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HomeMy WebLinkAboutResolution 96-27 06/25/1996 . . . RESOLUTION NO. 96---.f.L RESOLUTION AUTHORIZING THE CITY MANAGER TO EXECUTE A LOAN AGREEMENT WITH THE DEPARTMENT OF ENVIRONMENTAL QUALITY PROVIDING A LOAN NOT TO EXCEED $3,600,000 TO COVER COSTS OF CONSTRUCTION OF THE SOUTH SPRINGFIELD INTERCEPTOR, TO EXECUTE SUCH OTHER AGREEMENTS AS MAY BE NECESSARY TO EFFECTUATE SUCH LOAN AGREEMENT, AND ESTABLISHING A LOAN RESERVE ACCOUNT. WHEREAS, the City of Springfield has determined to enter into a loan agreement with the State of Oregon Department of Environmental Quality (hereinafter referred to as "DEQ") to provide funds for construction of Phase IV of the South Springfield Interceptor; and WHEREAS, the amount of such loan has been determined not to exceed $3,600,000 (the "DEQ Loan"); and WHEREAS, DEQ has provided a draft. copy of a form of loan agreement setting forth the terms and conditions of the DEQ Loan (the "DEQ Loan Agreement"), a true copy has been placed on file with the City Finance Director in connection with the adoption of this resolution; and WHEREAS, the DEQ Loan Agreement requires the creation of a Loan Reserve Account and the deposit into such account of an amount equal to the Loan Reserve Requirement specified in such DEQ Loan Agreement; WHEREAS, the City has heretofore issued its sewer system revenue bonds pursuant to a Trust Indenture dated as of June 1, 1995 between the City and First Interstate Bank of Oregon, N.A. (the "Indenture"), and has agreed to undertake the DEQ Loan subject to the following conditions: first, that the DEQ Loan be and remain second and subordinate in all respects to all bonds heretofore or hereafter issued under the Indenture, with the intent that the DEQ Loan shall constitute "Subordinated Debt" within the meaning. of the Indenture; and second, that prior to execution and delivery by the City the DEQ Loan Agreement shall be revised to the extent necessary or appropriate in order that the covenants, terms and conditions set forth therein be consistent with, and not in violation of, the covenants, terms and conditions set forth in the Indenture; and WHEREAS, the Common Council wishes to authorize the City Manager or his designee to execute a loan agreement and take all other steps which shall be good and proper to implement and effectuate such DEQ Loan; NOW, THEREFORE, BE IT RESOLVED, BY THE COMMON COUNCIL OF THE CITY OF SPRINGFIELD AS FOLLOWS: ' 1 ATTACHMENT A-I . . . 1. The City is hereby authorized to undertake the DEQ Loan in a maximum principal amount not to exceed the sum of $3,600,000, subject to the terms and conditions set forth in this resolution. The DEQ Loan shall be structured to constitute Subordinate Debt within the meaning of the Indenture. 2. The DEQ Loan authorized hereby shall be payable solely and only from, and be secured by a lien on and pledge of: (a) the Net Revenues of the sewer system (as the term "net Revenues is defmed in the Indenture); and (b) the funds required to be maintained on deposit in the Loan Reserve Account to be established pursuant to the DEQ Loan Agreement; provided that the DEQ Loan shall be payable from the Net Revenues on a basis that is second and subordinate to the payment out of such Net Revenues of all Bonds heretofore or hereafter issued under the Indenture, and the lien on and pledge of such Net Revenues securing the DEQ Loan shall be and remain second and subordinate in all respects to the lien on and pledge of such Net Revenues securing all such Bonds, all with the intent and purpose that the DEQ Loan shall constitute Subordinated Debt within the meaning of the Indenture. 3. The City Finance Director is hereby authorized, empowered and directed, for and on behalf of the City, to: (a) negotiate the final terms, covenants and conditions of the DEQ Loan Agreement, which covenants, terms and conditions shall be consistent with, and not in violation of, the covenants, terms and conditions set forth in the Indenture; (b) establish and fund the Loan Reserve Account as required under the DEQ Loan Agreement; (c) execute and deliver the DEQ Loan Agreement as finally negotiated in accordance with the terms and conditions of this resolution. 4. The City Manager, the City Finance Director and their respective designees are each hereby authorized, empowered and directed, for and on behalf of the City, to execute all documents, certificates, instruments and agreements, and take all such actions as may be necessary or appropriate, in order to undertake the DEQ Loan in accordance with the terms and conditions of this resolution. 5. This resolution shall take effect immediately upon adoption. ADOPTED BY mE COMMON COUNCIL AND APPROVED BY THE MAYOR OF THE CITY OF SPRINGFiELD THIS 25thnAY OF JUNE 1996. ADOPTED BY A VOTE OF 4 FOR AND o AGAINST. ~~~ \?J-g7~ ~ _:JtJ6 , ~ (Jl ,4- AYOR 2 ATTACHMENT A-2 . . . JU~-19-1996 16:27 FROM DEQ-WRTER QURLITY SOUTH TO 915417263613'3 P.02 "" ;':.:." '.'., ..;:''''.'';'~:;;!\::':';I:'i?:>"",I''I,;i:L'''''~''\:~:'I:';';:$ii~:ic}i::'!::::.f:t:;:.;i:i:l,,:::"';,,;::;: m:;;\:, 'ti'f1'1!ihu :;;..;:1';.:: "H.. "... , .. ~,~:':::::";'" ',_, ~::~':,~/ ~. -' :_<;,:,:~ ;:~;:~, ~~;;~;:;;:;~;:;~i;<;:;:i~ :; ~:,i,~\~r ";' i . ;,~~~'~~ :,:.~~: ~!.:..r~'<: ::: :~~{i:~;r;r;:~; ::~~:~; ~.~!~: ;"~:.i~ :~::,: '~::~: :;,,,;:,, :~~: a ,'~;I;:V;:~::!:~:~:~!~; I:~::i:'"': ~~':'~ :';o'~: ~:.:;~ ,.; ;::f:;;':;. ": 'J: : i~' .!,~:: '::: .<: :,:'~:..::.,: . ; ~; TABLE OF CONTENTS DRAFT ARTICLE 1: THE LOAN - SPECIFIC TERMS, CONDITIONS AND PROVISIONS...,............,...."......] ARTICI",E 2: DEFI.NITIONS.,. ..... .... ...... ........... .... iloilo.." .... .... ....... ..... ..........". ...~.... ......".. .......... ......... ............".. ...". III. 3 ARTICLE 3: GENERAL WAN PROVISIONS......... ............................. .............................................5 ARTICLE 4: TERi\1S, CONSIDERATIONS, AND PROCEDURES .............................................m....' 7 ARTICLE 5: GENEf''I\.L REPRESENTATJONS, WARRANTIES AND COVENANTS............m.........13 ARTICLE 6: REPRESENTATIONS, WARRANTIES AND COVENANTS RELATING TO CONSTRUCTION PROJECTS ONI. Y ....... ..... .... ..... .... ....... ...... ....... .... ........................................... 16 ARTICLE 1: RJCJITS OF DEQ; l.JJ\1ITAtJONS ON DEQ RESPONSJRJLITIES..................w........ J 7 l\RTICLE 8; DEI' Am T AND REMEDlES .................................................. ,.. ................................. 19 ARTICI.E 9: SRF PROCEDTJRES MANUAL......... ..... ......... .... ...... ..... ....... .....................................20 ARTICLE 10: APPLICABLE FEDERAl. AUTHORITIES AND LAWS ("CROSS-CUTTERSff) ..........21 ~TICLE 11: WAN EXE.CI.ITJON ......................".........................."................".................................."......23 APPENDIX A: PRELlJ\1INARY REPA YJ\1ENT SCHEDULE............................... ................................ 24 Al7END1X B: JWOLlITION. .... ..... ...... .... .... .......... .... ........ .......... ..... ......... ...... ......... ."'.................. ... ........ .It.. 25 JUt~-1'3-1996 16:29 FROM DEQ-WHTER QUHLITY SOUTH TO 9154172E,Jf.89 P.03 . OREGON DEPARTME.N1' Of ENVIRONMEN1'AL QUALITY STATE REVOLVING FUND DRAFT PAGE 1 ARTICLE 1: THE LOAN - SPECIFIC TERMS, CONDmONS AND PROVlSIONS (B) LoAN NO.: City of Springfield. R8677 1. (A) BORROWER: (e) LOAN AMOUNT: (D) PRO.JECf Tm..E: $3,000,000. East Springfield Interceptor, Phase 3. (E) DATE OF AGREEMENT: June ----..J 1996. (F) ES11MA TED COMPLETION DATE: January 1, 1998. (G) INTEREST RATE: 3.93% per annum. Calculation of interest is also discussed in Section 4(G) on page 11 and in Section 4(1) on page 11 of this agreement. . (1:1) LOAN PROCESSING FEE: 1.5% of the Final Loan Amount wjJl be due with tIle first repayment following the determination of the Final Loan .A.mount as discussed in Section 2(G) on page 4 and Section. 