Georgetown Idaho

STATE OF IDAHO, CITY OF GEORGETOWN

RESOLUTION NO. 003-2011

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF GEORGETOWN, IDAHO, MAKING FINDINGS AND DECLARATIONS WITH RESPECT TO THE FINANCING OF IMPROVEMENTS TO THE CITY’S WASTEWATER SYSTEM FACILITIES; APPROVING AND AUTHORIZING, SUBJECT TO JUDICIAL CONFIRMATION, THE EXECUTION OF A LOAN AGREEMENT BETWEEN THE STATE OF IDAHO AND THE CITY OF GEORGETOWN FOR THE FINANCING OF THE IMPROVMENTS; AUTHORIZING THE FILING OF A PETITION FOR JUDICIAL CONFIRMATION IN THE DISTRICT COURT OF THE SIXTH JUDICIAL DISTRICT OF THE STATE OF IDAHO, IN AND FOR BEAR LAKE COUNTY; PROVIDING FOR RELATED MATTERS; AND PROVIDING AN EFFECTIVE DATE

WHEREAS, the City of Georgetown, Bear Lake County, Idaho (the “City”), is a municipal corporation duly organized and operating under the laws of the State of Idaho, and has for many years owned and operated a public sewer and wastewater system (the “System”); and

WHEREAS, in May of 2009 the City received a Notice of Noncompliance and Request for Information for the EAP alleging a number of violations to the discharge limitations of a previous compliance order. The violations included exceeding legal discharge limits of BOD, TBS, and E.coli. In October 2010 the City received a notice from the EAP of its intent to file suit against the City for violations of the Clean Water Act; and

WHEREAS, the Mayor and the Council of the City have determined that certain improvements and extensions to the System (the “Improvements”) are required in order for the System to remain functional and adequate to meet the current and projected future needs of the City and to currently comply with applicable state and federal sewer treatment and discharge requirements and drinking water standards; and

WHEREAS, the estimated cost to the City to complete the Improvements to the existing wastewater facilities (exclusive of grants and other state and federal contributions) is $2,800,000; and

WHEREAS, the City does not have sufficient funds available in its current fiscal year’s budget to finance the cost of the acquisition of the Improvements, and the Mayor and Council have determined that it is necessary to finance the cost thereof from future years’ System revenue; and

WHEREAS, the Mayor and Council have further determined that it is in the best interest of the City to finance the cost of the Improvements through a loan from the Wastewater Treatment Facility Loan Account, of the State of Idaho, Department of  Environmental Quality (the “State”), and the City has made application to the State for such loan; and

WHEREAS, the State has approved such loan application, to be repaid by the City from System revenues over a 30-year term, as set forth in the attached Exhibit A, subject to the condition that the City first obtain judicial confirmation of the validity of the proposed loan agreement pursuant to the Idaho Judicial Confirmation Law, the same being Title 7, Chapter 13, Idaho Code; and

WHEREAS, the financing of the costs of the Improvements in the manner described would create an indebtedness or liability of the City exceeding the current year’s revenues; and

WHEREAS, the Mayor and Council have determined that the cost of the improvements, and the proposed loan obligation to be incurred to finance the same, constitute “ordinary and necessary expenses” of the City authorized by the general laws of the State within the meaning of Article 8, Section 3, of the Idaho Constitution, for which no approving vote of the electors is required; and

WHEREAS, the Mayor and Council , on April 15, 2011, held and conducted a public hearing, pursuant to at least fifteen (15) days published notice in the manner required by Sections 7-1304 and 7-1306, Idaho Code, on the question of whether the Council should adopt a resolution authorizing the filing of a petition with the District Court of the Sixth Judicial District of the State of Idaho, in and for the County of Bear Lake, seeking judicial confirmation of the proposed loan agreement and the incurring of such indebtedness as an “ordinary and necessary expense” within the meaning of Article 8, Section 3, of the Idaho Constitution, pursuant to the Judicial Confirmation Law; and

WHEREAS, at least fourteen (14) days have elapsed following such public hearing, and the Mayor and Council have determined that it is in the best interested of the City, and the public health, safety, and welfare for the City to file a petition for judicial confirmation pursuant to the Judicial Confirmation Law upon the question of the authority of the City to incur such indebtedness, to enter into the proposed own agreement, to issue its promissory note or other evidence thereof, and to pledge its domestic water System revenues as security for the payment thereof.

NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF GEORGETOWN, IDAHO, AS FOLLOWS:

Section 1: The foregoing recitations are hereby adopted as findings of fact by the Council.

Section 2: Subject to the entry of a final order of the District Court of the Sixth Judicial District of the State of Idaho, in and for the County of Bear Lake (the “District Court’), confirming the authority of the City to enter into the transaction, the Loan Offer, Acceptance and Contract, substantially in the form which is attached hereto and incorporated by reference as Exhibit “A” (the “Loan Agreement”), is hereby approved, and the Mayor is hereby authorized to execute, on behalf of the City, a promissory note as evidence of the indebtedness incurred pursuant to the Loan Agreement. The appropriate officials of the City are hereby further authorized to execute such additional documents and certifications as may be required to carry out the intent of the Resolution.

Section 3:The Petition for Judicial Confirmation (the “Petition”), substantially in the form which is attached hereto and incorporated herein by reference as Exhibit “B”, is hereby approved, and the Mayor is authorized to execute the verification of the same.

Section 4: The law firm of McKenzie & McKenzie P.A., as counsel to the City, is hereby authorized to file the Petition on behalf of the City in the District Court, and to take all actions necessary with respect thereto in order to obtain a judgment of the District Court in accordance with the prayer of the Petition.

Section 5: The Council hereby finds and declares that the proposed Loan Agreement, the indebtedness incurred thereby, and any evidence of indebtedness executed pursuant thereto, for the financing of the Improvements, constitute an ordinary and necessary expense of the City authorized by the general laws of the State of Idaho within the meaning of Article 8, Section 3, Idaho Constitution, for which no approving vote of the electors of the City is required, for the following reasons:

A. The proposed expenditure is necessary to protect the health and safety of the inhabitants of the City and to comply with applicable state and federal sewer treatment and discharge standards and applicable drinking water standards.

B. As opposed to the construction of wholly new facilities, the proposed expenditure is for the purpose of upgrading and improving the City’s existing wastewater facilities in order to provide sewer collection and treatment services, and to protect against groundwater contamination. The proposed expenditure is also to remedy certain violations of the Clean Water Act.

C. the proposed Improvements are authorized by the general laws of the State.

D. The City has operated the existing System for many years and has determined that the Improvements are indispensable to the efficient  continued operation and provision of the City’s wastewater facilities.

E. The proposed expenditure is not disproportionate to the City’s  overall budget for the year.

Section 6: The resolution shall take effect and be in force immediately upon its passage and approval.

DATED this 6th day of May, 2011

CITY OF GEORGETOWN
Bear Lake County, Idaho
(s) Robert W. Van Cleave, Ph.D.
Mayor

ATTEST:
(s) Marty Nate, City Clerk