. IN TESTIMONY WHEREOF, the City of Aspen, Colorado, has caused this Bond to be signed with the facsimile signature of its Mayor, sealed with a manual impression of the seal of the City, attested by the manual signature of the City Clerk, and counter- signed with the facsimile signature of the Director of Finance, and the interest coupons attached hereto to be signed with the facsimile signature of the Director of Finance, as of the day of December, 1972. (SEAL) ATTEST: (Manual Signature) (Do not Sign) City Clerk CITY OF ASPEN, COLORADO By (Facsimile Signature) (Do not Sign) Mayor (Facsimile Signature) (Do not sign) Director of Finance - 20 - (Form of Interest Coupon) No. A No. B $ April, On the 1st day of October, 19__, unless the bond to which this coupon is attached, if redeemable, has been called for prior redemption, the City of Aspen, in the County of Pitkin and State of Colorado, will pay to bearer hereof the amount shown hereon, in lawful money of the United States of America, at the Bank of Aspen, in Aspen, Colorado, out of the special fund referred to in the Bond to which this coupon appertains, but not otherwise, being interest then due on its Refunding and Acquisition Sales Tax Revenue Bond, Series , dated December 1, 1972, bearing No. (Facsimile Signature) (Do not Sign) Director of Finance Section 5. Allocation, Use and Disposition of Bond Proceeds. All of the proceeds of the Series A and Series B Bonds herein authorized shall be used and expended solely for the purposes herein specified for each series, respectively; PROVIDED, HOWEVER, that all or any appropriate portion of the bond proceeds of either or both of said series may be temporarily invested, pending such authorized use, in securities or obligations which are lawful invest- ments for municipalities in the State of Colorado. It is hereby covenanted and agreed by the City that the temporary investment of the said bond proceeds, or any portion thereof, shall be of such nature and extent, and for such period, that the bonds of the City shall not be or become arbitrage bonds within the meaning of Section 103 (d) of tke Internal Revenue Code, and pertinent regulations, and such proceeds, if so invested, shall be subject to the limitations and restrictions of said Section 103 (d) (4), as the same now exists or may later be amended, and shall further be subject to any applicable regulations of the Internal Revenue Service. Neither the purchaser of said bonds nor the subsequent holder of any of them shall be responsible for the application or disposal by the City or any of its officers of the funds derived from the sale thereof. The issuance of said bonds by the City shall constitute a warranty by and on behalf of the City for the benefit of each and every holder of said bonds, that said bonds have been issued for a valuable consideration in full conformity with law. Section 6. One Percent ~unicipal Sales Tax. The City Council of the City of Aspen has, by Ordinance No. 16, finally passed and adopted on the 13th day of July, 1970, authorized the imposition of a sales tax on the ~ale of tangible personal property at retail upon every retailer and the furnishing of services in the City of Aspen, Colorado. Such sales tax applies to all retail sales and the furnishing of services made on or after January 1, 1971. The rate of tax is one per cent (1%) of the gross receipts, - 22 - as set forth in said Ordinance and in Ordinance No. 28, Serles 1970, finally passed and adopted on the 12th day of December, 1970. Said one percent sales tax is imposed separate and apart from any State sales tax, or any sales tax imposed by Pitkin County. The Ordinance further provides for a food tax credit in the amount of $7.00 for certain residents of the City, to be paid from the revenue of the sales tax. Said Ordinance No. 16, Series 1970, provides.that all revenue from such one percent retail sales tax shall be set aside in a separate fund designated as the "Land Acquisition In- cluding Open Space and Capital Improvements Fund". The purposes for which such fund shall be used are for the acquisition of real property, including open space, or construction of capital improve- ments for municipal purposes, and for the payment of indebtedness incurred for such land acquisition, including open space, or construction of capital improvements, food tax refunds payable by the city, and for such expenditures as may be necessary to protect the real properties, including open space, acquired, or the capital improvements constructed, from any and all, threatened or actual, damages, loss, destruction or impairment from any cause or occurrences. The revenue from said one percent sales