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| 505 Travis Street P.O. BOX 31109 SHREVEPORT, LOUISIANA 71130 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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FACT SHEET TITLE DATE ORIGINATING DEPARTMENT A SUPPLEMENTAL NOVEMBER 10, 2009 DEPARTMENT OF ORDINANCE AMENDING OPERATIONAL SERVICES AND SUPPLEMENTING RESOLUTION NO. 131 OF 1984 (THE “GENERAL BOND RESOLUTION”) ADOPTED ON JUNE 12, 1984, AS AMENDED, ACKNOWLEDGING AND APPROVING THE ISSUANCE OF NOT TO EXCEED $12,000,000 PRINCIPAL AMOUNT OF TAXABLE WATER AND SEWER REVENUE BONDS, SERIES 2009D, OF THE CITY OF SHREVEPORT, STATE OF LOUISIANA, IN ACCORDANCE WITH THE TERMS OF RESOLUTION 172 OF 2009 ADOPTED ON SEPTEMBER 8, 2009; APPROVING AND CONFIRMING THE SALE OF SUCH BONDS; PLEDING REVENUE OF THE SYSTEM TO SECURE SUCH BONDS; DESIGNATING SAID BONDS AS BUILD AMERICA BONDS PURSUANT TO SECTION 54AA OF THE INTERNAL REVENUE CODE OF 1986 AS AMENDED; PRESCRIBING THE FORM, AND CERTAIN TERMS AND CONDITIONS OF SAID BONDS; AND SPONSOR PROVIDING FOR OTHER MATTERS IN CONNECTION THEREWITH. SAME PURPOSE This ordinance would amend and supplement Resolution No. 131 of 1984 (the “General Bond Resolution”) and acknowledge, authorize and approve the issuance of not to exceed $12,000,000 principal amount of Taxable Water and Sewer Revenue Bonds, Series 2009D of the City of Shreveport, State of Louisiana and provide for other matter in connection therewith. ____________________________________________________________________________ BACKGROUND INFORMATION On June 12, 1984, the Shreveport City Council adopted Resolution No. 131 of 1984 (the “General Bond Resolution”). The resolution authorized the issuance, from time to time, of Water and Sewer Revenue Bonds and the pledge of revenues of the City derived from the operation of a revenue-producing public utility system composed of a combined waterworks plant and system and sewer plant and system (the “System”) on the terms and conditions set forth in the General Bond Resolution. This ordinance would amend and supplement the General Bond Resolution and acknowledge, authorize and approve the issuance of not to exceed $12,000,000 principal amount of Taxable Water and Sewer Revenue Bonds, Series 2009D (the “2009 Bonds”) for the purpose of upgrades to the sewer portion of the System, paying the costs of issuance thereof and for provide for other matters in connection therewith. ______________________________________________________________________________ TIMETABLE Introduction: November 10, 2009 Final Passage: December 8, 2009 PROCEDURAL REQUIREMENTS None ALTERNATIVES 1. Adopt the ordinance as presented. 2. Deny the ordinance. CONCLUSION Alternative Number 1 is recommended. FACT SHEET PREPARED BY: Terri Anderson-Scott City Attorney
TABLE OF CONTENTS * * * * * * SECTION 2. Authorization of Series 2009 Bonds 3 SECTION 3. Deposit of Proceeds 6 SECTION 4. Use of American Iron, Steel, and Manufactured Goods 6 SECTION 5. Davis-Bacon Wage Rate Requirements 7 SECTION 7. Parties Interested Herein 7 SECTION 8. No Recourse on the 2009 Bonds 7 SECTION 9. Successors and Assigns 7 * * * * * * EXHIBIT “A” - FORM OF BONDEXHIBIT “B” - FORM OF COMMITMENT AGREEMENTAND LOAN AND PLEDGE AGREEMENT EXHIBIT “C” - DESCRIPTION OF PROJECTORDINANCE NO. ____ OF 2009 The following Ordinance was offered by ______________ and seconded by ________: TWENTY-SEVENTH SUPPLEMENTAL ORDINANCE
WHEREAS, the City of Shreveport, State of Louisiana (the "Issuer") now owns and operates a revenue-producing public utility composed of a combined waterworks plant and system and sewer plant and system (the "System"); andWHEREAS the City adopted Resolution No. 131 of 1984 (the General Bond Resolution”) on June 12, 1984, as amended and supplemented, authorizing the issuance from time to time of Water and Sewer Revenue Bonds and pledge of revenues of the City derived from the System on the terms and conditions set forth in the General Bond Resolution; andWHEREAS, pursuant to Part XIII, Chapter 4, Title 39 of the Louisiana Revised Statutes of 1950, as amended (LSA-R.S. 39:1011, et seq.), other constitutional and statutory authority (the "Act"), and the aforesaid General Bond Resolution it is the desire of this City Council of the City (the “Governing Authority”) to provide for the issuance of Water and Sewer Revenue Bonds of the Issuer, for the purpose of providing additions and improvements to the sewer portion of the System, and paying the costs of issuance thereof; andWHEREAS, the Issuer currently has outstanding notes, bonds or other obligations issued pursuant to the General Bond Resolution and various supplemental bond resolutions and ordinances, which are payable from a pledge and dedication of the income and revenues of the System but has sufficient income from the System to pay the bonds proposed by this Ordinance in accordance with their proposed terms and conditions as well as pay all other outstanding notes, bonds or other obligations in accordance with their respective terms and conditions; andWHEREAS, Section 1531 of Title I of Division B of the American Recovery and Reinvestment Act of 2009, Pub. L. No. 111-5, 123 Stat. 115 (2009) (enacted February 17, 2009) ("ARRA"), added §54AA to the Internal Revenue Code of 1986, as amended, authorizing state and local governments, at their option, to issue two general types of "Build America Bonds" as taxable governmental bonds with federal subsidies for a portion of their borrowing costs; andWHEREAS, it is now the desire of this Governing Authority to authorize the issuance of not to exceed $12,000,000 of Taxable Water and Sewer Revenue Bonds, Series 2009D (the “2009 Bonds”) of the Issuer, for the purpose of upgrades to the sewer portion of the System, which are "Capital Costs" as defined in the General Bond Resolution, and paying Costs of Issuance, as defined in the General Bond Resolution (collectively, "Costs of the Project");NOW, THEREFORE, BE IT ORDAINED by the City Council of the City of Shreveport, State of Louisiana, acting as the governing authority of the Issuer, that:In addition to words and terms elsewhere defined herein and in the General Bond Resolution, the following words and terms shall have the following meanings as used in this Ordinance, unless some other meaning is plainly intended: "Administrative Fee" means, with respect to the 2009 Bonds and any other bonds purchased by the Department from the State Loan Fund, the annual fee equal to one-half of one percent (0.5%) per annum of the outstanding principal amount of such bonds, or such lesser amount as the Department may approve from time to time, which shall be payable each year in two equal semi-annual installments on each Interest Payment Date."2009 Bonds" means the Issuer's Taxable Water and Sewer Revenue Bonds, Series 2009D authorized to be issued in multiple series by this Ordinance and particularly by Section 2 hereof."Code" means the Internal Revenue Code of 1986, as the same may be amended and supplemented from time to time, including any regulations promulgated thereunder or any administrative or judicial interpretations thereof."Costs of the Project" shall have the meaning set forth in the final preamble paragraph in this Ordinance."Delivery Date" means the date on which the 2009 Bonds are delivered to the Department. "Department" means the Louisiana Department of Environmental Quality, an executive department and agency of the State, and any successor to the duties and functions thereof."Executive Officers" means the Mayor, Chief Administrative Officer, Director of Finance, Clerk and other such officials of the City."General Bond Resolution" means the General Bond Resolution described in the preambles hereof."Loan Agreement" means the Loan and Pledge Agreement to be entered into by and between the Department and the Issuer, prior to the delivery of the 2009 Bonds, which will contain certain additional agreements relating to the 2009 Bonds and any other series of bonds purchased by the Department from the State Loan Fund, which Loan Agreement shall be in substantially the form attached hereto as Exhibit "B", as it may be supplemented, modified or amended from time to time in accordance with the terms thereof."Paying Agent" with respect to the 2009 Bonds means the chief financial officer of the Issuer or his authorized agent as defined in the Loan Agreement, unless and until a successor Paying Agent shall have assumed such responsibilities pursuant to the Loan Agreement."Ordinance" or “Twenty-Seventh Supplemental Ordinance” means this ordinance authorizing the issuance of the 2009 Bonds, as adopted on December 8, 2009."Reimbursement Expenditures" means Costs of the Project made prior to the date of delivery of the 2009 Bonds, but not more than sixty days prior to September 8, 2009, which was the date of adoption of an "official intent" resolution pursuant to Section 1.150-2 of the United States Treasury Regulations under Section 150 of the Code."State Loan Fund" means the Municipal Facilities Revolving Loan Fund established by the State of Louisiana, pursuant to subchapter II Chapter 4 of Title 30 of the Louisiana Revised Statutes of 1950, as amended (LSA-R.S. 30:2078, et seq.) in the custody of the Department, which is to be used for the purpose of providing financial assistance for the improvement of waste water treatment systems in the State, as more fully described in LSA-R.S. 30:2078(B)(2).SECTION 2. Authorization of Series 2009 Bonds . (a) In compliance with and under the authority of the Act and the General Bond Resolution, there is hereby authorized the incurring of an indebtedness of not to exceed Twelve Million and No/100 ($12,000,000) Dollars for, on behalf of and in the name of the Issuer, and to represent the indebtedness, this Governing Authority does hereby authorize the issuance of Twelve Million and No/100 ($12,000,000) Dollars of “Taxable Water and Sewer Revenue Bonds, Series 2009D”, of the Issuer. The 2009 Bonds shall be Current Interest Serial Bonds, and the exact principal amount of the 2009 Bonds, not to exceed $12,000,000 as stated above, shall be determined by the Executive Officers at the time of delivery of the 2009 Bonds. The 2009 Bonds shall be issued as “Taxable Water and Sewer Revenue Bonds, Series 2009D”, the proceeds of which shall be used to finance Costs of the Project and expenditures which are to be purchased by the Department. In the event that the delivery of the 2009 Bonds is delayed until after December 31, 2009, such bonds may be designated as "Series 2010," "Series 2010D" or any other series designation as may be determined by the Executive Officers. As provided in Article V of the General Bond Resolution, the 2009 Bonds shall be secured by a pledge and dedication of the Revenues of the System, subject only to the payment of the reasonable and necessary expenses of operating and maintaining the System. (b) The 2009 Bonds shall be issued for the purpose of paying the costs of acquiring improvements, extensions and replacements to the wastewater portion of the System as further set forth in Exhibit "C" hereto and paying costs of issuance. (c) The 2009 Bonds shall be dated the Delivery Date, and the 2009 Bonds shall mature in twenty (20) installments of principal, payable annually on each December 1, and each annual installment shall be the applicable percentage shown in the 2009 Bond Form attached hereto as Exhibit “A”, rounded to the nearest $1,000, of the outstanding principal amount of the 2009 Bonds on the day before the applicable Principal Payment Date. In the event that the Completion Date of the Project being financed with the 2009 Bonds is after June 30, 2011, the principal payment schedule set forth in the Bond may be adjusted for such series so that each payment shall be due on the December 1 that is not more than one year after the Completion Date, provided that in no event shall the final principal payment be more than twenty-two (22) years from the Delivery Date. (d) The 2009 Bonds shall be Current Interest Serial Bonds and the Interest Payment Dates shall be paid semi-annually on June 1 and December 1 of each year. The 2009 Bonds shall bear interest at the rate of forty-five hundredths of one percent (0.45%) per annum, said interest to be calculated on the basis of a 360-day year consisting of twelve 30-day months and payable on each Interest Payment Date, or such lower rate as may be in effect for loans from the State Loan Fund at the time of delivery. In addition to interest at the rate set forth above, at any time that the Department owns the 2009 Bonds the Issuer will pay the Administrative Fee to the Department on each Interest Payment Date. In the event (i) the Department owns any 2009 Bonds or the Department has pledged or assigned any 2009 Bonds in connection with its Municipal Facilities Revolving Loan Fund and (ii) the Administrative Fee payable by the Issuer to the Department under the terms of the Loan Agreement is declared illegal or unenforceable by a court or an administrative body of competent jurisdiction, the interest rate borne by the 2009 Bonds shall be increased by one-half of one percent (0.50%) per annum, effective as of the date declared to be the date from which the Administrative Fee is no longer owed because of such illegality or unenforceability. (e) The 2009 Bonds shall be issued as a single fully-registered bond, initially numbered DR-1. The 2009 Bonds shall be executed in the manner provided for in Section 310 of the General Bond Resolution, however inasmuch as there is no Trustee the 2009 Bonds need not be authenticated. (f) The chief financial officer of the Issuer shall be the initial Paying Agent for the 2009 Bonds. The principal and interest on the 2009 Bonds shall be payable by check mailed to the registered owner of the 2009 Bonds (determined as of the Interest Payment Date) at the address shown on the registration books kept by the Paying Agent for such purpose, provided that payment of the final installment of principal on the 2009 Bonds shall be made only upon presentation and surrender of the 2009 Bonds to the Paying Agent. (g) The principal installments of the 2009 Bonds are subject to prepayment at the option of the Issuer at any time, in whole or in part, at a prepayment price of par plus accrued interest and accrued Administrative Fee, if any, to the prepayment date and in such case the remaining principal of the 2009 Bonds shall continue to mature in installments calculated using the percentages shown in Section 2(c) above. (h) There are no mandatory retirement payments on the 2009 Bonds, within the meaning of the General Bond Resolution. (i) There are no Invested Sinking Fund Payments within the meaning of the General Bond Resolution; (j) The 2009 Bonds are hereby awarded to and sold to the Department at a price of par plus accrued interest, if any, under the terms and conditions set forth in the Loan Agreement, and after their execution and authentication by the Paying Agent, the 2009 Bonds shall be delivered to the Department or its agents or assigns, upon receipt by the Issuer of the agreed purchase price. Pursuant to the Act and LSA-R.S. 39:1426(B), the Issuer has determined to sell the 2009 Bonds at a private sale without the necessity of publishing any notice of sale. (k) The 2009 Bonds shall be in substantially the form attached hereto as Exhibit "A", together with such changes as are approved by Bond Counsel to the Issuer. (l) The 2009 Bonds shall all be "Build America Bonds (Direct Payment)" pursuant to Section 54AA of the Code. Interest on the 2009 Bonds shall not be excluded from gross income for federal income tax purposes, and the Issuer irrevocably elects to designate all of the 2009 Bonds as "Build America Bonds" under Section 54AA of the Code and specifically as "qualified bonds" within the meaning of Section 54AA(g) of the Code. All of the proceeds of the 2009 Bonds, other than no more than 2% of such proceeds used to pay issuance costs, plus investment proceeds thereof, will be used for capital expenditures, and the issue price of the 2009 Bonds has no premium over the stated principal amount. None of the proceeds of the 2009 Bonds will be deposited to the Reserve Fund or to any other reasonably required reserve fund. It is intended by this election that with respect to the 2009 Bonds the Issuer will be entitled to a credit with respect to each interest payment as provided by Section 6431 of the Code equal to 35% of the interest payable under the 2009 Bonds on each Interest Payment Date. The Executive Officers are authorized and empowered to take any further action as may be necessary in order to qualify the 2009 Bonds as Build America Bonds (Direct Payment) under said Section 54AA and Section 6431 of the Code, including any necessary filings, agreements, forms (including IRS Form 8038-CP) or other documentation necessary to receive the 35% reimbursement described in said sections. Should the Issuer or the Department determine that the use of any portion of the proceeds of the Series 2009A Bonds would not be allowable under ARRA, that portion may be issued as an additional series of the Series 2009 Bonds or added to the Series 2009B Bonds, as may be determined by the Executive Officers, which shall also be qualified "Build America Bonds (Direct Payment)" under this subsection. (m) No proceeds of the 2009 Bonds shall be deposited into the Reserve Fund, however upon the delivery of the 2009 Bonds the Issuer shall establish the "Series 2009D Account" in the Reserve Fund and shall cause the Reserve Fund Requirement to be deposited to said account within five (5) years after the Delivery Date. (n) No proceeds of the 2009 Bonds will be used to refund any outstanding obligations. (o) The Executive Officers are each hereby empowered, authorized and directed to do any and all things necessary and incidental to carry out all of the provisions of the Ordinance, to execute and deliver the Loan Agreement, and to cause the 2009 Bonds to be prepared and/or printed, to issue, execute and seal the 2009 Bonds