4(H)(1) on page 11 of1bis agreement. (I) LoAN SERVICING FEE: 0.5% of the outstanding principal will be due annually beginning witl1 the second repayment as discussed in Section 4{H)(2) on page 11 of this agreement. (.J) TERMS OF REPAYMENT: Twenty semiMannual payments beginning with an intefi;;st-only payment six months after project completion. \Vhen. all disbursements have been made and the Final Loan Amount is detennined, a repayment schedule amortizing the loarl over the remaining repayment period will be prepared. Attached as Appendix A is 8. prc11minary repayment schedule based on an estimated disbursement schedule and 1he original l...oan Amount. Repayment is also discussed in Section 4(1) on page 11 of this agreement. (K) BORROWER'S ADDRESS: City of Springfield 225 N. Fifth Street Springfield, Oregon 97477 . (L) DESCRWflON OF THE PRO.mer: Phase 3 of the East Springfield Sewer Interceptor Project to enlarge the sewer system. It includes the installation of a sanitary sewer interceptor from the South A Street Bridge to 32nd Street. CITY OF SPRINOPfEl-D : R86771 : 6/19/96 I...oAN AGREEMENT JUM-19-1995 15:29 FROM DEQ-WRTER QURLITY SOUTH TO 915417263689 F'.04 . OimOON DEPARTMeNT OF ENVIRONMENTAL QUALTTY STATE REVOLVING Furm DRAFT P AoE 2 -- (M) CONSTRUCTION COSTS. As of the date of ttlis Loan Agreement, the Borrower has already incurred $0 in construetion costs on the Project. (N) TYPE OF LOAN. The loan, authorized by this Loan Agreement has beet] approved by the DEQ as an lIRevenue Secured ,1oanl' pursuant to OAR Section 340~54- 065(2). (0) BORROWER'S AtITlfORIZA TION. The Borrower has authorized this agreement pursuant to ORS 468.439 by Resolution No. -:> which was duly passed by the Borrowers City COWlci) on. June --' 1996. A copy of this docwnent is attached as Appendix B. . (P) PLEDGE. The Borrower hereby pledges its Net Operating Revenues to pay the amounts due under this Loan Agreement. This pledge is subordinate only to the pledge of Net Operating Revenues in the 1995A Revenue Bonds which finance an earlier phase of tllis project The Borrower covenants with the DEQ and any assignee oft11is Agreement that the Borrower shall not issue any other obligations which bave a pledge or lien on tile Net Operating Revenues which is superior to or on a parity with the pledge herein granted ..vitbout the written permission of the DEQ. This loan is a parity obligation with all other State RevolvIng f'w1d ImuJlS between tJ1C DEQ and the Borrower. (Q) ADDmONAL PARm' DEBT TESTS. BOrll the DEQ and the Borrower understand and agree that it is the intention of the Borrower to seek additional financing in, the fonn of grants and/or loans to complete th.e remaining subprojects of the Springfield Sewer Interceptors Project of which this is one subproject. It is anticipated 1hat ilie Borrower will be required to pledge its Net Operating Revenues to secure the additional funding. It is the intention of tbe DEQ to employ appropriate means to work with the Borrower to faci]irnte this future financing. To assist the Borrower, tile DEQ allows parity debt. TIle Borrower, however, covenants with tbe DEQ and any assignee of the Loan Agreement that the Borrower shall not issue any parity obligations whicb have a pledge or lien on the Net Operating Revenues which is on a parity with the pledge herein granted unless such obligations also abide by a rate covenant equivalent to or higher than that set forth in Article 1, Section R of this Loan Agreement and require an appropriate debt service reserve. (R) COVERAGE REQUIREMENT. Until the loan is repaid in full, the Borrower covenants with the DEQ to maintain sewer rates sufficient t.o meet the requirements listed in Section 4(0) on page 9 with a debt service coverage factDr of 105%. . (S) LOAN RESERVE REQUIREMENT. TIle Bonower covenants with the DEQ and any assignee of this Loan. Agreement that the Borrower shall establish and maintain a Loan Reserve Account as described in Section 4(E) on page 10. TIle Loan Resove Requirement shall be an amount that equals )00% of the average annual debt service as shown on the LOAN AGRE.EMENT Crry 01' SPRINOFlBLD : R86771 : 6/1.9/96 JUN-l''j-19% 16:30 FROM DEQ-WRTER QURLITY SOUTH TO 9154172636:39 P.05 . OREGON DEPARTMENT or ENVIRONMENTAL QUALITY STATE REVOLVING FUND UKAr I PAGE 3 . repayment schedule, Until the Final Loan AmOWlt lS calculated, the Loan Reserve Requirement equals $165,598. ARTICLE 2: DEFJNJTIONS Unless t~e context ot~en\"ise requires) the capitalized tel illS used in tJlis Low' Agreement shall have the meanings defined. in this Article. (A) uBORROWER" means the public jurisdiction shown as the "Borrower" 10 Se\..1ion J (A) on page 1. (B) "COMPLETION DATE" means either the date on which a faciJity pliuming project is accepted by the Deparnner!4 tl,e date on which a design project is ready for the ^^...w...."tor t..:A pr"'cess O. Hhe AA"A on n'h~ch " co......"-,~^.n -..^:....ct J.s "ut){')t"'n~nnv ,......."""''''la+... ........HUw.".J VJU V , 1 U Ud!C ...", a Jlo':IUu.o.-UVII YJUJ"" 0':1 '........ U4JIJ "''''II'..!:'II...... and ready fOT initiation of operations. . (C) "COSTS OF THE PRO.JECT1f means expenditures approved lrf the DEQ which are necesswJ to construct the Project in compliance w:i1h DEQ requirements which may include but are not limited to the following items: (1) ObIigations of Ute Borrower incurred for labor and materials and all costs which the Borrower shall be required to pay under tl1e terms of any contract for .1.. de,.;, ~A~'. '1': ....tn' <h~ 0" ~_..t lJ"'~ .. i"tI.o D... . "'..' LlJe ;).gTl, d"'\iUJSi .!on, COHO uCuvn J JII;) ill auO" 0. 1... 1 .Oje"'L, (2) Engjneering fees for the design and construction of the Project. (3) The costs of contract bonds and of insurance of aJl kinds that may be required or necessary during the C01U'se of completion of the Project; (4) The legal, financing and administrnative costs of obtaining 1heJoan. and completing the Project:; and (5) Any other costs approved in writing by the DEQ. (D) "DEQ" means tie State of Oregon, acting by and tJ]rou~i tie Direv'1nr of the Oregon Department of Environmental Q-uaJity or the Director's aut1.;orized representa.fjve. . (E) "DIRECTOR'! means the Director oft~e Oregon Department of Environmental Quality or the Directors aul1lOrized representative. CrTY OF SPRJNGfllBLD : R86771 : 6/19/96 LOAN AGREEMENT JUN-19-1996 16:31 FROM DEQ-WRTER QURLITY SOUTH TO 9154172636E'9 P.06 OREaON DEPARTMENT or ENVIRONMENTAL QUALITY STATE REVOLVING FUND DRAFT . PAGE 4 ,1ri"I. \S' , disposal systems. ifF ACJLITYto means the Borrower's waste"~ater collection, trea1a-nent and (G) "FINAL LOAN AMOUNT" means the total of all Joan proceeds disbursed to the Borrower including any Loan Agreement amendment increases or decreases. The Final Loan i\."l1Cunt win be det..e:rmined when the project is complete or rlle Borrower indicates t,,",at no further loan funds v.iH be requested, or aU eligible expenditures have been reimbursed from t'Je loan proceeds. TIle Final Loan Amount wiH be amortiz.ed over t11e balance of the repayment period on a final repayment schedule. (I'I) "LoAN AGREEMENT" or "AGREEMENT" means this Loan Agreement, its appendices~ and any amendments or supplements thereto. (I) "LOAN AMOUJ'l;7" means the maximum amount the DEQ agrees to 10m the Borrower as shown in Section l(C) on page 1. This amount may be changed by an amendment to the Loan Agreement approved by both parties, . (.1) "NET OPERATING 'REVENUES" means the gross sewer system revenues Jess the operating expenses. Gross revenues are an fees and charges resulting from operation of tl1", """"',"r ""'st"'...... ""d """v 'nt"'T"'st e...-nu.ngs th"'f"'^Il Un~11ever grf"lss re1fenues ~Ot. <-'L.e nnrnnc-e .... ... ..,""Y'f........ ~....y .......".11, UJ,I Q,.I..lJ.J 1""'1.'-" (.4I...u .~ "",,v I.. ..l.LUn,--, '-, u ,.. I JJ .I UJ J.I~J 'Vi:; of this Loa.., Agreement does not include: any payments of assessments !eviedagainst -. -op"'~"'s' <-1-.". p"O^c<>An or ^....... ............<-,... i-he ..... ...,.."",,,,04<, ^.f" nfto, b^TYou";ngs .r:o'" ".:.a.... ;(-,,1 pi ",au"" U'IO' a.... ....uo ~ RHJ & tV 'I<), U. pLV~,,^,,"';:> V.l aJ'] VII'....U J.~ J ... Y....... improvements; tlie proceeds of any liability insurance; or the proceeds of any casualty insurance which dte Borrower intends to utilize for repair or replacement of tiJe sewer system. Operating expenses includes aU direct ti.l1d indirect expenses mClured for operation, ,.,....~. .............A a' f fI...... s""u..... "" i-"'m <t'l...ludit1l0 bnt ~ t l'mtf-"'d h.. aAm'''';stT''h,,,~ mw..rena......~ aJ.u rep 11' 0, ....," ....""