tax shall be pledged for the annual payment of the principal of and interest on the Series A and Series B Bonds herein authorized, as more particularly set forth in this Ordinance. Section 7. County-Wide Sales Tax - Pitkin County. The Board of County Commissioners of Pitkin County has, on the 7th day of October, 1968, adopted a resolution providing for a two percent (2%) sales tax on the purchase price paid or charged upon all sales and purchases of tangible personal property at retail and for furnishing of services in Pitkin County. The City of Aspen and Pitkin County have entered into various arrangements for the collection of said Pitkin County-wide sales tax by the State of Colorado and the distribution by the State of the proceeds of said two percent (2%) sales tax 53% to the City of Aspen'and 47% to the County of Pitkin. - 23 - It is hereby covenanted and agreed by the City that should the amounts available from the City's one percent (1%) sales tax be insufficient to meet the principal, interest and reserve fund requirements, hereinafter set forth, the City shall transfer, use and apply, from the proceeds of the two percent (2%) County-wide sales tax received by the City, whatever amount or amounts may be necessary to meet such principal, interest and reserve fund requirements. Said transfer, use and application shall be made at the time or times, and in the manner hereinafter more particularly set forth in Section 8 of this Ordinance. Section 8. Sales Tax Revenue Bond and Interest Fund, 1972. There is hereby established a separate fund to be designated as "Sales Tax Revenue Bond and Interest Fund, 1972" (hereafter referred to as the "Bond Fund") into which Fund the City shall deposit the following amounts: (a) All of the sales tax revenue~ and receipts set aside and deposited in the special fund designated as the "Land Acquisition Including Open Space and Capital Improvement Fund", after provision for the food tax credit, shall be transferred to and deposited into said Bond Fund, as soon as the sales tax revenues are received by the Land Acquisition Fund, and such transfers shall continue during each fiscal period, as herein defined, until the amount on deposit in the Bond Fund is sufficient to pay the installments of principal of and interest on the Bonds becoming due during said fiscal period, and the payments to the Reserve Fund required by Section 11 of this ordinance to be made during said fiscal period. When the amount on deposit in the Bond Fund is sufficient to pay such principal and interest and the payments to the Re- serve Fund, no further deposits need be made from the Land Acquisition Fund durincthat fiscal period. The term "FISCAL PERIOD", as used in this Ordinance, shall be defined as a period beginning on the 2nd day of October in one year and ending on the 1st day of October in the next succeeding year. - 24 (b) In the event that on the 1st day of March in any year there are not suf- ficient moneys on deposit in said Bond Fund to pay in full when due the install- ments of principal of and interest on the Series A end Series B Bonds becoming due on the 1st day of April in said year; or in the event that on the 1st day of September in any year there are not on deposit in said Bond Fund to pay in full when due the installments of principal of and interest on the Series A and Series B Bonds becoming due on the 1st day of October in said year and to make in full when required the payment to the Reserve Fund due on the 30th day of September in said year, then the City shall im- mediately take any and all actions neces- sary to transfer to and deposit in said Bond Fund, from the proceeds of the County- wide sales tax received by the City, whatever amount or amounts are necessary so that on the appropriate date there . shall be sufficient funds on deposit in said Bond Fund to make, in full when due, the said principal, interest and reserve fund payments. (c) Should the City hereafter issue additional bonds payable from and having a lien upon the Bond Fund on a parity with the lien of the Series A and Series B the amounts deposited in the Bond Fund from said Land Acquisition Fund and from the City's share of the County-wide sales tax shall be appropriately and sufficiently increased so that the security for the Series A and Series B Bonds herein authorized shall at no time be restricted or impaired. The owners and holders of the Series A and Series B Bonds authorized herein shall have a first and prior lien (al- though not necessarily an exclusive first lien) on said Bond Fund. The obligations evidenced by said Series A and Series B Bonds shall not constitute a lien on the real property or