and to effect delivery thereof as hereinafter provided. In connection with the issuance and sale of the 2009 Bonds, the Executive Officers and the chief financial officer of the Issuer are each authorized, empowered and directed to execute on behalf of the Issuer such additional documents, certificates and instruments as they may deem necessary, upon the advice of bond counsel, to effect the transactions contemplated by this Ordinance, including a Supplemental Loan Agreement covering the requirements of ARRA, if applicable. The signatures of said on such documents, certificates and instruments shall be conclusive evidence of the due exercise of the authority granted hereunder. (p) The 2009 Bonds are not tax-exempt bonds therefore they are not being designated as "qualified tax-exempt obligations" within the meaning of Section 265(b)(3) of the Code. (q) It is recognized that the Issuer will not be required to comply with the continuing disclosure requirements described in the Rule 15c2-12(b) of the Securities and Exchange Commission [17 CFR §240.15c2-12(b)], because (i) the 2009 Bonds are not being purchased by a broker, dealer or municipal securities dealer acting as an underwriter in a primary offering of municipal securities, and (ii) the 2009 Bonds are being sold to only one financial institution (i.e., no more than thirty-five persons), which has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of the prospective investment in the 2009 Bonds and is not purchasing the 2009 Bonds for more than one account or with a view to distributing the Bonds. (r) Application has been made to the State Bond Commission, Baton Rouge, Louisiana, and final approval granted for the issuance of the 2009 Bonds by the Issuer within the parameters set forth in this section. By virtue of the Issuer's application for, acceptance and utilization of the benefits of the Louisiana State Bond Commission's approval(s) resolved and set forth herein, it resolves that the Issuer understands and agrees that such approval(s) are expressly conditioned upon, and it further resolves that it understands, agrees and binds itself, its successors and assigns, to full and continuing compliance with the "State Bond Commission Policy on Approval of Proposed Use of Swaps, or other forms of Derivative Products Hedges, Etc.", adopted by the State Bond Commission on July 20, 2006, as to the borrowing(s) and other matter(s) subject to the approval(s), including subsequent application and approval under said Policy of the implementation or use of any swap(s) or other product(s) or enhancement(s) covered thereby. (s) The "Scheduled Completion Date" for the 2009 Bonds Project is [June 30, 2011]. (t) The Commitment Agreement, Loan Agreement and Supplemental Loan Agreements (if any), in substantially the forms attached hereto as Exhibit "B", are hereby approved, and the Executive Officers are authorized to execute and deliver the aforesaid documents on behalf of the Issuer, with such changes as may be deemed necessary, upon the advice of counsel, in connection with the 2009 Bonds. SECTION 3. Deposit of Proceeds . The proceeds of the 2009 Bonds shall be deposited, upon receipt by the Issuer, into a construction fund to be established pursuant to the General Bond Resolution to pay Costs of the Project, or to reimburse the Issuer for Costs of the Project. SECTION 4. Use of American Iron, Steel, and Manufactured Goods . If required to comply with ARRA, the Issuer agrees that all of the iron, steel, and manufactured goods used in the portion of the Project that is funded in whole or in part with the 2009 Bonds shall be produced in the United States unless the head of the United States Department of Environmental Quality ("EPA") finds that: (a) Applying the foregoing requirement would be inconsistent with the public interest; (b) iron, steel, and the relevant manufactured goods are not produced in the United States in sufficient and reasonably available quantities and of a satisfactory quality; or (c) inclusion of iron, steel, and manufactured goods produced in the United States will increase the cost of the overall Project by more than 25 percent. SECTION 5. Davis-Bacon Wage Rate Requirements . If required to comply with ARRA, the Issuer agrees that all laborers and mechanics employed by contractors and subcontractors on the portion of the Project that is funded in whole or in part with the Series 2009 Bonds shall be paid wages at rates not less than those prevailing on projects of a character similar in the locality of the Issuer as determined by the Secretary of the United States Department of Labor ("DOL") in accordance with Subchapter IV of Chapter 31 of Title 40, United States Code. DOL provides all pertinent information related to compliance with the foregoing requirements, including prevailing wage rates and instructions for reporting. The Issuer will ensure that all construction contracts relating to the portion of the Project that is funded in whole or in part with the 2009 Bonds will require that the contractor comply with the aforesaid wage and reporting requirements. This section shall not apply to "force account" work where the Issuer may perform construction work using its own employees rather than any contractor or subcontractor. . None of the proceeds of the 2009 Bonds shall be used for any casino or other gambling establishment, aquarium, zoo, golf course, or swimming pool, unless the owner(s) or user(s) of such facility is or are using the utility services furnished by the Project as a member of the general public. None of the proceeds of the 2009 Bonds shall be used for the for the purchase of land or any interest in land, including without limitation any easement, servitude or leasehold interest, as authorized by section 603(c) of the Federal Water Pollution Control Act. SECTION 7. Parties Interested Herein . Nothing in this Ordinance expressed or implied is intended or shall be construed to confer upon, or to give to, any person or corporation, other than the Issuer, the Paying Agent and the Owners of the 2009 Bonds any right, remedy or claim under or by reason of this Ordinance or any covenant, condition or stipulation thereof; and all the covenants, stipulations, promises and agreements in this Ordinance contained by and on behalf of the Issuer shall be for the sole and exclusive benefit of the Issuer, the Paying Agent and the Owners of the Series 2009 Bonds. SECTION 8. No Recourse on the 2009 Bonds . No recourse shall be had for the payment of the principal of or interest on the 2009 Bonds or for any claim based thereon or on this Ordinance against any member of the Governing Authority or officer of the Issuer or any person executing the Bonds. SECTION 9. Successors and Assigns . Whenever in this Ordinance the Issuer is named or referred to, it shall be deemed to include its successors and assigns and all the covenants and agreements in this Ordinance contained by or on behalf of the Issuer shall bind and inure to the benefit of its successors and assigns whether so expressed or not. . In case any one or more of the provisions of this Ordinance or of the 2009 Bonds issued hereunder shall for any reason be held to be illegal or invalid, such illegality or invalidity shall not affect any other provision of this Ordinance or of the 2009 Bonds, but this Ordinance and the 2009 Bonds shall be construed and enforced as if such illegal or invalid provisions had not been contained therein. Any constitutional or statutory provision enacted after the date of this Ordinance which validates or makes legal any provision of this Ordinance or the 2009 Bonds which would not otherwise be valid or legal shall be deemed to apply to this Ordinance and to the 2009 Bonds. . This Ordinance shall become effective as provided by the City Charter. This Ordinance having been submitted to a vote, the vote thereon was as follows: Member Yea Nay Absent Abstaining Councilwoman Bowman Councilman Lester Councilman Long Councilman Shyne Councilman Walford Councilman Webb Councilman Wooley And the ordinance was adopted on this, the _____day of ____________, 2009.
STATE OF LOUISIANA PARISH OF CADDO
IN FAITH WHEREOF, witness my official signature and the impress of the official seal of the Issuer on this, the 8th day of December, 2009. Clerk of the City Council SEAL EXHIBIT “A”
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REGISTRATION RECORD TAXABLE WATER AND SEWER REVENUE BONDS, SERIES 2009D | ||
Name and Address Of Registered Owner |
Date of Registration |
Signature of Chief Financial Officer |
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Department of Environmental Quality Attn: Financial Services Division, Accounts Receivable P. O. Box 4311 Baton Rouge, LA 70821-4311 |
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SCHEDULE A | ||||
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No. |
Date of Payment |
Amount of Payment |
Pursuant to Requisition No. |
Cumulative Outstanding Principal Amount |
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SCHEDULE B SCHEDULE OF PRINCIPAL PREPAYMENTS TAXABLE WATER AND SEWER REVENUE BONDS, SERIES 2009D, | ||
Prepayment |
Prepayment Amount |
Remaining Balance Due |
MUNICIPAL FACILITIES Commitment Agreement dated as of December ___, 2009 |
by and between Louisiana Department of Environmental Quality and the City of Shreveport, State of Louisiana |
relating to the issuance of: not exceeding $12,000,000 Taxable Water and Sewer Revenue Bonds, Series 2009 of the City of Shreveport, State of Louisiana Loan No. 221115-01 |
B:\DMW\DHH Revolving Fund\Shreveport\DEQ and DHH Docs\Commitment Agreement 11-5-09.doc |
TABLE OF CONTENTS
* * * * *
ARTICLE I
DEFINITIONS AND INTERPRETATION
ARTICLE II
THE LOAN AND THE BONDS
SECTION 2.01. Commitment to Make Loan 3
SECTION 2.02. Term of Commitment 3
SECTION 2.03. Disbursement of Loan; Excess Project Costs 3
SECTION 2.04. Payment of Additional Costs of the Project 4
SECTION 2.05. Principal and Interest Payments 4
SECTION 2.06. Administrative Fee 4
SECTION 2.07. Loan Agreement 4
SECTION 2.08. Audit Requirements 4
ARTICLE III
LOAN CLOSING REQUIREMENTS
SECTION 3.01. Conditions of the Department's Obligations 5
SECTION 3.02. Termination of Commitment 6
SECTION 4.01. Assignment of Rights 7
SECTION 4.02. Representations, Warranties and Agreements to Survive Delivery 7
SECTION 4.04. Amendments, Supplements and Modifications 7
SECTION 4.05. Execution in Counterparts 7
SECTION 4.06. Applicable Law 7
* * * * *
COMMITMENT AGREEMENT
This COMMITMENT AGREEMENT, which shall be dated for convenience as of December ___, 2009, by and between:
LOUISIANA DEPARTMENT OF ENVIRONMENTAL QUALITY (the "Department”), an executive department and agency of the State of Louisiana, appearing herein through Vince Sagnibene, Undersecretary, duly authorized hereunto pursuant to an executive order of the Secretary of the Department dated January 17, 2008, and
THE CITY OF SHREVEPORT, STATE OF LOUISIANA (the "City"), a political subdivision of the State of Louisiana, appearing herein though Cedric B. Glover, its Mayor, and Arthur G. Thompson, its Clerk, both duly authorized hereunto pursuant to an ordinance adopted by the governing authority of the City on December 8, 2009;
W I T N E S S E T H:
WHEREAS, the United States of America, pursuant to the Clean Water Act of 1972, as amended by the Water Quality Act of 1987, specifically Subchapter VI, Chapter 26 of Title 33 of the United States Code (the “Federal Act”), is authorized to make capitalization grants to states to be used for the purpose of establishing a water pollution control revolving fund for providing assistance (i) for construction of treatment works (as defined in Section 1292 of the Federal Act) which are publicly owned, (ii) for implementing a management program under Section 1329 of the Federal Act and (iii) for developing and implementing a conservation and management plan under Section 1330 of the Federal Act; and
WHEREAS, in order to be eligible to receive such capitalization grants, a state must first establish a water pollution control revolving loan fund to be administered by an instrumentality of the state with such powers and limitations as may be required to operate such fund in accordance with the requirements and objectives of the Federal Act; and
WHEREAS, the State of Louisiana (the "State"), pursuant to Subchapter II, Chapter 4 of Title 30 of the Louisiana Revised Statutes of 1950, as amended, specifically La. R.S. 30:2078, et seq.) (the "State Act"), has established a Municipal Facilities Revolving Loan Fund in the custody of the Department (the "State Revolving Fund") to be used for the purpose of providing financial assistance for the improvement of wastewater treatment facilities in the State, as more fully described in Section 2078(B)(2) of the State Act, and has authorized the Department to administer the State Revolving Fund in accordance with applicable federal and state law; and
WHEREAS, the City has made application to the Department for a loan from the State Revolving Fund to finance a portion of the costs of constructing and acquiring improvements, extensions and replacements to its sewerage system, as are generally described in Exhibit A hereto (the “Project”); and
WHEREAS, the Department has approved the City's application for a loan from the State Revolving Fund to finance the costs of the Project; and
WHEREAS, in accordance with Section 1383(g) of the Federal Act, the Department has established a priority list under Section 1296 of Title 33 of the United States Code, and the Project is on such list; and
WHEREAS, indebtedness will be incurred by the City to represent the City’s obligation to repay the loan from the State Revolving Fund, which indebtedness is referred to herein as the “Bonds”;
NOW, THEREFORE, the Department and the City each agree to perform their respective obligations under this Commitment Agreement in accordance with the conditions, covenants and procedures set forth herein and in the exhibits attached hereto and made a part hereof as follows:
DEFINITIONS AND INTERPRETATION
. In addition to the terms defined in the preambles hereto, the following terms used in this Commitment Agreement shall have the following meanings, unless the context clearly requires otherwise:
"Authorizing Ordinance" means the ordinance adopted by the governing authority of the City authorizing the issuance of the Bonds and authorizing the sale of the Bonds to the Department, as it may be supplemented, modified or amended from time to time in accordance with its terms.
"Closing Date" means the date on which the Bonds are delivered to the Department and the first installment of the purchase price therefor is paid by the Department to the City.
"Loan" means the loan to be made by the Department from the State Revolving Fund to the City pursuant to this Commitment Agreement and the Loan Agreement, the obligation to repay which Loan will be evidenced by the Bonds.
"Loan Agreement" means the Loan and Pledge Agreement to be entered into by the Department and the City in connection with the sale of the Bonds to the Department, including the exhibits attached thereto, as it may be supplemented, modified or amended from time to time in accordance with the terms thereof.
"System" means the City's revenue-producing sewage collection, treatment and disposal system, as said system now exists, and as it may be hereafter improved, extended or supplemented while any of the Bonds remain outstanding, as more fully described in the Authorizing Ordinance.
"Project" means the sewerage system improvements generally described in Exhibit A hereto, which are to be financed through the issuance of the Bonds.
. For the purpose of financing the costs of the Project and certain administrative costs relating to the issuance of the Bonds, as described generally in Exhibit A hereto, the Department commits to lend to the City, from legally available moneys in the State Revolving Fund, and under the terms and conditions specified in the Federal Act, the State Act, this Commitment Agreement, the Loan Agreement and the Bonds, the maximum sum of Twelve Million Dollars ($12,000,000), provided all of the conditions and requirements hereinafter set forth are fulfilled to the satisfaction of the Department. The City's obligation to repay the loan shall be represented by the Bonds, which will be issued by the City pursuant to the Authorizing Ordinance and sold to the Department. In the Authorizing Ordinance, the City will establish a dedicated source of revenue (or demonstrate that there is adequate security) for the repayment of the Bonds.
The Loan shall be subject to and conditioned upon the availability of sums in the State Revolving Fund and the Department will not be required to make the Loan or make disbursements pursuant to the Loan except from sums legally available to the Department in the State Revolving Fund. This Commitment Agreement constitutes a binding commitment of the Department to lend the City moneys from the State Fund and is intended to satisfy the requirement of Section 1282(b)(3) of the Federal Act as well as the requirements of 40 C.F.R §35.3135(c).
. (a) This Commitment Agreement must be accepted by the City no later than one month after the date of the execution hereof by the Department, otherwise it shall be null and void.
(b) Subject to the terms hereof and upon determination of the Department that the City, the Bonds and the Authorizing Ordinance comply with all applicable laws, regulations and program guidelines, the Department will accept delivery of and make the initial payment of the purchase price of the Bonds during a period ending up to six months after the date of the acceptance hereof by the City. If the Bonds are not delivered to the Department within said six months then this Commitment Agreement shall expire, unless extended by mutual consent of the Department and the City. This Commitment Agreement shall not be construed to preclude the City from obtaining financing for the Project, in whole or in part, from sources other than the State Fund.
