HomeMy Public PortalAboutResolution 01-20 Wastewater Facility LoanRESOLUTION NO. 01-20
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF McCALL, IDAHO,
AUTHORIZING THE ISSUANCE AND DELIVERY OF A PROMISSORY NOTE TO THE
STATE OF IDAHO, DEPARTMENT OF HEALTH AND WELFARE, IN THE PRINCIPAL
AMOUNT OF $3,140,850, AS EVIDENCE OF A LOAN INDEBTEDNESS INCURRED
BY THE CITY FROM THE WASTEWATER FACILITY LOAN ACCOUNT OF THE STATE
FOR THE PURPOSE OF PAYING THE COST OF WASTEWATER SYSTEM
IMPROVEMENTS; PROVIDING FOR THE ISSUANCE, FORM, EXECUTION,
REGISTRATION, MATURITY, AND PAYMENT OF THE NOTE; PROVIDING
COVENANTS WITH RESPECT TO THE NOTE; AUTHORIZING THE EXECUTION OF
ADDITIONAL DOCUMENTS; AND PROVIDING AN EFFECTIVE DATE
WHEREAS, the City of McCall, Valley County, Idaho (the
"City"), is a municipal corporation duly organized and operating
under and pursuant to the laws of the State of Idaho; and
WHEREAS, the City presently owns and operates, and has for
many years owned and operated, a municipal wastewater collection
and treatment system for the benefit of the residents of the City;
and
WHEREAS, the Mayor and Council of the City heretofore
determined that certain improvements to the existing wastewater
treatment facilities of the City, consisting generally of
construction of a land application disposal system and related
improvements, were necessary in order to continue to operate its
wastewater collection and treatment system in accordance with state
and federal environmental standards for the public health, safety,
and welfare, and, in order to finance the cost of such
improvements, the City made application to the State of Idaho,
Department of Health and Welfare, Division of Environmental Quality
(the "State"), for a loan under the State's Wastewater Facility
Loan Program in the amount of $3,140,850, which loan application
was approved by the State; and
WHEREAS, the Mayor and Council further determined that the
indebtedness to be incurred thereby was an ordinary and necessary
expense of the City within the meaning of Article 8, Section 3,
Idaho Constitution, for which no approval of the electors of the
City was necessary; and
WHEREAS, the City caused to be filed, in the District Court of
the Fourth Judicial District of the State of Idaho, in and for the
County of Valley (the "District Court".), a Petition for Judicial
Confirmation pursuant to Title 7, Chapter 13, Idaho Code, seeking a
judicial determination and declaration of the validity of the
City's incurring of an indebtedness and issuing its promissory note
as evidence thereof for the purpose of financing the cost of the
improvements; and
Page 1
WHEREAS, on November 16, 1995, the District Court, in Case No.
SP-95-173, entered its Findings of Fact, Conclusions of Law, and
Judgment (the "Judicial Confirmation
is authorizedO)ordering, eter adjudging,
olthe
and decreeing that (1) of the electors
loan agreement with the State without the approval
of the City voting at a special election called for such
c the purpose;
(2) the indebtedness of the City incurredpu sof ntthCity wiloan
agreement is an ordinary and necessary expense
the meaning of Article 8, Section 3, of the Idaho Constitution; (3)
the City is authorized to issueits evidence its ofsewage indebtedness
pursuant to the loan agreement and to pledge
revenues to the payment thereof; and (4) such evidence of
indebtedness, when issued pursuant to such authority, will be a
valid and binding special obligation of the City in accordance with
its terms; and
WHEREAS, pursuant to the Judicial Confirmation Orderhe,
the e Cityt
and the State entered into the loan agreement,
s
constructed and installed promissory note the improvements,
pr nanprincipal amount the Citnot
desires to issue its p
$3,140,850 to the State in accordance with the loan agreement and
Judicial Confirmation Order.
NOW, THEREFORE, BE IT RE Idaho, as
VED BY THE
CITY
COUNCIL OF THE CITY
OF McCALL, of Valley County, ED
Section 1: For the purpose of providing funds for the
permanent financing of the wastewater treatment system project, and
the payment of costs and fees incidental thereto,
the
eisayor is
hereby
hereby authorized to execute, and the City note
(the authorizedo" to atthetCit on in the mannerhalf of the
hereinafterpromissory
provided
(the "Note") of Y
Section 2: The Note shall be substantially in the form
e issued to the State of
Idaho, hereto as EHaand Welfare, Division of Environmental
Idaho, Department of Healthshall be in the
Quality (the "State"), as Registered Owner;
principal amount of $3,140,850;thspercent
and shall
(4.50%)interest
a numthe
on rate
the
of four and fifty-hundred
unpaid principal balance from its date of issuance. Principal of
and interest on the Note shall be payable in semi-annual
installments of $119,909.42, commencing on May 1, 2002, and
continuing on each November 1 and May 1 thereafter until the Note
is paid in full.
me
Section 3: The Note shall be both as registeredtoprincipal naand oas f tto
State as the Registered Owner,
interest, with the City Treasurer, and any transfer must likewise
be registered.
Page 2
Section 4: The Note shall be dated as of November 1, 2001,
shall mature twenty (20) years from its date, and shall, with the
Owner, be subject to
prior written permission of the Registeredregularly
in whole or in part, without penalty, on any reg y
scheduled payment date.
Section 5: The Note shall be payable in lawful money of the
United States of America to the Registered Owner thereof at the
address of such Registered Owner as shown in the registration books
of the City.
Section 6: The Note shall be executed in the name ohe the
Ciy
by the manual signature of the Mayor and attested by shall manual
signature of the City Clerk, and the seal of the City
be
impressed thereon.
Section 7: The Note shall be payable from the net revenues
(gross revenues less costs of operation and maintenance) of the
The Net Revenues
sewage system of the City (the
,Net Revenues").
of the Note. The City hereby
are hereby pledged for the payment as
further covenants and agrees to establish a reserve fund
as
additional security for the Note, to accumulate therein,
annual deposits of $47,963.77, commencing on or before November 1,
2002, and continuing on or befo2007the the e mdate
off$239 818each eaa.r
r
thereafter through and including
from Net Revenues, and to maintain said reserve fund until the Note
is paid in full.
Section 8: The City covenants with the Registered Owner of
the Note as follows:
l
A. In accordance with Section 149(a)of NofetheaIle nternalsRevenue
Code of 1986, as amended (the "Code"),be
the remain in fully registered f of them in order owner hor ownersat s forefederal
excluded from gross income
income tax purposes. The City covenants and agrees that it will
take no action to permit the Note to be issued in or converted to
bearer form.
B. The Note is hereby
designated a "qualified tax-exempt
obligation" within the meaning and for the purposes of
t2section
6(b) (3) ofthe Cand the ode,
000 ty does not reasonablyincluding g the Note,
that it willf designate more than$10, 000the calendar year 2001.
as qualified tax-exempt obligations during
C. None of the proceeds of the Note will be used directly or
indirectly (i) to make or finance loans to persons or (ii) in any
trade or business carried on by any person (other than use as a
For purposes
of the general public). of the preceding
sentence, the term "person" does not include
ar governmentunit
insrumentalii
other than the United States or any agency
Page 3
thereof, and the term "trade or business" means any activity
carried on by a person other than a natural person. The City
further covenants and agrees to take no action which would cause
the Note to be a "private activity bond," nor will it omit to take
any action necessary to prevent the Note from becoming a "private
activity bond," within the meaning of Section 141 of the Code.
D. The City has general taxing powers. The Note is not a
"private activity bond" within the meaning of Section 141 of the
Code. 95% or more of the net proceeds of the Note are to be used
for the local governmental activities of the City. The City has no
subordinate entities. The City has not issued, and does not
reasonably anticipate that it will issue, tax-exempt obligations in
the calendar year 2001 in a face amount which exceeds $5,000,000.
Accordingly, under Section 148(f) (4) (C) of the Code, the City is
not required to pay rebates to the United States under Section
148(f) of the Code.
