HomeMy WebLinkAbout850 - AUTHORIZING Water and Sewer Revenue Bonds, Series 2000 in the amount of $25,330,000. Intro. 5RESOLUTION NO. 850
A RESOLUTION CONCERNING THE PROPOSED CITY OF BOULDER,
COLORADO (ACTING THROUGH ITS WATER UTILITY ENTERPRISE AND
ITS WASTEWATER UTILITY ENTERPRISE), WATER AND SEWER
RBVENUE BONDS, SERIES 2000, IN A PRINCIPAL AMOUNT OF UP TO
$25,330,000; AUTHORIZING THE OFFICIAL NOTICE OF BOND SALE WITH
RESPECT TO SAID BONDS; PRESCRIBTNG CERTAIN DETAILS
CONCERNING SAID PROPOSED SALE AND SAID BONDS; APPROVING THE
FORM OF A PRELIMINARY OFFICIAL STATEMENT; AND PROVIDING THE
EFFECTIVE DATE OF THIS RESOLUTION.
WHEREAS, flie City of Boulder, Colorado, in the County of Boulder and State of Colorado
(the "City"), is a municipal corporation duly organized and existing as a home rule city pursuant to
Article XX of tha ConsYitution of the State of Colarado (the "Constitution") and Yhe home rule
charter of the City (the "Charter"); and
WHEREAS, Article X, Section 20 of the Constitution ("Amendment One") requires thati
bonded debt not be issued without prior voter approval unless the issuer is an "Enterprise" as defined
in Amendment One; and
WHEREAS, Ordinance No. 5601, introduced, read, passed and adopted on the 9th day of
November 1993, added new sections 11-1-55 to -61 to Yhe Boulder Revised Code, 1981 (the "City
Code") providing for the establishment of the City's water system as a"water activity enterprise"
within the meaning ofPart I ofArticle 45.1 ofTitle 37, Colorado Revised Statutes, as amended, and
naming the CiYy's water system the "Water Utility Lnterprise;" and
WHEREAS, Ordinance No. 5601 also added new sections 11-2-36 to -42 to the City Code,
providing for the establishment of the City's sanitary sewer system as a"water activity enterprise"
within the meaning ofPart 1 ofArticle 45.1 ofTitle 37, Colorado Revised Statutes, as amended, and
naming the City's sanitary sewer system the "Wastewater Utility Enterprise;" and
WHEREAS, pursuant to the Charter and the City Code, the City Council of the City (the
"Council") is the governing body of the Water Utility Enterprise and the Wastewater Utility
Enterprise and the Council need not announce or acknowledge that actions taken by the Council are
takenbythegoverningbodyofthe WaterUtilityEnYerprise and/arthe WastewaterUtilityEnterprise;
and
WHEREAS, pursuant to the Charter and tha City Code, the Water Utility Enterprise and the
Wastewater Utility Enterprise may issue revenue bonds payable from revanues derived from the
operation of such Enterprise without voter approval so long as such Enterprise qualifies as an
"Enterprise" within the meaning of Amendment One in the City's fiscal year of the issuance of such
revenue bonds; and
WHEREAS, the Water Utility Enterprise and the Wastewater Utility Enterprise are
"Enterprises" within the meaning of Amendment One; and
WHEREAS, the Council deems it advisable and necessary to issue revenue bonds ofthe City
in an aggregate principal amount of up to $25,330,000 designated Water and Sewer Revenue Bonds,
Series 2000 (the "Bonds"), to provide funds (a) to acquire Barker Reservoir and its related facilities,
purchase a conservation easement on approximately 1000 acres of private property known as
Caribou Ranch, replace the upper segment of the Lakewood Raw Water Pipeline, install Automated
Meter Reading Equipment on all City water meters and make any other additional improvements to
the City's water facilities, (b) to fund a Reserve Fund and (c) to pay necessary incidental and
appurtenant expenses in connection therewith, including the cost of issuance of the Bonds.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
BOULDER THAT:
Section 1. The Bonds shall be, and the same hereby are ordered to be, publicly sold, and
the Council shall cause sealed bids to be received and to be opened publicly for the purchase of the
Bonds on June 6, 2000 or such other date as shall be determined by the City Manager of the City (the
"City Manager"). Upon making such a public sale date determination, the City Manager shall notify
the Director of Finance and Record of the City (the "Director of Finance and Record") as to the date,
hour and place that sealed bids shall be received and opened. The City shall indicate in the notice
hereinafter described the date that sealed bids shall be received and opened.