Disbursement of Loan; Excess Project Costs
. The purchase price of the Bonds will be paid to the City by the Department in installments upon submission of requisitions for qualified costs and expenses, in the manner and at the times to be set forth in the Loan Agreement.
Payment of Additional Costs of the Project
. In the event that Loan proceeds are not sufficient to pay the costs of the Project in full, the City shall nonetheless complete the Project and pay that portion of the costs as may be in excess of available Loan proceeds and shall not be entitled to any reimbursement therefor from the Department, except for the proceeds of any additional financing which may (subject to availability) be provided by the Department pursuant to application by the City.
Principal and Interest Payments
. Beginning on the Closing Date, the Bonds shall bear interest only, payable semi-annually in the manner provided in the Authorizing Ordinance, at the rate equal to forty-five hundredths of one percent (0.45%) per annum, said interest to be calculated on the basis of a 360-day year consisting of twelve thirty-day months and payable on each interest payment date. The principal of the Bonds shall be payable in annual installments commencing not later than two (2) years after the Closing Date or one (1) year after the completion date of the Project, whichever occurs first, and will be fully amortized not later than twenty (20) years after the completion date of the Project, all in the manner to be set forth in the Loan Agreement.
Interest on the Bonds on any interest payment date prior to the completion date shall be payable only on the aggregate amount of the purchase price which shall have been paid theretofore and shall accrue with respect to each purchase price installment only from the date of payment of such installment.
The Bonds will be subject to prepayment or redemption prior to maturity in accordance with the terms of the Bonds.
. An annual administrative fee of one-half of one percent (0.50%) of the outstanding principal balance of the Loan will be payable to the Department in semi-annual installments on each interest payment date, in the manner set forth in the Bonds and the Loan Agreement.
. The Loan Agreement will contain detailed provisions concerning the terms and conditions of the Loan. Prior to the payment of the first installment of the purchase price of the Bonds, the City will be required to accept the terms and conditions of the Loan Agreement relating to the acquisition, construction, installation, maintenance and operation of the Project, the manner of payment of the purchase price of the Bonds, the use of funds from the State Revolving Fund by the City, the maintenance of financial records by the City, reporting requirements, user charges and compliance with state and federal laws and regulations, and the other provisions contained in the Loan Agreement.
. City acknowledges that by borrowing funds from the State Revolving Fund, it will be obligated to comply with the provisions of the Single Audit Act Amendments of 1996, and OMB Circular No. A-133, all as more further described in the Catalog of Federal Domestic Assistance (CFDC) Publication #66.458.
. The City will pay all fees and expenses due to its own counsel and the fees and expenses of the Department's bond counsel, Adams and Reese, LLP, in connection with the Loan. Fees and expenses of legal counsel to the City and bond counsel to the Department may be treated as a cost of the Project and paid by the City from proceeds of the Loan or otherwise, provided that the fees of the City's counsel in connection with the issuance of the Bonds may not exceed the maximum fee permitted by the Louisiana Attorney General's fees schedule for fees of bond attorneys, and further provided that no fees of the City's attorneys which exceed budgeted eligible costs may be paid from proceeds of the Loan. Fees of the Department's bond counsel shall be as detailed in Exhibit B hereto.
Conditions of the Department's Obligations
. In addition to the provisions hereof and the Loan Agreement, the obligation of the Department to make the Loan and advance moneys under the Loan Agreement will be subject to the following additional conditions:
the Bonds, the Authorizing Ordinance and the resolutions and/or ordinances imposing user charges with respect to the System, and authorizing the Loan Agreement, all will have been duly authorized, executed and delivered or adopted by the City, will be in full force and effect and will not have been amended, modified or supplemented except as may have been agreed to in writing by the Department as of the Closing Date;
On the Closing Date the Department will receive:
the executed opinions of counsel to the City and the Department in such form and containing such conclusions as may be reasonably required by the Department, addressed to the Department and the City;
a certificate or certificates, satisfactory in form and substance to the Department, from an authorized officer of the City, dated such Closing Date, to the effect that:
each of the representations of the City set forth herein and in the Loan Agreement is true, accurate and complete in all material respects as of such Closing date, and each of the agreements of the City set forth in the Loan Agreement to be complied with at or prior to such Closing Date has been complied with as of such date;
no litigation is pending, or to the knowledge of the authorized officer's knowledge, threatened, to restrain or enjoin the issuance, execution, sale or delivery of the Bonds or in any way contesting or affecting any authority for or the validity of the Bonds, the Loan Agreement, the Authorizing Ordinance or the creation, existence or powers of the City or the title of the present officers of the City, or any of them, to the respective offices and that none of the proceedings or authority for the issuance of the Bonds have been repealed, revoked or rescinded; and
the Bonds have been duly authorized, executed and delivered by the City, constitute valid and legally binding obligations of the City and are entitled to the security of and are secured by the Authorizing Ordinance which, together with the Loan Agreement have been duly authorized, executed and delivered by the City;
a non-arbitrage certificate or use of proceeds certificate executed by a duly authorized officer of the City in form and substance satisfactory to the Department and an opinion of bond counsel to the Department or other bond counsel acceptable to the Department;
executed originals of the Bonds and the Loan Agreement and a certified copy of the Authorizing Ordinance;
executed originals of a Site Certificate, an Engineer's Certificate and a Certification Regarding Cross-Cutting Federal Authorities, in substantially the forms attached hereto as Exhibit C-1, Exhibit C-2 and Exhibit C-3, respectively; and
such additional certificates, instruments and other documents, dated as of the Closing Date or before, as the Department or its counsel reasonably require to evidence the truth and accuracy as of the Closing Date of the representations of the City herein contained and contained in the Loan Agreement and the due performance and satisfaction by the City at or prior to such time of all agreements to be performed and all conditions then to be satisfied by the City.
Subsequent to the City's acceptance of this Commitment Agreement and at or prior to the delivery date of the Bonds:
there will not have occurred any materially adverse change, or any development involving or materially adversely affecting the business, finances, functions or affairs of the City and the ability of the City to repay the Bonds;
the City will not have incurred any additional indebtedness payable from the same source of revenues as the Bonds not otherwise described herein, and the City will not have defaulted in the payment of any obligation whatsoever due by it; and
the United States will not be or become engaged in any major outbreak of armed hostilities which results in the declaration of a national emergency or there will not have occurred any national calamity so as to affect, in the sole judgment of the Department, the investment quality of the Bonds.
. If the City is unable to satisfy the conditions to the obligations of the Department contained in this Commitment Agreement or if the obligations of the Department are terminated for any reason permitted by this Commitment Agreement, this Commitment Agreement will terminate.
. This Commitment Agreement may not be assigned by the City.
In the Loan Agreement the City will approve and consent to any assignment, transfer or sale of the Loan Agreement and/or the Bonds by the Department including but not limited to any such assignment or transfer in connection with the issuance by or on behalf of the Department of bonds, notes or other debt obligations. The City will further approve and consent to any assignment or pledge by the Department of payments due from the City pursuant to the Loan Agreement and the Bonds as security or partial security for the payment of principal and interest on such bonds, notes or other debt obligations issued by or on behalf of the Department. The City will agree to cooperate with the Department in accomplishing any such assignment, including execution of any additional certificates or documents as may be reasonably required by the Department.
Representations, Warranties and Agreements to Survive Delivery
. All representations, warranties and agreements of the City and the Department contained herein will remain operative and in full force and effect regardless of any investigation made by or on behalf of the City or the Department and will survive the closing of the Loan, delivery of the Loan documents and the delivery of the Bonds to the Department, provided that in the event of a conflict with this Commitment Agreement, the Loan Agreement shall control.
. In the event any provision of this Commitment Agreement shall be held illegal, invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate, render unenforceable or otherwise affect any other provision hereof.
Amendments, Supplements and Modifications
. This Commitment Agreement may be amended, supplemented or modified in writing by the consent of both the Department and the City.
. This Commitment Agreement may be executed in several counterparts, each of which shall be an original and all of which constitute but one and the same instrument.
. This Commitment Agreement shall be governed by and construed in accordance with the laws of the State of Louisiana.
. The captions or headings in this Commitment Agreement are for convenience only and shall not in any way define, limit or describe the scope or intent of any provisions or sections of this Commitment Agreement.
IN WITNESS WHEREOF, the Department and the City have caused this Commitment Agreement to be executed and accepted on the respective dates set forth below, but dated for convenience of the parties as of the date first above-written.
Date of Offer by Louisiana Department LOUISIANA DEPARTMENT OF
of Environmental Quality ENVIRONMENTAL QUALITY
, 20____ By:
Vince Sagnibene, Undersecretary,
CITY OF SHREVEPORT, STATE OF LOUISIANA
Date of Acceptance of Offer
by City
, 20____ By:
Mayor
ATTEST:
By:
DESCRIPTION OF PROJECT
AND PRELIMINARY PROJECT BUDGET
[TO BE FURNISHED BY CITY]
EXHIBIT B
to Commitment Agreement
FEES OF BOND COUNSEL TO THE DEPARTMENT
1. At the option of the City, the Department's Bond Counsel, Adams and Reese LLP, will undertake to prepare all loan documentation, including the Loan Agreement, the Authorizing Ordinance, the Bonds, Non-Arbitrage Certifications and other documents and certificates, including the rendering of an opinion relating to the tax-exemption of interest on the Bonds, but not including any documentation relating to the acquisition, construction or installation of the Project. In such case, the fee of Department's Bond Counsel will not exceed the "Maximum Fee" shown in the applicable table below.
When the Bonds are in the form of general obligation bonds and the amount of the Bonds is:
BUT NOT
MORE THAN MORE THAN MAXIMUM FEE*
Zero $405,000 1.5% of face amount of loan
$405,000 $810,000 $6,075 plus 0.90% of all over $405,000
$810,000 $1,350,000 $9,720 plus 0.75% of all over $810,000
$1,350,000 $2,700,000 $13,770 plus 0.50% of all over $1,350,000
$2,700,000 $6,750,000 $20,520 plus 0.20% of all over $2,700,000
$6,750,000 $13,500,000 $28,620 plus 0.10% of all over $6,750,000
$13,500,000 -- $35,370 plus 0.05% of all over $13,500,000
When the Bonds are in any form other than general obligation bonds and the amount of the Bonds is:
BUT NOT
MORE THAN MORE THAN MAXIMUM FEE*
Zero $1,350,000 1.5% of face amount of loan
$1,350,000 $2,700,000 $20,250 plus 0.75% of all over $1,350,000
$2,700,000 $6,750,000 $30,375 plus 0.30% of all over $2,700,000
$6,750,000 $13,500,000 $42,525 plus 0.20% of all over $6,750,000
$13,500,000 -- $56,025 plus 0.075% of all over $13,500,000
*Plus approved, reasonable and necessary travel and out-of-pocket expenses.
[EXHIBIT B CONTINUED ON NEXT PAGE]
2. Alternatively, the City may use its own counsel to prepare the Authorizing Ordinance, Bonds, Non-Arbitrage Certifications and opinion relating to the tax-exemption of interest on the Bonds. In such case, the Department's Bond Counsel, Adams and Reese, LLP, will be required to review all such documentation and the fee of Department's Bond Counsel will not exceed the "Maximum Fee" shown in the following table:
BUT NOT
MORE THAN MORE THAN MAXIMUM FEE*
Zero $1,000,000 $6,375
$1,000,000 $1,350,000 0.6375% of face amount of the Loan
$1,350,000 $2,700,000 $8,606 plus 0.1875% of all over $1,350,000
$2,700,000 $6,750,000 $11,138 plus 0.1350% of all over 2,700,000
$6,750,000 $13,500,000 $16,605 plus 0.06% of all over $6,750,000
$13,500,000 -- $20,655 plus 0.0413% of all over $13,500,000
*Plus approved, reasonable and necessary travel and out-of-pocket expenses.
EXHIBIT C-1
to Commitment Agreement
FORM OF SITE CERTIFICATE
(five executed originals to be furnished at or prior to loan closing)
This is to certify that THE CITY OF SHREVEPORT, STATE OF LOUISIANA (the "City"), has acquired all property (sites, easements, rights-of-way or specific use permits) necessary for construction, operation, and maintenance of facilities described as
(insert proposed contract number and description):
in accordance with approved plans and specifications and designated as Project Number 221115-01 by the State of Louisiana, Municipal Facilities Revolving Loan Fund program.
Any deeds or documents required to be recorded to protect the title(s) or rights held by the City have been recorded or filed for record wherever necessary. In the event of conflicts with existing underground utilities or to preserve unknown cultural or historic resources, the City has the right to eminent domain and will take condemnation action, if necessary, to acquire any sites, easements, or rights-of-way which may be required to change the location of any of the facilities described above; and upon acquisition of the rights-of-way and recording of documents, will submit another site certificate to that effect.
EXECUTED this ____ day of __________, 20_____.
(Signature of City's Counsel)
(Print Name and Title)
EXHIBIT C-2
FORM OF ENGINEER'S CERTIFICATE
(five executed originals to be furnished at or prior to loan closing)
This is to certify that the undersigned is the engineer for THE CITY OF SHREVEPORT, STATE OF LOUISIANA (the "City"), with respect to:
(insert proposed contract number and description):
in accordance with approved plans and specifications and designated as Project Number 221115-01 by the State of Louisiana, Municipal Facilities Revolving Loan Fund program.
The undersigned does hereby further certify that we are familiar with the sewer utility system of said City, including all the appurtenant equipment, accessories and properties, both real and personal (the "System") and have reviewed or participated in the actions taken by the City in obtaining continuous and adequate land and rights-of-way for the construction and operation of the System.
We further certify that we have reviewed the "Site Certificate" attached hereto and that we are not aware of any occurrences that would vary the statements contained therein and that we are not aware of any problem involving sites, easements, rights-of-way, or specific use permits that will materially impede the construction, operation and maintenance of the project described in said site certificate.
We further certify that all easements, franchises, rights-of-way and all other property necessary and essential to the operation of said System to constitute a complete and workable sewer system or necessary for the ownership by the City to constitute a revenue producing facility have been obtained.
EXECUTED this ____ day of __________, 20_____.
(Signature of Engineer)
(Print Name and Title)
EXHIBIT C-3
to Commitment Agreement
FORM OF CERTIFICATE REGARDING
CROSS-CUTTING FEDERAL AUTHORITIES
(Five executed originals to be furnished at or prior to loan closing)
The undersigned Mayor of the City of Shreveport, State of Louisiana (the “City”), do hereby certify that the City will comply with laws, regulations, policies and conditions relating to the Municipal Facilities Revolving Loan Fund (the "SRF"). I further certify that so long as the Loan is outstanding, to the extent that any of the following are applicable to the City or the Project, the City will comply with following cross-cutting federal authorities that apply to projects and activities receiving assistance from the SRF:
ENVIRONMENTAL AUTHORITIES:
1. National Environmental Policy Act (P.L. 91-190), the Clean Water Act (P.L. 92-500, as amended) and the Safe Drinking Water Act (P.L. 93-253, as amended) to protect the quality of the environment, all surface water, ground water and sole source aquifers.
2. The applicable State Environmental Review Process (See 40 CFR Part 35) to ensure consideration of environmental impacts, to resolve compliance through prudent planning and to integrate compliance with other cross-cutting environmental laws.
3. Section 106 of the National Historic Preservation Act of 1966 (PL 89-665, as amended), Executive Order 11593, and the Archaeological and Historic Preservation Act of 1974 (PL 93-291), to minimize harm to historic landmarks and/or cultural resources in the project area.
