An Ordinance of the Borough of Bolivar Authorizing the Incurrence of Additional Lease Rental Debt by Guaranty Agreement

Be it enacted and ordained and it is hereby ordained by the Council of the Borough of Bolivar in session lawfully assembled as follows:

Section I

The Borough of Bolivar shall incur additional lease rental debt by Guaranty Agreement for the Tri-Community Water and Sewer Authority project which consists of the construction and operation of a sewage collection, conveyance and treatment facility in certain areas of Fairfield Township, the Borough of Bolivar and the Township of West Wheatfield.

Section II

The aggregate principal amount of indebtedness to be secured was estimated to be #4,050,000.00 and this was approved by the Borough by Ordinance 1 of 1989. Upon completion of the system, it appears that the cost therefore exceeded the estimates by the amount of $1000,000.00. The maximum principal amount of the additional indebtedness for which the Borough of Bolivar may become liable is one third (1/3) of that amount or $33,333.00

Section III

The debt to be incurred is Lease Rental Debt.

Section IV

The President and Secretary of Council and their successors are authorizes and directed to prepare and certify and to file the debt settlement required by Section 410 of the Local Government Unit Debt Act, to execute and deliver the instrument evidencing lease rental debt, and to take other necessary action with the stipulation that the designation of specified officers may be changed from time to time thereafter. 

Section V

The President and Secretary of Council are authorized to prepare and file any statements required by Article II of the Local Government Unit Debt Act which are necessary to qualify all or any portion of the debt for exclusion from the Borough's debt limit.

Section VI

The President and Secretary of Council are authorized to execute and deliver a Guaranty Agreement and other papers required by the Local Government Unit Debt Act.

Section VII

The Borough of Bolivar covenants that it shall:

a. Include the amounts payable in respect of its guaranty for each fiscal year in which such sums are payable in its budget for that year,

b. Appropriate such amounts from its general revenues for the payment of such guaranty when the terms of the notice requirements are met, and

c. Duly and punctually pay or cause to be paid from such revenues to the extent of its obligation, the amount payable in respect of such guaranty at the dates and places and in the manner stated in such guaranty according to the true intent and meaning thereof.

Section VIII

For such budgeting, appropriation and payment, the Borough of Bolivar hereby pledges its full faith, credit and taxing power. this covenant shall be specifically enforceable, subject, as to the enforceability of remedies, to any applicable bankruptcy, insolvency, moratorium or other laws or equitable principles affecting the enforcement of creditors, rights generally. the Borough agrees that this covenant may be enforced against it by the Pennsylvania Infrastructure Investment Authority or its assigns or successors as provided in the Local Government Unite Debt Act.

Section IX

If any clauses, provisions or section of this Ordinance is held illegal or invalid by any court, the invalidity of such clause, provision or section shall not affect any of the remaining clauses, provisions or sections thereof, and this Ordinance shall be construed and enforced as if such illegal or invalid clause, provision or section had not been contained herein.

Section X

The range of lease rental payments is set forth in the Debt Service Schedule attached hereto as Exhibit "A"

Section XI

This Ordinance shall become effective on the date specified under the provisions of the Local Government Unit Debt Act.

Enacted and Ordained this 12th day of September 1994

J. Diane Robinson

Council President

Attest:

Cheryl McGinnis

Secretary

Original Ordinance on file in Vault 4

Debt Service Schedule to Ordinance Number 5 of 1994

Interest

The loan provides for interest on the unpaid principal balance outstanding from time to time at an annual rate equal to 1.0 percent for the initial loan's twenty year term with a balloon payment due and payable upon the end of the original twenty year term for the $4,050,000.00 initial debt.

Payment Schedule

Monthly Payment Time Period

Interest only on outstanding

principal balance of $4,150,000. month 1 - 22 inclusive

$3,458.33 months 23 - 240 inclusive

Liability of Borough of Bolivar

Monthly Payment Time Period

1/3 of interest on outstanding

principal balance month 1 - 22 inclusive

$1,152.78 month 23 - 240 inclusive

Exhibit "A"