Section 2. The Mayor of the City (the "Mayor") and the Director of Finance and
Record together are hereby authorized and directed to provide for the publication of the Official
Notice of Bond Sale in the (Boulder) Daily Cnmera at such times as they deem adequate to give
reasonable notice of the proposed sale, but no less than once after the date hereof and at least five
days prior to the public sale date determined by the City Manager. The Official Notice of Bond Sate
shall be in substantially the following form, with such changes therein, including but not limited to
changes in dates, principal amounts and maturities and completions thereto, as shall be deemed to
be in the best interest and to the best advantage of the City, the execution of such notice by the
Mayor and the Director of Finance and Record to indicate conclusively the Council's approval of
any and all such changes for purposes of this Resolution:
[Form of Official Notice of Bond Sale]
Official Notice of Bond Sale
$25,330,000
City of Boulder, Colorado
(Acting through its Water Utility Enterprise
and its Wastewater Utility Enterprise)
Water and Sewer Revenue Bonds
Series 2000
(Payable solely from certain net income ofthe municipal water system and municipal sanitary
sewer system.)
PUBLIC NOTICE IS HEREBY GIVEN that the City Council of the City of Boulder (the
"Council" and "City," respectively), in the County of Boulder and State of Colorado, will, on
Tuesday, the 6th day of June, 2000, at the hour of 10:00 a.m., local time, in the Municipal Building,
1777 Broadway, Boulder, Colorado, receive sealed bids and publicly open the same for the purchase
of the bonds of the City, particularly described below:
BOND PROVISIONS
Issue
The City (acting through its Water Utility Enterprise and its Wastewater Utility Enterprise)
will issue its "Water and Sewer Revenue Bonds, Series 2000," in the principal amount of
$25,330,000 (the "Bonds") pursuant to an ordinance to be adopted by the City (the "Ordinance").
Form, Dates and Maturities,
The Bonds subject to this Official Notice of Bond Sale will be issued as fully registered
bonds and shall be executed and delivered only in global book-entry form registered in the name of
Cede & Co., as nominee of The Depository Trust Company ("DTC"),New York, New York, acting
as securities depository of the Bonds. The Bonds may be purchased in the denominations of $5,000
and any integral multiples thereof. The Bonds will be dated June 1, 2000. Interest will be payable
on each June 1 and December 1, commencing December 1, 2000. The Bonds will mature on
December 1 in each of the designated amounts and years as follows:
Date Maturing Amounts
(December I) Maturing*
zooo $lsso,ooo
2001 955,000
2002 1,015,000
2003 1,080,000
2004 1,145,000
2005 1,210,000
2006 1,270,000
2007 1,335,000
2008 1,400,000
2009 1,465,000
2010 1,540,000
2011 890,000
2012 935,000
2013 985,000
2014 1,040,000
2015 1,090,000
2016 1,150,000
2017 1,215,000
2018 1,280,000
2019 1,355,000
2020 1,425,000
*Estimate; subject to change;
see "TERMS OF SALE-Adjustment of Principal Amount."
Book-Entry
The City, after consultation with its financial advisor, will make arrangements for custodial
deposit of the Bonds with DTC, New York, New York. The Bonds will therefore be registered in
the name of Cede & Co., as nominee of DTC, which will act as securities depository for the Bonds.
Ownership interest in the Bonds will be transferred onlypursuant to the "Book-Entry Only System"
of DTC in a denomination of $5,000 or any integral multiple thereof. After the initial deposit of the
Bonds with DTC, they may not be removed from such custodial deposit, transferred or exchanged
except as provided in the Ordinance.
Interest Rates and Limitations
(a) It is permissible to bid different or "sp1iY' interestrates for the Bonds;
provided, however, that only one interest rate shall be specified for any maturity.
(b) Each rate stated must be in a multiple of one-eighth (1/8) or
one-twentieth (1/20) of one percent (1%) per annum.