the improvements, or any other property of the City of Aspen, but shall constitute a lien only on the amounts on deposit in said Bond Fund as provided in this Ordinance. Section 9. Termination and Transfer of Existing Funds. Immediately upon the delivery of the Series A Bonds herein authorized and the establishment of the Refunding Escrow Account herein created, there shall be terminated all of the funds and accounts created and - 25 - established pursuant to the Ordinances and resolutions authorizing and relating to the Sales Tax Revenue Bonds, dated April 1, 1971, hereby refunded. Ail monies on deposit in the "Sales Tax Revenue Bond and Interest Fund, 1971" shall be transferred to the Bond Fund hereby created, and all of the monies on deposit in the "Sales Tax Revenue Bond Reserve Fund" shall be transferred to the Reserve Fund hereby created. Section 10. Administration of Bond Fund. Said Bond Fund shall be maintained as a separate account and is hereby irrevocably pledged for the following purposes and shall be disbursed only in the following order: (a) For the prompt payment of the annual principal of and the interest on the series A and Series B Bonds herein authorized, and the principal of and interest on any additional bonds, subsequently issued, having a lien on the Bond Fund on a parity with the lien of said bonds herein authorized, when and as the same shall become due and payable, respectively. (b) After the provision has been made for payment of the principal of and interest on the bonds authorized herein during a fiscal period, there shall be deposited annually, except as hereinafter provided, an amount of not less than $50,000 into the "Sales Tax Revenue Bond Reserve Fund, 1972," created by and described in the following Section. (c) After all of the payments and accumulations required during each fiscal period by sub- sections (a) and (b) above, any amouhts re- maining in said Bond Fund at the end of such fiscal period may be transferred to the "Land Acquisition Including Open Space and Capital - 26 - Improvement Fund", and thereafter used by the City for any of the purposes set forth in Section 7 of Ordinance No. 16, Series 1970. Section 11. Bond Reserve Fund. There is hereby created a separate fund to be known as the "Sales Tax Revenue Bond Reserve Fund, 1972," (herein called the Reserve Fund). The City shall transfer to and deposit in said Reserve Fund annually an amount of not less than $50,000, said deposits to be made at such time or times as the City Council may determine, but shall be made on or before the 30th day of September in each year commencing in the year 1973. Deposits to the Reserve Fund shall be continued each year until there is on deposit therein a total amount of not less than $400,000. Monies deposited and held in said Reserve Fund may be used and applied for the purpose of making up any deficiency in the Bond Fund to make the payments of principal and interest required by Section 10(a) of this Ordinance, PROVIDED, HOWEVER, that monies in said Reserve Fund shall be used and applied for such purposes ONLY in the event that no other funds or revenues are available to meet the required payments. In the event that monies are with- drawn from the Reserve Fund, the amounts so withdrawn shall be promptly restored to and deposited in the Reserve Fund from the first available monies, and the annual payments hereinabove specified shall be continued, or resumed and continued, until the amount on deposit in said Fund equals or exceeds $400,000. The Reserve Fund shall be maintained in the total amount of $400,000 until such time as the amount therein will be sufficient to pay all of the bonds authorized herein which are then outstanding, and the interest thereon, at which time such monies may be applied to redeem and pay the outstanding bonds or to pay the same at their normal maturity dates. Monies held in the Reserve Fund may be invested or deposited as may be directed by the City Council and in accordance with the ~ 27 - Charter of the City and the laws of the State of Colorado relating to the deposit or investment of such fund and monies. The amount of the earnings from such investments or deposits shall be placed into the Bond Fund. Section 12. Sale of Real Property and Improvements. Nothing in this Ordinance shall prevent the City Council from authorizing the sale at a later date of all or any part of the real property and/or improvements to be acquired with the pro- ceeds of this bond issue or such real property and/or improvements acquired with the proceeds of the Sales Tax Revenue Bonds, dated April 1, 1971, hereby refunded. The City may specifically sell or lease the golf course