ALBUQUERQUE BERNALILLO COUNTY
WATER UTILITY AUTHORITY
BILL NO. R-24-7
Resolution
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A Resolution Authorizing the Execution and Delivery of a Loan and Subsidy Agreement (“Loan Agreement”) by and Between the Albuquerque Bernalillo County Water Utility Authority, New Mexico (the “Water Authority”) and the New Mexico Finance Authority (“NMFA’), in the total amount of one million one hundred thousand dollars ($1,100,000) ($770,000 Loan Amount/$330,000 Principal Forgiveness Subsidy) Evidencing a Special Limited Obligation of the Water Authority to Pay a Maximum Repayable Principal Amount of no more than Seven hundred seventy thousand dollars ($770,000), Together with Interest, and Administrative Fees, and to Accept a Loan Subsidy of No More than Three Hundred and Thirty Thousand Dollars ($300,000), For the Purpose of Financing the Costs of Extending and Improving the Water Authority’s Joint Water and Sewer System (the “System”) by conducting a lead service line replacement project and associated activities directly connected to planning, designing and replacing of lead service lines including an inventory/survey to determine If lead exists in the System lines and shall include drinking water facility construction project work necessary to complete the Project (“PROJECT”), and Soley in the Manner Described in the loan Agreement; Providing for the Pledge and Payment of the Loan Soley From a Senior Lien (But Not an Exclusive Senior Lien) on the Net revenues of the system; Approving the Form of and Other Details Concerning the Loan Agreement; Ratifying Action Heretofore Taken; Repealing All Action Inconsistent With this Resolution; and Authorizing the Taking of Other Actions in Connection With the Execution and Delivery of the Loan Agreement
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Capitalized terms used in the following recitals have the same meaning as defined in Section 1 of this Resolution, unless the context requires otherwise.
WHEREAS, the Water Authority is a legally and regularly created, established, duly organized and existing public body politic and corporate, separate and apart from the City and the County under and pursuant to the laws of the State and more specifically; and
WHEREAS, the Water Authority owns, operates and maintains the System as a joint public utility water and sanitary sewer system; and
WHEREAS, the Water Authority is obligated on the outstanding Senior Obligations on parity with this Loan Agreement set forth in Exhibit A, payable from Net Revenues with a senior first lien on the Net Revenues; and
WHEREAS, the Water Authority is obligated on the outstanding Subordinate Obligations set forth in Exhibit A, payable from Net Revenues with a lien on the Net Revenues subordinate to the Senior Obligations, and superior to the lien of the Super Subordinate Obligations; and
WHEREAS, the Water Authority currently is obligated on the outstanding Super Subordinate Obligations set forth in Exhibit A, payable from Net Revenues with a lien on the Net Revenues subordinate to the Senior Obligations and Subordinate Obligations; and;
WHEREAS, except as stated in these preambles, the Net Revenues have not been pledged or hypothecated to the payment of any Outstanding obligations and no other obligations are payable from the Net Revenues on the date of this Resolution; and
WHEREAS, there are no obligations which have a lien on the Net Revenues superior to the lien thereon of the Senior Obligations; and
WHEREAS, the Governing Body has determined and hereby determines that the Project may be financed with amounts borrowed under the Loan Agreement and that it is in the best interest of the Water Authority and the public it serves that the Loan Agreement be executed and delivered and that the financing of the Project take place by executing and delivering the Loan Agreement; and
WHEREAS, the Governing Body has determined that it may lawfully pledge the Net Revenues for the payment of amounts due and enter into the Loan Agreement; and
WHEREAS, there have been presented to the Governing Body and there presently are on file with the Water Authority, this Resolution and the form of the Loan Agreement which is incorporated by reference and considered to be a part hereof; and
WHEREAS, the Governing Body hereby determines that the Project to be financed by the Loan Agreement is to be used for governmental purposes of the Water Authority; and
WHEREAS, all required authorizations, consents and approvals in connection with (i) the use and pledge of the Net Revenues to the NMFA (or its assigns) for the payment of amounts due under the Loan Agreement, (ii) the use of the proceeds of the Loan Agreement to finance the Project, and (iii) the authorization, execution and delivery of the Loan Agreement, which are required to have been obtained by the date of the Resolution have been obtained or are reasonably expected to be obtained prior to the Closing Date.
