Chapter 20

Part E: Pennvest Load - (OR5-1997)

100.00 xxx:
100.10 The Borough Council of the Borough of Saegertown hereby ratifies, reconfirms and accepts the negotiated proposal from the Pennsylvania Infrastructure Investment Authority ("Pennvest") for the purchase of the Borough's 20 year term, $725,000 - Guaranteed Water Revenue Note, Series of 1997, No. I (ME#50052);
100.20 With the purchase price, interest rates and the maturity to be as stipulated in the Commitment Letter, dated November 25, 1996, from Pennvest, previously accepted by the Borough on December 29, 1996, and incorporated herein by reference.
100.30 The Borough Council has previously considered and determined that under the present market conditions it is in the best financial interests of the Borough that said aforementioned 1997 Pennvest Note of the Borough be sold by the Borough to Pennvest at a private sale by negotiation.
100.40 In accordance with the aforesaid bid and subject to the approval of the authorizing proceedings by the Pennsylvania Department of Community and Economic Development ("Pa DCED"), the Borough Secretary is hereby directed to deliver said 1997 Pennvest Note when fully executed to Pennvest, upon receipt of the purchase price therefor in requested disbursements as specified in said bid.
   
200.00 Indebtedness:
200.10 The non-electoral indebtedness (excluded as self-liquidating) of the Borough be, and the same hereby is, increased by the total amount of $725,000 through the issuance of said 20 year term, $725,000 - Guaranteed Water Revenue Note, Series of 1997, No. I (ME#50052), for the purpose of:
200.11 Providing financing in part of the cost of construction of the 1997 Water System Project consisting of certain improvements to the Borough's Water System (the Borough's" 1997 Water System Project" and "Project");
200.12 Paying the costs and expenses of preparing and issuing said 1997 Pennvest Note.
200.13 The period for constructing and developing the 1997 Water System Project of the Borough is estimated to be thirteen (13) months;
200.14 The useful life of the Borough's Water System as improved by the 1997 Water System Project which is to be financed hereunder shall be in excess of twenty - five (25) years.
   
300.00 Terms:
300.10 The total no-electoral debt of Seven Hundred Twenty-Five Thousand Dollars ($725,000.00), which will be no- electoral debt (but be excluded as self-liquidating) of the Borough;
300.11 Shall be evidenced by a 20 year term, $725,000 - Borough of Saegertown, Guaranteed Water Revenue Note, Series of 1997, No. I (ME#50052), issued to the Pennsylvania Infrastructure Investment Authority ("Pennvest");
300.12 Will be dated and will bear interest from its date of issuance, presently estimated to be on or about July 17, 1997;
300.13 At the rates of interest per annum;
300.14 Payable monthly on the first day of each calendar month;
300.15 Calculated on the basis of a 360 day year, as set forth in the aforementioned Commitment Letter, dated November 25, 1996, with Pennvest;
300.16 Namely to be paid in installments of interest only at 1.660% per annum for the first 13 months;
300.17 Then in installments of principal and interest of $3,723.68 at 1.660% per annum for the 47 month balance of the first 5 years;
300.18 Thereafter in installments of principal and interest of $4,187.10 at 3.321 % for the 180 month balance of the 20 year term;
300.19 Which is the term of the 1997 Pennvest Note;
300.20 With all remaining unpaid principal and interest thereon at 3.321 % per annum also to be paid on the first day of the last calendar month of said 20 year term;
300.21 The principal and interest on said 1997 Pennvest Note shall be payable at the Saegertown Office, or at such other office as shall be designated by the Borough Secretary, of the 1997 Pennvest Guaranteed Water Revenue Note Sinking Fund No. I Depositary (hereinafter appointed and identified).
   
400.00 DCED Filing:
400.10 The indebtedness to be incurred hereunder which is hereby declared to be excluded self-liquidating non-electoral indebtedness of the Borough;
400.11 Will be done so by the issuance of said $725,000 - Guaranteed Water Revenue Note, Series of 1997, No. I (ME#50052), upon the proper filing with and approval of the Pennsylvania Department of Community and Economic Development.
   