E. The Mayor, Clerk, and Treasurer, and other appropriate
officials of the City, or any one or more of such officials, as may
be appropriate, are each hereby authorized and directed to execute,
on behalf of the City, such certificate or certificates as shall be
necessary to establish that the Note is not an "arbitrage bond"
within the meaning of Section 148 of the Code and the Treasury
Regulations promulgated thereunder, and to establish that interest
on the Note is not and will not become includable in the gross
income of the owners of the Note under the Code and applicable
regulations. The City covenants and agrees that no use will be
made of the proceeds of the Note, or any funds of the City which
may, pursuant to Section 148 of the Code and applicable
regulations, be deemed to be proceeds of the Note, which would
cause the Note to be an "arbitrage bond" within the meaning of
Section 148 of the Code. The City further covenants to comply
throughout the term of the Note with the requirements of Section
148 of the Code and the regulations promulgated thereunder in order
to prevent the Note from becoming an "arbitrage bond."
F. The City will comply with the information reporting
requirements of Section 149(e) of the Code.
G. None of the proceeds of the Note will be used to
reimburse the City for capital expenditures made prior to the date
of delivery of the Note unless the City, not later than 60 days
after the payment of such expenditure, shall have adopted an
official intent resolution as provided by Section 1.150-2 of the
Treasury Regulations.
Section 9: The Mayor, City Clerk, and City Treasurer, or any
one or more such officials, as shall be appropriate, are hereby
authorized to execute such further certifications and other
Page 4
l used
G. None of the proceeds of the Note wbe o the dateo
reimburse the City for capital expendituresmadeprior later than da
of delivery of the Note unless the City,
ado
te
after the p Ym
a ent of such expenditure, shall
have150- p o d the
official intent resolution as provided by
SectTreasury Regulations.
City Clerk, and City Treasurer, or any
Section 9: The Mayor, are hereby
one or more such officials, as shall be appropriate,
authorized to execute such further certifications
oer ific t ons and
y out ther
r
documents as may be necessary or appropriate
intent of this Resolution.
Section 10: This Resolution approval.
a l take effect and be in
force from and after its passage and
DATED this 25th day of October, 2001.
CITY OF McCALL
Valley County, Idaho
By
ATTEST:
City Clerk
-i•AccAip gi
� SEAL L )01
%.*$440• f, o ram:
4#4,9LL , 19,1.
Page 5
44a�o- President of
the Council
DEQ Loan #1894-04
PROMISSORY NOTE
WASTEWATER FACILITY LOAN ACCOUNT
This Promissory Note is executed in conformance with and pursuant
to the Wastewater Facility Loan Contract entered into between and
the State of Idaho, Department of Health and Welfare, Division of
Environmental Quality, (herein called the "State") on which is
attached as Appendix A; the Record of Disbursements prepared by the
State dated October 4, 2001, which is attached as Appendix B and
the Judicial Confirmation Findings of Fact which is attached as
Appendix C. Appendices A, B and C are hereby incorporated by
reference.
For value received, the City of McCall (herein called the
"Borrower") promises to pay to the State the principal amount of
three million one hundred forty thousand eight hundred fifty
dollars ($3,140,850), plus interest on the unpaid balance at the
rate of four and one-half percent (4.5%) per annum. The principal
and interest of this note shall be repaid in accordance with the
Loan Repayment Schedule, which is attached as Appendix D and hereby
incorporated by reference. In addition, the Borrower pledges
revenue and income of the Borrower's wastewater treatment facility,
whether collected or uncollected, in an amount sufficient to repay
all principal and interest and pledges to establish and maintain a
reserve account. The reserve account must total $239,818.84 at the
end of five years with at least 20% of that amount being deposited
annually.
Every payment made on any indebtedness evidenced by this note shall
be applied first to interest computed to the effective date of the
payment and then to principal. Prepayments of scheduled
installments, or any portion thereof, may be made only with prior
written permission of the State. Refunds and extra payments, after
payment of interest, will be applied to the installments last to
become due under this note and shall not affect the obligation of
the Borrower to pay the remaining installments as scheduled herein.
If the State at any time assigns this note and insures the payment
thereof, the Borrower shall continue to make payments to the State
as collection agent for the holder. No assignment of this note
shall be effective unless the Borrower is notified in writing of
the name and address of the assignee. The Borrower shall thereupon
duly note in its records the occurrence of such assignment,
together with the name and address of the assignee.
Any amount advanced or expended by the State for the collection
hereof or to preserve or protect any security hereto, or otherwise
under the terms of any security or other instrument executed in
EXHIBIT "A"
Promissory Note
Page Two
connection with the loan evidenced hereby, at the option of the
State shall become a part of and bear interest at the same rate as
the principal of the debt evidenced hereby and be immediately due
and payable by Borrower to the State without demand.
This note is given as evidence of a loan to Borrower made or
insured by the State pursuant to Title 39, Chapter 36, Idaho Code
(1992). This note shall be subject to the present regulations of
the State and to its future regulations not inconsistent with the
express provisions hereof.
Presentment, protest and notice are hereby waived.
Payments shall be sent to:
Idaho Department of Environmental Quality
1410 North Hilton
Boise, Idaho 83706-1253
Execution of this agreement must be accompanied by a written
resolution of the Borrower's governing body authorizing the
signator to sign on Borrower's behalf for the purpose of this
agreement.
Dated this first day of November 1, 2001.
CITY OF MCCALL
Valley County, Idaho
By
President of the Council
ATTEST:
216 East Park Street
P.O. Box or Street Address
McCall, Idaho 83638
City Clerk City, State, Zip Code
I
APPENDIX A
STATE OF IDAHO
DEPARTMENT OF HEALTH AND WELFARE
LOAN OFFER, ACCEPTANCE AND CONTRACT
FOR WASTEWATER TREATMENT FACILITY
DESIGN AND CONSTRUCTION
SECTION I. INTRODUCTION
The State of Idaho (State) is authorizedby
bytthe Water
erCoPollution
Abatement Act (Act), Title 39, ChapterAccount (Account)
, to make
loans from the Wastewater Treatment
construction y ofoan wastewater treatment
to assist municipalities in
facilities. The Idaho Board of Health and Welfare, through the
Department of Health and Welfare (Department), is authorized to
administer the Act. The thas eligibilitylfor ahloanhunderythe
of
McCall (Applicant) has established for
terms of the Act and the Rules and Regulations
1 s Chapter Administration
, Rulesaof
Wastewater Treatment Facility Loans,
Regulations of the Department (Regulations).
A completed application for a Wastewater Treatment Facility Design and
Construction Loan has been submitted
fe tos athe
Deporthe Apby n cthe
he
Applicant. The Department hereby
according to the terms and conditions contained in this document and
the Regulations.
SECTION II.DESCRIPTION OF PROJECT
This loan offer is for design and construction of the following
project:
A. Loan Project Number: 1894-04
1. Planning Grant Number: 202-2-000-1
B. Project Description:
Design and Construction of improvements to the
existing wastewater treatment facility,
effluent storage reservoir, pump station and
pipeline to farms south of McCall, and
improvements to farm irrigation systems.
C. Terms: $3,140,850 at 4.5% interest, to be repaid in
semi-annual installments over 20 years.
1
D. Estimated Project Budget
Total
1. Engineering Fees $345,494
2. Construction 2,795,356
3. Total $3,140,850 E
SECTION III. GENERAL CONDITIONS L
On November 16, 1995 the Applicant obtained, pursuant to Idaho
Code Section 7-1301 to 1312, judicial confirmation of the debt
to be incurred by this loan contract. This offer is made
contingent upon no appeal of the judicial confirmation being
filed within the time limit allowed by law.
This offer may only be accepted by signature of an authorized
representative of the Applicant. Upon acceptance by the
Applicant, this offer shall become a loan contract and the
Applicant shall become a Borrower. The effective date of this
loan contract shall be the date of acceptance by the Borrower
after this loan contract has been duly authorized by ordinance
of the Borrower. By accepting this offer, the Borrower agrees
to all terms and conditions set forth in this document and the
Regulations:
The Borrower agrees:
A. To not transfer, assign or pledge any beneficial interest
in this contract to any other person or entity without the
prior written consent of the Director of the Department. To
not enter into sale, lease or transfer of any of the
property related to the project. To not make any
additional material encumbrances to the project without the
prior written consent of the Director of the Department.
To not incur any liabilities that would materially affect
the funds pledged to repay this loan without the prior
written consent of the Director of the Department. To not
delegate legal responsibility for complying with the terms,
conditions, and obligations of this contract without the
prior written consent of the Director of the Department.