(c) The maximum interest rate named for any Bond shall not exceed the
minimum interest rate named for any other Bond by more than 3.50% per annum.
(d) A zero rate of interest may not be designated.
(e) Each Bond shall bear interest from its date to its stated maturity at the
interest rate stated in the bid.
(f) Bids may not provide for supplemental or "B" coupons or interest
rates.
Purpose of Issue
The Bonds are authorized to be issued for the purposes of (a) acquiring Barker Reservoir and
its related facilities, purchasing a conservation easement on approximately 1000 acres of private
property known as Caribou Ranch, replacing the upper segment of the Lakewood Raw Water
Pipeline, installing Automated Meter Reading Equipment on all City water meters and making any
other additional improvements to the City's water facilities, (b) funding a Reserve Fund and
(c) meeting necessary incidental and appurtenant costs and expenses in connection with these
purposes, including, without limitation, the costs of issuance of the Bonds.
Redemption
Optional Redemption. The Bonds maturing on and after December 1, 2011 will be callable
for redemption at the option ofthe City, in whole or in part, and, if in part, in such order of maturities
as the City shall determine and by lot within a maturity on December 1, 2010, and on any date
thereafter, at a redemption price equal to the par amount thereof plus accrued interest to the
redemption date.
Term Bonds; Mandatary Sinking Fund Redemption. A bidder may request that Bonds
maturing on and after December 1, 2011 be included in one or two term Bonds. Amounts included
in a single term Bond must consist of consecutive maturities of Bonds and must bear the same rate
of interest. Any such term Bond will be subject to mandatory sinking fund redemption in the same
amounts and on the same dates as the Bonds would have matured if they were not included in a term
Bond. Bonds redeemed pursuant to mandatory sinking fund redemption will be redeemed at a
redemption price equal to the par amount of such Bonds plus accrued interest to the redemption date
in the manner as otherwise provided in the Ordinance. Any election to designate Bonds as being
included in a term Bond must be made in the Official Bid Form available from the City. See
"TERMS OF SALE-Bid Proposals."
Tender for the Bonds
if the City provides funds to pay the principal of and interest on the Bonds prior to the date
such Bonds are subject to optional redemption (i.e., December 1, 2010), as described above, and the
City offers to purchase all of the Bonds at a purchase price consented to in writing by the registered
owners of 90% or more in aggregate principal amount of such Bonds then outstanding, then all other
registered owners will be deemed to have tendered their Bonds for purchase at such price, whether
or not actually tendered, and upon deposit of moneys sufficient to purchase all such Bonds, interest
on such Bonds will cease to accrue and the Bonds shall no longer be deemed outstanding.
Place of Payment
Principal of and premium, if any, on the Bonds will be payable to the registered owner
(Cede & Co.) upon presentation and surrender of the Bonds at the principal office of the Director
of Finance and Record, in Boulder, Colorado, as paying agent, or its successor or assignee (the
"Paying Agent"). Interest on the Bonds will be payable by check or draft ofthe Paying Agent mailed
or forwarded by wire transfer on the interest payment date to the registered owner thereof (Cede &
Co.) as of the close of business on the Record Date (the 15th day of the month prior to each interest
payment date on the Bonds, whether or not a business day). All payments of the principal of,
premium if any, and interest on the Bonds shall be made in lawful money of the United States of
America.
Security
The Bonds will be payable from, and will constitute a first and prior (but not exclusive) lien
on, the Net Income of the municipal water system and the sanitary sewer system and moneys on
deposit in the Bond Fund and the Reserve Fund established by the Ordinance. Net Income of the
municipal water system and sanitary sewer system means the gross income derived from the
operation and use of the water system and the sanitary sewer system as maybe designated after the
deduction of the operation and maintenance expenses as more fully described in the Offcial
Statement prepared by the City with respect to the Bonds.