500.00 Note:
500.10 The form of said Guaranteed Water Revenue Note, Series of 1997, No. I (ME#50052), issued hereunder to Pennvest shall be substantially as follows:
500.20 EXHIBIT "A":
500.30 Installments of interest only on this 1997 Pennvest Note No. I (ME#50052) at 1.660 % per annum on the unpaid principal slim following each loan advance to or for the benefit of the Borough pursuant to the 1997 Pennvest Loan Agreement shall be payable in 13 monthly installments commencing on August 1, 1997, and ending on August 1, 1998, the calendar month preceding the Amortization Date (" Amortization Date If”).
500.40 On the Amortization Date, the unpaid principal sum then outstanding and all accrued and unpaid interest shall become due and payable as follows:
500.41 Principal and interest shall be payable in 47 consecutive monthly installments of $3,723.68 at 1.660% per annum on the first day of each calendar month beginning with September 1, 1998;
500.42 Continuing the first day of each calendar month thereafter for the remainder of the first five (5) years of the twenty (20) year term, to and including July I, 2002.
500.50 Thereafter, said principal and interest shall be payable in 180 consecutive monthly installments of $4,187.10 at 3.321 % per annum on the first day of each calendar month beginning with August 1, 2002;
500.51 Continuing the first day of each calendar month thereafter for the remainder of the twenty (20) year term, to and including July 1, 2017.
500.60 On the first day of the last calendar month of said twenty (20) year term of said 1997 Pennvest Note No. I, namely July 1, 2017, all of the remaining unpaid principal sum then outstanding on said 1997 Pennvest Note No. I and all remaining accrued and unpaid interest thereon at 3.321 % per annum shall be due and payable.
   
600.00 Execution of Note:
600.10 It is hereby authorized and directed that said 1997 Pennvest Note No. I shall be executed on behalf of the Borough by the President of its Borough Council;
600.11 There shall be affixed thereto the Borough Seal which shall be attested by the Borough Secretary, and said 1997 Pennvest Note No. I shall thereafter be valid and obligatory for all purposes and shall be entitled to all benefits conferred thereon under the provisions of this 1997 Pennvest Note Ordinance.
600.20 The Borough Secretary is hereby authorized and directed to deliver said 1997 Pennvest Note No. I to Penn vest at the appropriate time.
   
700.00 Method of Payment:
700.10 The principal of and interest on the 1997 Pennvest Note No. I issued hereunder shall be payable out of the revenues and receipts of the Borough derived from the water rates and the connection charges levied and collected by the Borough for services rendered by the Water System after;
700.11 First paying therefrom the costs of operating, maintaining and repairing said Water System and the required debt service on any superior Water System debt obligations;
700.12 To the extent provided by this 1997 Pennvest Note Ordinance, said net revenues and receipts are hereby pledged to such payments;
700.13 And said 1997 Pennvest Note No. I herein authorized shall constitute a lien against said net revenues and receipts so pledged under this 1997 Pennvest Note Ordinance.
700.14 The payment of the principal and interest on said 1997 Pennvest Note No. I is further guaranteed by the Borough in the event and to the extent of any deficiency at any time in said pledged net revenues and receipts;
700.15 Accordingly, the Borough hereby declares that to said extent of any such deficiencies said 1997 Pennvest Note No. I shall be a general obligation of the Borough for the prompt and full payment of all or any part of which the full faith, credit and taxing power and resources of the Borough are hereby irrevocably pledged.
700.20 In consequence of the aforesaid guarantee, there is hereby levied and assessed upon all persons and property subject to taxation for Borough purposes an annual tax in each of the fiscal years that said 1997 Penn vest Note No. I remains outstanding of so many mills as will yield amounts, together with all other available general revenues of the Borough, which shall be sufficient for and shall be applied exclusively to said debt service charges on said 1997 Pennvest Note No. I to the extent of any aforementioned deficiencies as the same shall from time to time become due and payable.
700.21 The collection of said tax, if any is necessary, shall commence with the fiscal year 1998.
   