4. Executive Order No. 11990 (1977), as amended by Executive Order No. 12608 (1997), to minimize the destruction, loss, or degradation of wetlands in any manner when there are feasible alternatives available; and Executive Order No. 11988 (1977), as amended by Executive Order No. 12148 (1979), to promote the prudent management of flood plains; and the Farmland Protection Policy Act (P.L. 97-98) to minimize adverse effects of federal programs on farmland.
5. Coastal Zone Management Act (P.L. 92-583, as amended) and the Coastal Barrier Resources Act (P.L. 97-348, as amended) to protect and enhance the nation’s coastal zones and ecologically sensitive coastal barriers.
6. Wild and Scenic Rivers Act (P.L. 90-542, as amended) to preserve the special scenic, cultural, historic, recreational, geological, and fish and wildlife values of the nation's free flowing rivers and adjacent land.
7. Endangered Species Act (P.L. 93-205, as amended) to ensure that the project will not jeopardize, destroy, or adversely modify the continued existence of any endangered or threatened species or adversely affect its critical habitat.
8. Essential Fish Habitat Consultation Process under the Magnuson-Stevens Fishery Conservation and Management Act (P.L. 94-265, as amended) to manage and conserve national fishery resources.
9. The approved State Implementation Plan under the Clean Air Act (P.L. 95-95).
10. Safe Drinking Water Act (P.L. 93-523, as amended) to determine the impact, if any, that the project may have on ground water supplies.
11. Wilderness Act (16 U.S.C. 1131, et. seq.) to protect areas in national parks, wildlife areas or forests that have been designated as wilderness areas.
12. Fish & Wildlife Coordination Act (P.L. 89-665, as amended) to protect fish and wildlife when Federal actions result in the control or modification of a natural stream or body of water.
SOCIAL POLICY AUTHORITIES:
13. Title VI of the Civil Rights Act of 1964 (P.L. 88-352), which prohibits discrimination in the provision of service and benefits on the basis of race, color, or national origin.
14. Section 13 of the Federal Water Pollution Act Amendments of 1972 (33 U.S.C. Sec 1251), Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. Sec 794), and the Age Discrimination Act of 1975 (42 U.S.C. Sec 6102), which prohibit discrimination in the provision of services and benefits on the basis of race, color, national origin, sex, handicap or age.
15. Executive Order No. 11246 (1965), which applies equal employment opportunity principles to federally assisted construction programs.
16. Executive Orders 11625, 12138, 12432 and Section 129 of the Small Business Administration and Reauthorization and Amendment Act of 1988 (P.L. 100-590) with reference to utilization of minority and/or women business enterprises.
17. Department of Veterans Affairs and Housing and Urban Development, and Independent Agencies Appropriations Act (P.L. 102-389) to take six affirmative steps that are intended to promote the participation of disadvantaged business enterprises in their projects and activities, and thereby increase the likelihood that the state will achieve its fair share objective.
18. Executive Order 12898 (1994) with reference to federal actions to address environmental justice in minority populations and low-income populations.
ECONOMIC & MISCELLANEOUS AUTHORITIES:
19. Section 306 of the Clean Air Act, Section 508 of the Clean Water Act and Executive Order 11738 (1973), which prohibit the procurement of goods, services, or materials from suppliers who have been convicted of violations of these laws.
20. Executive Order No. 12549 (1986), which prohibits participation in a federal assistance program by anyone who has been debarred or suspended.
21. Demonstration Cities and Metropolitan Development Act of 1966 (P.L. 89-754), which requires intergovernmental review of the proposed project.
22. Title II and III of the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (P.L. 91-646) which provides for fair and equitable treatment of persons displaced or whose property is acquired as a result of federally assisted programs (See 40 CFR Part 4). These requirements apply to all interests in real property acquired for project purposes regardless of SRF participation.
23. Executive Order 13202 (2001), as amended by Executive Order 13208 (2001), with reference to preservation of open competition and government neutrality towards government contractors' labor relations on federal and federally funded construction projects.
OTHER AUTHORITIES:
24. All applicable requirements of all other federal and state laws, executive orders, policies, and regulations governing this program including compliance with the Single Audit Act (OMB Circular A-133).
25. Requirements that the facility to be designed to comply with the "American National Specifications for Making Buildings Accessible to, and Usable by the Physically Handicapped," Number A117-1-196.
The undersigned further agrees that the City will obtain approval by DHH of the final design drawings and specifications before the project is advertised for bidding; will complete the project in accordance with this application, the approved System Improvement Plan, and approved plans and specifications; and, will submit project changes to DHH for prior approval.
I further certify that I am a duly authorized representative of the City, and that I have read and understand these requirements and assurances.
CITY OF SHREVEPORT, STATE OF LOUISIANA
, 20____ By:
Mayor
MUNICIPAL FACILITIES Loan and Pledge Agreement dated as of December ___, 2009 |
by and between Louisiana Department of Environmental Quality and the City of Shreveport, State of Louisiana |
relating to the issuance of: not exceeding $12,000,000 Taxable Water and Sewer Revenue Bonds, Series _____ of the City of Shreveport, State of Louisiana Loan No. 221115-01 |
B:\DMW\DHH Revolving Fund\Shreveport\DEQ and DHH Docs\Loan & Pledge Agreement 11-5-09.doc |
TABLE OF CONTENTS
* * * * * *
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.02. Rules of Interpretation 6
ARTICLE II
REPRESENTATIONS OF THE DEPARTMENT
SECTION 2.01. Representations of the Department 8
SECTION 2.02. Representations of the City 8
SECTION 2.03. Particular Covenants of the City 11
SECTION 2.04. Tax-Exempt Status of Bonds 11
ARTICLE III
LOAN TO CITY; ISSUANCE OF BONDS
SECTION 3.01. Terms of the Loan 12
SECTION 3.02. Issuance of Bonds 12
SECTION 3.03. Delivery of Documents 12
SECTION 3.04. Interest and Principal Payments 13
SECTION 3.05. Prepayment of Bonds 14
SECTION 3.06. Administrative Fee 14
SECTION 3.07. Manner of Repayment 14
SECTION 3.08. Disclaimer of Warranties and Indemnification 14
SECTION 3.10. Lost, Destroyed or Improperly Cancelled Bonds 15
ARTICLE IV
PAYMENT OF BONDS; DEFEASANCE
SECTION 4.01. Pledge of Revenues 16
SECTION 5.01. Funds and Accounts 17
SECTION 5.03. Notification of Deficiencies 17
ARTICLE VI
CONSTRUCTION AND COMPLETION OF THE PROJECT
SECTION 6.01. Plans and Specifications; Construction Contracts 18
SECTION 6.03. Compliance with Law 18
SECTION 6.04. Payment of Additional Costs of the Project 19
SECTION 6.05. Completion Certificate 19
SECTION 7.01. Disbursement of Loan Proceeds 20
SECTION 7.02. Disbursement Procedure 20
SECTION 7.03. Modified Disbursement Procedure 21
SECTION 7.04. Reimbursement of Certain Costs 21
SECTION 7.05. Inspections; Possession of Project 21
SECTION 7.06. Conditions Precedent 22
SECTION 7.07. Conditions to all Disbursements 23
SECTION 7.08. Conditions to Disbursement of Retainage 24
ARTICLE VIII
OPERATION OF THE SYSTEM
SECTION 8.01. Operation of the System 25
SECTION 8.02. Sewer Charges and Connections 25
SECTION 8.04. Annual Review of User Fees 26
SECTION 8.05. Financial Records; Annual Audit 26
SECTION 8.06. Consulting Engineer 27
SECTION 8.07. Prohibition Against Liens 28
SECTION 8.09. Fidelity Bonds 28
SECTION 8.10. Competitive Franchises 28
SECTION 8.11. Equal Opportunity 28
SECTION 8.12. Access to Books 28
SECTION 9.01. Issuance of Additional Parity Obligations 29
SECTION 9.02. Junior and Subordinate Lien Obligations 29
ARTICLE X
DEFAULTS AND REMEDIES
SECTION 10.01. Events of Default 30
SECTION 10.02. Notice of Default 30
SECTION 10.03. Remedies on Default 30
SECTION 10.04. Appointment of Engineer; Required Reports 31
SECTION 10.05. Appointment of Receiver 31
SECTION 10.06. Attorney's Fees and Other Expenses 31
SECTION 10.07. Application of Moneys 32
SECTION 10.08. No Remedy Exclusive; Waiver; Notice 32
SECTION 10.09. Retention of Department's Right 32
SECTION 10.10. Default by Department 32
SECTION 11.01. Assignment, Transfer or Sale by the Department 33
SECTION 11.02. Assignment, Transfer or Sale by City 33
SECTION 12.01. Payment of Department Expenses 35
SECTION 12.02. Consents and Approvals 35
SECTION 12.04. Binding Effect 35
SECTION 12.05. Severability 35
SECTION 12.06. Amendments, Supplements and Modifications 35
SECTION 12.07. Execution in Counterparts 35
SECTION 12.08. Applicable Law 35
SECTION 12.10. Further Assurances 35
SECTION 12.11. City to Cooperate in Rating and Issuance of Department's Bonds 36
SECTION 12.12. City's Continuing Disclosure Obligations 36
* * * * * *
EXHIBIT A - Description of Project
EXHIBIT B - Estimated Principal Repayment Schedule
EXHIBIT C - Estimated Costs of the Project
EXHIBIT D - Form of Requisition
EXHIBIT E - Form of Circular A-133 Certification
LOAN AND PLEDGE AGREEMENT
This LOAN AND PLEDGE AGREEMENT, which shall be dated for convenience as of December ____, 2009, by and between:
LOUISIANA DEPARTMENT OF ENVIRONMENTAL QUALITY (the "Department”), an executive department and agency of the State of Louisiana, appearing herein through Vince Sagnibene, Undersecretary, duly authorized hereunto pursuant to an executive order of the Secretary of the Department dated January 17, 2008, and
THE CITY OF SHREVEPORT, STATE OF LOUISIANA (the "City"), a political subdivision of the State of Louisiana, appearing herein though Cedric B. Glover, its Mayor, and Arthur G. Thompson, its Clerk, both duly authorized hereunto pursuant to an ordinance adopted by the governing authority of the City on December 8, 2009;
W I T N E S S E T H:
WHEREAS, the United States of America, pursuant to the Clean Water Act of 1972, as amended by the Water Quality Act of 1987, specifically Subchapter VI, Chapter 26 of Title 33 of the United States Code (the “Federal Act”), is authorized to make capitalization grants to states to be used for the purpose of establishing a water pollution control revolving fund for providing assistance (i) for construction of treatment works (as defined in Section 1292 of the Federal Act) which are publicly owned, (ii) for implementing a management program under Section 1329 of the Federal Act and (iii) for developing and implementing a conservation and management plan under Section 1330 of the Federal Act; and
WHEREAS, in order to be eligible to receive such capitalization grants, a state must first establish a water pollution control revolving loan fund to be administered by an instrumentality of the state with such powers and limitations as may be required to operate such fund in accordance with the requirements and objectives of the Federal Act; and
WHEREAS, the State of Louisiana (the "State"), pursuant to Subchapter II, Chapter 4 of Title 30 of the Louisiana Revised Statutes of 1950, as amended, specifically La. R.S. 30:2078, et seq.) (the "State Act"), has established a Municipal Facilities Revolving Loan Fund in the custody of the Department (the "State Revolving Fund") to be used for the purpose of providing financial assistance for the improvement of wastewater treatment facilities in the State, as more fully described in Section 2078(B)(2) of the State Act, and has authorized the Department to administer the State Revolving Fund in accordance with applicable federal and state law; and
WHEREAS, the City has made application to the Department for a loan from the State Revolving Fund to finance a portion of the costs of constructing and acquiring improvements, extensions and replacements to the sewerage portion of its combined water and sewer system, as are generally described in Exhibit A hereto (the "Project"); and
WHEREAS, the Department has approved the City's application for a loan from the State Revolving Fund to finance the costs of the Project; and
WHEREAS, in accordance with Section 1383(g) of the Federal Act, the Department has established a priority list under Section 1296 of Title 33 of the United States Code, and the Project is on such list; and
WHEREAS, the City, by ordinance of its governing authority adopted on December 8, 2009, has authorized the incurring of debt and the issuance of its Taxable Water and Sewer Revenue Bonds, Series ______ in an amount not to exceed $12,000,000 (the "Bonds"), for the purpose of paying costs of the Project, which Bonds are proposed to be purchased by the Department using available moneys in the State Revolving Fund;
NOW, THEREFORE, the Department and the City each agree to perform their respective obligations under this Loan Agreement in accordance with the conditions, covenants and procedures set forth herein and in the exhibits attached hereto and made a part hereof as follows:
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DEFINITIONS AND INTERPRETATION
. The following terms used in this Loan Agreement shall have the following meanings, unless the context clearly requires otherwise:
"Administrative Fee" means the annual fee equal to one-half of one percent (0.5%) per annum of the outstanding principal amount of the Bonds, or such lesser amount as the Department may approve from time to time, which shall be payable each year in two equal semi-annual installments on each Interest Payment Date of the Bonds.
"Authorized Officer" means the officer or officers of the City who have executed this Loan Agreement, or their successors in office, or such other person or persons authorized pursuant to a resolution or ordinance of the Governing Authority to act as an authorized officer of the City to perform any act or execute any document relating to the Loan, the Bonds or this Loan Agreement.
"Authorizing Ordinance" means the ordinance adopted by the governing authority of the City authorizing the issuance of the Bonds and authorizing the sale of the Bonds to the Department, as it may be supplemented, modified or amended from time to time in accordance with its terms.
"Bonds" shall mean the City's Taxable Water and Sewer Revenue Bonds, Series 2009, in an amount not to exceed Twelve Million Dollars ($12,000,000), which indebtedness is being issued by the City pursuant to the Authorizing Ordinance for the purpose of paying Costs of the Project, sold to the Department and purchased by the Department from moneys in the State Revolving Fund.
"City" means the City of Shreveport, State of Louisiana, a political subdivision of the State of Louisiana, and its successors or assigns.
"Code" means the Internal Revenue Code of 1986, as the same may be amended and supplemented from time to time, including any regulations promulgated thereunder or any administrative or judicial interpretations thereof.
"Commitment Agreement" means Commitment Agreement entered into between the Department and the City in connection with the Loan, including the exhibits attached thereto, as it may be supplemented, modified or amended from time to time in accordance with the terms thereof.
"Completion Date" means the earlier of (i) the date of the final disbursement of the purchase price of the Bonds to the City, or (ii) date the operation of the Project is initiated or capable of being initiated, as certified by an Authorized Officer in accordance with Section 6.05.
"Construction Fund" means the fund or account to be established in accordance with the City's customary accounting practices, into which each installment of the purchase price of the Bonds is to be deposited, and from which Costs of the Project will be disbursed by the City.
"Contingencies Fund" means the fund or account to be established or maintained in accordance with the City's customary accounting practices, for the purposes set forth in the Authorizing Ordinance.
"Costs of the Project" means, with reference to the Project, all capital costs incurred or to be incurred for the Project, including but not limited to (a) engineering, financing, legal and other fees and expenses related to the engineering and design of the Project and related to the issuance of the Bonds, (b) acquisition and construction costs of the Project, (c) interest on the Bonds during construction, if specifically approved by the Department, and (d) a reasonable allowance for contingencies, all to the extent permitted by the Federal Act, the State Act and any rules or regulations promulgated thereunder.
"Debt Service Fund" means the fund or account to be established or maintained in accordance with the City's customary accounting practices, into which the City will periodically deposit funds for the payment of principal, Administrative Fee and interest on the Bonds, in the manner set forth in the Authorizing Ordinance.
"Default" means an event or condition, the occurrence of which would constitute with the lapse of time or the giving of notice or both an Event of Default with respect to the Bonds.
"Delivery Date" means the date on which the Bonds are delivered to the Department and the first installment of the purchase price therefor is paid by the Department to the City.
"Department" means the Louisiana Department of Environmental Quality, an executive department and agency of the State, and any successor to the duties and functions thereof.