Notwithstanding any other provision of this paragraph, the
Borrower may sell or otherwise dispose of any of the works,
plant, properties and facilities of the project or any real
or personal property comprising a part of the same which
shall have become unserviceable, inadequate, obsolete or
unfit to be used in the operation of the project, or no
longer necessary, material or useful in such operation,
without the prior written consent of the Director of the
Department.
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B . T o e n t e r i n t o s u c h c o n t r a c t u a l a r r a n g e m e n t s w i t h t h i r d
p a r t i e s a s i t d e e m s a d v i s a b l e t o a s s i s t i t i n m e e t i n g i t s
r e s p o n s i b i l i t i e s u n d e r t h i s c o n t r a c t .
C . T o f u l f i l l a l l d e c l a r a t i o n s , a s s u r a n c e s , r e p r e s e n t a t i o n s
a n d s t a t e m e n t s i n t h e a p p l i c a t i o n a n d a l l o t h e r d o c u m e n t s ,
a m e n d m e n t s a n d c o m m u n i c a t i o n s f i l e d w i t h t h e D e p a r t m e n t b y
t h e A p p l i c a n t i n s u p p o r t o f t h e r e q u e s t f o r t h i s l o a n .
D . T o c o m p l y w i t h a p p l i c a b l e S t a t e a n d F e d e r a l e m p l o y m e n t
r e q u i r e m e n t s i n c l u d i n g , b u t n o t l i m i t e d t o , E q u a l
E m p l o y m e n t O p p o r t u n i t y a n d C i v i l R i g h t s r e q u i r e m e n t s .
E . T o m a k e e f f o r t s t o a w a r d s u b a g r e e m e n t s t o M i n o r i t y a n d
W o m e n - o w n e d b u s i n e s s e s ( M B E / W B E ) . T h e f a i r s h a r e g o a l s , 9 %
a n d 3 % r e s p e c t i v e l y , w i l l b e i n b i d s o l i c i t a t i o n s a n d
d o c u m e n t a t i o n o f e f f o r t s t o o b t a i n M B E / W B E p a r t i c i p a t i o n
w i l l b e r e q u i r e d o f a n y c o n t r a c t o r w h o f a i l s t o a t t a i n t h e
g o a l s . Q u a r t e r l y r e p o r t s o f M B E / W B E u t i l i z a t i o n w i l l b e
p r e p a r e d o n f o r m s s u p p l i e d b y t h e D e p a r t m e n t .
F . T o p r o v i d e e v i d e n c e o f o w n e r s h i p i n t h e f o r m o f f e e s i m p l e
t i t l e o r l o n g - t e r m l e a s e a n d r i g h t o f a c c e s s o r e a s e m e n t s
f o r r e a l p r o p e r t y o n w h i c h t h e p r o j e c t i s t o b e
c o n s t r u c t e d . C l e a r t i t l e t o a l l r e a l p r o p e r t y n e c e s s a r y
f o r t h e s u c c e s s f u l o p e r a t i o n o f t h e f a c i l i t i e s s h a l l b e
g u a r a n t e e d b y t h e B o r r o w e r f o r t h e u s e f u l l i f e o f t h e
p r o j e c t .
G . T o t a k e a f f i r m a t i v e a c t i o n t o e n s u r e t h a t t h e p r o j e c t
s h a l l b e c o m p l e t e d a n d o p e r a t e d i n c o n f o r m a n c e w i t h f e d e r a l
a n d s t a t e l a w s r e l a t i n g t o o c c u p a t i o n a l h e a l t h a n d s a f e t y .
H . T h a t i f p r i o r t o c o m p l e t i o n o f t h i s c o n t r a c t t h e p r o j e c t
i s d a m a g e d o r d e s t r o y e d , t h e r e w i l l b e n o r e d u c t i o n i n t h e
a m o u n t s p a y a b l e b y t h e B o r r o w e r t o t h e D e p a r t m e n t .
I . T h a t i n t h e e v e n t t h e r e i s a n y d e f a u l t i n t h e p a y m e n t o f
e i t h e r t h e p r i n c i p a l a m o u n t o r t h e i n t e r e s t d u e u n d e r t h i s
c o n t r a c t , o r a n y b r e a c h b y t h e B o r r o w e r o f a n y o f t h e t e r m s
o r c o n d i t i o n s o f t h i s c o n t r a c t , t h e e n t i r e p r i n c i p a l a m o u n t
a n d w h a t e v e r i n t e r e s t i s d u e t o t h e d a t e o f p a y m e n t m a y b e
d e c l a r e d d u e a n d i m m e d i a t e l y p a y a b l e . T h e a m o u n t o f s u c h
d e f a u l t s h a l l b e a r t h e s a m e i n t e r e s t r a t e a s a p p l i e s t o t h e
p r i n c i p a l o f t h i s l o a n f r o m t h e d a t e o f d e f a u l t u n t i l t h e
d a t e o f p a y m e n t b y t h e B o r r o w e r . A 1 1 c o s t s i n c u r r e d b y t h e
D e p a r t m e n t d u e t o s u c h d e f a u l t , i n c l u d i n g c o u r t c o s t s a n d
a t t o r n e y ' s f e e s , s h a l l b e r e p a i d b y t h e B o r r o w e r t o t h e
D e p a r t m e n t .
J . T h a t a n y w a i v e r b y t h e D e p a r t m e n t a t a n y t i m e o f t h e
r i g h t s o r d u t i e s u n d e r t h i s c o n t r a c t s h a l l n o t b e d e e m e d a
3
i
waiver of any subsequent or additional rights or duties
under this contract.
K. That the use by the Department of any remedy specified in
this contract for its enforcement is not exclusive and
shall not deprive the Department of the right to seek any
other appropriate legal or equitable remedy.
L. That this agreement is binding upon the Borrower and the
Department, and any person, office or entity succeeding the
Borrower or the Department.
M. To comply with all applicable federal, state and local
laws.
SECTION IV. PROJECT MANAGEMENT
The Borrower agrees to:
A. Require the prime engineering firm(s) and their principals
retained for engineering services to carry professional
liability indemnification to protect the public from the
engineer's negligent acts and errors of omission of a
professional nature. The total aggregate of the engineer's
professional liability indemnification shall be one hundred
thousand dollars ($100,000) or twice the amount of the
engineer's fee, whichever is greater. Professional
liability indemnification must cover all services rendered
for all phases of the project, whether or not those
services are state funded, until the certification of
project performance is accepted by the Department.
B. Comply with the Public Contracts Bond Act, Title 54,
Chapter 19, Idaho Code, including requiring the prime
construction contractor retained for construction to carry
performance and payment bonds equal to one hundred percent
(100%) of the contract price. The bond will be released
when the constructed facility is accepted by the Borrower.
C. Assure that contracts related to the project which provide
for arbitration allow appeal of any resulting arbitration
decision to a district court or allow the arbitration to be
non -binding on both parties if either party desires not to
use arbitration as a method of dispute settlement.
D. Jointly with an engineering consultant provide assurances
that the physical and operational integrity of the works,
when constructed, will achieve the level of treatment
provided for in the design specifications.
E. 'Provide for the accumulation of funds through charges made
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i
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f o r s e r v i c e s , t h r o u g h r e v e n u e b o n d s , o r o t h e r w i s e , f o r t h e
p u r p o s e s o f ( 1 ) e s t a b l i s h i n g a f u n d d e d i c a t e d s o l e l y t o t h e
r e p a y m e n t o f p r i n c i p a l a n d i n t e r e s t o n t h i s l o a n , ( 2 )
c a p i t a l r e p l a c e m e n t a n d ( 3 ) f u t u r e i m p r o v e m e n t , b e t t e r m e n t ,
a n d e x t e n s i o n o f s u c h w o r k s o c c a s i o n e d b y i n c r e a s e d
w a s t e w a t e r l o a d i n g s o n t h e w o r k s .