800.00 Deposits:
800.10 The Borough covenants with Pennvest as the Registered Holder of the 1997 Pennvest Note No. I, in compliance with Section 404 of the Local Government Unit Debt Act, that it will deposit in the required sinking fund at the appropriate times the necessary debt service needed in order to pay the principal and interest on the 1997 Penn vest Note No. I for each of the years that the 1997 Pennvest Note No. I shall be outstanding,
800.11 That it shall budget and duly and punctually pay said principal and interest on the 1997 Pennvest Note No. I at the times and places and in the manner stated in the 1997 Pennvest Note No. I according to the true intent and meaning thereof;
800.12 For such budgeting, appropriation and payment, the Borough specially pledges its net revenues and receipts from its Water System,
800.13 And to the extent of any deficiencies therein, the Borough pledges its full faith, credit, revenues and taxing power.
800.14 This covenant shall be specifically enforceable and the Borough understands and intends that its pledge as above stated of its net revenues and receipts from its Water System and of its full taxing power to the extent of any such deficiencies as above stated is unlimited as to rate or amount.
   
900.00 Water Connection & Fees:
900.10 By separate Borough Ordinances to be adopted, the Borough will require connection to the Water System and has or will establish tap connection and inspection fees and water service charges sufficient in amount to finance the Borough's repayment of the 1997 Pennvest Note No. I in compliance with the 1997 Pennvest Loan Documents.
900.20 The Borough, in compliance with the foregoing, covenants that prior to completion of the 1997 Water System Project it will adopt and will continue to charge, maintain and collect, so long as the 1997 Pennvest Note No. I remains outstanding and funds for its payment have not been provided, reasonable water rates and tap connection and inspection charges upon properties and persons served by the Water System, which said water rates and tap connection and inspection charges shall be at least sufficient, after making due and reasonable allowances for prompt payment discounts to customers, if any, and contingencies and a margin of error in the estimates, to insure at all times the funds:
900.30 To pay the current operating and administrative expenses of the Water System and any required debt service on any superior Water System debt obligations;
900.40 To pay the interest on the 1997 Penn vest Note No. I as and when the same shall become due and payable;
900.50 To pay the principal of the 1997 Pennvest Note No. I as and when the same shall become due and payable;
900.60 To provide all other payments and transfers otherwise required to be made under this 1997 Pennvest Note Ordinance in order to comply in all respects with the terms of this 1997 Pennvest Note Ordinance and all of the other 1997 Pennvest Loan Documents and to meet any other obligations of the Borough incurred in connection with the 1997 Pennvest Note No. I and the other 1997 Pennvest Loan Documents and the Water System not hereinabove specifically mentioned, as the same shall become due and payable.
   
1000.00 Reasonable worth:
1000.10 The Borough covenants with Pennvest as the Registered Holder of the 1997 Pennvest Note No. I that the water rates and tap connection and inspection charges will continue to be classified in a reasonable way to cover the services provided by the Water System so that the water rates and tap connection and inspection charges will be uniform in application to all services falling within any reasonable class, regardless of the status of connection of any person, firm or corporation served,
1000.11 That it will not hereafter contract with any public body or customer for the furnishing of water services at prices less than their reasonable worth;
1000.12 Unless ordered to do so by a final decree of a court of competent jurisdiction.
1000.20 The Borough covenants with Pennvest as the Registered Holder of the 1997 Pennvest Note No. I that if at any time the Water System revenues and receipts collected shall not be sufficient to make the payments and transfers referred to herein and meet its obligations incurred hereunder, it will revise its water rates and other charges from time to time so that such deficiencies that may occur will be made up before the end of the next ensuing fiscal year.
1000.30 The Borough shall not render or cause to be rendered any free water service, or additional services at reduced rates, by its Water System.
1000.40 The Borough shall diligently enforce and collect all water rates or other charges for the services of the Water System and take all steps, actions and proceedings for the enforcement and collection of such water rates or other charges which shall become delinquent to the full extent permitted or otherwise authorized by the laws of the Commonwealth of Pennsylvania.
1000.50 The Borough shall not grant, or cause or permit the granting of, any franchise, permit or license for the construction, operation or maintenance of any water services or facilities which are or will be competitive with its Water System;
1000.51 Provided, however, that these provisions shall not affect any rights under any existing franchises, permits, licenses or contracts.
   