"Engineer" means a consulting engineer or firm of consulting engineers registered and licensed by the Louisiana Professional Engineering and Land Surveying Board, or its successor in function, as a professional engineer and selected by the City for the purpose of providing engineering services with respect to the Project. If the City employs a qualified in-house engineer, then such personnel may be the Engineer hereunder with the approval of the Department.
"EPA" means the United States Environmental Protection Agency or any successor entity which may succeed to the administration of the programs established by the Federal Act.
"Event of Default" means any occurrence or event specified in Section 10.01.
"Federal Act" means the Clean Water Act of 1972, as amended by the Water Quality Act of 1987, specifically Subchapter VI, Chapter 26 of Title 33 of the United States Code, and other statutory and regulatory authority amendatory or supplemental thereto.
"Fiscal Year" means the City's one-year accounting period determined from time to time by the Governing Authority as the fiscal year of the City.
"Funds and Accounts" collectively means the Construction Fund, the Revenue Fund, the Debt Service Fund, the Reserve Fund and the Contingencies Fund.
"Governing Authority" means the City Council of the City or its successor in function.
"Interest Payment Date" shall mean each date on which interest on the Bonds is payable, the first of which shall occur not more than six (6) months after the delivery of the Bonds to the Department and which shall occur semi-annually thereafter until the Bonds are paid in full, as determined by mutual agreement of the City and the Department on the date of delivery of the Bonds and designated in the Bonds.
"Loan" means the loan made by the Department from the State Revolving Fund to the City pursuant to this Loan Agreement, the obligation to repay which Loan is evidenced by the Bonds.
"Loan Agreement" means this Loan and Pledge Agreement, including the exhibits attached hereto, as it may be supplemented, modified or amended from time to time in accordance with the terms hereof.
"Loan Amount" means the maximum amount that the Department has agreed to loan the City, being the authorized principal amount of the Bonds.
"Outstanding" when used with respect to the Bonds, as of the date of determination, means all Bonds theretofore issued and delivered under the Authorizing Ordinance except:
Bonds that have been cancelled or delivered to the Paying Agent for cancellation;
Bonds that have been defeased in accordance with Section 4.02;
Bonds in exchange for or in lieu of which other Bonds have been registered and delivered pursuant to the Authorizing Ordinance; or
Bonds alleged to have been mutilated, destroyed, lost or stolen which have been paid as provided in the Authorizing Ordinance or by law.
"Parity Obligations" means additional pari passu indebtedness, if any, issued by the City and payable from the same source of revenues on a parity with the Bonds in the manner set forth in the Authorizing Ordinance.
"Paying Agent" means the person designated as such in the Authorizing Ordinance, unless and until a successor Paying Agent shall have assumed such responsibilities pursuant to the applicable provisions of the Authorizing Ordinance and thereafter "Paying Agent" shall mean such successor Paying Agent.
"Plans and Specifications" means the drawings, elevations, shop drawings and accompanying specifications for work prepared by the Engineer for the City relating to the Project or any portion thereof.
"Principal Payment Date" means each annual principal payment date on the Bonds, which dates are set forth in the Authorizing Ordinance, the first of which shall occur no later than one (1) year after the Completion Date and the last of which shall occur no later than twenty (20) years after the Completion Date.
"Project" means the improvements to the System generally described in Exhibit A hereto, which are being financed through the issuance of the Bonds.
"Regulations" means the regulations of the Department adopted pursuant to and in furtherance of the Clean Water Act of 1972, as amended by the Water Quality Act of 1987, and the State Act, as such may be amended from time to time, including, without limitation Title 33, Part IX, Chapter 21 of the Louisiana Administrative Code (L.A.C. 33:IX.2101, et seq.).
"Reserve Fund" means the fund or account to be established or maintained in accordance with the City's customary accounting practices, into which there shall be deposited from available funds of the City, in the manner set forth in the Authorizing Ordinance (but not from the proceeds of the Loan unless specifically approved by the Department), a sum equal to the Reserve Fund Requirement, as defined in the Authorizing Ordinance.
"Revenue Fund" means the fund or account to be established or maintained in accordance with the City's customary accounting practices, into which all revenues of the System shall be deposited in the manner set forth in the Authorizing Ordinance.
"Scheduled Completion Date" means the date presently estimated by the City and the Engineer to be the Completion Date, which is _________________.
"State" means the State of Louisiana.
"State Act" means La. R.S. 30:2078, et seq. and other constitutional and statutory authority supplemental thereto.
"State Revolving Fund" means the Municipal Facilities Revolving Loan Fund administered, operated and maintained by the Department pursuant to the Federal Act and the State Act.
"System" means the City's revenue-producing combined drinking water and sewerage system, as said system now exists, and as it may be hereafter improved, extended or supplemented while any of the Bonds remain outstanding, as more fully described in the Authorizing Ordinance.
"User Fees" means charges or fees levied on users of the System for the cost of operation, maintenance and replacement of the System, for the repayment of debt incurred with respect to the System and for such other purposes as may be determined by the Governing Authority from time to time.
(a) Unless the context clearly indicates to the contrary, the following rules shall apply to the interpretation and construction of this Loan Agreement:
words importing the singular number shall include the plural number and vice versa;
all references to particular articles or sections herein are references to articles or sections of this Loan Agreement;
the captions and headings herein are solely for convenience of reference and shall not constitute a part of this Loan Agreement, nor shall they affect its meaning, construction or effect;
the terms "hereby," "hereof," "hereto," "herein," "hereunder" and any similar terms as used in this Loan Agreement refer to the Loan Agreement in its entirety and not the particular article or section of this Loan Agreement in which they appear; and
the term "hereafter" means after the date of execution of this Loan Agreement and the term "heretofore" means before the date of the execution of this Loan Agreement.
(b) In the event that any provisions of the Authorizing Ordinance conflict with any provision of this Loan Agreement, then the provisions of this Loan Agreement shall control.
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REPRESENTATIONS OF THE DEPARTMENT
Representations of the Department
. The Department represents and covenants as follows:
The Department is authorized by the State Act to administer, operate and maintain the State Revolving Fund in full compliance with the Federal Act, as amended, and the requirements of the EPA promulgated thereunder.
The Department has complied with the provisions of the Federal Act and the State Act and all regulations thereunder with respect to the State Revolving Fund and has full power and authority to execute and deliver this Loan Agreement and to consummate the transactions contemplated hereby and perform its obligations hereunder.
The Department, by executive order of its Secretary, being the chief executive officer thereof, has authorized the execution, delivery and due performance of this Loan Agreement and the taking of any and all actions as may be required on the part of the Department to carry out, give effect to and consummate the transactions contemplated hereby and all approvals necessary in connection with the foregoing.
There is no action, suit, proceeding or investigation at law or in equity before or by any court, public board or body pending or threatened against or affecting the Department or to the best knowledge of the Department is there any basis therefor, wherein an unfavorable decision, ruling or finding would adversely affect the transactions contemplated hereby or which in any way would adversely affect the validity of this Loan Agreement or any agreement or instrument to which the Department is a party and which is used or contemplated for use in consummation of the transactions contemplated hereby.
The execution and delivery by the Department of this Loan Agreement and the consummation of the transactions contemplated hereby will not violate any indenture, mortgage, deed of trust, note, loan agreement, or other contract or instrument to which the Department is a party or by which it is bound, and to the best of the Department's knowledge any judgment, decree, order, statute, rule or regulation applicable to the Department and all consents, approvals, authorizations and orders of governmental or regulatory authorities which are required for the consummation of the transactions contemplated hereby have been obtained.
The Department has determined that the Project, subject to final review of the Plans and Specifications, is eligible for financial assistance from the State Revolving Fund, and the Project is listed on the State's priority list as required by Section 1383(g) of the Federal Act.
. The City represents and covenants as follows:
The City is a political subdivision of the State and has full legal right and authority and all necessary licenses and permits required as of the date hereof to own, operate and maintain the System, to carry on its activities relating thereto, to execute and deliver this Loan Agreement, to execute, issue and deliver the Bonds, to pledge the revenues necessary to secure the payment of the Bonds, to undertake and complete the Project and to carry out and consummate all transactions contemplated by this Loan Agreement.
The proceedings of the Governing Authority approving this Loan Agreement and the Bonds and authorizing their execution, issuance and delivery by the City and authorizing the City to undertake and complete the Project, including, without limitation the Authorizing Ordinance, have been duly and lawfully adopted in accordance with the laws of the State, including the Open Meetings Law (R.S. 42:4.1, et seq.).
The Authorizing Ordinance was duly adopted by the Governing Authority and was published in the official journal of the City no less than 30 days prior to the delivery date of the Bonds and since the said publication no actions or proceedings have been filed or threatened contesting the legality of the Authorizing Ordinance, the Bonds or any provision for payment of the Bonds.
This Loan Agreement and the Bonds have been duly authorized and have been or will be duly executed and delivered by the Authorized Officer, and assuming that the Department has all the requisite power and authority to authorize, execute and deliver and has duly authorized, executed and delivered this Loan Agreement, this Loan Agreement and the Bonds will constitute the legal, valid and binding obligations of the City, enforceable in accordance with their respective terms.
To the best of the City's knowledge, there is no fact that the City has not disclosed to the Department in writing on the City's application for the Loan or otherwise that materially adversely affects the properties, activities, prospects or condition (financial or otherwise) of the City or the System or the ability of the City to make all Loan repayments and otherwise to observe and perform its duties, covenants, obligations and agreements under this Loan Agreement and the Bonds.
To the best of the City's knowledge, the authorization, execution and delivery of this Loan Agreement and the Bonds by the City, the observance and performance by the City of its duties, covenants, obligations and agreements thereunder and under the Authorizing Ordinance and the consummation of the transactions provided for in this Loan Agreement, the Authorizing Ordinance and the Bonds, the compliance by the City with the provisions of this Loan Agreement, the Authorizing Ordinance and the Bonds and the undertaking and completion of the Project will not result in any breach of any of the terms, conditions or provisions of or constitute a default under or result in the creation or imposition of any lien, charge or other encumbrance upon any property or assets of the City pursuant to any ordinance or resolution, trust agreement, indenture, mortgage, deed of trust, loan agreement or other instrument (other than the lien and charge of the Authorizing Ordinance and the Bonds) and any ordinance, resolution or indenture which authorized outstanding debt obligations to which the City is a party or by which the City, the System or any of its property or assets may be bound, nor will such action result in any violation of the provisions of any laws, ordinances, resolutions, governmental rules, regulations or court orders to which the City, the System or its properties or operations are subject.
There are no proceedings pending, or to the knowledge of the City threatened, against or affecting the City in any court or before any governmental authority or arbitration board or tribunal that have not been disclosed in writing to the Department in the City's application for the Loan or otherwise that, if adversely determined, would materially adversely affect the properties, activities, prospects or condition (financial or otherwise) of the City or its System or the ability of the City to make all Loan repayments and otherwise observe and perform its duties, covenants, obligations and agreements under this Loan Agreement and the Bonds.
To the best of the City's knowledge, no event has occurred and no condition exists that, upon authorization, execution and delivery of this Loan Agreement and the Bonds or receipt of the amount of the Loan, or upon the happening of any such event and the giving of notice and/or the passage of time, would constitute an Event of Default hereunder or under the Authorizing Ordinance. The City is not in violation of and has not received notice of any claimed violation of any term of any agreement or other instrument to which it is a party or by which it or the System or its properties may be bound, which violation would materially adversely affect the properties, activities, prospects or condition (financial or otherwise) of the City or its System or the ability of the City to make all Loan repayments or otherwise observe and perform its duties, covenants, obligations and agreements under this Loan Agreement, the Authorizing Ordinance and the Bonds.
The City has obtained all permits and approvals required to date by any governmental body or officer (and reasonably expects to receive all permits required in the future by any governmental agency) for the making, observance and performance by the City of its duties, covenants, obligations and agreements under this Loan Agreement and the Bonds or for the undertaking or completion of the Project and the financing or refinancing thereof and the City has complied with all applicable provisions of law requiring any notification, declaration, filing or registration with any governmental body or officer in connection with the making, observance and performance by the City of its duties, covenants, obligations and agreements under this Loan Agreement and the Bonds or with the undertaking or completion of the Project and the financing or refinancing thereof. No consent, approval or authorization of, or filing, registration or qualification with any governmental body or officer that has not been obtained is required on the part of the City as a condition to the authorization, execution and delivery of this Loan Agreement and the Bonds, the undertaking or completion of the Project or the consummation of any transaction herein contemplated.
The City is in compliance with all laws, resolutions, ordinances, governmental rules and regulations to which it is subject, the failure to comply with which would materially adversely affect the ability of the City to conduct its activities or undertake or complete the Project, or the condition (financial or otherwise) of the City or its System; and the City has obtained or will obtain all licenses, permits, franchises or other governmental authorizations presently necessary for the ownership of its property or for the conduct of its activities which, if not obtained, would materially adversely affect the ability of the City to conduct its activities or undertake or complete the Project or the condition (financial or otherwise) of the City or its System.
The City has not previously pledged the revenues being used to repay the Bonds to the payment of any indebtedness of the City or any other entity, other than the Parity Obligations, if any, defined in Section 1.01.
Particular Covenants of the City
. The City further covenants and agrees for the benefit of the Department as follows:
The City agrees that the estimated Costs of the Project, as listed in Exhibit C hereto and made a part hereof, is a reasonable and accurate estimation as of the date hereof, and upon direction of the Department will supply the same with a certificate from its Engineer stating that such estimated cost is a reasonable and accurate estimation. With the approval of the State Revolving Fund Engineering Manager, the City and the Department may mutually agree to change the allocation and categories shown in said Exhibit C without the necessity of amending the Loan Agreement.
The City will promptly notify the Department of any material adverse change in the activities, prospects or condition (financial or otherwise) of the City relating to the System or to the ability of the City to make all or any Loan repayments, provide for the payment of Administrative Fees and otherwise observe and perform its duties, covenants, obligations and agreements under this Loan Agreement and the Bonds.
. The City covenants and agrees for the benefit of the Department that it will not take any action or omit to take any action, which action or omission would result in the loss of the exclusion of the interest on the Bonds (if the Bonds are issued as tax-exempt obligations for federal income tax purposes) or on any debt obligations now or hereafter issued by or on behalf of the Department from gross income for purposes of federal income taxation, as that status is governed by the Code. Furthermore, the City will not take any action or fail to take any action that could cause the Bonds or any debt obligations now or hereafter issued by or on behalf of the Department to be "arbitrage bonds" or "private activity bonds" under the Code.
The City shall not purchase, pursuant to any arrangement, formal or informal, any debt obligations issued by or on behalf of the Department in an amount related to the amount of the Loan.
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LOAN TO CITY; ISSUANCE OF BONDS
. The Department hereby agrees to reserve in the State Revolving Fund a sum equal to the Loan Amount from the sums available to the Department or to be received by the Department to be deposited in the State Revolving Fund. The Department further agrees that it will effect the Loan by purchasing the Bonds from the City and paying the purchase price thereof in installments pursuant to this Loan Agreement and the Authorizing Ordinance in accordance with Sections 7.01 and 7.02.
The City will apply the proceeds of the Loan to finance the Costs of the Project, and where applicable, to reimburse the City or any lender for such portion of the Costs of the Project that was paid or incurred by the City or for payment of the cost of which sums were borrowed on an interim basis in anticipation of reimbursement by the Department.
Notwithstanding the foregoing, (i) the Department shall be under no obligation to continue to make disbursements after an Event of Default has occurred and is continuing under the Authorizing Ordinance or this Loan Agreement; and (ii) the Department shall not be obligated to make or continue to make disbursements if funds are not legally available to the Department in the State Revolving Fund to make the Loan or make disbursements pursuant to the Loan. The City shall use the proceeds of the Loan strictly in accordance with the terms of the Authorizing Ordinance and this Loan Agreement.