F . P r o v i d e a p l a n a n d p r o g r a m f o r a n e q u i t a b l e u s e r c h a r g e
s y s t e m f o r p a y m e n t o f o p e r a t i o n a n d m a i n t e n a n c e o f
c o n s t r u c t e d f a c i l i t i e s . M a k e a v a i l a b l e o n a n e q u i t a b l e
b a s i s t h e s e r v i c e s o f t h e p r o j e c t t o t h e r e s i d e n t s a n d
c o m m e r c i a l a n d i n d u s t r i a l e s t a b l i s h m e n t s o f t h e a r e a i t w a s
d e s i g n e d t o s e r v e . T h e u s e r c h a r g e s y s t e m s h a l l b e
a p p r o v e d b y t h e D e p a r t m e n t a n d e n a c t e d b y t h e B o r r o w e r
p r i o r t o r e c e i v i n g f i n a l p a y m e n t .
G . D e v e l o p a n d a d o p t a s e w e r u s e o r d i n a n c e a p p r o v e d b y t h e
D e p a r t m e n t p r i o r t o r e c e i v i n g f i n a l p a y m e n t o f S t a t e l o a n
f u n d s .
H . P r o v i d e a n o p e r a t i o n a n d m a i n t e n a n c e m a n u a l f o r t h e
p r o j e c t a p p r o v e d b y t h e D e p a r t m e n t p r i o r t o r e c e i v i n g f i n a l
p a y m e n t o f S t a t e l o a n f u n d s .
I . P r o v i d e a d e q u a t e s t a f f i n g a n d q u a l i f i e d o p e r a t i o n a n d
m a i n t e n a n c e p e r s o n n e l a s s p e c i f i e d i n t h e o p e r a t i o n a n d
m a i n t e n a n c e m a n u a l a p p r o v e d b y t h e D e p a r t m e n t .
J . A s s u r e t h a t t h e o p e r a t o r i n c h a r g e o f t h e t r e a t m e n t
f a c i l i t y h a s a l e v e l o f c o m p e t e n c y c o m m e n s u r a t e w i t h t h e
n a t u r e o f t h e c o l l e c t i o n a n d t r e a t m e n t f a c i l i t y . H e ( S h e )
m u s t b e a g r a d u a t e o f a n a p p r o v e d w a s t e w a t e r o p e r a t o r s
t r a i n i n g p r o g r a m o r b e c e r t i f i e d a s a W a s t e w a t e r T r e a t m e n t
W o r k s O p e r a t o r i n a c l a s s e q u a l t o o r g r e a t e r t h a n t h a t o f
t h e f a c i l i t y .
K . A s s u r e t h a t t r e a t m e n t f a c i l i t y p e r s o n n e l s h a l l p a r t i c i p a t e
i n o p e r a t o r t r a i n i n g p r o g r a m s a p p r o v e d b y t h e D e p a r t m e n t
a n d d e s i g n e d t o a s s u r e c o m p e t e n c e i n t h e o p e r a t i o n a n d
m a i n t e n a n c e o f t h e f a c i l i t y .
L . C o m m e n c e s a t i s f a c t o r y o p e r a t i o n a n d m a i n t e n a n c e o f t h e
s e w a g e t r e a t m e n t f a c i l i t y o n c o m p l e t i o n o f t h e p r o j e c t i n
a c c o r d a n c e w i t h a p p l i c a b l e p r o v i s i o n s , r u l e s a n d
r e g u l a t i o n s o f t h e D e p a r t m e n t a n d a n y o t h e r a p p l i c a b l e l a w ,
r u l e o r r e g u l a t i o n a n d n o t d i s c o n t i n u e o p e r a t i o n o r d i s p o s e
o f t h e t r e a t m e n t f a c i l i t y w i t h o u t t h e w r i t t e n a p p r o v a l o f
t h e D e p a r t m e n t .
M . P r o v i d e f o r c o n t i n u i n g a c c e p t a n c e a n d t r e a t m e n t o f l o c a l
s e p t a g e w a s t e , i f s u c h f a c i l i t i e s w e r e c o n s t r u c t e d u n d e r
t h i s l o a n c o n t r a c t .
5
" "
N . R e v i e w a n d u p d a t e t h e u s e r c h a r g e s y s t e m a t l e a s t
b i e n n i a l l y d u r i n g t h e l i f e o f t h i s a g r e e m e n t t o a s s u r e t h a t
a l l c o s t s i n c l u d i n g d e b t r e t i r e m e n t , o p e r a t i o n a n d
m a i n t e n a n c e a r e o f f s e t b y s u f f i c i e n t r e v e n u e s .
O . M a i n t a i n p r o j e c t a c c o u n t s i n a c c o r d a n c e w i t h " g e n e r a l l y
a c c e p t e d g o v e r n m e n t a c c o u n t i n g s t a n d a r d s . " T h e s e s t a n d a r d s
a r e u s u a l l y d e f i n e d , b u t n o t l i m i t e d t o , t h o s e c o n t a i n e d i n
t h e U . S . G e n e r a l A c c o u n t i n g O f f i c e ( G A O ) p u b l i c a t i o n
" S t a n d a r d s f o r A u d i t o f G o v e r n m e n t a l O r g a n i z a t i o n s ,
P r o g r a m s , A c t i v i t i e s a n d F u n c t i o n s " ( 2 / 2 7 / 8 1 ) .
P . C e r t i f y w h e t h e r o r n o t t h e p r o j e c t i s p e r f o r m i n g i n
a c c o r d a n c e w i t h t h e d e s i g n p e r f o r m a n c e s t a n d a r d s a f t e r t h e
p r o j e c t h a s b e e n i n o p e r a t i o n f o r o n e y e a r . I f t h e p r o j e c t
c a n n o t m e e t t h e s e s t a n d a r d s , t h e B o r r o w e r m u s t s u b m i t a
c o r r e c t i v e a c t i o n r e p o r t a n d a s c h e d u l e f o r b r i n g i n g t h e
p r o j e c t i n t o c o m p l i a n c e .
S E C T I O N V . S P E C I A L C O N D I T I O N S
A . T h e f i n a l l o a n o f f e r w i l l b e i s s u e d a f t e r t h e B o r r o w e r
s u b m i t s a n e n v i r o n m e n t a l i n f o r m a t i o n d o c u m e n t d i s c u s s i n g
t h e e n v i r o n m e n t a l i m p a c t s o f t h e p r o j e c t a n d t h e D e p a r t m e n t
h a s r e v i e w e d t h e d o c u m e n t a n d i s s u e d a r e c o r d o f d e c i s i o n .
B . T h e B o r r o w e r s h a l l c o m p l e t e t h e p r o j e c t i n a c c o r d a n c e w i t h
t h e f o l l o w i n g s c h e d u l e :
N u m b e r o f m o n t h s f r o m T a s k
L o a n A c c e p t a n c e
1 0 % D e s i g n R e v i e w
5 0 % D e s i g n R e v i e w
9 0 % D e s i g n R e v i e w
F i n a l P l a n s , S p e c i f i c a t i o n s
a n d B i d d i n g D o c u m e n t s
B i d S u m m a r y
A w a r d C o n s t r u c t i o n C o n t r a c t
P r o j e c t M a n a g e m e n t C o n f e r e n c e
P l a n o f O p e r a t i o n A m e n d m e n t
D r a f t O p e r a t i o n &
M a i n t e n a n c e M a n u a l
S t a f f i n g P l a n
C o n s t r u c t i o n C o m p l e t i o n
U s e r C h a r g e S y s t e m E n a c t e d
S e w e r U s e O r d i n a n c e E n a c t e d
F i n a l O & M M a n u a l
F i n a l I n s p e c t i o n
I n i t i a t e O p e r a t i o n
F i n a l P a y m e n t
C e r t i f y P e r f o r m a n c e
C. The above schedule may be changed by amending the plan of
operation; all amendments to the plan of operation must be
approved by the state project engineer, prior to becoming
effective.
D. The City of McCall shall monitor the wastewater treatment
plant effluent discharge into the J-Ditch pipeline and
ensure that the mixed irrigation water leaving the mixing
station does not exceed 33% McCall wastewater.
SECTION VI. SECURITY REQUIREMENTS
The Borrower agrees:
A. This loan will be evidenced and secured by a promissory
note in an amount equal to the final approved project cost.
The promissory note shall include, among other things, a
promise to repay all principal and interest on the loan
and, as additional security, a pledge of the revenue and
income of the McCall Wastewater Treatment Facilities,
whether collected or uncollected, on a parity with all
other system debt and in an amount sufficient to repay all
principal and interest on this loan. The promissory note
shall be executed upon project completion.
