Resolution 2679-98
RESOLUTION NO. 2679-98
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A RESOLUTION OF THE BOARD OF DIRECTORS OF THE
SOUTH TAHOE PUBLIC UTILITY DISTRICT
PROVIDING FOR THE BORROWING OF FUNDS
AND THE ISSUANCE AND SALE OF 1998 GRANT ANTICIPATION NOTE
FOR THE EXPORT PIPELINE REPLACEMENT PROJECT
WHEREAS, pursuant to Sections 53859 et seq. of the Government Code of the State of California (the "Law"), this
Board of Directors (the "Board") has found and determined that moneys are needed for the requirements of the South
Tahoe Public Utility District (the "District"), a public utility district duly organized and existing under the laws of the State, to
complete the Export Pipeline Replacement Project (the "Project"), and that it is necessary that said sum be borrowed for
such purpose at this time by the issuance of a note therefor in anticipation of the receipt of a grant to be received from
the United States Environmental Protection Agency (the "EPA") in the amount of $7,150,000, as amended from time to
time by the EPA during the term of the Notes authorized hereunder to be received by the District for the Project;
NOW, THEREFORE, the Board of Directors of the South Tahoe Public Utility District hereby finds, determines,
declares and resolves as follows:
Section I. Recitals True and Correct.; Definitions. (i) All of the recitals herein set forth are true and correct, and
the Board so finds and determines.
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(ii) The following capitalized terms, when used herein, shall have the meanings set forth below:
(a) "Available Net Revenues of the Water System" means Net Revenues of the Water System less: ( I) the Installment
Payments; and (2) amounts payable to the Martin Family for the purchase of the Angora Water Company.
(b) "Bank" means U.S. Bank, a national banking association or'ganized and existing underthe laws ofthe United States
of America, at 1420 Fifth Avenue, Seattle, WA 98111-0720.
(c) "Grant" means the grantto be made to the District by the EPA in the amount of $7,150,000 under the 1998
Appropriations Act forthe Departments of Veterans Affairs and Housing and Urban Development, and Independent Agencies.
as such grant may be amended from time to time by the EPA while the Notes are outstanding.
(d) "Gross Revenues of the Sewer System" means for any period of calculation, all gross income and revenue
received by the District from the ownership and operation of the Sewer System, including, without limiting the generality of
the foregoing, (i) all income, rents, rates, fees, charges or other moneys derived from the services, facilities and commodities
sold, furnished or supplied through the facilities of the Sewer System, including connection fees, (ii) the earnings on and
income derived from the investment of such income, rents, rates, fees, charges or other moneys, (iii) the proceeds derived
by the District directly or indirectly from the sale, lease or other disposition of a part of the Sewer System, and (iv) repayments
made to the District of advances made by the District to any other entity; provided, that the term "Gross Revenues of the
Sewer System" shall not include restricted grants or loans.
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(e) "Gross Revenues of the Water System" means for any per'iod of calculation, all gross income and revenue
received by the District from the ownership and operation of the Water System, including, without limiting the generality of
the foregoing, (i) all income, rents, rates, fees, charges or other moneys derived from the services, facilities and commodities
sold, furnished or supplied through the facilities of the Water System, including connection fees, (ii) the earnings on and
income derived from the investment of such income, tents, r'ates, fees, charges or other moneys, (iii) the proceeds derived
by the District directly or indirectly from the sale, lease or other disposition of a part of the Water System, and (iv) repayments
made to the District of advances made by the District to any other entity: provided, that the term "Gross Revenues of the
Water System" shall not include restricted grants or loans.
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(D "Installment Payments" means the Installment Payments payable by the District under that certain Installment Sale
Agreement, dated as of October 3 I, 1994, between the District and LaSalle National Bank, in the original principal amount
of $8,829,000.
(g) "Net Revenues of the Sewer System" means Gross Revenues of the Sewer System less Operation and
Maintenance Expenses of the Sewer System.
(h) "Net Revenues of the Water System" means Gross Revenues of the Water System less Operation and
Maintenance Expenses of the Water System.
(i) "Operation and Maintenance Expenses of the Sewer System" means, for any period of calculation, all expenses
and costs of management, operation, maintenance and repair of the Sewer System, and all incidental costs, fees and expenses
and capital expenditures properly chargeable to the Sewer System, but excluding debt service or other similar payments and
depreciation and obsolescence charges or reserves therefor and amortization of intangibles.
