CITY OF HOMER

HOMER, ALASKA

                                                                                                                        City Manager

RESOLUTION 05-15(S)

 

 

A RESOLUTION OF THE CITY COUNCIL OF HOMER, ALASKA AUTHORIZING AND PROVIDING FOR THE INCURRENCE OF INDEBTEDNESS IN THE AMOUNT OF $1,700,000 FOR THE PURPOSE OF CONSTRUCTING THE NEW HOMER PUBLIC LIBRARY.

 

WHEREAS, It is necessary for the City of Homer to raise a portion of the cost of constructing the new Homer Public Library by borrowing funds in the principle amount of $1,700,000, and

           

WHEREAS, The authorization to borrow funds and incur indebtedness for this purpose is contained in Ordinance 04-30(A) and Resolution 04-88, and

 

WHEREAS, The City intends to obtain assistance from the United States Department of Agriculture Rural Development Community Facilities Grant and Loan Program in the financing of the library project, and

 

WHEREAS, The City Council understands that the interest rate on the loan is 4.5%, the term is thirty years, and the annual payments beginning in FY 2006 shall be $104,380, and

 

WHEREAS, The City Council has pledged its full faith and credit (Ordinance 04-30-A) to secure the loan.

           

NOW THEREFORE BE IT RESOLVED, In consideration of the premises above, the City Council hereby resolves:

 

  1. To have prepared on its behalf and to adopt an ordinance or resolution for the issuance of long term debt containing such items and in such forms as are required by State statutes and as are agreeable and acceptable to the Government.
  2. To refinance the unpaid balance, in whole or in part, of its loan upon the request of the Government if at any time it shall appear to the Government that the City is able to refinance its loan by obtaining a loan for such purposes from responsible cooperative or private sources at reasonable rates and terms for loans for similar purposes and periods of time as required by section 333 (c) of said Consolidated Farm and Rural Development Act (7 U.S.C. 1983 (c) ).

 

 

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  1. To provide for, execute, and comply with FORM RD 400-4, “Assurance Agreement,” and Form RD 400-1, “Equal Opportunity Agreement,” including an ”Equal Opportunity Clause,” which clause is to be incorporated in, or attached as a rider to, each construction contract and subcontract involving in excess of $10,000 of the proceeds from this loan.
  2. To indemnify the Government for any payments made or losses suffered by the Government on behalf of the City. Such indemnification shall be payable from the same source of funds pledged to pay the loan or any other legal permissible source,
  3. That upon default in the payments of any principle and accrued interest on the loan or in the performance of any covenant or agreement contained herein or in the instruments incident to making or insuring the loan, the Government at its option may (a) declare the entire principle amount then outstanding and accrued interest immediately due and payable, (b) for the account of the City (payable from the source of funds pledged to pay the loan or any other legally permissible source), incur and pay reasonable expenses for repair, maintenance, and operation of the facility and such other reasonable expenses as may be necessary to cure the cause of default, and/or (c) take possession of the facility, repair, maintain, and operate or rent it. Default under the provisions of this resolution or any instrument incident to the making or insuring of the loan may be construed by the Government to constitute default under any other instrument held by the Government and executed or assumed by the City, and default under any such instrument may be construed by the Government to constitute default hereunder.
  4. Not to sell, transfer, lease, or otherwise encumber the facility or any portion thereof, or interests therein, or permit others to do so without the prior written consent of the Government.
  5. Not to borrow money, enter into any contract or agreement, or otherwise incur any liabilities for any purpose in connection with the facility (exclusive of normal maintenance) without the prior written consent of the Government if such undertaking would involve the source of funds pledged to pay the loan.
  6. To place the proceeds of the loan on deposit in an account and in a manner approved by the Government. Funds may be deposited in institutions insured by the State or the Federal Government or invested in readily marketable securities backed by the full faith and credit of the United States. Any income from these accounts will be considered as revenues of the system.
  7. To comply with all applicable State and Federal laws and regulations and to continually operate and maintain the facility in good condition.
  8. To provide for the receipt of adequate revenues to meet the requirements of debt service, operation and maintenance, and the establishment of adequate reserves. Revenue from the operation of the facility accumulated over and above that needed to pay operating and

 

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maintenance, debt service and reserves may only be retained or used to make  prepayments on the loan. Revenue from the operation of the facility cannot be used to pay any expenses which are not directly incurred for the facility financed by the Government. No free service or use of the facility for activities other than normal library services will be permitted.

  1. To acquire and maintain such insurance and fidelity bond coverage as may be required by the Government.
  2. To establish and maintain such books and records relating to the operation of the facility and its financial affairs and to provide for the required audit thereof as required by the Government, to provide the Government a copy of each such audit without its request, and to forward to the Government such additional information and reports as it may from time to time require.
  3. To provide the Government at all reasonable times access to all books and records relating to the facility and access to the property of the system so that the Government may ascertain that the City is complying with the provisions hereof and of the instruments incident to the making or insuring of the loan.
  4. That if the Government requires that a reserve account be established and maintained, disbursements from that account may be used when necessary for payments due on the loan if sufficient funds are not otherwise available. With the prior written approval of the Government, funds may be withdrawn for: (a) Paying the cost of repairing or replacing any damage to the facility caused by catastrophe (b) Repairing or replacing short-lived assets (c) Making extensions or improvements to the facility. Any time funds are disbursed from the reserve account, additional deposits will be required until the reserve account has reached the required funded level.
  5. To operate the facility as a public library and provide adequate service to all patrons in accordance with applicable law.
  6. To comply with the measures identified in the Government’s environmental impact analysis for this facility for the purpose of avoiding or reducing the adverse environmental impacts of the facility’s construction or operation.
  7. To accept a loan in an amount not to exceed $1,700,000 under the terms offered by the Government.

 

The provisions hereof and the provisions of all instruments incident to the making or the insuring of the loan, unless otherwise specifically provided by the terms of such instrument, shall be binding upon the City as long as the loan is held or insured by the Government or assignee. The provisions of sections 6 through 17 hereof may be provided for in more specific detail in the loan authorization ordinance; to the extent that the provisions contained in such ordinance should be found to be inconsistent

 

 

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with the provisions hereof, these provisions shall be construed as controlling between the City and the Government or assignee.

 

BE IT FURTHER RESOLVED, That the City Manager is hereby authorized and empowered to execute the appropriate documents and to take all other actions necessary as may be required in regard to or as evidence of such loan; and to operate the facility under the terms offered in said loan agreement(s), and

 

BE IT FURTHER RESOLVED, That the City Manager is authorized to execute such documents at the time he determines that all of the other major identified funding sources are secured and confirmed and the loan is the final piece of funding needed to reach the project budget adopted by the Council.

     

PASSED AND APPROVED by a duly constituted quorum of the Homer City Council this 24th day of January, 2005.

 

CITY OF HOMER

 

 

                             

JAMES HORNADAY, MAYOR

 

ATTEST:

 

 

 

MARY L. CALHOUN, CMC, CITY CLERK

 

 

 

Fiscal Note: $1,700,000 loan, 4.5% annual interest, $104,380 annual payments

 

AYES         ___________

NAYS        ___________

ABSENT    ___________

Not Voting ___________