B. Within five (5) years of project completion, establish a
reserve account in an amount equal to one (1) year's
payment of principal and interest due on this contract. A
minimum of twenty percent (20%) of the total reserve amount
will be deposited annually during the five (5) year period.
In the event Borrower fails to make any payment due on this
contract, Borrower shall immediately use the funds in the
reserve account to pay the past due principal and interest
on this contract. Borrower shall inform the Department in
writing when funds from the reserve account are used.
Within thirty (30) days of using funds from the reserve
account, Borrower shall replenish the reserve account in an
amount equal to the amount borrowed from the reserve
account. The reserve account may be used by the Borrower
solely for the purpose of securing payments on this
contract.
SECTION VII. LOAN DISBURSEMENTS
The Borrower agrees:
A. This loan shall be used solely to aid in the financing of
the Borrower's project.
7
will begin accruing with the first disbursement of loan
funds.
B. This loan contract shall remain in full force and effect
for the actual service life of the project. At a minimum,
this loan contract shall remain in full force and effect
until all loan proceeds, including principal and interest,
have been paid in full or the contract is otherwise
suspended or terminated by the Department.
SECTION IX. PROHIBITIONS
The Borrower agrees:
Expansion of collection systems in excess of reserve capacity
of the treatment works will be prohibited unless concurrent
designated construction provisions for adequate treatment are
provided by the Borrower.
SECTION X. SUSPENSION OR TERMINATION OF LOAN CONTRACT
A. The Director may suspend or terminate this loan contract
prior to final disbursement for failure by the Borrower or
its agents, including architectural/engineering firm(s),
contractor(s) or subcontractor(s), to perform. This loan
contract may be suspended or terminated for good cause
including, but not limited to, the following:
1. Commission by an employee or agent of the Borrower, of
any of the following acts in a manner which materially
affects the Borrower's obligations under this
contract: fraud,embezzlement, theft, forgery,
bribery, misrepresentation, conversion, malpractice,
misconduct, malfeasance, misfeasance, falsification or
unlawful destruction of records, receipt of stolen
property or any crime for which the maximum sentence
includes the possibility of one (1) or more years'
imprisonment; or
2. Violation(s) of any term of this loan contract; or
3. Any willful or serious failure to perform within the
scope of the project, plan of operation and project
schedule, terms of architectural/engineering
subagreements, or contracts for construction; or
4. Utilizing a contractor or subcontractor who has been
debarred for good cause by any federal or state agency
from working on public work projects funded by that
agency.
9
" M
B . T h e D i r e c t o r w i l l n o t i f y t h e B o r r o w e r i n w r i t i n g a n d b y
c e r t i f i e d m a i l o f t h e i n t e n t t o s u s p e n d o r t e r m i n a t e t h i s
l o a n c o n t r a c t . T h e n o t i c e o f i n t e n t s h a l l s t a t e :
1 . S p e c i f i c a c t s o r o m i s s i o n s w h i c h f o r m t h e b a s i s f o r
s u s p e n s i o n o r t e r m i n a t i o n ; a n d
2 . A v a i l a b i l i t y o f a h e a r i n g , c o n d u c t e d b y t h e D i r e c t o r ,
o r h i s d e s i g n e e a s h e a r i n g o f f i c e r , s a i d h e a r i n g b e i n g
c o n d u c t e d i n a n i n f o r m a l m a n n e r a t a t i m e a n d i n a
p l a c e s p e c i f i e d b y t h e D i r e c t o r .
C . U p o n t h e p r o o f o f t h e e x i s t e n c e o f c a u s e ( s ) f o r s u s p e n s i o n
o r t e r m i n a t i o n b y s u b s t a n t i a l e v i d e n c e o r b y p r o o f o f
j u d g e m e n t o r c o n v i c t i o n o f o f f e n s e ( s ) , t h e D i r e c t o r s h a l l
m a k e a w r i t t e n d e t e r m i n a t i o n , s e n d i n g t h e d e t e r m i n a t i o n t o
t h e B o r r o w e r b y c e r t i f i e d m a i l w i t h i n s e v e n ( 7 ) d a y s o f t h e
h e a r i n g .
D . U p o n w r i t t e n r e q u e s t b y t h e B o r r o w e r w i t h e v i d e n c e t h a t
t h e c a u s e ( s ) f o r s u s p e n s i o n n o l o n g e r e x i s t s , t h e D i r e c t o r
m a y , i f f u n d s a r e a v a i l a b l e , r e i n s t a t e t h e l o a n c o n t r a c t .
I f a s u s p e n d e d l o a n c o n t r a c t i s n o t r e i n s t a t e d , t h e l o a n
w i l l b e a m o r t i z e d a n d a r e p a y m e n t s c h e d u l e p r e p a r e d i n
a c c o r d a n c e w i t h t h e p r o v i s i o n s o f t h i s l o a n c o n t r a c t .
E . N o t e r m i n a t e d l o a n s h a l l b e r e i n s t a t e d . T e r m i n a t e d l o a n s
w i l l b e a m o r t i z e d a n d a r e p a y m e n t s c h e d u l e p r e p a r e d i n
a c c o r d a n c e w i t h t h e p r o v i s i o n s o f t h i s l o a n c o n t r a c t .
S E C T I O N X I . A C C E S S A N D I N D E M N I F I C A T I O N
T h e B o r r o w e r a g r e e s t o :
A . P r o v i d e t h e D e p a r t m e n t , o r i t s a u t h o r i z e d a g e n t s , a c c e s s
t o a l l f i l e s , r e c o r d s , a c c o u n t i n g s a n d b o o k s r e l a t i n g t o
t h e m a n a g e m e n t a n d a c c o u n t a b i l i t y o f t h i s l o a n .
B . I n d e m n i f y a n d s a v e h a r m l e s s t h e S t a t e o f I d a h o , i t s
a g e n t s , a n d i t s e m p l o y e e s r e g a r d l e s s o f f a u l t o r
n e g l i g e n c e , f r o m a n y a n d a l l c l a i m s , a c t i o n s , d a m a g e s ,
l i a b i l i t i e s a n d e x p e n s e s d i r e c t l y o r i n d i r e c t l y c o n n e c t e d
t o t h e l o c a t i o n , d e s i g n , c o n s t r u c t i o n , o p e r a t i o n ,
m a i n t e n a n c e . , r e p a i r , f a i l u r e o r d e a c t i v a t i o n o f t h e p r o j e c t
o r a n y p a r t o f t h e p r o j e c t .
1 0
"
S E C T I O N X I I . O F F E R
T h e o f f e r s e t f o r t h h e r e i n m u s t b e a c c e p t e d , i f a t a l l , o n o r
b e f o r e D e c e m b e r 2 8 , 1 9 9 6 . A n a c c e p t a n c e m u s t b e a c c o m p a n i e d b y
a r e s o l u t i o n o f t h e A p p l i c a n t ' s g o v e r n i n g b o d y a u t h o r i z i n g t h e
s i g n a t o r t o s i g n o n t h e A p p l i c a n t ' s b e h a l f f o r t h e p u r p o s e o f
t h i s a g r e e m e n t .
D a t e d t h i s 2 8 t h d a y o f O c t o b e r , 1 9 9 6 .
a e - - ( 1 A - c - t Y )
W a l l a c e N . C o r y ,
A d m i n i s t r a t o r
D i v i s i o n o f E n v i o f n e n t a l Q u a l i t y
I d a h o D e p a r t m e n t o f H e a l t h a n d W e l f a r e
S E C T I O N X I I I . A C C E P T A N C E
T h e C i t y o f M c C a l l b y a n d t h r o u g h i t s u n d e r s i g n e d
r e p r e s e n t a t i v e ( s ) , a c c e p t s t h e f o r e g o i n g o f f e r a n d a g r e e s t o
d i s c h a r g e a l l o b l i g a t i o n s a n d t o c o m p l y w i t h a l l t e r m s a n d
c o n d i t i o n s c o n t a i n e d h e r e i
S i g n a t u r e
o f R e p r e s e n t a t i v e
i t / i 1 1 4 O K
4 .