U) "Operation and Maintenance Expenses ofthe Water System" means, for any period of calculation, all expenses
and costs of management, operation, maintenance and repair of the Water System, and all incidental costs, fees and expenses
and capital expenditures properly chargeable to the Water System, but excluding debt service or other similar payments and
depreciation and obsolescence charges or reserves therefor and amortization of intangibles.
(k) "Sewer System" means any and all facilities, properties and improvements at any time owned, controlled or
operated by the District for the collection, treatment, disposal or reuse of wastewater, including sewage treatment plants,
intercepting and collecting sewers, outfall sewers, force mains, pumping stations, ejector stations, pipes, valves, machinery
and all other appurtenances necessary, useful or convenient for the collection, treatment, disposal or reuse of wastewater,
and any necessary lands, rights of way and other real or personal property useful in connection therewith.
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(I) 'Water System" means the complete waterworks plant and water system of the District serving the District and
its Inhabitants, including all improvements, extensions, and additions thereto which may be made while the Note IS
outstanding. and including all property, real, personal and mixed, of every nature now or hereafter owned by the District and
used in the operations of its waterworks properties. The term 'Water System" shall include the component parts of the
District's water system previously known as the Angora Water System, the Tahoe Paradise Water System, the Hoffman Water
System and the Globin Water System.
Section 2. Limitation on Maximum Amount. The principal amount of the note issued pursuant hereto shall not
exceed Five Million Dollars ($5,000,000), which amount is less than ninety-five percent (95%) of the estimated amount of
the Grant available for the payment of said note (as required by Section 53859.08 of the Law).
Section 3. Issuance and Terms of Notes. Solely for the purpose of anticipating grant moneys to be received by the
District for the Project, the District hereby determines to and shall borrow the principal amount of not to exceed Five Million
Dollars ($5,000,000) by the issuance of a note (revolving line of credit) under the Law, designated "South Tahoe Public Utility
District (EI Dorado County, California) 1998 Grant Anticipation Note (Revolving Line of Credit)" (the "Note"). The Note shall
be dated the date upon which the District first draws funds down on the Note, shall mature (subject to prior prepayment
of the principal amou nt thereoD not more than three years from the date of issue, and shall bear interest from its date, payable
quarterly and computed on a 365 day year, actual days elapsed basis. I nterest on the principal amount of the Note (based
upon the amounts advanced by the Bank to the District on the Note), shall be calculated at a fioating rate equal to sixty
percent (60%) of the Bank's "Reference Rate" (as such rate is announced from time to time by the Bank). Both the principal
of and interest on the Note shall be payable in lawful money of the United States of America, as described below.
Section 4. Form of Note. The Note shall be issued in fully registered form, without coupons, and shall be
substantially in the form and substance set forth in Exhibit A attached hereto and by reference incorporated herein, the blanks
in said form to be filled in with appropriate words and figures.
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Section 5. Use of Proceeds. The moneys so borrowed shall be deposited in the Sewer Fund of the District and
used and expended by the District for acquiring and constructing the Project.
Section 6. Security. The principal amount of the Note, together with the interest thereon, shall be payable from:
(i) proceeds of the Grant; (ii) Net Revenues of the Sewer System; and (iii) Available Net Revenues of the Water System
(together, the "Pledged Revenues"), which the District hereby pledges as a security for the payment of the interest on the
Note, and principal thereof.
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The principal of the Note and the interest thereon shall constitute a first lien and charge thereon and shall be payable
from the Pledged Revenues. To the extent not so paid from the Pledged Revenues, the Note shall be paid from any other
moneys of the District lawfully available therefor. In the event that there are insufficient Pledged Revenues received by the
District to repay the principal of and interest on the Note, then the amount of any deficiency shall be satisfied and made up
from any other moneys of the District lawfully available for the repayment of the Note and interest thereon.
Notwithstanding the foregoing, the District may use the proceeds of the Grant to reimburse itself for costs of the
Project paid by the District from its own funds, so long as the District has on hand, at the time the District reimburses itself
for such costs of the Project, Net Revenues of the Sewer System and Available Net Revenues of the Water System sufficient
to pay the principal of and interest on the Notes.
