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HomeMy WebLinkAboutRes1989-141 . . . Sponsored by: Schaefermever CITY OF SEWARD, ALASKA RESOLUTION NO. 89-141 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA, AUTHORIZING THE CITY TO BORROW $200,000 FOR THE PURPOSE OF FUNDING HOSPITAL OPERATIONS IN ANTICIPATION OF COLLECTING ACCOUNTS RECEIVABLE AND AUTHORIZING THE ISSUANCE OF A REVENUE ANTICIPATION NOTE WHEREAS, the EXXON VALDEZ oil spill of March 24, 1989, resulted in high levels of clean-up and related activity in and around the city of Seward, which in turn resulted in dramatically increased demands for services at the Seward General Hospital; and WHEREAS, the Seward General Hospital is funded through the budget of the City of Seward and is accounted for as an enterprise fund of the City of Seward; and WHEREAS, Seward General Hospital has developed a much larger than normal volume of accounts receivable, and it is anticipated that during this fiscal year there will exist a cash flow deficit in the Seward General Hospital fund due to the inability to match the receipt of accounts receivable with expenditures; and WHEREAS, at the request of the Seward Community Hospital Board, the city Council of the City of Seward desires to avoid the projected cash flow deficit by the issuance of revenue anticipation notes as authorized by section 11.1 of the Seward City Charter; and WHEREAS, the Charter authorizes the City to borrow money and to issue revenue anticipation notes and other short term obliga- tions which can be used for the purposes set forth in the Charter; and WHEREAS, Veco, Inc., has submitted an offer to loan to the City for repayment within the current fiscal year the sum of Two Hundred Thousand Dollars ($200,00.00); and WHEREAS, the City Council determines it to be in the best interest of the City to accept such offer; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA, that: section 1. The City is authorized to borrow the sum of Two Hundred Thousand Dollars ($200,000.00), such amount to be repaid as set forth herein. To accomplish the purposes set forth herein, the City is authorized to issue a revenue anticipation note or other short-term obligation (the "Obligation") in the amount of $200,000.00. -1- . . . CITY OF SEWARD, ALASKA RESOLUTION NO. 89-141 section 2. The Obligations shall be designated in such manner as the city manager shall direct, shall be dated as the date of its delivery to the lender, and shall be in substantially the form set forth in Exhibit A hereto without interest. principal shall be payable in six equal installments of $33,333.33 payable on the 30th day of January, 1990, and on the same day of each month for the next succeeding five months. If not sooner paid, the entire principal outstanding shall be payable on or before June 30, 1990. The obligation shall be subject to optional prepayment by the City at any time without penalty. section 3. The obligation shall be signed by the Mayor and countersigned by the Clerk under the seal of the city. section 4. All money derived from the sale of the obligation authorized herein shall be expended solely for the purpose of Seward General Hospital operations and for such other purposes as may be authorized by section 11.1(C) of the Seward city Charter. section 5. The Obligation shall be repaid from the revenues of the Seward General Hospital. To the extent the revenues of Seward General Hospital are not sufficient for the timely payment of principal, the full faith, credit and resources of the City are hereby pledged for payment of principal on the obligation as the same shall become due. Section 6. The ci ty makes no covenant or warranty or representation of any kind concerning the status of the obligation under the Internal Revenue Code or any other tax law. section 7. The proper officials of the City are hereby authorized and directed to do all things necessary and to execute any and all papers and documents and to do or cause to be done any and all acts and things necessary or proper for the carrying out of the resolution. section 8. Nothing contained in this resolution nor in the Obligation shall be construed as an admission of liability on the part of Veco, Inc., or Exxon with respect to the EXXON VALDEZ oil spill nor shall it be construed as a waiver or satisfaction of any claim the City may have against Exxon or Veco, Inc., in connection with the EXXON VALDEZ oil spill, or an agreement on the part of the City that Exxon or Veco, Inc., have satisfied any or all obliga- tions they may have under federal or state law with respect to the oil spill or clean-up activities. section 9. The Obligation shall not be a negotiable promis- sory note. The Obligation shall not be sold or otherwise trans- -2- . . . CITY OF SEWARD, ALASKA RESOLUTION NO. 89-141 ferred by Veco, Inc., to any other party. The city shall be obligated to repay principal on the Obligation only to VECO, Inc. The Obligation shall be repaid without assertion of any offset or counterclaim by the city. section 10. The City has disclosed to Veco, Inc., all information that Veco, Inc., has requested concerning the financial status of the city and otherwise concerning the issuance of the obligation. Veco, Inc., as the purchaser of the Obligation, shall acknowledge that it has received all financial and other business information respecting the City and the Obligation as it deems necessary to enable it to make an informed decision with respect to the purchase of the obligation. section 11. The clerk is authorized and directed to deliver a certified copy of this resolution to Veco, Inc. The sale of the Obligation to Veco, Inc., shall be subject to the terms and conditions contained in this resolution and the Obligations shall not be sold to Veco, Inc., until it acknowledges and accepts the terms and conditions contained herein. section 12. Pursuant to Section 1l.1 of the Seward city Charter, the Obligations shall not be sold to Veco, Inc., until thirty days have passed from the date of passage of this resolu- tion. PASSED AND APPROVED by the city Council of the city of Seward, Alaska, this 27th day of November, 1989. THE CITY OF SEWARD, ALASKA ~ (~ ~ . iam C. Noll, Mayor AYES: NOES: ABSENT: ABSTAIN: Burgess, Hilton, Meehan, Noll, Sieminski Dunham Simutis None -3- . . . CITY OF SEWARD, ALASKA RESOLUTION NO. 89-141 ATTEST: \=>~j,~ Patricia J. Jones Acting city Clerk (City Seal) APPROVED AS TO FORM: Perkins Coie, Attorneys for the city of Seward, Alaska 7~f/P~ Fred B. Arvidson City Attorney -4- . . . EXHIBIT A CITY OF SEWARD. ALASKA REVENUE ANTICIPATION NOTE. SERIES 1989 5200,000.00 November 27 , 1989 Seward, Alaska FOR VALUE REeEIVED, CITY OF SEWARD, ALASKA, (the "eity") promises to pay to VECO, Inc., the sum of $200,000.00, without interest, in equal monthly installments of $33,333.33 on the 30th day of January, 1990, and on the same day of each month thereafter until paid in full. Pursuant to eity of Seward Resolution 89-141, this note is issued to finance operations of the Seward General Hospital in anticipation of the collection of revenues by the Seward General Hospital. Principal shall be paid first from the revenues of the Seward General Hospital. To the extent such revenues are not adequate, the full faith, credit and resources of the eity available for the repayment of non-voted general indebtedness are hereby irrevocably pledged for the prompt payment of such principal. If not sooner paid, Principal of this Note shall be payable in whole at maturity on June 30, 1990. This Note may be prepaid, without penalty, at the option of the City at any time. Principal of this Note shall be payable in currency of the united States of America. The undersigned hereby waives demand, protest, and notice of demand, and protest of nonpayment. The undersigned further agrees that it shall not assert any counterclaim or offset against the obligation represented by this Note. This Note is to be construed in all respects and enforced according to the laws of the state of Alaska. This Note shall be fully binding on and inure to the benefit of the successors, heirs, legal representatives, and assigns of the parties hereto. CITY OF SEWARD, ALASKA BY:~~ WILLIAM e. NOLL, ,MAYOR ATTEST: BY: -?~ ~~ PATSY JONES, AeTING CITY eLERK (SEAL)