1100.00 National City Bank:
1100.10 National City Bank of Pennsylvania is hereby appointed the 1997 Pennvest Guaranteed Water Revenue Note No. I Sinking Fund Depositary.
1100.11 There is hereby created hereunder a sinking fund for the payment of the 1997 Penn vest Note No. I (ME#50052) hereby authorized, said fund to be known as the "1997 Penn vest Guaranteed Water Revenue Note No. I Sinking Fund", and which Fund is to be an account in the Saegertown Office of said National City Bank as the 1997 Pennvest Guaranteed Water Revenue Note No. I Sinking Fund Depositary hereunder.
1100.12 The required net moneys realized from the water rates and tap connection charges, after payment of current operating and administrative costs of the Water System, and any tax moneys to the extent of any deficiencies, shall be transferred by the Borough from its Water Users Fee Account (hereinafter established) to the 1997 Pennvest Guaranteed Water Revenue Note No. I Sinking Fund and from its Tap Connection Fee Account (hereinafter established) to the 1997 Pennvest Guaranteed Water Revenue Note No. I Sinking Fund, held in the 1997 Pennvest Guaranteed Water Revenue Note No. I Sinking Fund Depositary Bank, in the appropriate amounts on or before the last business day which is at least five (5) calendar days immediately preceding each monthly interest and principal payment date for the 1997 Pennvest Note No. I,
1100.13 And shall be applied on each monthly payment date exclusively to the payment of the interest and principal on the 1997 Pennvest Note No. I, to which purpose it is hereby irrevocably pledged.
1100.14 The Borough hereby covenants to and authorizes the making of payments by the appropriate Borough officers out of said 1997 Pennvest Guaranteed Water Revenue Note No. I Sinking Fund at such times and in such monthly amounts as are sufficient for the payment of the interest and principal on the 1997 Pennvest Note No. I as they become due.
   
1200.00 Special Accounts:
1200.10 The Borough hereby covenants to establish and maintain, if necessary, two (2) special accounts of the Borough for its Water System revenues, to be known as the Borough's "Water Users Fee Account" and the Borough's "Tap Connection Fee Account" (or similarly entitled accounts), in its designated authorized depositary.
1200.11 All revenues and receipts from the aforementioned water rates and from the aforementioned tap connection charges and, except as herein otherwise expressly provided, all sums received by the Borough from any other source for paying any part of the cost of operating, administering, maintaining and repairing its Water System and any superior Water System debt obligations and the 1997 Pennvest Note No. I, shall be deposited promptly into its Water Users Fee Account and its Tap Connection Fee Account, respectively.
1200.20 Notwithstanding the pledge of the Water System net revenues and receipts from the aforementioned water rates and the aforementioned tap connection charges hereunder,
1200.21 The Borough shall pay promptly by check out of its Water Users Fee Account the current operating and administrative expenses of the Borough's Water System (to the extent moneys therein are available) as they become due and thereafter the required debt service on any superior applicable Borough Water System debt obligations and thereafter on the 1997 Penn vest Note No. I issued hereunder.
   
