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HomeMy Public PortalAboutResolution 20-91 Replacing certain water mains --- RESOLUTION NO. 20" A resolution regarding the McCall City Water System; making certain findings and providing that the City of McCall has elected to replace certain water mains to protect the public health and safety, providing that costs thereof shall be paid by borrowing required funds from West One Bank, Idaho N. A. , evidenced by a promissory note, subject to judicial confirmation and authorizing and directing the City Attorney to file a petition in the District Court of the Fourth Judicial District of the State of Idaho, in and for the County of Valley, seeking a judicial examination and determination of the validity of its authority to execute such note, incur such debt, pledge its water revenues and that such indebtedness will be a valid obligation of the City of McCall. The following findings are hereby made : 1. The City of McCall owns and operates a municipal water system furnishing domestic water and fire protection to the City and its inhabitants. 2. The City of McCall, Idaho, has engaged professional engineers, to-wit : J-U-B Engineers, Inc. , to evaluate the City' s water system. The said engineers completed their evaluation and published their findings in the form of a Water Master Plan which was approved and adopted by the City Council, December, 1988, and amended August, 1990. The following water main replacements were a part of the recommendations of the engineers in the said Water Master Plan as necessary to provide safe drinking water in sufficient quantity and at sufficient pressure for public consumption and for fire fighting : a. Mission Street - Replace 1240 feet of 6-inch and 8-inch water mains with 10-inch water main. This main will provide adequate fire flows to the McCall-Donnelly Elementary and High schools. b. Deinhard Lane and Thula Street - Replace 2450 feet of 4-inch water main with 8-inch water main. c. Thula Street and Floyde Street - Replace 700 feet of 4-inch water main with 8-inch water main. d. Floyde Street. to Sampson Trail - Replace 67 feet of 6-inch • water main with 8-inch water main. Items 2, 3 and 4 above will provide adequate water for fire fighters at the McCall Care Center, a nursing home. e. Third Street, Timm Street to Colorado Street - Replace 1277 feet of 2-inch water main with 6-inch water main. This replacement will provide fire protection for a number of busineses S. offices along Highway 55. 3. The water main replacements above enumerated and necessary repairs and work related thereto are required to protect the ' health of the public' s drinking water supply, as mandated by the United States Government in the adoption of the Safe Drinking Water Act of 1974. 4. The Idaho Survey and Rating Bureau have examined the foregoing water mains and have identified them to be inadequate to provide water to a conflagration. 5. The water main replacements herein described are most economically and practically completed as a single project. 6. Upon competitive bidding under the provisions of Section 50-341, Idaho Code, the lowest and best bid for the above main replacements was submitted by Brogan Construction Company of Caldwell, Idaho, in the amount of $354, 588. 00 and an additional sum of $55, 247. 00 is required for engineering services and other costs, making in all a total project cost of $409, 835. 00. 7. The costs for replacement of such mains as set forth in item 6 above, exceed the yearly income of the municipal water system. 8. West One Bank, Idaho, N. A. , has offered to finance the replacement of such mains and engineering and related costs on an amortized basis over a seven (7) year term bearing interest at 7. 20% per annum, according to the terms of that certain promissory note annexed hereto as Exhibit I and by reference incorporated herein. 9. West One Bank, Idaho U. S. , has advised the city that it shall not advance funds to the city under the promissory note until the city has obtained judicial confirmation and approval of such note under the provisions of Section 7-1301 et seq. , Idaho Code. 10. The proposed expenditure is necessary to protect the health and safety of the inhabitants of the Petitioner and to comply with state and federal health and drinking water standards. 11. The proposed expenditure is for the purpose of repairing, rehabilitating, maintaining, and replacing existing city services in order to render them serviceable, as opposed to the construction of wholly new facilities. 12. The amount of the proposed indebtedness is not disproportionate to the Petitioner' s overall budget for the year. 13. The proposed Improvements are authorized by the general laws of the state. 