. As evidence of its obligation to repay the principal, interest and premium, if any, of the Loan, and to pay the Administrative Fee, the City contemporaneously herewith has issued and delivered the Bonds to the Department, which Bonds are payable in the manner and from the sources set forth in the Authorizing Ordinance.
. On the Delivery Date the City will cause to be delivered to the Department each of the following items:
the executed opinions of counsel to the City in such form and containing such conclusions as may be reasonably required by the Department, addressed to the Department and the City;
a certificate or certificates, satisfactory in form and substance to the Department, from an authorized officer of the City, dated such Closing Date, to the effect that:
each of the representations of the City set forth herein and in the Loan Agreement is true, accurate and complete in all material respects as of such Closing date, and each of the agreements of the City set forth in the Loan Agreement to be complied with at or prior to such Closing Date has been complied with as of such date;
no litigation is pending, or to the knowledge of the authorized officer's knowledge, threatened, to restrain or enjoin the issuance, execution, sale or delivery of the Bonds or in any way contesting or affecting any authority for or the validity of the Bonds, the Loan Agreement, the Authorizing Ordinance or the creation, existence or powers of the City or the title of the present officers of the City, or any of them, to the respective offices and that none of the proceedings or authority for the issuance of the Bonds have been repealed, revoked or rescinded; and
the Bonds have been duly authorized, executed and delivered by the City, constitute valid and legally binding obligations of the City and are entitled to the security of and are secured by the Authorizing Ordinance which, together with the Loan Agreement have been duly authorized, executed and delivered by the City;
a non-arbitrage certificate or use of proceeds certificate executed by a duly authorized officer of the City in form and substance satisfactory to the Department and an opinion of bond counsel acceptable to the Department;
executed originals of the Bonds and the Loan Agreement and a certified copy of the Authorizing Ordinance;
executed originals of a Site Certificate, in substantially the forms attached to the Commitment Agreement; and
such additional certificates, instruments and other documents, dated as of the Closing Date or before, as the Department or its counsel reasonably require to evidence the truth and accuracy as of the Closing Date of the representations of the City herein contained and contained in the Loan Agreement and the due performance and satisfaction by the City at or prior to such time of all agreements to be performed and all conditions then to be satisfied by the City.
the Bonds duly executed;
Interest and Principal Payments
. The Bonds shall be payable as set forth in the Authorizing Ordinance and as follows:
Interest shall be payable semiannually in arrears on each Interest Payment Date based on the amount of the Loan theretofore paid by the Department to the City; and
Principal shall be payable annually on each Principal Payment Date in the amounts set forth on Exhibit B hereto. Exhibit B has been prepared assuming that the full amount of the Bonds will be disbursed. In the event that less than the full amount of the Loan is made to the City, then the payment schedule shown as Exhibit B will be adjusted in the manner set forth in the Authorizing Ordinance and in this Loan Agreement.
Promptly after the payment of the final installment of the purchase price of the Bonds, the completion certificate required by Section 6.05 shall be attached to and made a part of the Bonds.
In the event that any installment of principal, interest or Administrative Fee shall become past due for a period in excess of fifteen (15) days from the payment date specified herein, in addition to interest continuing to accrue on the principal amount due until the payment thereof, the City shall pay upon demand an amount equal to five percent (5%) of the amount of such past-due installment to defray the expenses of handling the delinquent payment.
. The Department acknowledges that the Bonds are subject to prepayment at the times and in the manner set forth in the Bonds and in the Authorizing Ordinance. In addition to the principal, interest and premium, if any, on such prepayment date, the City shall pay to the Department the amount of the Administrative Fee that has accrued on the amount prepaid from the most recent date on which any Administrative Fee was paid.
Prepayment shall be applied first to the Administrative Fee, second to accrued interest on the portion of the Bonds to be redeemed, then to any redemption or prepayment premium and finally to principal.
. The Administrative Fee shall be payable to the Department on each Interest Payment Date. The City's obligation to pay the Administrative Fee shall be terminated upon the sale or other disposition of the Bonds by the Department, other than a pledge or assignment of the Bonds or this Loan Agreement pursuant to Section 11.01, or upon full payment by the City of the Bonds and all amounts owed the Department under this Loan Agreement. In the event that the Administrative Fee is declared illegal or unenforceable by a court or administrative body of competent jurisdiction, the interest rate borne by the Bonds shall be increased by one half of one percent (0.50%) per annum, effective as of the date declared to be the date from which the Administrative Fee is no longer owed because of such illegality or unenforceability.
. Payment of the principal, interest and premium on the Bonds, and payment of the Administrative Fee, shall be made by immediately available funds or mailed and/or made available to the Department no later than the applicable payment date at the following address:
Department of Environmental Quality
Attn: Financial Services Division, Accounts Receivable
P. O. Box 4311
Baton Rouge, Louisiana 70821-4311
or such other address as may be designated by the Department, without presentation or surrender of the Bonds, except upon final payment. If acceptable to the Department, the City may make arrangements to make such payments by wire transfer of immediately available funds.
Payments with respect to the Bonds shall be applied first to the interest due to the date of payment, next to principal and thereafter to the Administrative Fees and other amounts payable on the Loan and the payment of principal and interest shall be recorded on a payment record to be kept and maintained by the Department.
Disclaimer of Warranties and Indemnification
. The City acknowledges and agrees that:
the Department and the State make no warranty or representation, either express or implied, as to the value, design, condition, merchantability or fitness for particular purpose or fitness for any use of the System, the Project or any portions thereof or the Plans and Specifications or any other warranty or representation with respect thereto;
in no event shall the Department or the State be liable or responsible for any direct, incidental, indirect, special or consequential damages in connection with or arising out of this Loan Agreement or the Project or the existence, furnishings, functioning or use of the System or the Project or any item or products or services provided for in this Loan Agreement, including the Plans and Specifications; and
to the extent authorized by law, the City hereby indemnifies, saves and holds harmless the Department and the State against any and all claims, damages, liability and court awards, including costs, expenses and attorney fees, incurred as a result of any act or omission by the City, or its employees, agents or subcontractors pursuant to the terms of this Loan Agreement, including but not limited to failure of the Department to note any defect in materials or workmanship or of physical conditions or failure to comply with any plans, specifications, drawings, ordinances, statutes or other requirements of a governmental authority, or to call to the attention of any person whatsoever, or take any action, or to demand that any action be taken, with regard to any such defect or failure or lack of compliance.
. The City agrees to initially prepare, keep, and maintain books and records reflecting the authorization, issuance, transfer and assignment of the Bonds and has appointed the Paying Agent in the Authorizing Ordinance. A successor Paying Agent may be appointed in the manner set forth in the Authorizing Ordinance, provided, however, that in no event shall the Department be liable for the payment of any fees of such Paying Agent.
Lost, Destroyed or Improperly Cancelled Bonds
. In case any of the Bonds shall become lost, destroyed or improperly cancelled, such Bonds may be replaced pursuant to any applicable terms of the Authorizing Ordinance, or in the absence of any such terms, in the manner set forth in R.S. 39:971, et seq., or other applicable laws.
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. The Bonds, and to the extent allowed by applicable law all other sums due pursuant to this Loan Agreement, including the Administrative Fee, equally with the Parity Obligations, if any, shall be secured and payable from a pledge and dedication of the revenues of the combined water and sewerage system, after payment of the reasonable and necessary expenses of operating and maintaining the System. The net revenues of the System shall be set aside in the Funds and Accounts described in the Authorizing Ordinance and shall be and remain so pledged for the security and payment of the Bonds in principal and interest, until the Bonds shall be fully paid and discharged. The City agrees that it shall not further encumber the pledged revenues, to the payment of any indebtedness having an equal or superior lien to that enjoyed by the Bonds, other than through the issuance of Parity Obligations, or junior lien obligations, in the manner and under the conditions provided in the Authorizing Ordinance.
. Notwithstanding any defeasance procedures set forth in the Authorizing Ordinance, so long as the Bonds are owned by the Department or pledged as security for any indebtedness issued by or on behalf of the Department, the Bonds may be defeased and may be deemed to be paid and shall no longer be considered outstanding under the Authorizing Ordinance and under this Loan Agreement, only in the event that the City has complied with the requirements of Chapter 14 of Title 39 of the Louisiana Revised Statutes of 1950, as amended (La. R-S. 39:1441 et seq.), or any successor provision thereto, to defease all remaining scheduled payments of principal, interest, premium, if any, and Administrative Fees on the Bonds.
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. For the purpose of receiving purchase price payments of the Bonds and paying Costs of the Project, the City has established and agrees to maintain the Construction Fund to be administered in the manner set forth herein and in the Authorizing Ordinance. Additionally, for the payment of and further security for the principal, interest and Administrative Fee on the Bonds, the City has established and agrees to maintain the Funds and Accounts to be administered in the manner set forth in the Authorizing Ordinance.
If at any time the Department deems, in its sole discretion, that the depository for any of the aforesaid funds and accounts to be unsatisfactory for whatever reason, then the City agrees that it will transfer any or all of said funds to such depository as may be designated by the Department.
. All moneys in any of the Funds and Accounts shall be invested in investment securities permitted by State law and the Authorizing Ordinance. All income derived from such investments shall be added to the amounts in the respective funds, if required, or to the Revenue Fund or to such funds as may be designated in the Authorizing Ordinance, and such investments shall be liquidated to the extent at any time necessary to apply the proceeds thereof to the purpose for which the respective funds have been created. For the purpose of determining if the required amount is being maintained in any of the funds, such investment securities shall be valued at least annually at the lesser of amortized cost (exclusive of accrued interest) or fair market value.
. The City shall notify the Department, and as required by R.S. 39:1410.62 the State Bond Commission, in writing, whenever (i) transfers to any fund required to be established by the Authorizing Ordinance or any ordinance or resolution authorizing the issuance of indebtedness of the City have not been made timely or (ii) principal, interest, premiums, or other payments due on the Bonds or any other outstanding indebtedness of the City have not been made timely.
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CONSTRUCTION AND COMPLETION OF THE PROJECT
Plans and Specifications; Construction Contracts
. The Plans and Specifications must be submitted to the Department for approval in writing, prior to formal request for bids on a construction contract or contracts. The Plans and Specifications shall comply with all laws, regulations and ordinances including, in particular, all zoning, fire, safety and environmental laws, regulations and ordinances. Contracts for the acquisition, construction and installation of the Project shall be entered into in compliance with Chapter 10 of Title 38 of the Louisiana Revised Statutes of 1950, as amended.
As a condition of the Loan, the City will demonstrate to the satisfaction of the Department before issuing an initial work order for construction, that the City has or will have an ownership or such other real interest in the site(s) of the Project, including necessary servitudes and rights-of-way as the Department finds sufficient to assure undisturbed use and possession for the purpose of construction and operation of the Project for the estimated life of the Project. The City agrees to provide the Department with a Site Certificate in substantially the form attached to the Commitment Agreement prior to disbursement by the Department of any Loan proceeds for construction.
The City will exercise its best efforts to initiate construction of the Project within six (6) months after the Delivery Date and in accordance with prudent public utility practice to complete the Project and to so accomplish such completion on or before the Scheduled Completion Date, and to provide from its own financial resources all moneys required to complete the Project in excess of the Loan Amount available hereunder.
. Prior to signing a construction contract or contracts, the City shall name the Engineer. If so required by the Department, the Engineer shall issue prior to each disbursement request a progress report detailing construction status to date and stating whether construction is within the Project budget. Requisitions for funds during construction, in the form attached hereto as Exhibit D will be executed by the City and certified by the Engineer.
. If requested by the Department, the City will furnish the Department with evidence that the property and equipment constituting the System, and the proposed and actual use thereof, comply with all laws, ordinances, rules and regulations of all governmental authorities having jurisdiction over the same, including the Regulations, and that there is no action or proceeding before any court, quasi-judicial body of administrative agency at the time of any disbursement by the Department relating to the System.
The City will obtain all necessary approvals from any and all governmental agencies requisite to the completion of the Project in compliance with all federal, State and local laws, ordinances and regulations applicable thereto. Upon completion of the Project the City shall obtain all required permits and authorizations from appropriate authorities as required for operation and use of the Project as contemplated by this Loan Agreement.
In the event that archeological artifacts or historical resources are unearthed during construction excavation of the Project, the City shall stop or cause to be stopped construction activities and will notify the Department of such fact.
The City will immediately halt construction of the Project and notify the Department if any endangered species are encountered during construction so that mitigating measures can be taken in accordance with the Endangered Species Act of 1973, as amended.
The City will take and institute such proceedings as will be necessary to cause and require all contractors and materials suppliers to complete their contracts diligently and in accordance with the terms of the contracts, including without limitation, correcting any defective work.
Payment of Additional Costs of the Project
. In the event that Loan proceeds are not sufficient to pay the Costs of the Project in full, the City shall nonetheless complete the Project and pay that portion of the Costs of the Project as may be in excess of available Loan proceeds and shall not be entitled to any reimbursement therefor from the Department, except for the proceeds of any additional financing which may (subject to availability) be provided by the Department pursuant to application by the City.
. The Project will be considered complete when the provisions of Section 7.08 have been met for all construction contracts included in the Project, or upon the disbursement of the final installment of the purchase price of the Bonds, whichever occurs first, and such date will be the Completion Date for purposes of this Loan Agreement. On or as soon as practicable after the Completion Date, the City shall submit the Certificate of Substantial Completion required by Section 7.08(a) and shall certify to the Department when it has initiated or is capable of initiating operation of the Project. The City shall also ratify and confirm in writing the final principal amount of the Loan and the final principal amortization schedule for the Loan.
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. Prior to any disbursement of Loan Proceeds, the City will prepare a budget and construction disbursement schedule which shall be updated from time to time as required by the progress of construction. Installments of the Loan, representing purchase price installments of the Bonds, shall be paid by the Department to the City under the terms of this Loan Agreement, upon receipt of a properly completed requisition in the form attached hereto as Exhibit D, subject to and conditioned upon the availability of sums on deposit in the State Revolving Fund. The City will deposit such proceeds in the Construction Fund and will utilize and expend such proceeds in a timely and expeditious manner and, in particular, will:
pay promptly all approved Costs of the Project;
proceed expeditiously with and complete the Project in accordance with Plans and Specifications, with construction reasonably expected to begin within six (6) months after the Delivery Date;
provide and maintain competent and adequate supervision and inspection of the Project;
return promptly upon written request any and all unused funds, including all costs or amounts found not eligible or disallowed by the Department; and
complete the Project within two years of the Delivery Date unless the Department gives its written approval to an extended construction period.
. Purchase price installments of the Bonds for the payment of Costs of the Project shall be made by the Department to the City from time to time as the construction of the Project progresses, subject to the satisfaction of the following conditions:
in connection with each disbursement, the City shall submit a requisition in the form attached hereto as Exhibit D, which requisition shall include:
an updated copy of the disbursement schedule (if applicable);
the report of the Engineer, which report shall be in the form and substance satisfactory to the Department and shall state that the Project, to the best of the Engineer's knowledge, as completed as of the date of such report, has been constructed in accordance with the Plans and Specifications and that the undisbursed portion of the Loan Amount is sufficient to complete the Project in accordance with the Plans and Specifications and the disbursement schedule;
if required by the Department, evidence satisfactory to the Department that the insurance required by Section 8.08 of this Loan Agreement remains in full force and effect;
such other instruments, documents, certificates, endorsements, invoices and opinions as the Department may reasonably require to substantiate the Costs of the Project for which payment is requested; and
if the requisition is the final requisition, the Completion Certificate required by Section 6.05;
disbursements shall be made by the Department not more frequently than twice per calendar month;
each disbursement shall be subject to the review and approval of the Department; and
the amount of each disbursement shall be computed so that five (5%) percent, or such larger percentage as may be requested by the City, of such disbursement constituting eligible costs and one hundred (100%) percent of non-eligible costs will be deducted from the total amount payable as retainage or as non-eligible costs with respect to each contract for construction of the Project or any portion thereof. The total amount of retainage withheld from the disbursements during the construction of the Project with respect to each contract shall be disbursed pursuant to the provisions of Section 7.08.