facility or the "Happy Hearth Lodge"so acquired, as it may deem necessary and in the best interests of the City. In the event of the sale of all or any part of said real property and/or improvements, including either the golf course facility or the Happy Hearth Lodge, or both, all of the proceeds from such sale shall be deposited into the Reserve Fund, established by Section 11 of this Ordinance. In the event that by the deposit therein of the proceeds of such sale, the amount in the Reserve Fund would then exceed $400,000, the amount in excess of $400,000, may be transferred to the Land Acquisition Fund, and, if so trans- ferred, shall be used and applied for any of the lawful purposes set forth in Ordinance No. 16, Series of 1970. Section 13. Covenants of the City. The City hereby irrevocably covenants and agrees with each and every holder of the Bonds issued under the provisions of this Ordinance, that so long as any of said bonds remain outstanding: (a) It will not repeal either Ordinance No. 16, Series of 1970 or Ordinance No. 28, Series of 1970, referred to above, and that it will not amend either Ordinance by decreasing the sales tax rate of 1% of gross receipts. (b) It will administer, enforce and collect, or cause to be administered, enforced and collected, the sales tax authorized by said Ordinance NO. 16, Series of 1970, and shall de- posit all of the revenue received from the imposition of the sales tax into the separate fund provided by Section 7 of Ordinance No. 16, Series of 1970. (c) It will keep such books and records showing the proceeds of the one percent municipal sales tax and the share received by the City from the County-wide sales tax, in which com- plete entries shall be made in accordance with standard principles of accounting, and any owner and holder of any of the Sales Tax Revenue Bonds shall have the right at any reasonable times to in- spect the records and accounts relating to the collection and receipts of such sales tax. (d) It will, at least once each year, cause an audit of the records relating to the collaction and receipts of the sales tax proceeds, and upon request, make available the report of the auditor or accountant, to any holder of such bonds, and shall mail a copy of the report to the original purchaser of the bonds. Such audit may be made part of and included within the general audit of the City, and made at the same time as the general audit. (e) In the event that the City's 1% sales tax or the County-wide 2% sales tax, or both such taxes, are replaced and superceded by a State collected-locally shared sales tax or taxes, or are replaced and superceded in some other manner from some other source or sources, the revenues derived by the City from such replacement source or sources are hereby pledged and as received by the City shall be placed in the Bond Fund in amounts at least sufficient to meet all principal, interest and reserve fund require- ments relating to the Series A and Series B Bonds herein authorized and any then outstanding parity bonds. The City Council shall, promptly as required hereby, take any and all actions which may be necessary to accomplish such deposits. From and after the - 29 - date of said replacement, the bonds herein authorized, and any then outstanding parity lien bonds, shall have a first and prior lien (but not necessarily an exclusive such lien) upon such re- placement revenues to the extent herein specified. Section 14. Additional Bonds. No additional bonds shall be issued payable from the one percent municipal sales tax, or the share received by the City from the County-wide sales tax, and having a lien upon such funds or amounts which is superior to the lien of the bonds authorized herein. However, nothing in this Ordinance shall be construed in such manner as to prevent the issuance by the City of additional bonds payable from any or all of the funds referred to above and constituting a lien upon said fund or funds equal to or on a parity with the lien of the bonds authorized herein, provided that the City is current in all payments of principal and interest herein required and in the accumulation of the Reserve Fund herein provided, and that the revenue from only the one percent municipal sales tax authorized by Ordinance No. 16, Series of 1970, after payments for food tax credit, in the twelve (12) calendar months immediately preceding the issuance of said additional parity bonds shall have been equal to or greater than 1.4 times the aggregate average annual principal and interest requirements on the Bonds herein authorized, all then outstanding parity bonds, and the additional parity bonds proposed to be issued. Nothing