..., "'J'StI;. ,.,.... "0 .... 1.0 .. ..j~ . IAJ ........ ................... ","v...."""""" -h............,..;..1 and "'....COl1....h...g expen"""" ;t1"nran...... p..."...,....urns ....t""ms (t{~ '.h.... ~""nt tlh",. 'w^'p...1IU,-",Q, .........lA~.""',lU-l .J ........... "f.-LIUA.J '"' . L3........., .........3....... YoI.""""'" ,."'Jl.JJ.I~'" , "",..t,A.,t.., fo..lIV;... .... .....,..i.'.- .. ...a.(i..i.. ................"';.:.",,:0. _T....:Joo J~O'~. ..:lo...,.r"';JG1:.:L~ .c;.......l'l ........-o'~.....a.IIl:lo.Al~ Oi~ ~n'~ur~~. ,..~) ".""""lor'".....~ t.......nr~l ""'-MA ""''''\o1-M,p..-r1-n.g p.'Vn~~iP€r "IUJI.H_03 QJI...... ., Ill. a Ya.J .u.A..Jj~ j.1u IJ pi ......~......u~ ..,.;:) Q4......,..., \..UJ't..'-'"', ~""'ESUA u..a..&\..._ ~.1~&.JI,U_'",-..I...U.. ~n..l.l~'''''''~J relating to the operation and maintenance, payments and reserves for pension, retirement, t.""..l'-h l..~~p:'i"'~:-?""':o~ <>.....:l .~:.~1, ""aUi>' ~~,....,.,..f::)t." a~d ^j'V Otll""'- ";ml'l".... "'xpens""s ~-,.., I.."" Dn~d <1-,-. JlLi:l1U,. HU.:> JULI.JLClH 111 ......u l:>1~"" J....,,'" ,",..:;II\;,J 0:>, II a'J ' ......, '<AI.'" .... l.V....... J.... LV 'Ole extL'1lt properly and directly attributable to operations of the sewer S'jstem. (K) "OmSTAi'TOING WAN AMOWi'T" :me~:ms the sum of all disbursements to the Borrower hereunder Jess the smn of all Joan principal repayments. (L) "Pi\o.w.crH means the faciJities, activities or documents described in Sec1ion l(L) on page J. . (M) "SRF" means the State Revolving Fund. TIle State Revolving Fund is the \V"1/,,'-r JD.. ....u.!!.',.;o'~ Co,...t.-,..,l Ra"r.1H:"'v T.'..r.d rr>r"'Tf",A t^ ."nnc::: rh"'...L.... 4r.~ ... """ _JI. . .<!lUlU, ....J .!I!!U,J.'. ....."VjYJJlIIO J 1,AA. _........... '-"'" tA..1 "A. '-'...~ ...........uyuv. - __, e<of-:'~G ,:)oQ,lu..... _~.' fh.o. Q..'") LAJ\... Division 423. ........ "-_.~-- CrTY OF SPRINGFIELD: R86771 : 6/19/96 LoAN AGREEMENT JU~-19~1996 16:32 FROM DEQ-WATER QURLITY SOUTH TO 9 1541 '721':,3689 P.0'7 OREGON DEPARTMe.NT OP ENVJRONMENTAL QUALITY . STATE ReVOLVING FUND .DRAFT PAGE 5 (N) "STATE" means th.e State of Oregon. ARTICLE 3: GENERAL LOAN PROVISIONS (A) AGREEMENT OF DEQ TO LoAN. TIle DEQ agrees to loan the Borrower Wl amount not to exceed the Loan Amount, subject to the tenns and conditions of this Loan Agreement, but soleJy from funds available to the DEQ wIder its State Revolving Fund program. The obligation of the DEQ to make the JOWl. described in this agreement is subject 1'0 the availability of such funds, and the DEQ shall have no liability to the Borrower or any other party if such funds are not available, or are not available in amounts sufficient to fund the entire loan described herein. (B) A V All..ABJLITY OF FUNDS. TIle DEQ represents tJlat it has available to it, or expects that it can obmin within a reasonable period of time, money to make the loan contemplated by this Loan Agreement. . (e) TAX~EXEMPT STATUS. The Borrower covenants to comply with aU provisions of dIe Code which are required in order for interest on the Loan to be excluded :from gross income under Section 103(21) of tile Internal Revenue Code of 1986 as afllendetJ and any regulations or ruling issued thereunder, (D) SINGLE AUDIT ACT REQUIREMENTS. The State Revolving Fund (SRF) is a loan program of the DEQ which operates under the regulations of the u.s. Environmental Protection Agency and receives capitalization grants through the Catalog of FederaJ . Domestic Assistance (CFDA) No. 66.458: Capitalization Grants for State Revolving Foods. As such, the SRF program and its loan recipjents are subject to the U.s. Office of Management and Budget Circular Aa128, "Audits of State and Local Governments" implementing the Single Audit Act of 1984. Borrowers are subject to Circular A~ 128 to the extent that loan proceeds include federal capitalization grant funds. The DEQ wiU notify the Borrower of the sources of the Joan funds after the completion of each fiscal year. The Borrower is responsible for compliance with A~128 audit procedures. (E) AGREEMENT OF BORROWER TO REPAY. TIle Borrower agrees tD repay all aInOWitli owed on this loan as described in Section 1(1) on page 1. Tn any case. the Borrower agrees to repay aU BmOlUlts owed on this loan within twenty years of the actual completion date of the Project. . (F) AUTIJORIZA TION. CITY or Sr)RTNOPTEtD : R86771 ; 6/19/96 LoAN AGREEMENT JU~~19-1996 16:36 FROM DEQ-WRTER QURLITY SOUTH TO 915417263689 P.02 . OREGON DEPARTMENT OF ENVIRONMENTAL QUALITY STATR REVOLVING FUND DRAFT P A.GE 6 I (1) This Loan Agreement is given as evidence of a loan to the Borrower made by the DEQ pursuant tn ORS Title 21 and ORS Chapters 190, 287, 288, and 468, as amended., and shaJl be subject to the present regulations of the DEQ and to its future regulations consistent with the express provisions hereof. (2) The Borrower has authorized this agreement pursuant to ORS 468.439 by a resolution or ordinance, which was duly passed by the Borrower's governing body as described in Section 1(0) on page 2. (G) TERMlNATION OF LOAN AGREEMENT. Upon compliance by the Borrower widl all of its obligations under this Loan Agreement, including payment in full of file Final Loan Amount, accrued interest and fees, this Loan Agreement win terminate and the DEQ shaJl1ake the steps necessary to release the DEQ's jnterest jn. any collateral given as security under this Loan Agreement. ' . (H) NOTICES. All notices, payments, statements, demands~ costs, approvals, authorizations, offers, designations, requests or other commW1ications under this Loan Agreement by either party to the other shall be in wri.ting and shall be sufficiently given. and served upon the other party if delivered by certified mail, return receipt requeste~ an~ jf to the Borrower, addressed to the location listed in Section 1 (K) on page 1, "Borrower's Address," and if to the DEQ, addressed to: State Revolving Fund Program Warer Quality Division Department of Environmental Quality tn 1 S.W. Sixth Avenue Portland, Oregon 97204-1390 or to such other addresses as the respective parties may from time to time designate. (1) CONTRALT. TIlts Lowl AgU;:l;;J)lCnt ~hall GOnStitutOll oontract be1ween tbe Borrower and the DEQ which shall be binding on th.e parti.es thereto upon their being separately executed by the parties. This Loan Agreement including all related loan documents and instruments may not be amended, changed, modified, altered or tenninated without 1he written consent of the parties. . (J) FUR11IER INStRUMENTS. The Borrower and the DEQ agree to execute and deliver any written instruments necessary to cany out any agreement, term, condition or assurance in this Loan Agreement whenever occasion shall arise and reasonable request fOf such instruments shaH be made. Crrv OF SPTUNGFJELD : R86771 : 6/19/96 LOAN AGREBMENT JUM-19-1996 16:37 FROM DEQ-WRTER QURLITY SOUTH TO 9154172E,3t-.s9 P.D] . OREGON DEPARTMENT OF ENVIRONMENTAL QuALITY STA'f"T:l Rr.VOLVING FUND DRAFT PAGE 7 (K) ASSIGJiI'MEJilT. The DEQ shall have the rig.'1t to transfer the loan. or assign this Loa,li /~greement at any time aP.:er its execution upon v.'litten approval of the Borrower. This Loan Agr~~ent shall be assigned by the Bon-ower only v.ith the v/ntten approval of the DEQ. (L) LAWS GoVERNING. This agreement shall be oonstIUed and interprete.d In accordance with 1fJe laws of the State of Oregon as the same from time to rime exist. ' (!vI) .JURISDICfION OF LrnGA nON. Any litigation brought lL"1der this Loan Agreement shall be conducted in the courts of the COUi1ty designated by the DEQ or in the courts of Marion County, (N) VALlDIT\' AND SEVERABILITY. If any part, term, or provision of this Loan Agrecffi;;j1t. or of any other loan dDcumen~ shall be held by a court of competent jurisdiction f-.... l."", "0;..4 ""....;..1"b'... or unenfi^rceabJ'" by pid.er party ..L.e --1i...aitv ofthf>> r............inin" n.-hons or LJJ u.... Y U"') YUllUi I\", . v ,,.,, '!w'"U.J.. J III vW"'W"'J . .--..- .\..UUJ.l.........rJ r~nu._- ,j.