Section 7. Other Obligations of the District. While the Note is outstanding, the District: (i) shall not issue any other
indebtedness or other obligations secured by the proceeds of the Grant; (ii) shall not issue any indebtedness or other
obligations superior to the Note; and (iii) may issue indebtedness or other obligations on a parity with the Net Revenues of
the Sewer System or Net Revenues of the Water System, as the District shall determine, so long as the District does not
impair its obligation to repay the Note.
Section 8. Execution of Note. The President of the Board is authorized to execute the Note by manual signature,
and the Clerk of the Board of the District is hereby authorized to countersign the same by facsimile signature and to affix the
seal of the District thereto either manually or by facsimile impression thereof, and said officers are hereby authorized to cause
the blank spaces thereof to be filled in as may be appropriate.
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Section 9. Covenants and Warranties. It is hereby covenanted and warranted by the District that all representations
and recitals contained in this Resolution are true and correct, and that the District and its appropriate officials have duly taken
all proceedings necessary to be taken by them, and will take any additional proceedings necessary to be taken by them, for
the prompt collection and enforcement of the Pledged Revenues and other moneys pledged hereunder in accordance with
law and for carrying out the provisions of this Resolution.
Section 10. Tax Covenants. (a) No Arbitrage. The District shall nottake, nor permit nor suffer to be taken any
action with respect to the proceeds of the Note which, if such action had been reasonably expected to have been taken, or
had been deliberately and intentionally taken, on the date of issuance of the Note (the "Closing Date") would have caused
the Note to be "arbitrage bonds" within the meaning of section 148 of the Internal Revenue Code of 1986 (the "Code").
(b) Rebate Requirement. The District shall take any and all actions necessary to assure compliance with section
I 48(D of the Code, relating to the rebate of excess investment earnings, if any, to the federal government.
(c) Private Activity Bond Limitation. The District shall assure that proceeds of the Note are not so used as to cause
the Note to satisfy the private business tests of section 141 (b) of the Code.
(d) Private Loan Financing Limitation. The District shall assure that proceeds of the Note are not so used as to cause
the Note to satisfy the private loan financing test of section 141 (c) of the Code.
(e) Federal Guarantee Prohibition. The District shall not take any action or permit or suffer any action to be taken
if the result of the same would be to cause any of the Note to be "federally guaranteed" within the meaning of section I 49(b)
of the Code.
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(D Maintenance of Tax-Exemption. The District shall take all actions necessary to assure the exclusion of interest
on the Note from the gross income of the owners of the Note to the same extent as such interest is permitted to be
excluded from gross income under the Code as in effect on the Closing Date.
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(g) Small Issuer Exemption from Bank Nondeductibility Restriction. The District hereby designates the Note for
purposes of paragraph (3) of section 265(b) of the Code and represents that not more than $10,000,000 aggregate principal
amount of obligations the interest on which is excludable (under section I 03( a) of the Code) from gross income for federal
income tax purposes, including the Note, has been or will be issued by the District, during the calendar year 1998.
Section I I. Sale of Note. The Note shall be sold to the Bank. The President of the Board is hereby authorized
to execute a Note purchase agreement or accept a commitment of the Bank to purchase the Note, or other document in
connection with such award.
Section 12. Execution of C1osine: Documents. The President of the Board, the General Manager, the Assistant
General Manager, the Chief Financial Officer, the Clerk of the Board and other officers of the District are authorized and
directed to execute such certificates, agreements and other closing documents as are necessary to consummate the
transactions contemplated by this Resolution.