herein shall prevent the City from issuing bonds payable from such fund or funds and having a lien which is junior or subordinate to the lien of the bonds herein authorized. Section 15. Refunding Escrow Account. The par proceeds of Series A Bonds herein authorized, in the amount of $3,760,000, shall 5e deposited by the City, in a special fund and separate trust account, for the purpose of refunding the outstanding Sales Tax Revenue Bonds, dated April 1, 1971, of the City (herein sometimes - 30 - referred to as the "Bonds 1971"). said trust account shall be d~signated as the "City of Aspen, Sales Tax Revenue Bonds Refunding Escrow Account, 1972" (herein sometimes referred to as the "Refunding Escrow Account", or "Escrow Account"), to be established and main- tained at the Central Bank and Trust Company, Denver, Colorado, a commercial bank duly organized and existing under the Laws of the State of Colorado, being a member of the Federal Deposit In- surance Corporation, having full and complete trust powers (here- inafter sometimes referred to as the "Bank"). The accrued interest, if any, on the outstanding Bonds 1971 to be refunded, from the last interest payment date thereon to the date of the issuance of the Series A Bonds herein authorized shall be deposited by the City with the Bank in the Refunding Escrow Account. Such amounts, when invested by the Bank, will be at all times at least sufficient to pay the interest and principal, together with any prior redemption premiums, of the Bonds 1971 to be refunded and paid under and in accordance with the following schedule: (A) Bonds of the designated issue, numbered and maturing as follows, shall be paid and retired at their respective maturity dates according to their original terms: Issue Bonds Maturin~ Bonds Numbered Bonds 1971 1973 to 1981, incl. 9 to 197, incl. (B) Bonds of the designated issue, maturing and n~_mbered as follows, shall be called for redemption prior to their respective maturity dates, and shall be paid on the Prior Redemption Date and at the price set forth below. (all Issue Maturity Bond Numbers Bonds 1971 1988 and 1989 573 to 740 Bonds 1971 1982 to 1987 198 to 572 numbers inclusive) Prior Redemption Date April 1, 1980, at par an( accrued interest, plus a premium of 3% of princip~ April 1, 1982, at par an( accrued interest, plus a premium Of 3% of principal. - 31 - (C) Interest on said Bonds 1971 maturing in the years 1973 and thereafter shall be paid semi-annually each year, on the proper interest payment dates according to their original terms, until said bonds mature or until the proper Prior Redemption Date, whichever is the earlier date. Section 16. Accrued Interest on Series A and Series B Bonds. The accrued interest, if any, on the Series A and Series B Bonds herein authorized from their date to the date of the issuance and delivery thereof, shall be deposited in the Bond Fund herein created, and held for the payment of interest on said Bonds when the same becomes due and payable. Section 17. Investments in Refunding Escrow Account. The Bank shall invest the funds on deposit in the Refunding Escrow Account in direct obligations of the United States of America ONLY, and shall fully secure any cash balance in said Account in the manner required by law for other trust funds. If, for any reason, at any time, the funds on hand in such Refunding Escrow Account shall be insufficient to meet such payments, as the same shall be about to become due and payable, the City shall forthwith deposit in such Refunding Escrow Account such additional funds as may be required fully to meet the amount so about to become due and payable from any legally available fund or monies of the City. Section 18. Obligations of Escrow Bank. The Bank shall from time to time redeem at maturity all or the appropriate portion of the United States obligations in said Refunding Escrow Account, in sufficient amounts so that the proceeds therefrom and the interest thereon as the same accrues, will be sufficient to meet the interest requirements on the Bonds 1971 as such interest accrues and to pay or call in and redeem said Bonds 1971 at their respective maturities or on the Prior Redemption Date, according to the schedule hereinabove set forth. - 32 - Section 19. Authorization to Execute Escrow Agreement. The Mayor, City Clerk and Director of Finance shall, and they are hereby authorized and directed to take all necessary or appropriate action toward the execution of a proper Escrow Agreement with the Bank concerning the deposits in, investments of and disbursements from said Refunding Escrow Account, and such other agreements as may be necessary or desirable to effectuate