--' provisions shall not be affected, and all such remaining portions or pro\~sions ~haH rer!"min in full for.ce and effect. . . (0) ARnCI"E HEADJNGS. AU headings contained herein arc for convenience of refJ;;;ier1Ce only a.nd are nut intended to define or limit the scope of a.1JY pro"\':ision of this Loan Agreement. (P) APPENDICES. The appendices a1tached to tl]is Loan Agreement are a part of it. (Q) COUNTERPARTS. This Loan Agreement may be executed in any nwnber of counlL;parts, each of which shaJI be deemed to be a" original, but all tnget.lter shall cons1jtute but one and ll1e same ins1rument ARTICLE 4: TERMS, CONSIDERA TJONSt AND PROCEDURES (A) OPINION OF LEGAL COUNSEL. TIle DEQ shall not be obligated to disburse any fund:; to tie Borrower hereunder W1]ess and tmtiJ tlJe Borrower has provided tile DEQ v.1.m un opinion of the legal counsel to the Borrower, in 1nnn and suhstance sallsf.-'lctory to !lIe DEQ, to the eJIect that (1) TIle Borrower has tJle power and autllority to execute and deliver, and . penonn its obligations under this Loan. Agreement; . (2) This Loan Agreement has been duly executed, acknowledged where necessary by the Borrowers authorized representatives and, to the best knowledge of such counsel, aU o1her necessary ac1ions have been taken, so that 1his Loan Agreement CITY OF SPRINOPfELD ; R86771 : 6/19/96 LoAN AGrHmMeN'r JUH--l 9-1 'J36 16: 37 FROM DEQ-WRTER QURLITY SOUTH TO 9154172636:=:9 P.04 . OREGON DEPARTMENT OP ENVIRONMBNTAL QUALITY STATE REVOLVING PUND DRAFT PAGE 8 - is valid, binding, and enforceable upon Borrower in ?oCcordance vvith it., terms, except as such enforcement is affected by bankruptcy, insolvency. moratorium, or other Jaws affecting creditors rights generally; and (3) To such counsel's knowledge, this Loan Agreement does not violate Wly other agreement, st:a.tute, court order, or Jaw to which Borrower is a party or by which it is bound. (4) Interest on. the SRF loan, is excluded from gross income under Section 103(a) of the Internal Revenue Code of 1986 as amended and any regulations or ruling issued thereunder. (5) Revenues used as security for the loan win not constitute taxes which are limited by Section llb, Article XI of the Oregon Constitution. (B) BORROWER'S FINANCIAL RF..cORDS. . (l) The Borrower shall maintain appropriate at'jd complete financial ~count& for this Project, for tt.lis debt service fund, and for the foa.l") repayment funding source at aU times during the term of 1his Loan Agreement consistent with GeneraUy Accepted Government Accounting St.andards, Generally Accepted Accounting Principles, and State Minimum Standards for Audits of Municipal Corporations. Separate accoWlting will be performed for the Facility producing the gross sewer revenues and for tbe Project. (2) TIle Borrower shall retain files and records relating to the Project and this Loan Agreement for at least tJlree (3) years after tJle project has been compieted and an amounts due under this Loan Agreement are fully repaid. (3) Audit. Federal enabling legislation and rules require an audit of each SRF loan. DEQ agrees to accept tJle following as adequate to meet this requirement. (8) A full and complete accounting of Project costs incurred including docwnentation to support eacb cost element with a summary of the total costs of the Project and the sources of funding submitted tD the DEQ no more than six months following project comple1ion~ and . (b) A copy tllc Borrower's annual audit report provided by December 31st of each year until the loan is fully repaid. (C) INSURANCE. At its own expense, the Borrower shan procw-e and maintain insurance coverage (including, but not limited to hazard, flood a,1Jd general lJabi]jty insurance) CITY OF SPRINGFIELD: R86771 : 61l9/96 loAN AGRP.BMeNT JU~-19-1996 16:38 FROM DEQ-WRTER QURLITY SOUTH TO 915417263689 P.~5 . OJtE..OON DE.PARTMENT OF ENVIRONMBNTAL QUALITY STATE REVOLV!NG FUND DRAFT PAGE 9 .~ ~---.........,=-~ .=~"'IooL.'-j-:.a=" ~"""'I adequ<'U~ to protect DEQ's interest, and in such amounts a..'1d against such risks as are usually ~ ...._~t..1 :.. ^ - ^.~~_. ':"h . .~1~_ - . ..... and ^ .-. ^H_l1.. ^ _.:: ..3 1_, L:'~ _ ~ ~~.~ , .n",Wl1we IH COUnel..UUa WIU SlAT!lli1.I. proJecu. as lS ibu.llll)' ~ill.HCu 'OJ enOue:. Ujkluu..iIg similar facmties, The Borrower shall maintain this insurance until aU amounts dueund,,'T t,is Loan Agreement are fully repaid, and shall provide evidence of such insurance to tlle DEQ. S...1C ~-.sn~_^.;> pn_sn.,.,.t to a -'~cogn;"'''''d mun;~;p~l -. o~-~.- o.~ ..~1~ ~-.'''''''''''lce S1..._11 be ;".d~~"-'^. ~u. UI ULaJI'-'''' UL UUI J J I,:;; IU,A, J I. J~J W pJ 0' I1JJI J. ;)t;;1J. JJ J;)....... IIWJ 1:1 t:AjlUl,u.; to satisfy this requirement. (D) SEWER RATE COVENANT. (1) Sewer Rates to Cover Debt Service Pay1tlCilts. TIle Borrower CQvena."lts .......:...... "'lC DE::''' "'nd ~_.. <>ss;~e~ ofth:~ Lo~- Agr~~e~' ..1.". .t.e n"rro"'<><r S11~11 ,,1.,.,,~.,..'. .....JUI U ~ U.I WI)'.. 10'1 l;; . l>:t WJ.i~ !;;.I;;U.. Hi loU..t. UJ J~V WVI;;I 1 Wl ....H...C.... fees in connection with the operation of the sewer system which are adequate: it} generate Net Operating Revenues in each fiscal year equal to or greater than the debt service coverage factor given in Section 1 CQ) on page 2 multiplied by the debt service payments due under this Loan Agreement in that fiscal year. . (2) Sewer Rate Adjustments. If the Borrower fails to charge fees at tJ1C level required by this Section, t1:te BOlTower shaU promptly adjust its fees 10 assure future compJia.,cc. Howe-ver, failure to adjust fees shall not constitute an e"lIent of default hereunder jf the Borrower transfers funds to tile Sewer Fund from other sources in an amount equal to the deficienC"'j in L"Ie year in which the Borrower djscovers the deficiency. Any transfers or depos,lts to L'Ie Se-wer FUiid shall be maintained in the Sewer FWld and be used only for purposes for which the Net Operating Revenues may be used. (3) Conditions of Default. If the Borrower meet.s compliance with paragraph (2) of this section by transferring funds to tlle Sewer Fund tD remedy a revenue coverage deficiency for two consecutive years, the Borrower may he deemed ~n 1"'1(>" 'J'Jn rlr>~aYW.j'l. v~n t]t.e Joan wn]e~.' th". Bo-.....w.c- ~an sh~...f .u..hf. ^~...~ -a.~~ ~"-"~--~ r.y~^.,.A ~ ~- ... ~j.i .. J . .1 .;;>;:, '.. Jj v I.... 1.1 .IVV-. lilul. ;:'''''''1II;;J j "...." .."1.... a.!,)I;;U bya."1 amount which should have been sufficient to meet coverage, If sewer rates are insufficient to cover expenses :'And deht ;::ervicef::;r thr!:lc consecutive yelU'~, the Borrower may be deem.ed to be in default. . (4) Financial Reporting Requirement. 'Die Borrower shaH provide the DEQ \\ltll a report which demonstrates the Borrowers compliance 'with the requjrcmcnts of this section by December 31st of each year until the low! is repaid. If t~e audit repm1. described in Section 4(B)(3)(b) on page 8 identifies tlJe Net Operating Revenues and contains a calculation demonstrating whether the Borrower satisfied t1e requirements of subsection (1) of tJijS section, the audit jepOjt described in Section 4(B)(3)(b) on page 8 shall satisfy the requirements of this subsection. (E) LOAN REsERVE ACCOUNT. CITY OF SPRrNGPIELD : R8677l : 6/19/96 LOAN AGREnMENT JUN-19-1996 16=39 FROM DEQ-WRTER QURLITY SOUTH TO '315417263689 P.0[, OREGON DEPARTMENT OF ENVIRONMENTAL QUALITY . STATE REVOLVING FUND DRAFT PAGE 10 (1) The Borrower covenants with the DEQ and any assignee of this Loan Agreement that the Borrower shall create a restricted Loan Reserve Account, which it shaJ1 hold in trust for the benefit of the DEQ and any assignee of this Loan Agreement. The Borrower covenants to use the funds in the Loan Reserve Account solely to pay amounts due hereunder until the loan, interest and fees have been fully repaid. (2) The Borrower covenants that it shall deposit an. amDlUlt equal to the Loan Reserve Requirement as described in Section 1(5) on page 2 into the Loan Reserve Account no later than the first day on. which a disbursement is received hereunder. (3) The Borrower covenants that if the balance in the Loan Reserve Account falls below the Loan Reserve Requirement~ it will promptly deposit an wnOWlt sufficient to restore tlre balance from the first net revenues available after payment of tlle amounts due hereunder unless the deposit has been made previously from other money of the Borrower. . (F) DISBURSEMENT OF LOAN PROCEEDS. (1) Bid Documents. The DEQ shall not be obligated tD clisbw-se any loan proceeds to the Borrower hereWlder