Modified Disbursement Procedure
. The Department reserves the right to modify the procedures set forth in Section 7.02 in order to make disbursements directly to any contractor or to subcontractors and suppliers when it is necessary to prevent a default under any construction contract or to insure that all subcontractors, suppliers and laborers who have performed services or provided materials to the Project are paid.
Reimbursement of Certain Costs
. The City will promptly reimburse the Department for any portion of the Loan which is determined by the Department to have been expended for a cost which is not eligible for funding from the State Revolving Fund, which reimbursement will be made not more than 180 days after the discovery thereof by either the City or the Department. Such reimbursement shall be promptly paid to the Department upon written request of the Department with interest on the amount reimbursed at the rate borne by the Bonds from the later of the date of the disbursement from which any such non-eligible item was paid or the last Interest Payment Date on which the City paid interest with respect to said amounts, and shall be applied in inverse order of maturity against the outstanding principal amount of the Bonds.
Inspections; Possession of Project
. Upon the occurrence of an Event of Default, the City does hereby agree and authorize the Department, EPA, the Engineer, or any agent, officer, employee or representative of the Department or EPA to enter upon the Project to make inspections of the materials, plans, shop drawings, workmanship and construction of the Project or to enter into possession of the Project and perform any work necessary or desirable to complete the Project and to take all other action in connection therewith, in order that the Department may:
verify that each disbursement is appropriate and in conformity with the requirements of this Article;
verify that all work covered by a proposed disbursement is in accordance with the Plans and Specifications;
determine whether there has been or may be any default of the obligations of the City under this Loan Agreement or the Authorizing Ordinance; and
take any necessary or appropriate action to insure that the Project will be completed in a timely manner and in accordance with the Plans and Specifications and the disbursement schedule.
None of the aforesaid actions by the Department or by any agent, officer, employee or representative of the Department shall be or may be construed in such a manner as to impose any duty or obligation whatsoever on the Department, the Engineer, or any agent, officer, employee or representative of the Department to protect or represent any owner, City, contractor, surety, or any other person whatsoever and shall not be considered or construed as having made any warranty whatsoever, whether express or implied, as to the adequacy, quality of fitness or purpose of any physical conditions, materials, workmanship, plans, specifications, drawings or other requirements pertaining to the Project, or whether any such physical conditions, materials or workmanship comply with any plans, specification, drawings, ordinances, statutes, or other governmental requirements pertaining to the Project.
. It is specifically understood and agreed that the obligation of the Department to fund any disbursements for payments to contractors or suppliers (other than engineering expenses and costs of issuance of the Bonds) shall be subject to the receipt by the Department of the following items with respect to each construction contract that is entered into with respect to the Project:
a true and correct copy of all applicable construction contracts pertaining to the Project (including all amendments, addenda, supplements, modifications and related documents), which contracts shall be for a guaranteed maximum contract price satisfactory to the Department or on such terms and conditions as shall be satisfactory to the Department;
three (3) complete sets of the Plans and Specifications relating to any construction contract pertaining to the Project, which Plans and Specifications shall be in final form and shall have been approved in scope and substance by the City and the Department;
a "Notice to Proceed" statement from the City or the Engineer stating that the Engineer has reviewed and approved the disbursement schedule and that the applicable portion of the Project can be completed in accordance with such Plans and Specifications for the amounts reflected in the disbursement schedule;
a certificate from the Engineer stating that the proposed use of the Project as contemplated by the Plans and Specifications is consistent with all applicable zoning ordinances and such use of the Project for the purposes contemplated thereby is permitted under all applicable zoning ordinances;
a copy of any building permits, if required, issued by the applicable agency or agencies with respect to the proposed construction of the Project;
a copy of any policy or policies of builder's all-risk insurance issued by an insurance company or companies acceptable to the Department, insuring the Project for its full replacement costs (or on a progressively full insured basis) with extended coverage, and said policy shall insure against such loss or damages as the Department may require, or the City shall provide proof of self-insurance;
a copy of a policy of comprehensive general liability insurance, which policy shall be satisfactory to the Department in form, substance, limits and coverage, or the City shall provide proof of self-insurance;
a copy of a policy of worker's compensation insurance issued in accordance with applicable law, or the City shall provide proof of self-insurance;
a copy of a payment and a performance bond from a surety company acceptable to the Department; and
a final site certificate.
Conditions to all Disbursements
. In addition to the requirements of Section 7.06 with respect to the initial disbursement for each construction contract that is entered into with respect to the Project, the obligation of the Department to fund the initial and all subsequent disbursements of the purchase price of the Bonds is subject to the satisfaction of the following further conditions:
that as of the date of such disbursement, there has occurred no Default and no condition which, with the giving of notice or lapse of time or both, would become an Event of Default under the Bonds, any Parity Obligations or this Loan Agreement;
that each of the representations, covenants and agreements of the City contained herein shall be true and correct on and as of the date of the respective disbursements;
that the City shall be in full compliance with all obligations and covenants contained herein, the applicable Regulations and all other applicable State, Department and federal regulations; and
that as of the date of the request for disbursement there have been no changes made to the Plans and Specifications nor any change orders executed which have not been approved by the Department.
Conditions to Disbursement of Retainage
. The disbursement by the Department of the retainage withheld pursuant to Section 7.02 shall be subject to the satisfaction of the following conditions:
receipt by the Department of a certificate signed by the City and the Engineer stating that to their best knowledge the Project or applicable portion of the Project has been completed in accordance with the Plans and Specifications therefor;
receipt by the Department of a copy of a lien and privilege certificate showing that no liens have been recorded encumbering the Project;
if requested by the Department, receipt by the Department of a certificate of cancellation evidencing that the construction contract or contracts have been canceled and erased from the mortgage records, if applicable;
receipt by the Department of a duly completed request for disbursement executed by the City covering the retainage;
a certificate of the City certifying that all Costs of the Project, and all change orders and amendments to all construction contracts, have been previously submitted by the City to the Department, which certificate contains an acknowledgment by the City that no further disbursements will be due to the City from the Department;
completion of a final inspection of the Project by the Department;
receipt by the Department of a duly completed certificate of labor standards by the City, if applicable; and
if not previously furnished by City, (i) a certified copy of a duly enacted sewer use ordinance, (ii) a sewer user charge ordinance and (iii) if applicable, an industrial waste ordinance, all as defined by the Regulations, each complying with applicable provisions of the Regulations and all other applicable State and federal regulations, which have been approved as to form and substance by the Department.
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. The City will maintain the System in good repair and operating condition and will cooperate with the Department in the observance and performance of the respective duties, covenants, obligations and agreements of the City and the Department under this Loan Agreement.
The City will insure that the Project operates and meets minimum technical and administrative requirements in accordance with the State Sanitary Code, and the City will meet all requirements imposed by the EPA and the Department as a condition of receiving the Loan from the State Revolving Fund under the Federal Act, the State Act and any applicable Regulations.
The City will, in accordance with prudent sewerage utility practice,
at all times operate the properties of its System and any business in connection therewith in an efficient manner;
maintain the System in good repair working order and operating condition; and
from time to time make all necessary and proper repairs, renewals, replacements, additions, betterments and improvements with respect to the System so that at all times the business carried on in connection therewith shall be properly and advantageously conducted, provided, however, that this covenant shall not be construed as requiring the City to expend any funds which are derived from sources other than the operation of its System or other receipts of such System which are not pledged hereunder, and provided further that nothing herein shall be construed as preventing the City from doing so.
. Acting in the exercise of its police powers, the City shall take all action necessary to require every owner, tenant or occupant of each lot or parcel of land within the geographical boundaries of the City which abuts upon a street or other public way containing a sewer line and upon which lots or parcels of a building shall have been constructed for residential, commercial or industrial use, to connect said building with the System and to cease to use any other method for the disposal of sewage, sewage waste or other polluting matter which can be handled by the System. All such connections shall be made in accordance with the rules and regulations to be adopted from time to time by the City, which rules and regulations may provide for an inspection charge to assure the proper making of such connection
In addition to all other rights and remedies available to be used for the enforcement of public sewerage charges and for the compelling of the making of utility connections as aforesaid, the City covenants that it shall exercise and enforce promptly and efficiently all rights given it under the laws of the State for the enforcement and collection of such charges..
The City will not furnish or supply or cause to be furnished or supplied any use, capacity or service of the System free of charge to any person, firm, corporation (public or private), public agency or instrumentality.
. The City will enact, maintain and enforce an ordinance or resolution imposing User Fees and will enact, maintain and enforce a utilities use ordinance or resolution or similar proceeding that satisfies the requirements of all applicable regulations. So long as the Bonds are outstanding, the City through its Governing Authority obligates itself to fix, establish, maintain, levy and collect such rates, fees, rents or other charges for services and facilities of the System and all parts thereof and to revise the same from time to time whenever necessary to always provide User Fees in each Fiscal Year sufficient to meet all requirements of the Authorizing Ordinance and at least to:
pay the reasonable and necessary expenses of operating and maintaining the System in such Fiscal Year and to satisfy the requirements of Louisiana Administrative Code 33:IX.2111(L), or any successor provision, that the User Fees generate sufficient revenues to cover the costs of operation, maintenance and replacement;
pay debt service and Administrative Fee on the Bonds and any Parity Obligations and make all required deposits to the Funds and Accounts to the extent that such payments are not provided for from other sources of pledged revenues; and
meet any coverage ratio requirement set forth in the Authorizing Ordinance.
. At least annually, but in no event later than six (6) months after the close of the previous Fiscal Year, the City shall review the adequacy of its User Fees to satisfy the requirements of Section 8.03 for the next succeeding Fiscal Year. If required by the Department, the City shall prepare a report of such review stating the City's opinion regarding the adequacy or inadequacy of the existing User Fees to satisfy the requirements of Section 8.03 and what action the City will take to satisfy such requirements, if any, and shall furnish a copy of such report to the Department upon its completion.
If such review indicates that the User Fees are, or are likely to be, insufficient to meet the requirements of Section 8.03 for the next succeeding Fiscal Year, or if it otherwise appears at any time during such Fiscal Year that User Fees are or are likely to be insufficient to meet such requirements, the City shall promptly take such steps as are necessary to cure or avoid the deficiency.
Financial Records; Annual Audit
. The City will establish and maintain adequate financial records as required by the laws of the State governing financial record-keeping by political subdivisions and in accordance with generally accepted accounting principles ("GAAP") and will make these and the following records and reports available to the Department and EPA or their authorized representatives upon request.
The City will cause an audit of its financial statements to be made by an independent firm of certified public accountants in accordance with the requirements of Chapter 8 of Title 24 of the Louisiana Revised Statutes of 1950, as amended, and in accordance with the requirements of Circular A-133 of the U.S. Office of Management and Budget, and Section ) Publication 66.458 of the Catalog of Federal Domestic Assistance (CFDA Publication #66.458 - Capitalization Grants for State Revolving Funds) if applicable. The City and its auditor have furnished a certification, attached hereto as Exhibit E, acknowledging the requirements of Circular A-133.
Upon completion, but in no event later than six (6) months after the close of the applicable Fiscal Year, the City shall file a copy of such audited financial statements with the Department.
A reasonable portion of the expenses incurred in the preparation of the audit report required by this Section may be regarded and paid as a maintenance and operation expense of the System. The City further agrees that the Department shall have the right to ask for and discuss with the accountant making the review and the contents of the review and such additional information as it may reasonably require. The City further agrees to furnish to the Department, upon request therefor, a monthly statement itemized to show the income and expenses of the operation of the System and the number of users for the preceding month.
. The City will submit over the life of the Loan sufficient information as is reasonably requested by the Department to demonstrate that the City has legal, institutional, managerial and financial capability to ensure the construction, operation and maintenance of the Project and the System and the repayment of the Loan, interest and administrative fees.
To this end, the City may retain an Engineer, but shall be required to do so only in accordance with provisions of this section and Section 10.04, for the purpose of providing the City with continuous engineering counsel in the operation of the System. The Engineer shall be retained under contract at such reasonable compensation as may be fixed by the City, and the payment of such compensation shall be considered to be one of the costs of maintaining and operating the System. Any Engineer appointed under the provisions of Section 10.04 may be replaced at any time by another Engineer appointed or retained by the City upon written notice to the Department.
Upon the occurrence of an Event of Default, or if requested in writing by the Department, the City shall prepare, or shall have the Engineer prepare within one hundred eighty (180) days after the close of each Fiscal Year a comprehensive operating report which shall contain therein or be accompanied by a copy of the audit required by Section 8.05, and in addition thereto shall report upon the operation of the System during the preceding Fiscal Year, the maintenance of the properties, the efficiency of the management of the property, the proper and adequate keeping of the books of account and record, the adherence to budget and budgetary control provisions, all matters bearing upon the sufficient and profitable operation of the System, and shall include whatever criticism of any phase of the operation of the System the City or the Engineer, as the case may be, may deem proper and such recommendation as to changes in the operation and the making of repairs, renewals, replacements, extensions, betterments and improvements as the City or Engineer may deem proper. Copies of such report shall be furnished to the Department upon written request. It shall be the duty of the Engineer, if retained in accordance with this Section, to determine the economic soundness or feasibility of any extensions, betterments, improvements, expenditures or purchases of equipment and materials or supplies, which will involve the expenditure of more than Twenty-Five Thousand Dollars ($25,000), whether in one or more than one order, and whether from funds on deposit in the Contingencies Fund.
. Except as provided in Section 11.02, the City will maintain title to or the possession of the System and equipment acquired and properties improved by the Project, including any necessary servitudes and rights-of-way acquired in connection with the Project. Title to any immovable equipment and any real property purchased by the City in connection with the Project will remain free and clear of all liens and encumbrances. Furthermore, all movable property necessary for the operation of the System will remain free of all liens except liens necessary to secure the purchase of said movable equipment.
. So long as the Bonds are Outstanding the City will maintain or cause to be maintained in force insurance policies with responsible insurers or self insurance programs providing against risk of direct physical loss, damage or destruction of the System at least to the extent that similar insurance is usually carried by utilities constructing, operating and maintaining facilities similar in nature to the System, including liability coverage, all to the extent available at reasonable cost. In case of loss, any insurance money received by the City shall be used for the purpose of promptly repairing or replacing the property damaged or destroyed or shall be deposited in the Contingencies Fund to supplement any other amounts required to be paid into said Fund.
. So long as the Bonds are Outstanding the City, in operating the System, shall require all of its officers and employees who may be in a position of authority or in possession of money derived from the operation of the System to obtain or be covered by blanket or faithful performance bond, or independent fidelity bonds, written by a responsible indemnity company in amounts adequate to protect the City from loss.
. So long as the Bonds are Outstanding the City obligates itself not to grant a franchise to any utility for operation within the boundaries of the City which would render services or facilities in competition with the System, and also obligates itself to oppose the granting of any such franchise by any other public body having jurisdiction over such matters. Further, the City shall maintain its corporate identity and existence so long as any of the Bonds remain outstanding.
. The City will comply with all federal and State laws pertaining to equal employment opportunities insuring that all engineers and contractors for this Project not discriminate against any person on the basis of race, color, sex, religion, age, national origin or handicap.
. The Department and the EPA or their authorized representative shall have access to the Project and to the City's administrative offices, books, records, reports, design documents, contract documents and similar documents at any reasonable time. The City hereby covenants and agrees that the City shall cause its engineers and contractors to cooperate during Project inspections, including making readily available books, records, current working copies of plans and specifications and supplementary materials and further consents and agrees that the City will allow inspections and examinations by the Department, and EPA during construction and periodically over the term of the Loan.
Issuance of Additional Parity Obligations
. Additional Parity Obligations may be issued in accordance with the provisions of and subject to the terms and conditions imposed by the Authorizing Ordinance, to complete the acquisition and construction of the Project, to make additional improvements to the System or to refund or refinance any portion of the Loan or other Parity Obligations.