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PASSED AND ADOPTED at a duly held regular meeting of the Board of Directors of the South Tahoe Public Utility
District, South Lake Tahoe, California, this 16th day of July, 1998, by the following vote:
AYES:
Wallace, Strohm, Jones, Gochnauer, and Mosbacher
NOES:
None
ABSENT:
None
[S E A LJ
Attest:
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EXHIBIT A
SOUTH TAHOE PUBLIC UTILITY DISTRICT
(EL DORADO COUNTY, CALIFORNIA)
1998 GRANT ANTICIPATION NOTE
(REVOLVING LINE OF CREDIT)
ISSUE DATE:
The SOUTH TAHOE PUBLIC UTILITY DISTRICT, EI Dorado County, State of California (the "District"),
acknowledges itself indebted, and promises to pay, to U.S. Bank, at its office in Seattle, Washington (presently located at 1420
Fifth Avenue, Seattle, WA 98111-0720) (the "Bank"), not later than three years from the Issue Date set forth above (the
"Maturity Date"), the principal amount then drawn down hereunder and not yet repaid to the Bank, in lawful money of the
United States of America, and to pay interest thereon in like lawful money at a fioating tate of interest, calculated at sixty
percent (60%) of the Bank's "Reference Rate", as such rate may be announced from time to time by the Bank, calculated on
a 365 day year, actual days elapsed basis. Interest on the Note shall be payable quarterly, commencing The
principal of this Note shall be payable on the Maturity Date to the Bank, unless earlier repaid by the District.
Capitalized terms used herein shall have the meanings contained in the Resolution, and set forth below.
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(a) "Available Net Revenues ofthe Water System" means Net Revenues ofthe Water System less: (I )the Installment
Payments; and (2) amounts payable to the Martin Family for the purchase of the Angora Water Company.
(b) "Grant" means the grant to be made to the District by the United States Environmental Protection Agency (the
"EPA") in the amount of $7, 150,000 under the 1998 Appropriations Act for the Departments of Veterans Affairs and Housing
and Urban Development, and Independent Agencies, as such grant may be amended from time to time by the EPA while
the Notes are outstanding.
(c) "Gross Revenues of the Sewer System" means for any period of calculation, all gross income and revenue
received by the District from the ownership and operation of the Sewer System, including, without limiting the generality of
the foregoing, (i) all income, rents, rates, fees, charges or other moneys derived from the services, facilities and commodities
sold, furnished or supplied through the facilities of the Sewer System, including connection fees, (ii) the earnings on and
income derived from the investment of such income, rents, rates, fees, charges or other moneys, (iii) the proceeds derived
by the District directly or indirectly from the sale, lease or other disposition of a part of the Sewer System, and (iv) repayments
made to the District of advances made by the District to any other entity; provided, that the term "Gross Revenues of the
Sewer System" shall not include restricted grants or loans.
(d) "Gross Revenues of the Water System" means for any period of calculation, all gross income and revenue
received by the District from the ownership and operation of the Water System, including, without limiting the generality of
the foregoing, (i) all income, rents, rates, fees, charges or other moneys derived from the services, facilities and commodities
sold, furnished or supplied through the facilities of the Water System, including connection fees, (ii) the earnings on and
income derived from the investment of such income. rents, rates, fees, charges or other moneys, (iii) the proceeds derived
by the District directly or indirectly from the sale, lease or other disposition of a part of the Water System, and (iv) repayments
made to the District of advances made by the District to any other entity; provided, that the term "Gross Revenues of the
Water System" shall not include restricted grants or loans.
....
(e) "I nstallment Payments" means the I nstallment Payments payable by the District under that certain I nstallment Sale
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Agreement, dated as of October 3 I, 1994, between the District and LaSalle National Bank, in the original principal amount
of $8,829,000.
(D "Net Revenues of the Sewer System" means Gross Revenues of the Sewer System less Operation and
Maintenance Expenses of the Sewer System.
(g) "Net Revenues of the Water System" means Gross Revenues of the Water System less Operation and
Maintenance Expenses of the Water System.
(h) "Operation and Maintenance Expenses ofthe Sewer System" means, for any period of calculation, all expenses
and costs of management, operation, maintenance and repair of the Sewer System, and all incidental costs, fees and expenses
and capital expenditures properly chargeable to the Sewer System, but excluding debt service or other similar payments and
depreciation and obsolescence charges or reserves therefor and amortization of intangibles.
(i) "Operation and Maintenance Expenses of the Water System" means, for any period of calculation, all expenses
and costs of management, operation, maintenance and repair of the Water System, and all incidental costs, fees and expenses
and capital expenditures properly chargeable to the Water System, but excluding debt service or other similar payments and
depreciation and obsolescence charges or reserves therefor and amortization of intangibles.