unless and until the Borrower has submitted a copy of the awarded contract and bid documents to the DEQ for the portion of the Project costs which will be funded with the disbursement. (2) Documentation of Expenditllres. The Borrower shall provide the DEQ with written evidence of materials and labor furnished to and perfonned upon the premises, receipts for the payment of the same, releases, satisfactions and other signed statements and forms as may be reasonably required by the DEQ. . (3) Adjustments and Corrections. The DEQ may at any time, review and audit requests for disbursement and make adjustments for, but not limited to. ineligible expenditures, mathematical errors, items not built or bOUgllt and Wl3cceptabJe work. Nothing herein contained shall require the DEQ to pay any 3moWlts for labor or materials unless satisfied that such claims are reasonable and that such labor and materials were actually expended and used in the completion of 1he Project. In addition, the DEQ shall not be required to disburse loan proceeds in any amount greater than ~the total estimated cost of the work completed at the time of the disbursement as determined by the DEQ. (4) Contract Retainage Disbursement. The DEQ will not disburse Joan proceeds to cover contractor retainage unless the Borrower is disbursing retainage to CITY OF SPRlNOFrBLD : R86771 : 6/19/96 LoAN AGREEMENT JU~-19-1996 16:40 FROM DEQ-WRTER QURLITY SOUTH TO 915417263E,89 P.07 . OREOON DEPARTMENT OF ENVIRONMENTAL QUALITY STATE REVOLVJNG FUND DRAFT PAGE 11 an escrow account and provides proof of the deposit, or until the Borrower provides proof that retained flUlds were paid to the contractor. (G) INTEREST EXPENSE. Interest will accrue at the rate specified in Sect1...on l(G) on p~c 1 from the date that a di3bUl"3cment io moiled OT delivered to the Borrower, OT deposited into an acGount of the Borrower. Interest vlilJ accrue v/ithout compoundil1g using a 365/356 day year until the Final Loan AiiiQW&:is determined. After the Final Loa.~ p.Jnount is detem1ined and the final repayment schedule is prepared, interest on future scheduled payments will a.cerue on a 360 day year basis and compound semi~annual]y on tire payment due dates. Scheduled payments wilJ be applied to interest and principal according to the it;-paym(;-nt schedu1e~ rather than being applied based on the day the payment is received. (B) FEES. (1) Loan Processing Fee. TIle Borrower agrees to pay a one~time loan processing fee of one and one-half percent (1.5%) of the Final Loan Amount. The loan processing fee shall be assessed a..~..er the Final A..'1lount is detennined and sha]] be due and payable as described in. Section I(H) on page 1. . (2) Loan Servicing Fee. The Borrower agrees to pay an annual lOWl servicing fee during the repayment period equal to one-haIf of one percent (0.5%) of the Outstanding Loan Amount. The loan servicing fee shall be assessed and payable as described in Section 10) on page 1. The loan servicing fee shall be calculated based upon the Outstanding Loan Amount prior to the posting of the payment due on that date. (3) Late Payment Fee. The Borrower agrees to pay immediately upon demand of the DEQ, a late fee equal to five percent (5%) afmy Joan payment Wl1ich is not received by the DEQ on or before the tenth. day after such payment is due. This late fee shall also apply to any loan processing fee or loan. servicing fee which is due on that loan payment due date. (I) LOAN REPAYMENT. . (1) Final Loan Amount. After the final request for loan proceeds is submitted by the Borrower and disbursed by the DEQ, the Final Loan AmDunt will be detennined. The Final Loan AmoWlt is the sum of all disbursements made including any amounts authorized by loan. amendments. The Final Loan Amount is amortized over the balance of the repayment term specified Wlder "Terms of Repayment" in Section I(J) on page 1. CITY OP SPRlNGFrEtD : R86771 : 6/19/96 LoAN AGREBMi1NT JUN-19-1996 16:41 FROM DEQ-WATER QUALITY SOUTH TO 915417263689 F.. 0:3 . OREOON DEPARTMENT OF ENVIRONMENTAL QUALITY STATE REVOLVING FUND DRAFT PAGE 12 (2) Interim Payments. The Borrower agrees to make the first repayment on the loan as stated on the repayment schedule, but, in any case, no later than one year fonowing the actual completion date of the Project. Semi-annual payments will continue to be due based upon a Preliminary or revised schedule until the Final Loan Amount is detennined and 1he final repayment schedule is prepared. Any payments received during tllis period will be credited first to accrued interest as of the date due and then to 108n principal. (3) Repayment Schedule. A final repB.)111ent schedule win be calculated after 1iIe final disbw-sement is made and the Final Loan Amount is detennined. This schedule will record any interim payments which have already been made. The remaining scheduled payments will amortize the Pinal J.A)an Amount over the remaining number of years or payments specified under liT erms of Repayment" in Section 1(J) on page 1. Attached as Appendix A is a provisional repayment schedule based on tJle estimated completion date and original Loan Amount. . (4) Crediting of ScheduJ.ed Payments. Scheduled payments will be applied first to fees due, jf any, and then tD interest according tD tllC T~paYlfu;ut: schedule, and then to principal. (5) Crediting of Unscheduled Payments. All unscheduled payments, including any prepayments and partial payments, will be applied first to fees due, if any, and then to interest computed using a 365/366 day year, and then to principal. After an unscheduled payment, the Outstanding Loan Amount will be rewnonized at the same interest rate and payment amount to reduce the loan maturity. After a partial payment, the Ou.tstanding Loan AmOWlt win be reamortized at the same interest rate for the same number of payments tD increase the loan payment amOlDlt. (6) Final Payment. AU outstanding loan principal, interest and fees win be due and payable no later than twenty years after the completion date. (J) PREPAYMENT. (1) Optional Prepayment. TIle Borrower may prepay any amounts owed on tllis loan WitJlOUt penalty on any business day upon 24 hDurs prior wrlu:en noocc. . (2) MandatoI)' Prepayment. TI.le Borrower shall prepay aJj amounts owed on this Joan upon receipt of notice that 1he DEQ has accelerated the loan in accordance with the d.efault provisions of tllis Loan Agreement. (3) Refinancing of Loan by Borrower. TIle Borrower warrants that jf it refinances the portion of the Project financed by this loan, or obtains an additional CITY OF SPRINGFIELD: R86771 : 6/19/96 loAN AGREEMENT JUN-19~1996 16:42 FROM DEQ-WRTER QURLITY SOUTH TO 915417263689 P.09 . OREGON DSPARTMENT OF ENVIRONMENTAL QUALITY STATE REVOLVING FUND ~ m DRAFT PAGE 13 grantor Joan which is intended to finance the portion of the Project financed by this loan, it will prepay the portion of the Loan constituting a double benefit. ARTICLE 5: GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS (A) REpRESENTA nONS AND W ARRANTJES OF mE BORROWER.. (1) The Borrower hereby certifies, recites and declares that all BC1:B, conditions and things required to e,..jst, happen and be perfonned precedent to and in the issuance of this Agreement have existed, have happened, and have been performed in due time, fann and manner as required by law; and tJlat the Loan Amount toge1f](~ wiUl all obligations of the Borrower does not, and will not, exceed any limits prescribed by the Constitution and Statutes of the State of Oregon or the Borrower's autbority . . (2) The Borrower warrants that it is a duly fonned and existing municipal corporation of the State of Oregon and bas fuJl corporate and other power tn enter into this Loan Agreement. (3) The Borrower warrants that there is no material adverse information relating to the Project or the loan, known to the Borrower, which has not been disclosed to tbe DEQ. (4) nle Borrower warrants that no litigation exists or has been. threatened which would cast doubt on the enforceability of the Borrower's obligations under this Loan Agreement. (5) TIle Borrower warrants that this Loan Agreement does not create any unconstitutional indebtedness. . (6) The Borrower warrants that neither the execution of this Loan Agreement:, nOT the