Additional Bonds
The Ordinance will permit the issuance of additional bonds of the City, payable from a lien
on the Net Income on a parity with, or subordinate to, the lien thereof of the Bonds. There are
presently $1,670 ,000 City of Boulder, Colorado, Water and Sewer Revenue Bonds, Series 1992,
$9,955,000 City of Boulder, Colorado, Water and Sewer Revenue Bonds, Series 1996, and
$15,830,000 City of Boulder, Colorado (Acting through its Water Utility Enterprise and its
Wastewater Utility Enterprise), Water and Sewer Revenue Bonds, Series 1999, outstanding payable
from the Net Income on a parity with the Bonds.
Authorization
The Bonds are authorized to be issued by the Constitution of the State of Colorado, the
Charter of the City, the laws of the State of Colorado, the ordinance of the City establishing the
systems as "Enterprises" and the Ordinance.
TERMS OF SALE
Bid Proposals
Any bidder is required to submit an unconditional and written bid for the entire issue,
specifying the interest rate or rates and specifying the price at which the bidder will purchase the
Bonds, which price shall be at or above par plus accrued interest. Each bidder must use the Official
Bid Form available from the City. Each bid shall also set forth, for informational purposes only, the
actuarial yield as defined under "Basis Of Award" below. Each bid must be in a sealed envelope
addressed to: Ms. Cappie I. Fine, Office of Director of Finance and Record, City of Boulder,
Municipal Building, 1777 Broadway, Boulder, Colorado 80302.
Gaod Faith Deposit
A good faith deposit (the "Deposit") in the form of a certified or cashier's check or a
financial surety bond (the "Financial Surety Bond") in the amount of $505,000, payable to the order
of the City of Boulder, Colorado, is required for each bid to be considered. If a check is used, it must
accompany each bid. If a Financial Surety Bond is used, it must be from an insurance company
licensed to issue such a bond in the State of Colorado, and such bond must be submitted to the City
or its financial advisor prior to the opening of the bids. The Financial Surety Bond must identify
each bidder whose Deposit is guaranteed by such Financial Surety Bond. If the Bonds are awarded
to a bidder utilizing a Financial Surety Bond, then that purchaser (the "Purchaser") is required to
submit its Deposit to the City or its financial advisor in the form of a cashier's check (or wire transfer
such amount as instructed by the City or its financial advisor) not later than 3:30 p.m. M.S.T. on the
next business day following the award. If such Deposit is not received by that time, the Financial
Surety Bond may be drawn by the City to satisfy the Deposit requirement. No interest on the Deposit
will accrue to the Purchaser. The Deposit of the Purchaser will either be applied to the purchase
price ofthe Bonds or returned to the Purchaser on the closing date upon payment of the full purchase
price of the Bonds. In the event the Purchaser fails to honor its accepted bid, the Deposit will be
retained by the City. Deposits of all bidders other than the Purchaser shall be promptly returned to
each such bidder.
Tax Status
Kutak Rock, Denver, Colorado, bond counsel, will opine that, under existing laws,
regulations, rulings and judicial decisions, the interest on the Bonds (a) is not includible in gross
income for federal income tax purposes and is not includible in gross income for Colorado income
tax purposes, (b) is not includible in alternative minimum taxable income for the purpose of the
Colorado alternative minimum tax and (c) is not a specific preference item for purposes of the
alternative minimum tax provisions contained in the Internal Revenue Code of 1986, as amended
(the "Code"); however, such opinion will also state that interest on the Bonds will be included in the
adjusted current earnings of certain corporations, and such corporations are required to include in
the calculation ofalternative minimum taxable income 75%ofthe excess ofeach such corporation's
adjusted current earnings over its alternative minimum taxable income (determined without regard
to this adjustment and prior to reduction for certain net operating losses) and that the opinion
described in clause (a) above is subject to continuing compliance by the City with the covenants
regarding federal tax law contained in the Ordinance authorizing the Bonds and that failure to
comply with such covenants could cause interest on the Bonds to be so included in federal and
Colorado gross income retroactive to the date of issue of the Bonds. Bond counsel's opinion will
also state that the accrual or receipt of interest on the Bonds may otherwise affect the federal income
tax liability of the recipient and that the extent of these other tax consequences will depend upon the
recipient's particular tax status or other items of income or deduction. If, prior to the delivery of the
Bonds to the successful bidder therefor, the income received by private owners of obligations of the
same type and character as the Bonds shall be includible in gross incotne for federal or State of
Colorado purposes, the successful bidder, at its election made prior to the tender by the City of the
Bonds for delivery, may be relieved of any obligation under the contract to purchase the Bonds. In
such case, the contract to purchase the Bonds shall terminate, and the deposit accompanying the
purchaser's bid will be returned to the purchaser upon written request therefor. Any such option
shall be exercised by a letter addressed to the Director of Finance and Record and bond counsel, and
deposited in the United States mails, as first-class mail, postage prepaid.