Junior and Subordinate Lien Obligations
. Junior and subordinate lien Obligations may be issued by the City at any time without restriction or notice thereof to the Department.
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. Each of the following events is defined as and declared to be and to constitute an "Event of Default" hereunder:
Failure by the City to pay, or cause to be paid, the principal of or interest on the Bonds or any other amount payable on the Loan other than the payment of the Administrative Fee when due;
Failure by the City to pay, or cause to be paid, the Administrative Fee or any portion thereof when due;
Failure by the City to observe and perform any duty, covenant, obligation or agreement on its part to be observed or performed under this Loan Agreement, other than as referred to in subsections (a) or (b) above, which failure shall continue for a period of thirty (30) days after written notice specifying such failure and requesting that it be remedied is given to the City by the Department, unless the Department shall agree in writing to an extension of such time prior to its expiration; provided, however, that if the failure stated in such notice is correctable but cannot be corrected within the applicable period, the Department may not unreasonably withhold its consent to an extension of such time up to sixty (60) days from the delivery of the written notice referred to above if corrective action is instituted by the City within the applicable period and diligently pursued until the Event of Default is corrected;
If any representation made by or on behalf of the City contained in this Loan Agreement, or in any instrument furnished in compliance with or with reference to this Loan Agreement or the Loan or in connection with the Bonds, is determined to be false or misleading in any material respect; or
A petition is filed by or against the City under any federal or state bankruptcy or insolvency law or other similar law in effect on the date of this Loan Agreement or hereafter enacted, unless in the case of any such petition filed against the City such petition shall be dismissed within thirty (30) days after such filing and such dismissal shall be final and not subject to appeal, or the City shall become insolvent or bankrupt or make an assignment for the benefit of its creditors; or a custodian (including, without limitation, a receiver, liquidator or trustee of the City or any of its property) shall be appointed by court order to take possession of the City or its property or assets if such order remains in effect or such possession continues for more than thirty (30) days.
. The City shall give the Department prompt notice, by telephone, fax or electronic mail, of the occurrence of any Event of Default and of the occurrence of any other event or condition that constitutes an Event of Default. Any telephone notice pursuant to this Section shall be confirmed in writing by the end of the next business day.
. Until an event of default shall have occurred, the City shall retain full possession and control of the System with the full right to manage, operate and use the same and every part thereof with rights appertaining thereto, and to collect and receive, and subject to the provisions of this Loan Agreement, to take, use, enjoy and distribute the earnings, income and profits accruing or derived from the System.
However, when an Event of Default shall have occurred and be continuing the Department shall have the right to take any action permitted or required pursuant to this Loan Agreement or the Authorizing Ordinance and to take whatever other action at law or in equity may appear necessary or desirable to collect the amounts then due and thereafter to become due hereunder or to enforce the performance and observance of any duty, covenant, obligation or agreement of the City hereunder, including, without limitation, obtaining the appointment of a receiver of the System in an appropriate judicial proceeding in a court of competent jurisdiction.
Appointment of Engineer; Required Reports
. In the event that the City should fail to derive sufficient User Fees from the operation of the System to make the monthly payments into the Funds and Accounts, as required in the Authorizing Ordinance, or in the event of an Event of Default hereunder, then it will retain an Engineer in the manner provided in the Authorizing Ordinance.
. In the event that the Department obtains the appointment of a receiver after the occurrence of an Event of Default, such receiver shall, in the performance of the powers conferred upon him, be under the direction and supervision of the court making such appointment, shall at all times be subject to the orders and decrees of such court and may be removed thereby and a successor receiver appointed in the discretion of the court.
Nothing herein contained shall limit or restrict the jurisdiction of such court to enter such other and further orders and decrees as such court may deem necessary or appropriate for the exercise by the receiver of any function not specifically set forth herein.
Any receiver appointed as provided shall hold and operate the System in the name of the City and for the joint protection and benefit of the City, any owners of Parity Obligations and the Department. Such receiver shall have no power to sell, assign, mortgage or otherwise dispose of any assets of any kind or character belonging or pertaining to the System and the authority of such receiver shall be limited to the possession. operation and maintenance of the System for the sole purpose of the protection of both the City, any owners of Parity Obligations and the Department and the curing and making good of any Default. In such case, title to and the ownership of the System shall remain in the City, and no court shall have any jurisdiction to enter any order or decree permitting or requiring such receiver to sell, mortgage, or otherwise dispose of any assets of the System except with the consent of the City and in such manner as the court shall direct.
Attorney's Fees and Other Expenses
. The City shall, on demand, pay to the Department the reasonable fees and expenses of attorneys and other reasonable expenses (including without limitation the reasonably allocated costs of in-house counsel and legal staff) incurred by the Department in the collection of delinquent Loan repayments or any other sum due hereunder or in the enforcement of performance or observation of any other duties, covenants, obligations or agreements of the City hereunder, under the Authorizing Ordinance or under any other agreements relating to the Bonds.
. Any moneys collected by the Department pursuant to Section 10.03, after payment of the costs of operation and maintenance of the System, shall be applied
first to pay interest due and payable on the Loan;
second, to pay principal due and payable on the Loan;
third, to pay any fees and expenses owed by the City pursuant to Section 10.06;
fourth, to pay any other amounts due and payable under this Loan Agreement; and
fifth, to pay any other amounts payable hereunder, including Administrative Fees, as such amounts become due and payable.
No Remedy Exclusive; Waiver; Notice
. No remedy herein conferred upon or reserved to the Department is intended to be exclusive and every such remedy shall be cumulative and shall be in addition to every other given under this Loan Agreement or now or hereafter existing at law or in equity. No delay or omission to exercise any right, remedy or power accruing upon any Event of Default shall impair any such right, remedy or power or shall be construed to be a waiver thereof, but any such right, remedy or power may be exercised from time to time and as often as may be deemed expedient. To entitle the Department to exercise any remedy reserved to it in this Article, it shall not be necessary to give any notice, other than such notice as may be required in this Article.
Retention of Department's Right
. Notwithstanding any assignment or transfer of this Loan Agreement pursuant to the Section 11.01 or otherwise, and anything else to the contrary contained herein, the Department shall have the right upon the occurrence of an Event of Default to take any action, including (without limitation) bringing an action against the City at law or in equity, as the Department may, in its discretion, deem necessary to enforce the obligations of the City to the Department.
. In the event of any default by the Department under any duty, covenant, agreement or obligation of this Loan Agreement, the City's remedy for such default shall be limited to injunction, special action, action for specific performance or any other available legal or equitable remedy designed to enforce the performance or observance of any duty, covenant, obligation or agreement of the Department hereunder as may be necessary or appropriate.
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Assignment, Transfer or Sale by the Department
. The City hereby approves and consents to any assignment, transfer or sale of this Loan Agreement and/or the Bonds by the Department including but not limited to any such assignment or transfer in connection with the issuance by or on behalf of the Department of bonds, notes or other debt obligations. The City hereby further approves and consents to any assignment or pledge by the Department of payments due from the City pursuant to this Loan Agreement and the Bonds as security or partial security for the payment of principal and interest on such bonds, notes or other debt obligations issued by or on behalf of the Department. The City agrees to cooperate with the Department in accomplishing any such assignment, including execution of any additional certificates or documents as may be reasonably required by the Department.
Assignment, Transfer or Sale by City
. Neither this Loan Agreement nor the Project may be assigned, transferred or sold by the City for any reason, unless the following conditions shall be satisfied:
the Department shall have approved said assignment, transfer or sale in writing;
the assignee or transferee shall be a governmental unit within the meaning of Section 141(c) of the Code, unless the Department shall have received the opinion described in (d) below notwithstanding the fact that the assignee or transferee is not a governmental unit, and the assignee shall have expressly assumed in writing the full and faithful observance and performance of the City's duties, covenants, agreements and obligations under this Loan Agreement;
immediately after such assignment, transfer or sale, the assignee or transferee shall not be in default in the performance or observance of any duties, covenants, obligations or agreements of the City hereunder or under the Authorizing Ordinance;
the Department shall have received an opinion of its bond counsel to the effect that such assignment, transfer or sale will not or would not adversely affect the exclusion of interest on the Bonds from gross income for federal income tax purposes under the Code;
if applicable, the Department shall have received an opinion of its bond counsel to the effect that such assignment, transfer or sale will not adversely affect the exclusion of interest on any bonds, notes, or other debt obligations issued by or on behalf of the Department from gross income for federal income tax purposes under the Code or affect the ability of the Department to repay or cause to be repaid any such bonds, notes or other debt obligations; and
the Department shall receive an opinion of its counsel to the effect that such assignment, transfer or sale will not violate the provisions of any agreement entered into by the Department with, or condition of any grant received by the Department from, the United States of America relating to any capitalization grant received by the Department or the State under the Federal Act or the Regulations.
No assignment, transfer or sale shall relieve the City from primary liability for any of its obligations under this Loan Agreement and in the event of such assignment, the City shall continue to remain primarily liable for the performance and observance of its obligations to be performed and observed under this Loan Agreement.
Notwithstanding the foregoing, the City may dispose of property which in its reasonable judgment is worn out unserviceable, unsuitable, or unnecessary in the operation of the System, when other property of equal value is substituted therefor, or the proceeds derived from the disposal of such property are deposited in a Contingencies Fund or used to prepay or redeem the Bonds.
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Payment of Department Expenses
. The City agrees to pay at the Delivery Date all fees and expenses incurred by the Department in connection with the Loan which shall include the payment of all attorneys' fees and expenses of Adams and Reese, LLP, bond counsel to the Department, approved by the Department in connection with the Loan.
. Whenever the written consent or approval of the Department shall be required under the provisions of this Loan Agreement, such consent or approval may only be given by the Secretary of the Department, or the officer signing this Loan Agreement on behalf of the Department (or his or her successor) unless otherwise provided by law or by rules or regulations of the Department or executive order of the Secretary of the Department.
. All notices, certificates or other communications hereunder shall be sufficiently given and shall be deemed given when hand delivered or sent by registered or certified mail, postage prepaid, or by overnight courier service to the City and to the Department at the addresses shown in the appearances to this Loan Agreement. Either of the foregoing parties may designate any further or different addresses to which subsequent notices, certificates or other communications shall be sent by notice in writing given to the other party, and may accept notices by facsimile or electronic mail.
. This Loan Agreement shall inure to the benefit of and shall be binding upon the Department and the City and their respective successors and assigns.
. In the event any provision of this Loan Agreement shall be held illegal, invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate, render unenforceable or otherwise affect any other provision hereof.
Amendments, Supplements and Modifications
. This Loan agreement may be amended, supplemented or modified in writing with the consent of both the Department and the City.
. This Loan Agreement may be executed in several counterparts, each of which shall be an original and all of which constitute but one and the same instrument.
. This Loan Agreement shall be governed by and construed in accordance with the laws of the State of Louisiana.
. The captions or headings in this Loan Agreement are for convenience only and shall not in any way define, limit or describe the scope or intent of any provisions or sections of this Loan Agreement.
. The City agrees, at the request of the Department to authorize, execute, acknowledge and deliver such further resolutions, ordinances, conveyances, transfers, assurances, financing statements and other instruments as may be necessary or desirable for better assuring, conveying, granting, assigning and confirming the rights and agreements granted or intended to be granted by the City under this Loan Agreement.
City to Cooperate in Rating and Issuance of Department's Bonds
. The City acknowledges that the Department may assign the Bonds and this Loan Agreement as security for the payment of bonds issued by or on the Department's behalf, and that in order to facilitate the rating of any such bonds City shall furnish to the Department, any issuer of any such bonds, or any nationally recognized rating agency, such documents and financial reports as may be reasonably required to obtain a rating for such bonds. Further, City agrees to perform such acts and execute such further documents and certificates as may be reasonably required by the Department in connection with the issuance of any such bonds.
City's Continuing Disclosure Obligations
. The City hereby acknowledges and agrees that even though the Bonds are initially exempt from the continuing disclosure requirements of Rule 15c2-12(b)(5) of the Securities and Exchange Commission (the "Rule") pursuant to section (d)(1) and/or other exemptions to the Rule, in the event the Department should transfer the Bonds or the Bonds become a source of repayment of "municipal securities" sold through a "primary offering" (as both terms are defined and used in the Rule), it is possible that the City could constitute an "obligated person" as defined and used in the Rule. In that case, the City agrees to comply with the continuing disclosure requirements of the Rule.
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IN WITNESS WHEREOF, the Department and the City have caused this Loan Agreement to be executed, sealed and delivered on this ____ day of _________, 20__, but dated for convenience of the parties as of the date first above-written.
LOUISIANA DEPARTMENT OF
ENVIRONMENTAL QUALITY
By:
Undersecretary
CITY OF SHREVEPORT, STATE OF LOUISIANA
ATTEST: By:
Mayor
By:
Clerk (SEAL)
EXHIBIT A
to Loan and Pledge Agreement
DESCRIPTION OF PROJECT
EXHBIT B
to Loan and Pledge Agreement
ESTIMATED PRINCIPAL REPAYMENT SCHEDULE
EXHIBIT C
to Loan and Pledge Agreement
ESTIMATED COSTS OF THE PROJECT
EXHIBIT D
to Loan and Pledge Agreement
FORM OF REQUISITION
EXHIBIT E
to Loan and Pledge Agreement
ACKNOWLEDGEMENT OF
OMB CIRCULAR A-133 REQUIREMENTS
(for governmental and non-profit borrowers)
The undersigned Director of Finance of the City of Shreveport, State of Louisiana (the "City"), together with the undersigned certified public accountant, hereby represent and acknowledge as follows:
1. This certification is being executed in connection with the issuance and delivery by the City of its $12,000,000 Taxable Water and Sewer Revenue Bonds, Series 2009, which bonds are being purchased by the Municipal Facilities Revolving Loan Fund administered by the Louisiana Department of Environmental Quality (the "Fund"), and represent the City's obligation to repay a loan from the Fund (the "Loan").
2. The undersigned certified public accountant is currently performing, has performed or is engaged to perform an annual audit of the City's financial statements.
3. By virtue of undertaking the aforesaid Loan from the Department, the City and the undersigned certified public accountant acknowledge that for any fiscal year during which the City has received installments of Loan proceeds from the Department, the City's audited financial statements must comply with the requirements of the Single Audit Act Amendments of 1996, and OMB Circular No. A-133, all as more further described in the Catalog of Federal Domestic Assistance (CFDC) Publication #66.468.
4. With respect to fiscal years after City has received any Loan proceeds and completed construction of the project, and when City's only ongoing financial activity with respect to the Fund is the payment of principal and interest on outstanding balances, the prior balances are not considered to have continuing compliance requirements under Circular A-133. Such loans that do not have continuing compliance requirements other than to repay the loans are not considered Federal awards expended and therefor are not required to be audited under Circular A-133. However, the undersigned acknowledge that in such fiscal years its audited financial statements may be required to comply with Circular A-133 by virtue of receiving federal funds from sources other than the Fund, and the City undertakes to make an annual determination of whether or not such compliance will be required.
5. The City agrees that it will undertake to notify any successor auditor of the requirements described in 3 and 4 above.
CITY OF SHREVEPORT, STATE OF LOUISIANA
By:
Director of Finance
NAME OF AUDITOR:
Dated: _________________, 20___ By:
Printed Name:
EXHIBIT “C”
To Bond Ordinance
DESCRIPTION OF PROJECT
The projects include rehabilitation of existing lift stations and collection system pipelines and manholes. Repair, replacement and rehabilitation of these facilities will significantly reduce problems with sanitary sewer overflows in the areas the facilities serve. The lift station projects include new, more efficient, state of the art electrical, control and pumping equipment and power monitoring facilities. Rehabilitation and replacement of aging pipelines and manholes will reduce the overall flows coming to the stations and ultimately the treatment plant which will reduce overall pumping and treatment costs.