conswnmarion of the transactions contemplated hereby, nor the fulfillment of or rompliance with any of the terms and conditions of tilis J....oan Agreement, will violate any provision of Jaw, or any order of any court or other agency of government, or any agreement or other instrument to which tlle Borrower is now a party or by which the Borrower or any of its properties or assets is boood, nor will same be in conflict witl\ result in a breach or constitute a default (with due notice or Ule passage of time or both) under any such agreement or OUleT instrument,. or, except as provided hereunder, result in t11e creation or imposition of any lien, charge or encumbrance of any nature whatsoever upon any of the property or assets of the Borrower. CJry OP SPRINGFIELD: R86771 : 6119/96 LoAN AOREEMENT JUN-19-1996 16:42 FROM DEQ-WRTER QURLITY SOUTH TO 915417263689 P.10 . OREGON DBPARTMENT OF ENVIRONMENTAL QUALITY STATE RaVOLVING FUND ' DRAFT PAGE 14 (1) The Borrower warrants that any necessary local, state~ and federal licenses, pennits, and other approvals and authorizations for completion of Ute Project have been or win be obtained before the Project begins, and their provisions shall he complied with during1he term of this Loan Agreement. (D) REpRESENTA nONS AND WARRANTIES OF THE DEQ. The DEQ represents and warrants that the Director or the Directors representative has power Wlder ORS 468 and OAR, Chapter 340, Division 54, to enter into the transactions contemplated by this Loan Agreement and to carry out the Departmenfs obligations thereunder. By proper action of 1he State, bie Director and the DirectDrs representative have been dilly authorized 10 execute and deliver this Loan Agreement and to make the loan as contemplated hereby. (e) PROJECf AsSURANCES. Nothing in this Loan Agreement prohibits the Borrower from requiring more assurances, guarantees, or indemnity or oth.eT contractual requirements from any party perfonning Project work. (D) GENERAL COVENANTS OF THE BORROWER. The Borrower covenants with . the DEQ that: (1) The Borrower shall use the Joan funds only for payment of or reimbursement of costs of the Project in accordance with this Loan Agreement. (2) The Borrower is and win be the owner of the sewer system and the Project, and shall defend it against the claims and demands of all other persons at any time claiming the same or any interest therein. (3) The Borrower shall not sell, transfer, or encumber the sewer system without the prior written approval of 1he DEQ. which approval shall not unreasonably be widlheld. Upon sale of the sewer system or the Project., in whole or in part, to a private purchaser, tIllS SRF loan shall be immediately due and payable in fuU. . (4) The Borrower shall undertake the Project, request disbursements Wlder this Loan Agreement, and use the Loan ArnoWlt in full compliance with aU applicable laws and rules of the State of Oregon, including ORS Chapter 468 and Oregon Administrative Rules Sections 340r54-005 to 340.54-075, as they may be amended from time to time, and all applicable laws and rules of the United Stat.es, including Title VI of the Clean Water Act as amended by the Water Quality Act of 1987, Public Law lOOr4 and any subsequent amendments, and all applicable rules of the U.S. Environmental Protection Agency. Article 10 lists many of the applicable federal Jaws and authorities ("Cross-Cutters"). LoAN AORBEMENT CITY or SPRINGFIELD: R86771 : 6/19/96 JUN~19-1995 15:43 FROM DEQ-WRTER QURLITY SOUTH TO 915417253589 P.11 . OREOON DEPARTMeNT OF ENVIRONMENTAIJ QUALITY STATE REVOLVING FmJD DRAFT PAGE 15 (5) To the fullest extent pennitted by law, the Borrower shall indemnifY, save~ defend and hold the DEQ harmless in. any action, suit, or claim arising from the Borrower's failure to romply with any Jaws, requirements, permits and licenses relating to the Project or this Loan Agreement. (6) The Borrower shall disburse monies from the Joan proceeds solely for tlle costs of the Project. (7) ConcWTent with the execution and deliveJ)' of this Loan Agreement, or as soon thereafter as practicable, 1he Borrower shall take aU steps necessary 10 cause the Project to be completed in accordance with all applicable DEQ requirements. (8) If the Loan Amount is not sufficient to pay fOr the costs of the Project in full, the Borrower shall pay at its own expenses from its own funds and wi1hout any right of reimbursement from the DEQ all such costs of the Project in excess of the loan funds and additions thereto. . (9) The Borrower shall take no action which would adversely affect tl1e eligibility of the Project as a State Revolving Fund Project~ or cause a violation of any loan covenant herein. (10) The Borrower shall keep the sewer sYStlml in good repair and working order at all times and operate tlle system in. an efficient and economical manner. (E) PROJECf COVENANTS OF mE BORROWER.. TIle Borrower covenants with 1he DEQ that: (1) MBE, WBE and SBRA Affinnative Steps. The Borrower shall promote a fair share award to Small Businesses in Rural Areas, Minority Business Ent.erprises. and Women's Business Enterprises on all contract and subcontracts awarded as a part of the Project. (2) Surety Bond. Unless the DEQ provides a written waiver, the Borrower shall bave aU prime contractors execute and deliver a corporate surety bond acceptable tn 1he DEQ for the fai1hful performance of the contract or subcontract and payment of all liens and lienable expenses in. connection. therewith in a sum equal to the contract or subcontract price. . (3) Retainage. lbe Borrower shall include a five percent (5%) retainage provision in all of the Borrower's contracts for purchases or complelion of any part of the Project greater in cost than One Hundred TIlousand ($100,000) DoBars. CITY or SPRlNGPJELD : R86771 : 6/19/96 I..oAN AGREEMENT . . . JUN-19-1996 16:44 FROM DEQ-WRTER QURLITY SOUTH TO 915417263689 P.12 OREGON DEPARTMENT OF ENVIRONMENTAL QUALITY STATE REVOLVING FUND 'l7 L DRAFT PAGE 16 (4) Change Orders. The Borrower shall submit aU change orders to the DEQ. The Borrower shall not use am01JJ'lts loa.'led under this Loan Agreement to pay for costs of BJ'lY change order "...hich has not been approved, in ~T.iting, by the DEQ. TIlis subsecti.on shall not prevent the Borrower from approving a change prior to approval by DEQ, as long as the Borrower accepts the risk uf paying for costs of dle change if it is not approved by DEQ. ARTICLE 6: REPRESENTA nONS, W ARRANTJES AND COVENANTS RELATING TO CONSTRUCTION PROJECTS ONl.Y (A) COVENANTS. TIle Borrower covenants with tJle DEQ tbat: (1) Inspections. The Borrower shall provide inspections dur~'g tIu;; building of the Project as required by tbe DEQ to ensure that the Project complies with approvei! plan~ and gpecificatiotul. TIlel:le infipection~ shall bl.'i conducrod hy qunlified inspectors under the direction of a registered civil. mechanical or electrical engineer, whichever is appropriare. TIle DEQ or its representatives may conduct interim bwld1ng inspections to detennine compliance with approved p)a,iS and specifications and with the Loan Agreement, as appropriate. (2) Asbestos. TIle Borrower shall ensure that any removal of asbestos whjch may be pa...'1: oftl)is Project ",ill be perfonned by parties trained and qualified for asbestos removal. (3) Operation and Maintenance Manual. The Borrower shall submit a draft facility operation and maintenarlce manual before dle project is fifty percent (50%) complete. The Borrower shall submit a facility operation and maintenance manual which meets DEQ approval before the Project is ninety percent (90%) complete. (4) Alterations After Completion. TIle Borrower shall not materially alter the desjgn or s1ructural cbaracter of the Project after the completion of the Project without tlle written approval ofthe DEQ. (B) COSTS ALREADY INCURRED BY TIn: BORROWER.. (1) TIl'- DOHUWCI iCVH;;~l;J1b dial tJ,,,, imJUUUL of l,;UJI:iUUl,;UOJl WSLS of me Project which have been incurred by the Borrower for the Project as of the date of Ll;is Loan Agreement do not exceed 1he amounts sho\\71. in Seclion ] (M) on page 2. (2) The DEQ has relied upon Borrower's representation as 10 tJle amount of construction costs incurred prior to the date of this Loan Agreement. If 1l1at sum is CITY OF SPRINGFIELD: R86771 : 6/19/96 LOAN AClREEMBNT JUN-19-1996 16:45 FROM DEQ-WATER QUALITY SOUTH TO 9154172636Ei':3 P.1J . OREGON De.PARTMENT OF ENVIRONMENTAL QUALITY STATE RaVOLVING FUND DRAFT PAGE 17 within the U.S. Environmenml Protection Agency's definition of lIretinancing," the DEQ warrants that dlat amount is within the exception to the refinancing role allowed by the EP A. As such, State Revolving Food rules (40 CFR Part 35) allow disbursements to be made on a reimbursement basis. (C) PLANS AND SPECJFICATlONS. The Borrowers plans. specifications and related documents for the Project will be reviewed and approved. by the DEQ. (D) PROJECT J.NITIA nON OF OPERA nONS. (1) The Borrower shall notify the DEQ no more than thirty (30) days after the actual Project Completion Date. (2) If the Project is completed, or is completed except for minor items, and the Project is operable, but the Borrower has not sent its notice of initiation of operation, the DEQ may assign an initia1ion of operation date. . ARTICLE 7: RIGHTS OF DEQ; LIMITATIONS ON DEQ RESPONSIBILITIES (A) QUALITY OF MATERIALS. The DEQ does not warrant or guarantee the qualify of materials supplied to ~ntf which become a part .ofJh~__Proj~_~1~__Jb~__Jl1!