BE IT RESOLVED BY THE WATER AUTHORITY:
Section 1. Definitions. Capitalized terms defined in this Section 1, for all purposes, shall have the meaning herein specified, unless the context clearly requires otherwise (such meanings to be equally applicable to both the singular and the plural forms of the terms defined) and, any term not defined herein shall have the definition given it by the Loan Agreement:
“Administrative Fee” or “Administrative Fee Component” means the 0.25% annual fee payable to the NMFA as 0.25% of the Aggregate Repayable Disbursements then outstanding as a part of each Loan Agreement Payment for the costs of originating and servicing the Loan.
“Aggregate Disbursements” means, at any time after the Closing Date, the sum of all Disbursements.
“Aggregate Forgiven Disbursements” means the amount of subsidy provided in the form of principal forgiveness, and shall at any time after the Closing Date be equal to the product of the subsidy times the Aggregate Disbursements, up to the Maximum Forgiven Principal Amount.
“Aggregate Repayable Disbursements” means, at any time after the Closing Date, the Aggregate Disbursements less the Aggregate Forgiven Disbursements.
“Approved Requisition” means a requisition in the form of Exhibit “C” to the Loan Agreement, together with supporting documentation submitted to and approved by the NMFA pursuant to Section 4.2 of the Loan Agreement.
“Authorized Officers” the Chair, the Executive Director, the Chief Operating Officer, the Chief Financial Officer or other officer or employee of the Water Authority when designated by a certificate signed by the Chair from time to time.
“City” means the City of Albuquerque, New Mexico.
“Closing Date” means the date of execution, delivery and funding of the Loan Agreement authorized by this Resolution.
“Credit Facility” means a letter of credit, line of credit, bond insurance policy or reserve account surety bond, guaranty or similar agreement provided by a Credit Source to provide support to pay the purchase price of, or the payment when due of the principal of and interest on, System Obligations.
“Credit Source” means any bank, insurance company or other financial institution which provides a Credit Facility for a series of System Obligations.
“County” means Bernalillo County, New Mexico.
“Debt Service Account” means the debt service account established in the name of the Water Authority and administered by the NMFA to pay the Loan Agreement Payments under the Loan Agreement as the same become due.
“Debt Service Fund” means Debt Service Fund previously established by the Water Authority and continued in Section 13 of this Resolution.
“Debt Service Requirements” means with respect to System Obligations and for any given period, the sum of: (1) the amount required to pay the interest, or to make reimbursements for payments of interest, becoming due on System Obligations during that period, plus (2) the amount required to pay the principal or to make reimbursements for the payment of principal becoming due on System Obligations during that period, whether at maturity or upon mandatory sinking fund redemption dates, plus (3) the periodic payments required to be made by the Water Authority pursuant to a Qualified Exchange Agreement minus (4) the periodic payments to be received by the Water Authority pursuant to a Qualified Exchange Agreement. No payments required for any System Obligations which may be tendered or otherwise presented for payment at the option or demand of the owners of System Obligations, or which may occur because of the exercise of an option by the Water Authority, or which may otherwise become due by reason of any other circumstance or contingency, including acceleration or early termination payments, which constitute other than regularly scheduled payments of principal, interest or other regularly scheduled payments on System Obligations shall be included in any computation of Debt Service Requirements for that period.
Unless, at the time of computation of Debt Service Requirements, payments on System Obligations are owed to, or System Obligations are owned or held by, the provider of a Credit Facility pursuant to the provisions of that Credit Facility, the computation of interest for the purposes of this definition shall be made without considering the interest rate payable pursuant to a Credit Facility.
In any computation of Debt Service Requirements relating to the issuance of additional System Obligations, there shall be excluded from the computation of the Debt Service Requirements amounts and investments which are irrevocably committed to make designated payments on System Obligations during the applicable period, including, without limitation, money on deposit in any Debt Service Account and amounts on deposit in an escrow account irrevocably committed to make designated payments on System Obligations during the applicable period and earnings on such investments which are payable and committed to the payment of such System Obligations during the applicable period.
Unless otherwise required by a Water Authority ordinance or resolution relating to a series of System Obligations, to determine Debt Service Requirements of Variable Rate Obligations, the Water Authority shall use the procedures set forth in the following paragraphs to determine the amount of interest or other payments to be paid by the Water Authority on Variable Rate Obligations.