Sale Reservations
The City reserves the privilege of:
(a) waiving any irregularity or informality in any bid;
(b) rejecting any and all bids for the Bonds; and
(c) reoffering the Bonds for sale in any manner permitted bylaw.
Adjustment of Principal Amount
Upon acceptance of bids, the Council, after consultation with its Financial Advisor, shall
determine the amount of the Minimum Bond Reserve (as defined in the Ordinance) to be deposited
to the Reserve Fund. To the extent more or less Bond proceeds are required to fund the Reserve
Fund, the principal atnount of the Bonds shall be adjusted upward or downward as the City shall in
its discretion determine. Such adjustment shall not exceed $10,000 for any one year and shall not
exceed $80,000 in total principal amount.
Basis of Award
The Bonds, subj ect to such sale reservations, shall be sold to the responsible bidder making
the best bid for the Bonds to the best advantage of the City. The best bid shall be determined by
computing the actuarial yield on the Bonds (i.e., using an actuarial or True Interest Cost method) for
each bid received, and an award will be made (if any is made) to the responsible bidder submitting
the bid that results in the lowest actuarial yield on the Bonds. "Actuarial yield" on the Bonds as used
herein means that yield which, if used to compute the present worth as of the date of the Bonds (i.e.,
June 1, 2000) of all payments of principal and interest to be made on the Bonds from their date to
their respective maturity dates (including mandatory sinking fund redemption dates) using the
interest rates specified in the bid, produces an amount equal to the aggregate principal amount of the
Bonds plus any premium bid. No adjustment shall be made in such calculation for accrued interest
on the Bonds from their date to the date of delivery thereof. Such calculation shall be based on a
360-day year and a semiannual compounding interval. If there are two or more equal bids for the
Bonds and such equal bids are the best bids received, the Council shall determine in its discretion
wlriclr bid will be accepted.
No Sale Below Par or Discount or Commission
The Bonds shall not be sold by the City at less than their principal amount and accrued
interest thereon to the date of their delivery, nor will any discount or commission be allowed or paid
on the sale of the Bonds; provided that the foregoing provision shall not preclude original issue
discount so long as the total purchase price paid by the Purchaser to the City is at least equal to the
par amount of the Bonds plus accrued interest.
Time of Award
The City shall open the bids at such time as hereinabove specified. It intends to take action
upon determining the best bid and to award the Bonds or reject all bids for the Bonds by action of
the Council at a meeting to be held not later than 24 hours after the expiration of the time for opening
bids.
Offering Price and Yields
On the date herein stated for opening bids, the successful bidder shall notify the Director of
Finance and Record in writing of:
(a) the initial offering price of the Bonds to the public (excluding bond brokers
and other intermediaries) at which a substantial portion of the Bonds of each maturity are
sold, and
(b) the initial offering yield to maturity for each maturity of the Bonds in a stated
percentage for the Council's use in making any necessary arbitrage bond investment yield
calculations for federal income tax purposes. In addition, prior to delivery of the Bonds the
successful bidder will be required to sign and deliver an exhibit to the no arbitrage certificate
of the City with respect to the public offering price and yield of the Bonds in form and
substance required by bond counsel.
Manner and Time of Delivery
The deposit of the successftil bidder shall be credited to the purchaser at the time of delivery
of the Bonds (without accruing interest). If the successful bidder for the Bonds fails or neglects to
complete the purchase of the Bonds on the date the Bonds are made ready and are tendered by the
City for delivery, the amount of this deposit shall be forfeited (as liquidated damages for
noncompliance with the bid) to the City, except as hereinafter provided. In that event, the City may
reoffer the Bonds for sale. The purchaser shall not be required to accept delivery of any of the Bonds
if they are not tendered for delivery within 60 days from the date herein stated for opening bids, and,
if the Bonds are not so tendered within said period of time, the good faith deposit shall be returned
to the purchaser upon its request. Unless the City shall otherwise notify the purchaser, the Bonds
will be tendered to the purchaser for delivery on July 6, 2000.