~_4Y__9_L_~1~.__h_______ workmanship performed upon the project, or the extent and smge of completion of tile Projec~ and no such warranty or guarantee shall be impJied by virtue of any inspection or disbursement made by the DEQ. (B) LiaBILITY OF 11IE DEQ. It is expressly understood and agreed th.at the DEQ will be under no liability of any kind or character whatsoever for payment of Jabor or materials or otherwise in connection with the completion of the Project or for tlle carrying out of contracts entered into by the Borrower 'with third parties for the completion of the Project All costs of material, labor and construction, including indirect costs. shall be paid by the Borrower. (C) RICIIT OF ENTRY AND JNSPECIlON. The Borrower will allow the DEQ or its agents Of assignees the right to enter the premises during reasonable business hours upon reasonable notice to the Borrower to inspect the Project and for all other lawful purposes including the examining of books and records pertaining tn the Project or this Loan Agreement and to make extracts and copies thereof . (D) DEQ NOT REQiJ1RED TO ACT. Notlling contalned in this Loa."l. .A..greement shall require tile DEQ to incur any expense or to take any action hereunder) and it shall not be CJTY OF SPRINGFIELD: R86771 : 6/19/96 LOAN AORE.BMENT JUr~-lt3-1996 16: 46 FROM DEQ-WRTER QURLITY SOUTH TO 91541726368':3 P.14 . OREGON DEPARTMBNT OP ENVIRONMENTAL QUALITY STATE REVOLVING FUND DRAFT PAOR18 liable to 1he Borrower for any damages or claims arising out of action taken pursuant to this Loan Agreement. (E) W AlVERS AND RESERVA nON OF RIGHTS. (1) The waiver by the DEQ of any breach by the Borrower of any term, covenant or condition of this Loan Agreement shall not operate as a waiver of any subsequ..~t breach of th.e same or any other tenn, C',ovenant, or condition of this Loan Agreement. The DEQ may pmsue any of its remedies hereunder concurrently or consecutively without being deemed to have waived itsrigbt to pursue any other remedy. (2) NOtlling in this Loan Agreement affects tile DEQ's right to take remedial action, including, but not ljmited to, administrative enforcement action and actions for breach of contract against a Borrower that fails to carry out its obligations under this Loan Agreement. (F) NONLJABILITYOFSTATE. . (1) The State and its officers, agents and empJoyees shall not be liable to the Borrower, or to any oth.er party whomsoever for any death, injwy, damage, or loss that may result to any person or property by or from any cause whatsoever, arising out of the Project. The Borrower shal]~ and does hereby agree to the extent permitted by law and the Oregon Constitution, to indemnify, defend, save and hold the Stare, its officers, agents and employees hannJess from and defend each of them aga.inst any and all claims, liens and judgments for death oJ: injury tn, or loss by any person or damage to property whatsoever occurring in, on or about the premises of the Project: or due to the existence or activities of the Project, and, to the extent pennitt.ed by law, any reasonable attorneys' fees and expense incurred in connection with litigation against the State challenging or questioning the validity of this Loan Agreement~ the existence or activities of tbe Project or actions, contracts, permits, or licenses obtained, agreed to, or perfonned by the Borrower in connection therewith. (2) Any findings by the Department concerning t~.e Project and any inspections or analyses of tbe Project by the DEQ are for purposes of detenninjng eligibility for the loan and disbursement of loan proceeds only and do not constitute an endorsement of the feasibi1i1y of the Project or its components or all ass1l1'31lCe of any kind for any other purpose. . (3) Review and approval of facilities plans, design drawings and specifications or other documents by or for the DEQ does not relieve the Borrower of CITY OF SPRJ/IIOPJELD : R86771 : 6119/96 LOAN AOREEMENT . . . JU~-19-1996 16:47 FROM DEQ-WRTER QURLITY SOUTH TCI 915417263689 P.15 OREGON DEPARTMENT OF ENVIRONMENTAL QUALITY STATE REVOLVING FUND DRAFT PAGE 19 its responsibiHty to properly plan, design, build and effectively operate and maintain the Facility as required by law, regulations, penn its and good management practices. ARTICLE 8: DEFAULT AND REMEDIES (A) EVENTS OF DEFAULT. The OCCU11"ence of one or more of tIll: foHov.ring events shaH constitute an Event of Default, whether occwJ;ng voluntarily or involuntarily, by operation of law or pu..""Suant tD any order of any court or governmental agency: (1) The Borrower's failure to make any loan payment within thirty (30) days after tile payment is scheduled to be made according ro the repayment schedule; (2) TIle Borrower's failure to comply in any material respect "';tl1 any other covenant, condition, or agreement of the Borrower herc\mder for a period of thirty (30) days after notice tllereof from the DEQ; (3) TIle DEQ reasonably dt:tcnnines that aDY representation or warranty made by the Borro\ver hereunder W~ untrue in any :tmlterial re!i:pf>ct as of th~ datC'ott was made; (4) The Borrower becomes insolvent or admits in vffiting an inability to pay its debts as t;ey mature or ~Jplie5 for, COn5t11.15 to, or acquiesces in the appoin1ment of a trustee or receiver for tl;e Borrower or a substantial p~ut of its property; or in ti-Je absence of such application, consent, OJ acquiescence, a trustee or receiver is 2jJpointed for the Borrower or a substantial part of its property and is nDt discharged within sixty (60) days; or any bankrupt.cy, reorgani2'.ation, debt aIT3flgement Of moratorium or a..'1y dissolution or liquidation proceeding, 1s instjtuted by or against the Borrower and, jf instituted against the Borrower" is consented to or acquiesced in by the Borrower or is not dismissed. witltin ninety (90) days; or (5) TIle DEQ reasonably detennines that, as a result of any changes in the Constitution of the United SUites of America or the Oregon Constitlltion or as a result of any legislative, judicial, or administrative action, any part of this Loan Agreement shall have become void or unenforceable or impossible to perfonn in accordance Vlitn the intention and pwposes of the parries hereto, or sha11 have been dec!aredunJawfill. (B) DEQ may: REJ\.1EDrES. If tie DEQ detennines that an Event of Default has OCCUlTed, lne (l) Declare the Outstanding Loan Aiuount plus any unpaid accrued intci(~st and fees immediately due and payabJe~ CITY OF SPRINGFIELD: R86771 : 6/19/96 LoAN AGREEMENT JUN--1 '3-1996 16: 47 FRO~i DEQ-WFlTER QURL I TY SOUTH TO 915417263EB3 F'.16 . OREGON DEPARTMENT or ENVIRONMENTAL QUALITY STNTE RBVOLVING FUND - DRAFT PAGE 20 (2) Cease making disbursement of loan proceeds, or make some ..<1~Al~"~A"""""'~nts o.&'loan p"oceeA~ ""...d W].jthhn1d 0" "efus'" 1-f.. m",t-", n{h~ d;cbHr"ements~. W~uLU_~t:.JIJ\:;J J. J J J ~ qAl . . UJI .I J .... t.V . . "^'"' VLU;w'" J.-. Uii;)Tw' ..