(1) During any historical period for which the actual variable interest rate or rates are determinable, the actual variable interest rate shall be used. During any historical period when the actual variable interest rate is not determinable, the variable interest rate shall, for the purpose of determining Debt Service Requirements, be deemed to be the higher of:
(a) the actual variable interest rate, if any, at the time of computation; or
(b) a fixed annual rate equal to the prevailing rate on the Variable Rate Obligations on the date of computation (which, for the purpose of determining the Debt Service Requirements, shall be a date which is no more than 60 days prior to the date of issuance of the applicable System Obligations) as certified by the Water Authority’s financial advisor, the underwriters of the System Obligations, an investment banker designated by the Water Authority from time to time or a counterparty with respect to a Qualified Exchange Agreement.
(2) Prospective computations of interest payable on Variable Rate Obligations, including those relating to the issuance of additional System Obligations or required by the Rate Covenant, shall be made on the assumption that such obligations bear interest at a fixed annual rate equal to:
(a) the average of the daily rates of such System Obligations during the 365 consecutive days (or any lesser period such System Obligations have been Outstanding) next preceding a date which is no more than 60 days prior to the date of the issuance of the additional System Obligations; or
(b) with respect to System Obligations initially issued or incurred as or being converted to Variable Rate Obligations, the estimated initial rate of interest of such System Obligations upon the date of issuance, exchange or conversion as certified by the Water Authority’s financial advisor, another investment banker, as designated by the Water Authority from time to time, or a counterparty with respect to a Qualified Exchange Agreement.
“Disbursement” means an amount caused to be paid by the NMFA for an Approved Requisition for costs of the Project, calculated on the basis of the amount of such Approved Requisition.
“DWSRLF Act” means the general laws of the State, particularly the Drinking Water State Revolving Loan Fund Act, NMSA 1978, §§ 6-21A-1 through 6-21A-9, as amended; and enactments of the Governing Body relating to the Loan Agreement, including this Resolution.
“Final Loan Agreement Payment Schedule” means the schedule of Loan Agreement Payments due on the Loan Agreement following the Final Requisition, as determined on the basis of the Aggregate Repayable Disbursements.
“Final Requisition” means the final requisition of moneys to be submitted by the Water Authority, which shall be submitted by the Water Authority on or before the date provided for in Section 4.1(b) of the Loan Agreement.
“Governing Body” means the duly organized Board of Directors of the Water Authority, or any successor governing body of the Water Authority.
“Gross Revenues” means all income and revenues directly or indirectly derived by the Water Authority from the operation and use of the System, or any part of the System, and includes, without limitation, all revenues received by the Water Authority, or any municipal corporation or agency succeeding to the rights of the Water Authority, from the System and from the sale and use of water, water services or facilities, sewer service or facilities or any other service, commodity or facility or any combination thereof furnished to the inhabitants of the geographic area served by the Water Authority by means of the System as the same may at any time exist to serve customers outside the Water Authority’s geographical limits as well as customers within the Water Authority’s geographical limits. Such term also includes:
(1) All income derived from the investment of any money in the Joint Water and Sewer Fund, Debt Service Account, and Rate Stabilization Fund and income derived from surplus Net Revenues;
(2) Money released from a rebate fund to the Water Authority;
(3) Money released from the Rate Stabilization Fund to the Water Authority to the extent that the amount released is used to pay Operation and Maintenance Expenses or Debt Service Requirements on System Obligations in the year released; provided that withdrawals from the Rate Stabilization Fund shall not be included in Gross Revenues for the purposes of the Rate Covenant in any two consecutive calendar years;
(4) Property insurance proceeds which are not necessary to restore or replace the property lost or damaged and the proceeds of the sale or other disposition of any part of the System; and
(5) Funds received from users of the System as a reimbursement of, or otherwise in connection with, franchise fees to be paid by the Water Authority.
Gross Revenues do not include:
(a) any money received as grants or gifts from the United States of America, the State or other sources, or the proceeds of any charge or tax intended as a replacement therefor or other capital contributions from any source which are restricted as to use; and
(b) condemnation proceeds or the proceeds of any insurance policy, except any property insurance proceeds described above in clause (4) of this definition or derived in respect of loss of use or business interruption.
“Interest Component” means the portion of each Loan Agreement Payment paid as interest accruing on the Aggregate Repayable Disbursements then outstanding, calculated from the date of each Disbursement.
“Interest Rate” means the rate of interest on the Loan Agreement, which includes the Administrative Fee, as shown on the Term Sheet.