14. Petitioner has operated the existing System for many years and has determined that the Improveents are indispensable to the y • efficient continued operation of the System. 15. The replacement of such water mains constitute an integral part of the operation and maintenance of the McCall Municipal Water System and as such the cost thereof is an ordinary and necessary expense of the City within the meaning and interpretation of Article 8, Section 3 of the Constitution of the State of Idaho, and incurring such indebtedness does not require the assent of the qualified electors of the City at a bond election. 16. That the City shall pledge the revenues from the City water system to the payment of said promissory note over the term thereof . NOW, THEREFORE, Be it resolved by the City Council of the City of McCall, Idaho, as follows : 1. That the City of McCall has elected to proceed to replace said water mains, employ engineers to do and perform the necessary engineering services in connection therewith, to protect the public health and safety. 2. That said promissory note is hereby approved and the Mayor and City Clerk be, and they are hereby authorized and directed to execute the same to West One Bank, Idaho, N. A. , in the form hereto annexed as Exhibit I, subject to a judicial confirmation under the provisions of Section 7-1301, et seq. , Idaho Code. 3. The City hereby pledges the revenues of the City water system to the payment of said promissory note over the term thereof . 4. That ROBERT H. REMAI(LUS, Lawyer P. A. , McCall City Attorney, be, and is hereby authorized and directed to file a petition pursuant to Section 7-1301, et seq. , Idaho Code, in the District Court of the Fourth Judicial District of the State of Idaho, in and for the County of Valley, for a judicial examination and determination of the validity of the power and authority of Petitioner (a) to execute such promissory note to West One Bank, Idaho, N. A. , (b) to incur indebtedness thereunder without the approval of the electors of Petitioner at a special election as an "ordinary and necessary expense" and to issue its note to said bank, and (c) to pledge its water revenues to the payment of such indebtedness; and a declaration that such evidence of indebtedness of Petitioner, when issued pursuant to such authority, will be a valid and binding special obligation of Petitioner. Dated this 10th day of October, 1991. ria o r Att -t City 7 erk 4 r UNITED STATES OF AMERICA STATE OF IDAHO City of McCall, Valley County, Idaho PROMISSORY NOTE • FOR VALUE RECEIVED, the City of McCall (the "city's) , a political subdivision of the State of Idaho, acknowledges itself owe and promises to pay West One Bank, Idaho, N.A. , McCall, Idaho, on or before the 16th day of December,1998, the principal amount of Four Hundred Nine Thousand, Eight Hundred Thirty-Five and no/100 DOLLARS ($409,835.00) , pursuant to Resolution No.409>authorizing a maximum amount of $409,835.00, together with interest thereon, at the rate of 7.20 percent per annum, on the unpaid principal balance. The principal of and interest on this note are payable in lawful money of the United States of America at the McCall office of West One Bank. The City shall make payment of the outstanding principal balance, together with accrued interest, in 14 equal semiannual payments of $37,780.00 each. The City's first payment is due June 16,1992, and all subsequent payments are due on the 16th day of December/June thereafter. City's final payment will be due on or before December 16,1998 and will be for all principal and all accrued interest not yet paid. Unless otherwise agreed on or required by applicable law, payments will be applied first to accrued unpaid interest, then to principal and any remaining amount to any unpaid collection costs and late charges. The outstanding balance on this note may be prepaid in its entirety, plus accrued interest, on any scheduled payment date without penalty. . This note is a special obligation of the City, payable from the City water system revenues and the City hereby pledges such revenues for payment of this note. The city will be considered in default if any of the following events occur: (a) City fails to make any payment when. due. (b) City breaks any promise City has made to Bank, or City fails to perform promptly at the time and strictly in the manner provided in this Note (c) Any representation or statement made or furnished to Bank by City or on City's behalf is false or misleading in any material respect. (d) City becomes insolvent, a receiver is appointed for any part of City's property, City makes an assignment for the benefit of creditors, or any proceeding is commenced