the provisions of this Ordinance and comply with the requirements of law. The form of the Refunding Escrow Agreement is attached as "Exhibit A" and in- corporated herein by specific reference. Section 20. Notice of Refundin~ and Redemption.. Notice of refunding and redemption of the Bonds 1971 shall be given at or about the time of such refunding, by publication of such notice one time in a newspaper having general circulation in the City of Aspen. The form of such notice is set forth in Exhibit "B" and incorporated herein by specific reference. Notice of the prior redemption of said Bonds 1971 shall also be given in the time and manner required by law and, unless additional and more extensive notice is so required, such notice shall be given by publication one time in a newspaper having general circulation in the City of Aspen, at least thirty (30) days prior to the date of such redemption. Such notice shall describe the bonds by their legal descriptions, date, number and amount, and shall further state that after such redemption date the interest on those bonds called for redemption will cease. In addition to the published notice referred to above, notice of such refunding and redemption shall be sent by registered ma~l at the time of said publication to the following at the last known address thereof: (a) Bond Purchaser: (b) Fiscal Agent: (c) Paying Agent: Merrill Lynch, Pierce, Fenner and Smith, Inc., San Francisco, California Kirchner, Moore & Company, Denver, Colorado Bank of Aspen, Aspen, Colorado - 33 - Section 21. Declarations and Findings of the City Council. The City Council having been fully informed of and having considered all the pertinent facts and circumstances, does hereby determine and declare that all of the applicable requirements, limitations and provisions of the home rule Charter of the City of Aspen, and Chapter 125, Article 8, Colorado Revised Statutes 1973, as amended, have been met and complied with in the issuance of the Series A and Series B Bonds herein authorized and further that all procedures undertaken incident thereto, are in full compliance and conformity with all applicable requirements, provisions and limitations prescribed by the Charter of the City, and the Constitution and Laws of the State of Colorado thereunto enabling. That the officers and members of the City Council are hereby authorized and directed to take all other actions necessary or appropriate to effectuate the provisions of this Ordinance, including, but not being limited to, the execution of such certificates and affidavits as may reasonably be required by the purchaser of said bonds. Section 22. Ratification and Approval of Prior Action. That all actions heretofore taken by the officers and members of the City Council, not inconsistent with the provisions Of this Ordinance relating to the authorization, sale, issuance and delivery of said series A and Series B Bonds, be and the same are hereby ratified, approved and confirmed. Section 23. Severabilit~. That if any one or more sections or parts of this Ordinance shall be adjudged unenforce- able or invalid, such judgment shall not affect, impair or in- validate the remaining provisions of this Ordinance, it being the intention that the various provisions hereof are severable. Section 24. Repealer. All ordinances or parts thereof in conflict with this Ordinance are hereby repealed. Section 25. Ordinance Irrepealable. After said bonds are issued, this Ordinance shall be and remain irrepealable until said bonds and the interest thereon shall have been fully paid, satisfied and discharged. - 34 - Section 26. Emergency Provision. By reason of the fact that the City must complete the refunding procedures and the pur- chase of the real property herein provided, pursuant to the option granted to the City, at the earliest possible date, and that it is necessary to issue the Series A and Series B Bonds herein authorized for such purposem, it is hereby declared that an emergency exists and that this Ordinance is necessary to the immediate preservation of the public property, health, peace and safety, and that it shall be in full force and effect upon final passage, and be published within ten (10) days after final passage, or as soon thereafter as possible. Section 27. Recording and Authentication. This Ordinance, as adopted by the City Council, shall be numbered and recorded in the official records of the City. Its adoption and publication shall be authenticated by the signature of the Mayor, or Mayor Pro-Tem, and the City Clerk, and by the certificate of publication. INTRODUCED AND APPROVED ON FIRST READING This day of , 1972. (SEAL) ATTEST: Mayor City Clerk - 35 -