N a m e a n d T i t l e o f R e p r e s e n t a t i v e - t y p e o r p r i n t
D a t e
1 1
10/12/01 IDAHO DEPARTMENT OF HEALTH AND WELFARE
REPAYMENT SCHEDULE
CITY OF MCCALL LOAN NO. 1894-04
Loan Amt.: 3,140,850.00 Term: 20 years Repayment Frequency: Semi-annual
Int. Rate: 4.50% Repayments to begin: 05/01/2002
DATE AMOUNT INTEREST PRINCIPAL BALANCE
05/01/2002 119,909.42 70,669.13 49.240.29 3,091,609.71
11/01/2002 119,909.42 69,561.22 50,348.20 3,041,261.51
05/01/2003 119,909.42 68,428.38 51,481.04 2,989,780.48
11/01/2003 119,909.42 .67,270.06 52,639.36 2,937,141.12
05/01/2004 119.909.42 66,085.68 53,823.74 2,883,317.38
11/01/2004 119,909.42 64,874.64 55,034.78 2,828,282.60
05/01/2005 119,909.42 63,636.36 56,273.06 2,772,009.54
11/01/2005 119,909.42 62,370.21 57,539.21 2,714,470.34
05/01/2006 119,909.42 61,075.58 58,833.84 2,655,636.50
11/01/2006 119,909.42 59,751.82 60.157.60 2,595,478.90
05/01/2007 119,909.42 58,398.28 61,511.14 2,533,967.76
11/01/2007 119,909.42 57,014.27 62,895.15 2,471,072.62
05/01/2008 119,909.42 55,599.13 64.310.29 2,406,762.33
11/01/2008 119,909.42 54,152.15 65,757.27 2,341,005.06
)5/01/2009 119,909.42 52,672.61 .67,236.81 2,273,768.25
11/01/2009 119,909.42 51,159.79 68,749.63 2,205,018.62
)5/01/2010 119,909.42 49,612.92 70,296.50 2,134,722.13
11/01/2010 119,909.42 48,031.25 71,878.17 2,062,843.96
)5/01/2011 119,909.42 46,413.99 73.495.43 1,989,348.53
11/01/2011 119,909.42 44,760.34 75.149.08 1,914,199.45
)5/01/2012 119,909.42 43,069.49 76.839.93 1.837.359.52
11/01/2012 119,909.42 41,340.59 78,568.83 1,758,790.70
)5/01/2013 119,909.42 39.572.79 80,336.63 1,678,454.07
11/01/2013 119.909.42 37,765.22 82.144.20 1,596,309.87
)5/01/2014 119,909.42 35,916.97 83.992.45 1,512,317.42
11/01/2014 119,909.42 34,027.14 85,882.28 1,426,435.15
)5/01/2015 119,909.42 32,094.79 87.814.63 1,338,620.52
L1/01/2015 119,909.42 30,118.96 89,790.46 1,248,830.06
)5/01/2016 119,909.42 28,098.68 91.810.74 1,157,019.32
L1/01/2016 119,909.42 26,032.93 93,876.49 1,063,142.83
)5/01/2017 119,909.42 23.920.71 95,988.71 967,154.13
11/01/2017 119,909.42 21,760.97 98,148.45 869.005.68
)5/01/2018 119,909.42 19,552.63 100,356.79 768,648.89
L1/01/2018 119,909.42 17,294.60 102.614.82 666,034.07
)5/01/2019 119,909.42 14,985.77 104.923.65 561,110.42
_1/01/2019 119,909.42 12-624.98 107.284.44 453,825.99
)5/01/2020 119.909.42 10,211.08 109.698_34 344,127.65
_1/01/2020 119,909.42 7,742.87 112,166.55 231,961.10
)5/01/2021 119,909.42 5,219.12 114,690.30 117,270.80
_1/01/2021 119,909.42 2,638.62 117,270.80 0.00
City of McCall Wastewater Facilities Project
Project Description: Design and Construction of improvements to the existing wastewater treatment
facility, effluent storage reservoir, pump station and pipeline to farms south of McCall, and
improvements to farm irrigation systems.
Project Completion:
Sand Filter April-1998
Phase I May-1999
Phase II Completed but some items in dispute
A. Project Funding:
State Revolving Fund Loan (#1894-04) $3,140,850
Challenge Grant $1,000,000
Interest Earned on Challenge Grant $116,150
Supplemental Grant $2,500,000
Idaho Dept. Of Water Resources Grant $100,000
City of McCall Funds $6,531
Total Project Funding S6,863,531
B. Design and Construction Costs:
Phase I:
Engineering: JUB Engineers, Inc. $758,294
Sand Filter Rehabilitation and Construction
Bezates Construction, Inc. $978,613
Effluent Pump Station, Transmission Main and Mixing Station
Warrington Construction Corp. $1,165,363
On -Farm Sprinkler Systems $976,076
Pipeline $1,864,898
Idaho Power Company $131,292
J-Ditch Pipeline Contract Administration $2,753
RH2 Engineers $21,059
Cascade Earth Sciences $170,305
Administrator- JDPAI $27,433
Inspector- Valley Soil & Water Conservation District $18,562
Survey - On Farm $10,740
Phase 2: (Storage Lagoon)
Engineering: JUB Engineers, Inc. $720,079
Project Funds Expended To Date $6,845,467
Remaining Loan Funds - Available For Project Closeout $17,764
Remaining Grant Funds- Available For Project Closeout $300
Total Funds Expended S6,863,531
10/04/00
09:58:48
IDAHO DEPARTMENT OF HEALTH AND WELFARE
WATER QUALITY LOAN SYSTEM
APPENDIX B
Loan No: 1894-04
Loan No: 1894-04 LOAN DETAIL Phase: DISBURSEMENT
Borrower: CITY OF MCCALL Principal: 3,140,850.00
Purpose: WWTF IMPROVEMENTS, STORAGE, PIPELINE Revised:
Contractor: BEZATES CONSTRUCTION Contractor 2: WARRINGTON CONSTRUCT Revision Date:
Engineer: J-U-B ENGINEERS Project Officer: JG See also: 202 Interest Rate: 4.50%
Security: NOTE
Environmental Review: FNSI First Use:
Commitment Date: 10/28/96
Disbursement Period: 0 mos.
Disburs. Completion Date:
Repayment Period: 240 mos.
Repayment Frequency: SEMI-ANNUAL
0.00
Minority: 0.00% 0.00
Women: 0.00% 0.00
Tran Post Interest Estimated Actual
Date Date Document Disbursements Accrued Repayments Repayments Principal Interest
12/10/96 12/20/96 Q9334502 963,997.00
04/29/97 05/09/97 Q0811901 01 588.133.00
09/26/97 10/03/97 08426901 01 571,023.00
12/08/97 12/15/97 Q9134201 01 448,361.00
07/02/98 07/10/98 08718301 01 188,486.00
09/10/98 09/19/98 Q8225301 Ol 91,556.00
02/01/99 02/08/99 08903201 01 33,755.00
09/01/99 09/08/99 Q0824402 01 16,958.00
06/08/00 06/26/00 Q0916002 01 110,989.00-
10/04/00 10/14/00 109,828.00
Totals: 3,123,086.00 0.00 0.00 0.00 0.00 0.00
Principal Balance Due: 3,123,086.00
Total Balance Due: 3,123,086.00
111 RECEIVED
NOV 2 1 1995
DN.OF COMMUNIITTIPEROGRAM"SUIY
APPENDIX C
LELAND G. HEINRICH, CLERK
tyy AI G. HAT71,10 Deputy
Case No.
Filed
NOV 01995
Inst. No.
AM.
P.M.
IN THE DISTRICT COURT OF THE FOURTH JUDICIAL DISTRICT OF THE
STATE OF IDAHO, IN AND FOR THE COUNTY OF VALLEY
In re: )
)
THE CITY OF McCALL, )
an Idaho municipal )
corporation, )
)
Petitioner. )
)
Case No. SP-95-173
FINDINGS OF FACT, CONCLUSIONS
OF LAW AND JUDGMENT
This matter having come on duly and regularly before this
Court for hearing, and Petitioner having submitted a verified
Petition for Judicial Confirmation, and a memorandum of law and
affidavits in support of its petition, and it appearing that proper
notice of the filing of the Petition for Judicial Confirmation has
been given as provided in Title 7, Chapter 13, Idaho Code, and the
Court having examined the allegations of the Petition, the exhibits
annexed thereto, and the memorandum and affidavits in support
thereof; the Court, being fully advised in the premises, now makes
the following:
FINDINGS OF FACT, CONCLUSIONS OF LAW AND JUDGMENT - Page 1
FINDINGS OF FACT
I.