either by City EXHIBIT I, P. 1 or against City under any bankruptcy or insolvency laws. Upon default, Bank may declare the entire unpaid principal ;balance on this Note and all accrued unpaid interest immediately due, without notice, and then City will pay that amount. Bank may hire or pay someone else to help collect this Note if City does not pay. City also will pay Lender that amount. This includes, subject to any limits under applicable law, Lender's reasonable attorney's fees and legal expenses whether or not there is a lawsuit, including reasonable attorney's fees and legal expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction) , appeals, and any anticipated post-judgement collection services. If not prohibited by applicable law, City also will pay any court costs, in addition to all other sums provided by law. This Note has been delivered to Bank and accepted by Bank in the State of Idaho. If there is a lawsuit, the City agrees upon Bank's request to submit to the jurisdiction of the courts of Ada County, the State of Idaho. This Note shall be governed by and construed in accordance with the laws of the state of Idaho. City and Bank agree that the payments hereunder are based upon their assumption that the interest component payable to . Bank hereunder is excluded from federal and State of Idaho Income tax. This exclusion provides the inducement for Bank's offer of financing at 7.20%. Should the transaction giving rise to this note be deemed by the State of Idaho or the federal government not to be exempt from income taxation, City agrees that it will pay as additional stuns hereunder sufficient funds to adjust the interest to be paid hereunder to an amount equivalent to the income contemplated hereunder as a tax exempt transaction. Said adjustment shall be retroactive and apply to any installments already paid by City to Bank to the extent that any ruling by any such taxing authority requires the payment of additional tax upon payments already received by Bank. This indemnification shall survive the full performance of this promissory .note. Bank may delay or forgo enforcing any of its rights or remedies under this Note without losing them. City and any other person who signs, guarantees or endorses this Note, to the extent allowed by law, waive presentment, demand for payment, protest and notice of dishonor. Upon any change in the terms of thisallote, and unless otherwise expressly stated in writing, no party who signs this Note, whether as maker, guarantor, accommodation maker or endorser, shall be released from liability. All such parties agree that Bank may renew, extend (repeatedly and for any length of time) or modify this loan, or release any party or guarantor; or impair, fail to realise upon or perfect Bank's security interest in the collateral; and take any other action deemed necessary by ' Bank without the consent of or notice to anyone. EXHIBIT I, P. 2 • • r � h PRIOR TO SIGNING THIS NOTE, Tut; CITY READ AND tNDERSTOOD ALL THE PROVISIONS OF THIS NOTE. THE CITY AGREES TO THE TERMS OF i THE NOTE AND ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THE NOTE.. Signed and executed this 16th day of December, 1991. • 1'Ht` CITY OF McCALL, VALLEY COUNTY, IDAHO 111111 Mayor, ty of 711 Call City'TreasUr,r (71 El/(1 F City Clerk EXHIBIT I, P. 3 CERTIFICATE OF RECORDING OFFICER STATE OF IDAHO ) ss COUNTY OF VALLEY) I, the undersigned, the duly appointed, qualified, City Clerk of McCall City, Idaho, do hereby certify the following: 1 . That pursuant to the provisions of Section 50-207, Idaho Code, I keep a correct journal of the proceedings of the Council of McCall City, Idaho and that I am the statutory custodian of all laws, ordinances and resolutions of said City. 2 . That the attached Resolution No. 20-91 is a true and correct copy of a resolution passed at a regular meeting of the Council of McCall City held on October 10, 1991, and duly recorded in my office; and 3 . That said regular meeting was duly convened and held in all respects in accordance with law and to the extent required by law, due and proper notice of such meeting having been given; that a legal quorum was present throughout the meeting and that a legally sufficient number of members of the Council of McCall City voted in the proper manner and for the passage of said resolution; and that all other requirements and proceedings incident to the proper adoption and passage of said resolution have been duly fulfilled, carried out and observed; and that I an authorized to execute this certificate. IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of McCall, Idaho, this / 6-7:_t")- day 5— -- day of (Ocv (oe c_ , 199 Arthur J. Sc idt, City Clerk (Seal of the City)