~,.,.. I (3) Appoint a receiver at the expense of the Borrower to operate 1he Facility and collect the gross revenues; (4) Pay, compromise or settle any liens on the premises or the Project or pay other sums required to be paid by the Borrower in connection \Vith the Project, at tl-,e DEQ's d;s^~.'~!.jo- ..".,.J....,g +1."" 1"''''.... "'..'I""'~p_..JC' "'''d <"1>1"1. "lrldl.i~nn..l ~n,.,ey as Tna)' be ..... J ~J \;.u ", ~ uJ..... ,1VQJJ, pJ t..,......,.,.tAJ~ c.u.. t:tUIWIII UItl.&- .liv,," U". ..1I....,.6I\.. ... required. In the event of payment by the DEQ, or any payment out of the loan __~~~~.."...l~ ~~~H'''d t.~~1~., "",r ......., ""..."',......1....anroa. I]. "'n C1,,~..... ^" rI........"'nri th". Dr.;'() m'll'lp pi u....I,;;I.:;U~ ;:'\';;wW \,;; H\';;~ !;;,VI, Vl. a...y ,",,."'..uUU& "^',' '" J, ......., V. ....u......_, ... .....x. .....), ,.~. i....~ o~. '':'o~ b- -"1,-. ~gated to. ..tie exten."' of .-he "mo"-". ror ....",1. .....". ......eni. ton all i-'h", _ ~ pu JJ, . C ~u JU - \.1. l u. iJ I WH v.. ....."'.. ]}uy........ J.i. au.... rights, powers, privileges, and remedies of the payor or payee, as tlle case may be, and any such subrogation rights shaJ1 be additional cumulative security fOT this Loan Agreement; . (5) Direct the State Treasurer to withhold any amounts othenvise due to the Borrower from the State of Oregon and, to the extent permitted by Law, direct that such f.mds be applied to t~e amounts due to dle DEQ un del" t11is Loar: Agreement and be deposited into the State Revolving Fund; /6) C~m-",l tll..~ ~-ec:fi'" pe..r:o.........."'.n""" ^r "no' /-orm ""'''en''....f- or conA;h"'.... ^i~ \. UII p"'J 1\O;;:'jJ I '" . IJ' ,..UV ...'"' v.. ..... Y LL,U.I, ....u.. ""n., '~UVH VJ. thi s Loan Agreement; and (1) Pursue any other legal or equitable remedy it may have. (C) ArrOM"EYS' FEES AND EXPENSES. In the event the Borrower shall default und~J ai1Y of the prOvisions of this Loan Agreement and the DEQ shaJl empioy at:tomeys or jncw- other expenses for tllC DEQ's successful enforcement of or tllC pertorma.'1ce or observance of any obligation or agreement on the part of tie Borrower conmined 1herejn, the Borrower agrees t~at it will, upon demand 1Jiereof, pay 1n tJ"1e order of the DEQ the reasonable fee of such attorneys and other expenses incurred by theDEQ. ARTICLE9: SRF PROCEDURES MANUAJ.. . The Oregon Administrative Rule references the Stlite Revolving Fund P;ocedures J\,1,anuAJ for guidance on many asp~;;;ts of Section 2] 2 publidy-ov.mcd treatment works projects. This guidance is Vw11,tten witl.} tllC intent of assisting tie Borrowe; ~1tl1 irnporla.-,t issues. Borrowers arC strongly encouraged to consider a."ld foH{)w the guidance when applicable. Some sections of tI,e gv.idf'u"'lce will be required in order to meet DEQ plan T;,;.'.lCw and approval st.:'.."1dards. CITY OP SPRJNOAELD : R86771 : 6/19/96 LoAN AaREEMENT JUN-19-1995 15:48 FROM DEQ-WATER QUALITY SOUTH TO 915417253589 P.l? . OREOON DEPARTMBNT OF ENVIRONMENTAL QUALITY STATE REVOLVING FUND DRAFT PAGE 21 , r ARTICLE 10: ApPLICABJJE FEDERAL AUTHORITiES ANn I.,A WS C'CRosS-CtrrrKRS") (A) ENVIRONMENTAL LEGISLATION: Archaeological and Historic Preservation Act of 1974, PL 93-291. Clean Air Act, 42 D.S.C. 7506(c). Coastal Banier Resources Act, 16 D.S.c. 3501, et seq. Coastal Zone Management Act of 1972, PL 92.583, as amended. Endangered Species Act 16 V.S.c. 1531, et seq. Executive Order 11593, Protection. and EnJ)a....l~amen1: ofrlle Cultural Environment. Executive Order 11988, Floodplain Management. Executive Order 11990, Protection. ofWetJands. Fannland Protection Policy Act, 7 U.S.C 4201, et seq. Fish. and Wildlife Coordination Act, PL 85.624, as amended. National Historic Preservation Act of 1966, PI.. 89-665, as amended. Safe Drinking Water Act, Section 1424(e), PL 92-523, as wnended. Wild and Scenic Rivers Act, PL 90.542, as amended. :. Federal Water Pollution Control Act: Amendments of 1972, PL 92-500. (B) r!.CONOMIC LEGJSLA nON: Derr)onstT:tt;on Cities Q1ld Metropolitan DcvcJopmcnt Act of 1~66. PI. 89-75-4, j}3 amended. Section 306 of the Clean Air Act and Section 508 of the Clean Water Act, including Executive Order 11738, Administration of the Clean Ajj Act and the Federal Water Pollution Control Act wjd] Respect to Federal Contracts, Grants or Loans. (e) SOCIAL J."EGISLA nON: Age Discrimination Act, PL 94-135. Civil Rights Act of 1964, PL 88-352, as amende~ 42 U.S.c. 2000d et seq. Section 13 of PL 92p500; Prohibition against Sex Discrimif.ation imder t]lC Federal \Va~j PoHution Control Act:. Executive Order 11246,EquaI Employment Opportunity. Executive Order 11625 and 12138, Women's and Minority Business Enterprise. Section 504 oft11e RehabiJitation Act of 1973, PL 93-112 (including Executive Orders 11914 and 11250), as amended, 29 V.S.C. 794. . (D) MISCELLANEOUS AUTIfORJTY: Unlfonn Relocation and Real Property Acquisition Policies Act of ] 970, PL 92-646. ~fT _~''''''''''''''''''''-J-'''-'''''-____'~~'''''''''';I""""",,,,,-,,,~,,,,,,,,,,,,,,,~,,,,,,,,,,,_,,,,,,,,,,,,,,~,,,,,,,,,,,,,,,, CITY or SPR.1NGPiELD : R86771 : 6/19/96 LoAN AGREEMENT JU~-19-1996 16:49 FROM DEQ-WATER QUALITY SOUTH TO g 1541 7263fJEJ9 ORnGON DEPARTMENT OF ENVIRONMENTAL QUALITY . STATE REVOLVING FUND DRAFT Executive Order 12549 and 40 CPR Part 32, Debarment and Suspension. Disclosure of Lobbying Activities, Section] 352, Title 31, U $. Code. . . P.18 PAGE 22 CITY OP SPRINGPIELD : R86771 : 6/19/96 l..oAN AGREEMENT JU~-19-1996 16:50 FROM DEQ-WRTER QURLITY SOUTH TO 9154172E:,3689 P.19 . OREGON DEPARTMENT OF ENVIRONMENTAL QUALITY STATE REVOLVING FUND DRAFT PAGIl 23 ARTICIJE 11: LoANEXF..clITlON This Io:m agreement is executed between the STATE OF OREGON DEPARTIVl"ENT OF ENVIRONMENTAL QUALITY (the "DEQ") and the CITY OF SPRINGFIELD (the 'IBorrower") effective as of the date indicated in. Section 1(E) on page L BORROWER: CITY OF SPRINGFIELD Authori7..ed Officer Typed Name: Title: Date STATE OF OREGON, ) ) ) ;. ('Aunty of This instrument was acknowledged before me on hy as the Name Title , ---.~-.-.- of the City of Springfield. NoWy Public for Oregon My commission expires: DEQ: STATE OF OREGON DEPARTMENT OF ENVIRONMENTAL QUALITY AUthOri7.ed Officer Typed Name: Langdon MarL Title: Director Date . CITY or SPIUNQPIELD ; R86771 : 6/19/96 LoAN AORBP.MBNT JUN-19-1996 16:50 FROM DEQ-WRTER QURLITY SOUTH TO ':31541726368':3 P.20 OREGON DEPARTMENT OP ENVJRONMENTAI. QUALTTY STA'tE REVOLVING FUND DRAFT . PAGE 24 , ApPENDIX A: PRELIMINARY REPAYMENT SCHEDULE BORROWER; C.rv OF SPRINGFIELD ANNUAL INTEREST RATE: 3.93% SRF LOAN NO.: R86771 TERM IN YEARS: 10 LOAN AMOUNT: $ 3,000.000.00 PRINCIPAl.. + INTEREST: $190.728.19 Due ...----............PAYMENT-.......---..-..... Principal Date Pmt# Principal Interest Fees Total Balance $3,000,000.00 1/1/98 1 0.00 58,950.00 45,000.00 103,950.00 3,000,000.00 711/98 .2 131.778.19 58,950.00 15,000.00 205,728.19 2,868,221.81 1/1/99 3 134,367.83 58,360.56 0.00 190,728.19 2,733,854.1 B 7/1/99 4 137,007.96 53,720.23 13,669.27 204,397.46 2,596,846.22 iii/DO 5 139,700.18 51,028.03 0.00 190,728.19 2,457,146.06 711/00 6 142,445.27 48,282.92 12,285.13 203,013.92 2,314,700.79 1/1101 7 145,244.32 45,483.87 0.00 190,728.19 2,169.456.47 7/1/01 8 148.098.37 42,629.82 10,847.28 201,575.47 2,021,358.10 1/1102 9 151,008.50 39,719.69 0.00 190,728.19 1,870,349.60 7/1/02 10 153,975.82 36,752.37 9,351.75 200,079.94 1,716,373.78 1/1/03 11 157,001.45 33,726.74 0.00 190,728.19 1,559,312.33 7/1/03 12 160,086.52 30,641.67 7,796.86 198,525.05 1.399,285.81 1/1/04 13 163,232.22 27,495.97 0.00 190,728.19 1.236,053.59 7/1/04 14 166,439.74 24,288.45 6,160.27 196,908.46 1,069,613.85 . 1/1/05 15 169,710.28 21,017.91 0.00 __ 190,726,19 8~)~O3.57 7/1/05 16 173,046.08 17,683.11 4,499.52 195,227.71 726,858.49 111 JOe 17 176,445.42 14,282.77 0.00 190,728.19 550,413.07 7/1/06 18 179,912.57 10,816.62 2,752.07 193,480.26 370,500.50 1/1/07 19 183,447.86 7,280.33 0.00 190.728.19 187,052.64 7/1/07 20 187,052.64 3,675.58 935.28 ,1~, ,663.4.8 0.00 TOiAt..S e 3,OOO~OOO.OO $ 682,785.64 $1~318.01 $ 31811,103.65 . CITY OF Sl"RlNGflELD : R86771 : 6/19/96 J..oAN AGREEMENT . . . / JU~-19-1995 15:51 FROM DEQ-WRTER QURLITY SOUTH TO 915417263689 P.21 DRAFT OREGON DEPARTMENT OF ENVIRONMENTAL QUAI-fTY STATE REVOLVrNO FUND PAGE 25 APPENDIX B: RESOLUTION [Allach copy ofrhe Resolution approving the loan] Cn'Y OF SPJUNGPlELD : R86771 : 6/19196 LOAN AGREEMBNT Tr-1T,....d D "-J1