Petitioner, the City of McCall, Valley County, Idaho (the
"City"), is a political subdivision within the definition contained
in Section 7-1303(b), Idaho Code, and has filed this action
pursuant to Sections 7-1301, fit, seq., Idaho Code (the "Judicial
Confirmation Law"), seeking judicial confirmation of,the validity
of a certain loan agreement, and promissory note or other evidence
of indebtedness to be issued pursuant thereto, between the City and
the State of Idaho, Division of Environmental Quality, whereby the
City will borrow funds for improvements to the City's sewage
treatment and disposal facilities.
II.
Pursuant to Section 7-1304, Idaho Code, the City Council (the
"Council") of the City, on August 24, 1995, held and conducted a
public hearing to consider whether it should adopt a resolution
authorizing the filing of a petition under the Judicial
Confirmation Law. A notice of the public hearing, in the form and
content described in Section 7-1306(2), Idaho Code, setting forth
the time, place, and summary of the matter, was published once in
The Central Idaho Star -News, a newspaper of general circulation
within the City, at least fifteen days prior to the public hearing.
Following the public hearing, the Council adopted Resolution No.
21-95, authorizing the filing of a petition for judicial
confirmation and making certain findings and determinations.
FINDINGS OF FACT, CONCLUSIONS OF LAW AND JUDGMENT - Page 2
" "
I I I .
P u r s u a n t t o S e c t i o n s 7 - 1 3 0 5 a n d 7 - 1 3 0 6 , I d a h o C o d e , n o t i c e o f
t h e f i l i n g o f t h e P e t i t i o n f o r J u d i c i a l C o n f i r m a t i o n w a s d u l y
s e r v e d b y p u b l i c a t i o n o n c e a w e e k f o r t h r e e ( 3 ) c o n s e c u t i v e w e e k s
b y t h r e e ( 3 ) w e e k l y i n s e r t i o n s i n T h e C e n t r a l I d a h o S t a r - N e w s , a
n e w s p a p e r o f g e n e r a l c i r c u l a t i o n w i t h i n t h e C i t y , a n d b y p o s t i n g i n
a p r o m i n e n t p l a c e a t o r n e a r t h e m a i n d o o r o f t h e a d m i n i s t r a t i v e
o f f i c e o f t h e C i t y t h i r t y ( 3 0 ) d a y s p r i o r t o t h e d a t e f i x e d i n t h e
n o t i c e o f h e a r i n g o n t h e P e t i t i o n , a l l a s m o r e f u l l y s h o w n b y t h e
A f f i d a v i t o f P u b l i c a t i o n a n d A f f i d a v i t o f P o s t i n g o f N o t i c e o n f i l e
h e r e i n .
I V .
N o p e r s o n o r e n t i t y h a s f i l e d a n y w r i t t e n a p p e a r a n c e o r
p l e a d i n g o r h a s o t h e r w i s e a p p e a r e d h e r e i n . T h e a l l e g a t i o n s o f t h e
V e r i f i e d P e t i t i o n f o r J u d i c i a l C o n f i r m a t i o n a n d t h e a u t h e n t i c i t y o f
t h e d o c u m e n t s a n n e x e d t h e r e t o a s e x h i b i t s a r e t h e r e f o r e d e e m e d t o
b e a d m i t t e d .
V .
T h e C i t y h a s s u b m i t t e d w i t h i t s P e t i t i o n f o r J u d i c i a l
C o n f i r m a t i o n a c o p y o f t h e p r o p o s e d l o a n a g r e e m e n t t h e " L o a n
A g r e e m e n t " ) b e t w e e n t h e C i t y a n d t h e S t a t e o f I d a h o , D i v i s i o n o f
E n v i r o n m e n t a l Q u a l i t y ( t h e " S t a t e " ) , w h i c h t h e C i t y p r o p o s e s t o
e x e c u t e . T h e C i t y h a s a l s o s u b m i t t e d , a s a n e x h i b i t t o t h e
A f f i d a v i t o f J a m e s M . H e n d e r s o n , a c o p y o f R e s o l u t i o n N o . 2 1 - 9 5 ,
a d o p t e d b y t h e C o u n c i l o n A u g u s t 2 4 , 1 9 9 5 . S a i d e x h i b i t s a r e
F I N D I N G S O F F A C T , C O N C L U S I O N S O F L A W A N D J U D G M E N T - P a g e 3
conclusively presumed to be true and correct in accordance with
their terms.
VI.
The City owns, maintains, and operates, and has for many years
owned, maintained, and operated, pursuant to Sections 50-332, 50-
1032, and 50-1033, Idaho Code, and related statutes, a municipal
sewage collection and treatment system (the "System") for the
collection, treatment, and disposal of sewage. The System serves
the entire City and also provides sewage treatment for sewage
effluent collected by the Payette Lakes Water and Sewer District.
The City's System is the sole provider of sewage treatment services
for approximately 2,750 residential households and businesses.
VII.
The City's existing sewage treatment process consists of
collecting sewage effluent at its municipal sewage treatment plant,
treating the raw effluent in a biological process at aerated and
facultative lagoons, followed by filtration and disinfection.
Treated effluent is then discharged directly into the North Fork of
the Payette River, which flows into Cascade Reservoir. Discharge
into the Payette River has been governed by an NPDES permit granted
to the City by the U.S. Environmental Protection Agency. The
City's existing permit has expired. The City is currently
discharging treated effluent pursuant to an extension of its
existing permit, and the City's continued ability to maintain such
permitteddischarge depends upon renewal of its NPDES discharge
permit.
FINDINGS OF FACT, CONCLUSIONS OF LAW AND JUDGMENT - Page 4
VIII.
In Idaho, the State Division of Environmental Quality ("DEQ")
administers federal water quality standards promulgated by the U.S.
Environmental Protection Agency. Several studies of the water
quality in Cascade Reservoir have been performed by local, state,
and federal agencies over the past decade. These studies have
disclosed high algae growth in Cascade Reservoir. One of the
principal causes of algae growth has been identified as the
presence of phosphorous in the water. Treated effluent from the
City's sewage treatment facility has been identified as one of the
sources of phosphorous contributing to this problem.
IX.
As a result, DEQ has recommended to the U.S. Environmental
Protection Agency that very stringent NPDES permit limitations for
phosphorous, ammonia, and heavy metals be'imposed upon the City as
part of a program to improve water quality in the Payette River and
in Cascade Reservoir. In order to comply with the anticipated
permit limitations (the violation of which could result in serious
sanctions against the City by way of monetary finds and revocation
of its discharge permit altogether, leaving the City with 'no method
of disposing of treated sewage effluent), the City, through its
Council, has determined that an alternative disposal method will be
required.
X.
The City has considered several alternative disposal methods.
Engineering studies have demonstrated that any disposal method
FINDINGS OF FACT, CONCLUSIONS OF LAW AND JUDGMENT - Page 5
which requires continual discharge into the river would be more
expensive than would alternative land application systems. The
City, through its Council, has determined, based upon its
engineering facility planning studies and cost estimates, that the
least expensive and most effective method of meeting the problem
would be to pursue a land application method of disposal of treated
sewage effluent. This alternative would require,the pumping of
treated effluent to a land disposal site located approximately 4.5
miles from the City's treatment plant, where it would be discharged
onto the land via a sprinkler system and used for irrigation
purposes. The chosen alternative would require improvements and
alterations to the existing treatment plant, installation of pipes,
pumping, and sprinkler system, construction of a winter storage
facility, and related improvements (the "Improvements"). The total
cost of the Improvements has been estimated at $11,280,000.
Approximately 500 of the cost of the Improvements has been
requested from the U.S. Bureau of Reclamation, which administers
the Cascade Reservoir and is thus directly affected and benefited
by the Improvements. DEQ would provide approximately $2,500,000 of
the costs through direct grants, and the City would be required to
provide $3,140,850 of the cost.
XI.
