20-11042 Loan Agreement Between Salina, KS and the State of Kansas through the KS Department of Health and Environment (Summary published in The Salina Journal on October 1 ,2020.)
(Published on the City of Salina's website for a minimum of one week from September , 2020.)
ORDINANCE NO.20-11042
AN ORDINANCE AUTHORIZING THE EXECUTION OF A LOAN AGREEMENT
BETWEEN SALINA, KANSAS AND THE STATE OF KANSAS, ACTING BY AND
THROUGH THE KANSAS DEPARTMENT OF HEALTH AND ENVIRONMENT
FOR THE PURPOSE OF OBTAINING A LOAN FROM THE KANSAS PUBLIC
WATER SUPPLY LOAN FUND FOR THE PURPOSE OF FINANCING A PUBLIC
WATER SUPPLY PROJECT; ESTABLISHING A DEDICATED SOURCE OF
REVENUE FOR REPAYMENT OF SUCH LOAN; AUTHORIZING AND
APPROVING CERTAIN DOCUMENTS IN CONNECTION THEREWITH; AND
AUTHORIZING CERTAIN OTHER ACTIONS IN CONNECTION WITH THE
" LOAN AGREEMENT.
WHEREAS, the Safe Drinking Water Act Amendments of 1996 [PL 104-182] to the Safe Drinking
Water Act (the "Federal Act") established the Drinking Water Loan Fund to assist public water supply
systems in financing the costs of infrastructure needed to achieve or maintain compliance with the Federal
Act and to protect the public health and authorized the Environmental Protection Agency (the "EPA") to
administer a revolving loan program operated by the individual states; and
WHEREAS, to fund the state revolving fund program, the EPA will make annual capitalization
grants to the states,on the condition that each state provide a state match for such state's revolving fund; and
WHEREAS, by passage of the Kansas Public Water Supply Loan Act, K.S.A. 65-163d et seq., as
amended(the "Loan Act"),the State of Kansas (the "State") has established the Kansas Public Water Supply
Loan Fund(the "Revolving Fund")for purposes of the Federal Act; and
WHEREAS, under the Loan Act, the Secretary of the Kansas Department of Health and
Environment ("KDHE") is given the responsibility for administration and management of the Revolving
Fund; and
WHEREAS,the Kansas Development Finance Authority(the "Authority") and KDHE have entered
into a Master Indenture (the "Master Indenture") pursuant to which KDHE agrees to enter into Loan
Agreements with Municipalities for public water supply projects (the "Projects") and to pledge the Loan
Repayments (as defined in the Master Indenture) received pursuant to such Loan Agreements to the
Authority; and
WHEREAS,the Authority is authorized under K.S.A. 74-8905(a)and the Loan Act to issue revenue
bonds (the "Bonds") for the purpose of providing funds to implement the State's requirements under the
Federal Act and to loan the same, together with available funds from the EPA capitalization grants, to
Municipalities within the State for the payment of Project Costs (as said terms are defined in the Loan Act);
and
WHEREAS, Salina, Kansas (the "Municipality") is a municipality as said term is defined in the
Loan Act which operates a water system(the "System"); and
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WHEREAS, the System is a Public Water Supply System, as said term is defined in the Loan Act;
and
WHEREAS, the Municipality has, pursuant to the Loan Act, submitted an Application to KDHE to
obtain a loan from the Revolving Fund to finance the costs of improvements to its System consisting of the
following:
Replace approximately 6 miles of deteriorated distribution pipe and associated valves, fire hydrants, and
N meters.
N (the "Project"); and
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WHEREAS,the Municipality has taken all steps necessary and has complied with the provisions of
the Loan Act and the provisions of K.A.R. 28-15-50 through 28-15-65 (the "Regulations") applicable thereto
necessary to qualify for the loan; and
WHEREAS, KDHE has informed the Municipality that it has been approved for a loan in amount
not to exceed$4,250,000.00(the "Loan")in order to finance the Project; and
WHEREAS,the governing body of the Municipality hereby finds and determines that it is necessary
and desirable to accept the Loan and to enter into a loan agreement and certain other documents relating
thereto, and to take certain actions required in order to implement the Loan Agreement.
