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HomeMy WebLinkAboutPublic Works Trust Fund Loan PW-00-691-043 Amend 1AMENDMENTNUMBERI PUBLIC WORKS TRUST FUND LOAN AGREEMENT NUMBER PW -00-691-043 BETWEEN THE PUBLIC WORKS BOARD AND THE CITY OF PASCO WHEREAS, the Public Works Board (hereinafter referred to as BOARD) is authorized to make loans to local governments pursuant to the provisions of Chapters 43.155 and 39.69 of the Revised Code of Washington, as supplemented and amended; and WHEREAS, the City of Pasco (hereinafter referred to as LOCAL GOVERNMENT) desires to amend Loan Agreement Number PW -00-691-043; and WHEREAS, consistent with its governmental purposes, the BOARD has an established program of lending money to local governments that, among other things, is intended to (i) minimize borrowing costs to local governments, (ii) operate with low administrative burdens on the BOARD and local governments, (iii) ensure future participation by local governments in the program and (iv) provide reasonable loan security for the BOARD and its funds; and WHEREAS, the BOARD's standard loan agreements contain provisions (the "Acceleration Provisions") allowing the BOARD, in certain circumstances, to declare the entire remaining balance of a loan made thereunder, together with accrued interest, immediately due and payable; and WHEREAS, various local government borrowers under the BOARD's programs believe that the Acceleration Provisions increase the cost of incurring indebtedness with a lien senior to that of the BOARD's loans and have requested that the BOARD either modify the loan agreements to remove the Acceleration Provisions or otherwise agree not to exercise the Acceleration Provisions; and WHEREAS; the BOARD, after receiving the analysis of its staff and advisors, has determined that the Acceleration Provisions have increased borrowing costs for certain borrowers and are likely to increase such costs in the future; and WHEREAS, the BOARD has rarely invoked acceleration as a remedy against the borrowers under its loan programs, has various other rights under the loan agreements following a default by a borrower and operates its programs without requirements that may be associated with a leveraged loan program; and WHEREAS, consistent with its program of lending, the BOARD desires to minimize the impact of its loan agreements on the borrowing costs of local governments and to increase demand for its loans; and WHEREAS, existing remedies contained within the loan agreements, together with clarifications of certain of the BOARD's existing rights in relation to other creditors, provide protection to the BOARD and its funds which the BOARD deems sufficient in light of its desire to decrease borrowing costs for local governments; and WHEREAS, on February 4, 2003 the BOARD modified its form loan agreements by removing acceleration provisions and adding provisions clarifying the existing right of the BOARD to notify a borrowers other creditors upon an event of default or other failure to comply with a loan agreement; and WIIEREAS, consistent with its program of lending, the BOARD desires that its loan provisions be generally consistent and, therefore, desires to amend its existing loan agreements to conform to the modifications of its form loan agreements; and CADocuments and Settings\CHASERMy Documents\Pasco 00-043 PWTF Loan Amend Doc,doc WHEREAS, the BOARD has lent funds to the LOCAL GOVERNMEN i and the LOCAL GOVERNMENT is authorized to enter into loan agreements with the BOARD pursuant to the provisions of Chapter 39.69 of the Revised Code of Washington, as supplemented and amended; and WHEREAS, the execution and delivery of this Amendment has been duly authorized pursuant to proper action of the BOARD and of the governing body of the LOCAL GOVERNMENT; and WHEREAS, all acts, conditions and things required by law to exist, to have happened and to have been performed precedent to and in connection with the execution and delivery of this Amendment, have happened and have been performed in regular and due time, form and manner as required by law, and the parties hereto are now duly authorized to execute, deliver and perform their respective obligations under this Amendment; NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein and for other valuable consideration, the sufficiency of which is hereby acknowledged, the BOARD and the LOCAL GOVERNMENT agree to amend Public Works Trust Fund Loan Agreement Number PW -00-691-043 as described below: Section 4.05 Time of Performance is amended to delete the original section and replace it with the following: The LOCAL GOVERNMENT shall begin the activities identified within ATTACHMENT I: SCOPE OF WORK no later than three (3) months after the date of agreement execution, and reach project completion no later than thirty-six (36) months after the date of agreement execution. Failure to perform within the time frame described in the preceding paragraph may constitute default of this agreement. In the event of extenuating circumstances, the LOCAL GOVERNMENT may request, in writing, that the BOARD extend the deadline for project completion. The BOARD may, by a two-thirds vote, extend the deadline. The term of this agreement shall be for the entire term of the loan, irrespective of actual project completion, unless terminated sooner as provided herein. Section 4.08 Default in Repayment is amended to delete the original section and replace it with the following: Loan repayments shall be made on the loan in accordance with Section 4.06 of this agreement. A payment not received within thirty (30) days of the due date shall be declared delinquent. Delinquent payments shall be assessed a daily penalty beginning on the thirty-first (3 1) day past the due date. The penalty will be assessed on the entire payment amount. The penalty will be twelve percent (12%) per annum calculated on a 360 -day year. The same penalty terms shall apply to delinquent repayment of funds paid in excess of eligible costs as provided for in Section 4.03, The LOCAL GOVERNMENT acknowledges and agrees to the BOARD'S right, upon delinquency in the payment of any annual installment, to notify any other entity, creditors or potential creditors of the LOCAL GOVERNMENT of such delinquency including, without limitation, the state government and the United States of America or its agencies, credit rating agencies, and the municipal finance market. 'Che LOCAL GOVERNMENT shall pay the costs and reasonable legal fees incurred by the BOARD in any action undertaken to enforce its rights under this section. C:\Documents and Settings\CHASEJ\My Documents\Pasco 00-043 PWTF Loan Amend Doc.doc Section 4.14 Termination for Cause is amended to delete the original section and replace it with the following: If the LOCAL GOVERNMENT fails to comply with the terms of this agreement, or fails to use the loan proceeds only for those activities identified in ATTACHMENT I: SCOPE OF WORK, the BOARD may terminate the agreement in whole or in part at any time. The BOARD shall promptly notify the LOCAL GOVERNMENT in writing of its determination to terminate, the reason for such termination, and the effective date of the termination. Nothing in this section shall affect LOCAL GOVERNMENT obligations to repay the unpaid balance of the loan. Section 4.15 Termination for Convenience is amended to delete the original section and replace it with the following: The BOARD may terminate this agreement in the event that federal or state funds are no longer available to the BOARD, or are otherwise not allocated for the purpose of meeting the BOARD'S obligations under this agreement. Termination will be effective when the BOARD sends written notice of termination to the LOCAL GOVERNMENT. Nothing in this section shall affect LOCAL GOVERNMENT obligations to repay the unpaid balance of the loan. A copy of this amendment, consisting of 3 pages, shall be attached to and incorporated into the original agreement between the BOARD and the LOCAL GOVERNMENT. All other items and conditions of the original loan shall remain in full force and effect. IN WITNESS THEREOF, the BOARD and the LOCAL GOVERNMENT have executed this amendment as of the date and year last written below. PUBLIC WORKS, BOW John aRocque, Exe utive Director Pu Works Board i-�4' S Y Date APPROVED AS TO FORM ONLY This 24°i Day of March, 2003 Christine O. Gregoire Attorney General By: Signature on File Jeanne A. Cushman Assistant Attorney General Gary Crutchfield Print Name City Manager, City of Pasco Title J -V-0 3 Date 91-6001264 Federal Taxpayer Identification Number C:\Documents and Settings\CHASEJ\My Documents\Pasco 00-043 PWTF Loan Amend Doc.doc