The City does not have the necessary $3,140,850 available in
its current funds or in its anticipated sewer revenues for the
current fiscal year, and therefore must finance its portion of the
costs over a term of years. The City has made application to DEQ
FINDINGS OF FACT, CONCLUSIONS OF LAW AND JUDGMENT - Page 6
for a loan in the amount of $3,140,850 from the State's Wastewater
Facility Loan Account, established pursuant to Sections 39-3624
through 39-3632, Idaho Code (Supp. 1995). DEQ has determined that
the City is eligible for the loan and has indicated its approval of
the loan to be repaid at an interest rate of 4.5a per annum over a
term of 20 years from the City's sewer system revenues,'subject,
however, to the City obtaining judicial confirmation of its
authority to incur such indebtedness.
XII.
The loan, if incurred pursuant to the proposed loan agreement
(the "Loan Agreement"), would be evidenced by a promissory note or
other evidence of indebtedness and would constitute an indebtedness
of the City extending beyond its current year's revenues. The City
has not sought or obtained an approving vote of the electors at a
special election called for the purpose of approving such
indebtedness, nor has the City made provision for the levying of an
annual property tax to constitute a sinking fund for the payment of
the interest on or principal of such indebtedness.
XIII.
Article 8, Section 3, Idaho Constitution, provides, in
relevant part, that no county, city, or other political subdivision
shall incur any indebtedness or liability, in any manner or for any
purpose, exceeding in that year the income and revenue provided to
it for such year, without the assent of two-thirds (or, in the case
of certain revenue bonds, the assent of the majority) of the
qualified electors thereof voting at an election held for that
FINDINGS OF FACT, CONCLUSIONS OF LAW AND JUDGMENT - Page 7
" "
p u r p o s e , b u t s a i d A r t i c l e 8 , S e c t i o n 3 , c o n t a i n s t h e f o l l o w i n g
e x c e p t i o n : " p r o v i d e d , t h a t t h i s s e c t i o n s h a l l n o t b e c o n s t r u e d t o
a p p l y t o t h e o r d i n a r y a n d n e c e s s a r y e x p e n s e s a u t h o r i z e d b y t h e
g e n e r a l l a w s o f t h e s t a t e . . . . "
X I V .
T h e C i t y , b y a n d t h r o u g h i t s C o u n c i l , h a s d e t e r m i n e d t h a t t h e
p r o p o s e d L o a n A g r e e m e n t f o r t h e f i n a n c i n g o f t h e I m p r o v e m e n t s
c o n s t i t u t e s a n d " o r d i n a r y a n d n e c e s s a r y e x p e n s e " o f t h e C i t y w i t h i n
t h e m e a n i n g o f t h e a b o v e - q u o t e d p r o v i s o t o A r t i c l e 8 , S e c t i o n 3 ,
I d a h o C o n s t i t u t i o n , f o r w h i c h n o a p p r o v i n g v o t e o f t h e e l e c t o r s i s
r e q u i r e d . T h i s d e t e r m i n a t i o n i s . b a s e d u p o n t h e f o l l o w i n g f a c t o r s :
A . T h e p r o p o s e d e x p e n d i t u r e i s n e c e s s a r y t o p r o t e c t t h e
h e a l t h a n d s a f e t y o f t h e i n h a b i t a n t s o f t h e C i t y a n d t o
c o m p l y w i t h s t a t e a n d f e d e r a l h e a l t h a n d e n v i r o n m e n t a l
s t a n d a r d s .
B . T h e p r o p o s e d e x p e n d i t u r e i s f o r t h e p u r p o s e o f
r e h a b i l i t a t i n g , m a i n t a i n i n g , a n d e x t e n d i n g e x i s t i n g C i t y
s e r v i c e s i n o r d e r t o r e n d e r t h e m s e r v i c e a b l e , a s o p p o s e d
t o t h e c o n s t r u c t i o n o f w h o l l y n e w f a c i l i t i e s .
C . T h e a m o u n t o f t h e p r o p o s e d i n d e b t e d n e s s ' i s n o t
d i s p r o p o r t i o n a t e t o t h e C i t y ' s o v e r a l l b u d g e t f o r t h e
c u r r e n t f i s c a l y e a r .
D . T h e p r o p o s e d I m p r o v e m e n t s a r e a u t h o r i z e d a n d r e q u i r e d b y
t h e g e n e r a l l a w s o f t h e s t a t e .
E . T h e C i t y h a s o p e r a t e d t h e e x i s t i n g S y s t e m f o r m a n y y e a r s
a n d h a s d e t e r m i n e d t h a t t h e I m p r o v e m e n t s a r e
F I N D I N G S O F F A C T , C O N C L U S I O N S O F L A W A N D J U D G M E N T - P a g e 8
indispensable to the efficient continued operation: of the
System.
XV.
The Council has determined that the loan obligation may be
validly secured by the City issuing its promissory note as evidence
thereof and agreeing to repay the same from its sewer System
revenues.
Based upon the foregoing Findings of Fact, the Court now makes
the following:
CONCLUSIONS OF LAW
I.
Proceedings under the Judicial Confirmation Law, Title
Chapter 13, Idaho Code, are proceedings in ram, and jurisdiction of
the subject matter and of all interested parties is lawfully
obtained through publication and posting as provided therein.
Publication and posting as authorized by the Judicial Confirmation
Law is a valid method of vesting jurisdiction of this Court over
all interested parties and over the subject matter.
II.
Jurisdiction of this Court over the subject matter cf the
Petition for Judicial Confirmation and over all interested parties
has, as a matter of law, been obtained herein by publication and
posting as provided by law.
FINDINGS OF FACT, CONCLUSIONS OF LAW AND JUDGMENT - Page 9
III.
The allegations of the petition for Judicial Confirmation are
deemed to be admitted by all interested parties who failed to
appear in objection thereto. This Court is authorized to render
the judgment as prayed for in the City's Petition for Judicial
Confirmation and as set forth hereinafter.
IV.
All of the Improvements proposed to be made by the City, and
the indebtedness proposed to be incurred therefor, meet the
criteria articulated by the Idaho Supreme Court to qualify under
the "ordinary and necessary expense" exception to Article 8,
Section 3, Idaho Constitution, for the following reasons:
1. The Council of the City has determined that the expense
is necessary to protect the health and safety of the
inhabitants of the City and its environs and to comply
with state and federal health and environmental
standards.
2. The expense is for the purpose of rehabilitating,
maintaining, and extending existing City services in
order to render them serviceable to the City and to
reduce potential monetary liability of the City.
3. The City has a long-standing involvement in the
enterprise of collecting, treating, and disposing of
sewage effluent for the public health and safety.
4. The proposed expense involves the rehabilitation,
maintenance, and extension of the existing sewage
FINDINGS OF FACT, CONCLUSIONS OF LAW AND JUDGMENT - Page 10
treatment and disposal system of the City, as opposed to
wholly new services or facilities.
;. The proposed expense isnot disproportionate to the
City's overall budget for the current fiscal year.
6. The proposed Improvements are expressly authorized by the
general laws of the State.
V.
As "ordinary and necessary expenses" within the meaning of
Article 8, Section 3, Idaho constitution,- no approval of the
electors of the City at a special election called for such purpose
is required.
VI.
The Loan Agreement, when duly executed by the City and the
State, will be a valid and binding special obligation of the City,
payable in accordance with its terms.
VII.
The Loan Agreement may be validly secured by the City's
promissory note and the pledge of its sewage System revenues.
Based on the foregoing Findings of Fact and Conclusions of
Law, and good cause appearing thereof,
IT IS HEREBY ORDERED, ADJUDGED, AND DECREED:
1. The City is authorized to enter into the proposed Loan
Agreement with the State without further approval of the electors
of the City voting at a special election called for such purpose.
FINDINGS OF FACT, CONCLUSIONS OF LAW AND JUDGMENT - Page 11
2. The indebtedness of the City incurred pursuant to the
Loan Agreement is an ordinary and necessary expense of the City
within the meaning of Article 8, Section 3, Idaho Constitution.
3. The City is authorized to issue its promissory note or
other evidence of indebtedness pursuant to the Loan Agreement and
to pledge its sewage System revenues to the payment thereof.
4. The Loan Agreement and promissory note, when issued
pursuant to such authority, will be valid and binding special
obligations of the City in accordance with their terms.
DATED this day of November, 1995.
FINDINGS OF FACT, CONCLUSIONS OF LAW AND JUDGMENT - Page 12