THEREFORE, BE IT ORDAINED BY THE GOVERNING BODY OF THE CITY OF
SALINA,KANSAS:
Section 1. Authorization of Loan Agreement. The Municipality is hereby authorized to accept the
Loan and to enter into a certain Loan Agreement, with an effective date of July 7, 2020, with the State of
Kansas acting by and through the Kansas Department of Health and Environment(the "Loan Agreement")to
finance the Project Costs(as defined in the Loan Agreement). The Mayor and Clerk are hereby authorized to
execute the Loan Agreement in substantially the form presented to the governing body this date, with such
changes or modifications thereto as may be approved by the Mayor and the Municipality's legal counsel,the
Mayor's execution of the Loan Agreement being conclusive evidence of such approval.
Section 2. Establishment of Dedicated Source of Revenue for Repayment of Loan. Pursuant to
the Loan Act, the Municipality hereby establishes a dedicated source of revenue for repayment of the Loan.
In accordance therewith, the Municipality shall impose and collect such rates, fees and charges for the use
and services furnished by or through the System, including all improvements and additions thereto hereafter
constructed or acquired by the Municipality as will provide System Revenues (as defined in the Loan 1
Agreement) sufficient to (a) pay the cost of the operation and maintenance of the System, (b) pay the
principal of and interest on the Loan as and when the same become due, (c)pay all other amounts due at any
time under the Loan Agreement, and (d)pay the principal of and interest on Additional Revenue Obligations
(as defined in the Loan Agreement) as and when the same become due; provided, however, the pledge of the
System Revenues contained herein and in the Loan Agreement(i) shall be subject to reasonable expenses of
operation and maintenance of the System, and(ii)shall be junior and subordinate in all respects to the pledge
of System Revenues to any Additional Revenue Obligations. In the event that the System Revenues are
insufficient to meet the obligations under the Loan and the Loan Agreement, the Municipality shall levy ad
valorem taxes without limitation as to rate or amount upon all the taxable tangible property, real or personal,
within the territorial limits of the Municipality to produce the amounts necessary for the prompt payment of
the obligations under the Loan and Loan Agreement. In accordance with the Loan Act, the obligations under
the Loan and the Loan Agreement shall not be included within any
limitation on the bonded indebtedness of the Municipality.
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Section 3. Further Authority. The Mayor, Clerk and other City officials and legal counsel are
hereby further authorized and directed to execute any and all documents and take such actions as they may
deem necessary or advisable in order to carry out and perform the purposes of the Ordinance, and to make
alterations, changes or additions in the foregoing agreements, statements, instruments and other documents
Z herein approved, authorized and confirmed which they may approve, and the execution or taking of such
W action shall be conclusive evidence of such necessity or advisability.
77,
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Section 4. Governing Law. The Ordinance and the Loan Agreement shall be governed exclusively
by and construed in accordance with the applicable laws of the State of Kansas.
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U Section 5. Effective. This ordinance shall be in full force and effect from and after its adoption and
publication once in the official city newspaper by the following summary:
Ordinance No. 20-11042 Summary
On September 28, 2020 the City of Salina, Kansas, passed Ordinance No. 20-11042. The
ordinance authorizes an agreement between the City of Salina and the Kansas Department of
Health and Environment for the purpose of obtaining a Kansas Public Water Supply Loan for
the purpose of financing public water main replacement projects. A complete copy of the
ordinance is available at www.salina-ks.gov or in the office of the city clerk, 300 W. Ash
Street,free of charge. This summary is certified by the city attorney.
Introduced: September 21,2020
Passe.: Septes ber 28,2020
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Mi hae L. opp•f- ayor
[SEAL]
ATTEST:
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QACL. d W.Qin
Shandi Wicks,CMC, City Clerk
Till
The publication summary set forth above is certified this .2day of September, 2020...11‘
A.A. Be�O.on, City Attorney
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