1300.00 Necessary Documentation:
1300.01 The Borough Council herewith directs that the necessary documentation be filed with the Pennsylvania Department of Community and Economic Development so that the $725,000.00 debt incurred hereunder may be approved as excluded self-liquidating nonelectoral debt of the Borough.
1300.10 On this basis, it is hereby declared that the net nonelectoral debt (not excluded) of the Borough to be incurred hereunder, as represented by the 1997 Pennvest Note No. I to be issued hereunder, shall initially be $0.00,
1300.11 and the self-liquidating nonelectoral debt (excluded) of the Borough to be incurred hereunder shall initially be $725,000.00, which, together with all presently existing net debt of the Borough, will not be in excess of the constitutional limitations as set forth in the Local Government Unit Debt Act.
1300.12 The President of the Borough Council and the Borough Secretary are hereby further directed to prepare, execute and verify under oath a "Debt Statement" of the Borough in order to obtain approval for the 1997 Pennvest Note No. I, and to submit the same, together with an executed "Application for Approval", "Debt Statement", "Borrowing Base Certificate" and "Self­ Liquidating Debt Exclusion Certificate" for the 1997 Pennvest Note No. I and the necessary filing fee, to the Pennsylvania Department of Community and Economic Development pursuant to the Local Government Unit Debt Act as promptly as practicable.
1300.13 Upon approval by the Pennsylvania Department of Community and Economic Development, the "Certificates of Approval" shall be promptly filed with the Records of the Borough.
1300.14 The Borough Council also hereby approves and adopts the Consulting Engineer's Report and Cost Estimate that is hereby made a part hereof by reference.
1300.15 Said aforementioned officers of the Borough are also hereby further authorized and directed to perform all other acts and do all other things necessary to obtain said approvals.
   
1400.00 Deposit of Funds:
1400.10 All moneys derived from time to time from the 1997 Pennvest Loan in conjunction with the issuance of the 1997 Pennvest Note No. I, shall be deposited by the Borough in the Borough's "1997 Water System Project Construction Account" hereby established with the Saegertown Office of National City Bank of Pennsylvania for the payment of the costs of constructing the Borough's 1997 Water System Project and shall be applied by the appropriate Borough officers at the appropriate times to the payment thereof as provided herein and in the other 1997 Penn vest Loan Documents relating to the 1997 Penn vest Note No.1.
   
1500.00 Authorization for Documents:
1500.10 The Borough Council hereby approves and authorizes and directs the execution and delivery to Pennvest of all documentation necessary to complete the 1997 Penn vest Loan, including specifically the 1997 Loan Agreement, the 1997 Pennvest Note No. I the 1997 Account Security Agreement,
1500.11 All of the other related 1997 Pennvest Loan Documents, and the Borough covenants and agrees to be bound by all the provisions thereof and understands and agrees that in the event of a conflict herewith the provisions of said other 1997 Pennvest Loan Documents shall prevail.
   
1600.00 Project Completion:
1600.10 The Borough Council hereby further authorizes and directs that the Borough shall commence and complete its 1997 Water System Project as promptly as practicable and that it shall be financed in part through Pennvest through the issuance of the aforementioned 1997 Pennvest Note No. I, with said debt being secure as provided hereunder.
   
1700.00 Authorization:
1700.10 The proper and appropriate officers of the Borough are also hereby authorized and directed to perform any and all other acts and execute and deliver all other documents necessary and proper to be done as required by the Local Government Unit Debt Act and Pennvest in connection herewith.
   
1800.00 Repealer:
1800.10 All ordinances or resolutions or parts of ordinances or resolutions not in accordance with this 1997 Penn vest Note Ordinance are hereby repealed insofar as they affect this 1997 Pennvest Note Ordinance.
   
1900.00 Enacted:
1900.10 This 1997 Pennvest Note Ordinance shall take effect five (5) days after the second and final advertisement of its adoption.
1900.20 ORDAINED AND ENACTED into law by the Borough Council of the Borough of Saegertown in lawful session assembled this June 9, 1997.