Payment and Place of Delivery
The successful bidder shall be required to make payment of the balance due for the Bonds
by wire transfer in immediately available funds to an account designated by the City. Such balance
of the purchase price, including any premium, must be paid in such immediately available funds and
not by any waiver of interest, nor by any other concession as a substitution for such immediately
available funds. The successful bidder shall be required to accept delivery of the Bonds at the office
of DTC in New York, New York.
CUSIP Numbers
CUSIP numbers shall be printed on the Bonds at the expense of the City. If an incorrect
number is imprinted on any Bond or if a number is not printed thereon, any such error or omission
shall not constitute cause for the successful bidder to refuse delivery of any Bond.
Legal Opinion, Bonds and Transcript
The legality of the Bond issue will be approved by the firm of Kutak Rock LLP,
717 Seventeenth Street, Suite 2900, Denver, Colorado 80202, whose unqualified approving opinion,
together with the Bonds, a certified transcript of the proceedings, including a certificate stating that
there is no litigation pending affecting the validity of the Bonds as of the date of their delivery, and
other closing documents, will be furnished to the purchaser without charge by the City. A certified
true copy of the approving opinion of bond counsel for the issue will be printed on each Bond at the
City's expense.
Financial Advisor
U.S. Bancorp Piper Jaffrey Inc. is acting as financial advisor to the City in connection with
the issuance of the Bonds. Pursuant to its contract with the City, it is required to submit a bid to
purchase the Bonds.
Rule 15c2-12 Compliance
The City covenants and agrees to enter into a written agreement or contract, constituting an
undertaking to provide ongoing disclosure about the City, for the benefit of the owners of the Bonds
on or before the date of delivery of the Bonds as required by Section (b)(5) of Securities and
Exchange Commission Rule 15c2-12 (17 CFR § 240.15e2-12) (the "Rule"),which undertaking shall
be a part of the Ordinance and in the form summarized in the Preliminary Official Statement. The
form of the Preliminary Official Statement has been approved by the Council. The City has not
previously failed to supply any annual financial information as required.
The Preliminary Official Statement which will be delivered pursuant to the sale of the Bonds
is, except for Permitted Omissions (as defined below), final as of its date, within the meaning of the
Rule, and the information therein is accurate and complete except for the Permitted Omissions.
"Permitted Omissions" shall mean the offering prices, interest rates, selling compensation, delivery
date, ratings, any other terms required by the City to be specified in the competitive bid, the identify
of the underwriters and other terms of the Bonds depending on such matters, all with respect to the
Bonds.
To enable the successful bidder to comply with the Rule, after the award of the Bonds and
within seven business days following receipt by the City ofwritten advice from the successful bidder
of the full name or names of the successful bidder (if the same cannot be readily ascertained from
the Official Bid Forni submitted thereby), the offering prices of the Bonds and the amount of selling
compensation realized, the City will furnish thereto, in reasonable quantities as requested, copies of
a final Official Statement. Failure by the successful bidder to provide (or delay by the successful
bidder in providing) such information will prevent the City from furnishing such Official Statement
as described above, and the City shall not be responsible or liable in any manner for the accuracy of
the information provided by the successful bidder or failure to furnish such Official Statement as
described above which results from a failure by the successful bidder to provide the aforementioned
information within the time specified.
Information
This Official Notice ofBond Sale, and a Preliminary Official Statement relating to the Bonds,
maybe obtained from Ms. Cappie I. Fine, Office of the Director of Finance and Record, City of
Boulder, Municipal Building, 1777 Broadway, Boulder, Colorado 80302, (303) 441-3014, or from
Mr. Jonathan Heroux, U.S. Bancorp Piper Jaffray Inc., 1050 17th Street, Suite 2100, Denver,
Colorado 80265, (303) 820-5808.
By order of the City Council of the City of Boulder, Colorado, dated this 16`h day of May,
2000.
[CITY SEAL]
By
By