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U) "Sewer System" means any and all facilities, properties and improvements at any time owned, controlled or
operated by the District for the collection, treatment, disposal or reuse of wastewater, including sewage treatment plants,
intercepting and collecting sewers, outfall sewers, force mains, pumping stations, ejector stations. pipes, valves, machinery
and all other appurtenances necessary, useful or convenient for the collection, treatment, disposal or reuse of wastewater,
and any necessary lands, r'ights of way and other real or personal property useful in connection therewith.
(k) 'Water System" means the complete watervvorks plant and water' system of the District serving the District and
its inhabitants, Including all improvements, extensions, and additions thereto which may be made while the Note IS
outstanding. and including all property, real, personal and mixed, of every nature now or hereafter owned by the District and
used in the operations of its waterworks properties. The term 'Water System" shall include the component parts of the
District's water system previously known as the Angora Water System, the Tahoe Paradise Water System, the Hoffman Water
System and the Globin Water System.
The principal amount of the Note, together with the interest thereon, shall be payable from: (i) proceeds of the
Grant; (ii) Net Revenues of the Sewer System; and (Iii) Available Net Revenues of the Water System (together, the "Pledged
Revenues"), which the District hereby pledges as a security forthe payment of the interest on the Note, and principal thereof.
The principal of the Note and the interest thereon shall constitute a first lien and charge thereon and shall be payable
from the Pledged Revenues. To the extent not so paid from the Pledged Revenues, the Note shall be paid from any other
moneys of the District lawfully available therefor. I n the event that there are insufficient Pledged Revenues received by the
District to repay the principal of and interest on the Note, then the amount of any deficiency shall be satisfied and made up
from any other moneys of the District lawfully available for the repayment of the Note and interest thereon.
It is hereby certified, recited and declared that this Note is an authorized issue in the aggregate principal amount of
up to Five Million Dollars ($5,000,000), issued pursuant to the provisions of Resolution No. _ ofthe Board of Directors
of the District duly passed and adopted onJuly 16, 1998 (the "Resolution"), and pursuant to Article 7.7 (commencing with
Section 53859) of Chapter 4, Part I, Division 2, Title 5, of the California Government Code, and that all conditions, things
and acts required to exist, happen and be performed precedent to and in the issuance of this Note do exist, have happened
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and have been performed in regular and due time, form and manner as required by law, and that this Note, together with
all other indebtedness and obligations of the District, does not exceed any limit prescribed by the Constitution or statutes of
the State of California.
The Note are issuable as one fully registered Note, without coupons.
The principal amount of this Note may be repaid by the District at any time pr'ior to maturity, without premium or
penalty.
The District hereby designates this Note for purposes of paragraph (3) of section 265(b) of the Code and represents
that not more than $1 0,000,000 aggregate principal amount of obligations the interest on which is excludable (under section
I 03(a) of the Code) from gross income for federal income tax purposes, including this Note, has been or will be issued by
the District, during the calendar year 1998.
This Note is transferable by the Bank hereof, notice of which shall be given to the District. Upon registration of such
transfer a new Note or Note, of authorized denomination or denominations, for the same aggregate principal amount and
of the same maturity will be issued to the transferee in exchange for this Note.
IN WITNESS WHEREOF, the South Tahoe Public Utility District has caused this Note to be executed by the
President of the Board of Directors of the District and countersigned by the Clerk of the Board of the District and its official
seal to be affixed hereto all as of this _ day of , 1998.
SOUTH TAHOE PUBLIC UTILITY DISTRICT
By:
James R. Jones, President of the Board
[S E A LJ
Countersigned:
Kathy Sharp, Clerk of Board
and Ex-Officio Secretary of the Board of Directors
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ASSIGNMENT
For value received, the undersigned do(es) hereby sell, assign and transfer unto
(Name. Address and Tax Identification 01' Social Security Number of Assignee)
the within Note and do(es) hereby irrevocably constitute and appoint
, attorney, to transfer the same on the registration books of the District with full power of
substitution in the premises.
Dated:
Signature Guaranteed:
NOTICE: Signature(s) must be guaranteed by an eligible
guarantor
NOTICE: The slgnatur'e on this Assignment must corTespond
with the name(s) as wl'itten on the face of the within
Note in every paliiculal' without alteration or'
enlar'gement or' any change whatsoever
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