“Joint Water and Sewer Fund” means the “City of Albuquerque, New Mexico, Joint Water and Sewer Fund” originally established in Section 16 of City Ordinance No. 18-1984 and continued in Section 13 of this Resolution as the “Albuquerque Bernalillo County Water Utility Authority Joint Water and Sewer Fund.”
“Loan” means the funds to be loaned to the Water Authority by the NMFA pursuant to the Loan Agreement, up to the Maximum Principal Amount.
“Loan Agreement” means the loan and subsidy agreement and any amendments or supplements thereto, including the exhibits attached to the loan and subsidy agreement.
“Loan Agreement Payment” means, collectively, the Maximum Repayable Principal Amount, the Interest Component, and the Administrative Fee Component to be paid by the Water Authority as payment on the Aggregate Repayable Disbursements under the Loan Agreement, as shown on Exhibit “B” thereto.
“Maximum Forgiven Principal Amount” means the maximum amount of loan subsidy available in the form of principal forgiveness to be applied proportionally at the time of each Disbursement to the Water Authority, up to thirty percent (30%) of the Maximum Principal Amount. The Maximum Forgiven Principal Amount is three hundred thirty thousand dollars ($330,000).
“Maximum Principal Amount” means one million one hundred thousand dollars ($1,100,000).
“Maximum Repayable Principal Amount” means the maximum amount of Aggregate Repayable Disbursements repayable by the Water Authority pursuant to this Loan Agreement. The Maximum Repayable Principal Amount is seven hundred seventy thousand dollars ($770,000).
“Net Revenues” means the Gross Revenues after deducting Operation and Maintenance Expenses.
“NMFA Act” means the New Mexico Finance Authority Act, NMSA 1978, §§ 6-21-1 through 6-21-31, as amended.
“NMSA 1978” means the New Mexico Statutes Annotated, 1978 Compilation, as amended and supplemented from time to time.
“Operation and Maintenance Expenses” means all reasonable and necessary current expenses of the System, paid or accrued, related to operating, maintaining and repairing the System, including, without limiting the generality of the foregoing:
(1) legal and overhead expenses directly related and reasonably allocable to the administration of the System;
(2) insurance premiums for the System, including, without limitation, premiums for property insurance, public liability insurance and workmen’s compensation insurance, whether or not self-funded;
(3) premiums, expenses and other costs (other than required reimbursements of insurance proceeds and other amounts advanced to pay Debt Service Requirements on System Obligations) for Credit Facilities;
(4) Expenses other than expenses paid from the proceeds of System Obligations;
(5) the costs of audits of the books and accounts of the Water Authority and the System;
(6) amounts required to be deposited in a rebate fund or otherwise required to make rebate payments to the United States Government;
(7) salaries, administrative expenses, labor costs, surety bonds and the cost of materials and supplies used for or in connection with the current operation of the System; and
(8) franchise tax payments to the City, County or any other local government.
Operation and Maintenance Expenses do not include any allowance for depreciation, payments in lieu of taxes, liabilities incurred by the Water Authority as a result of its negligence or other misconduct in the operation of the System or any charges or costs allocable to capital improvements or replacements. Operation and Maintenance Expenses do not include any payment of or reimbursement for the payment of Debt Service Requirements on the Loan Agreement.
“Outstanding” means when used in reference to System Obligations, on any particular date, the aggregate of all System Obligations issued and delivered under the applicable Water Authority ordinance or resolution authorizing the issuance of System Obligations except:
(1) those canceled at or prior to such date or delivered to or acquired by the Water Authority at or prior to such date for cancellation;
(2) those which have been paid or are deemed to be paid in accordance with the Water Authority ordinance or resolution authorizing the issuance of the applicable System Obligations or otherwise relating thereto, provided that the payment of insured Obligations with the proceeds of a bond insurance policy shall not result in those insured obligations ceasing to be Outstanding;
(3) in the case of Variable Rate Obligations, System Obligations deemed tendered but not yet presented for payment;
(4) any System Obligation which has been refunded in accordance with this Resolution or other ordinances or resolutions of the Water Authority authorizing the defeasance of such designated System Obligations; and
(5) those in lieu of or in exchange or substitution for which other System Obligations shall have been delivered, unless proof satisfactory to the Water Authority and the paying agent for the applicable System Obligations is presented that any System Obligation for which a new System Obligation was issued or exchanged is held by a bona fide holder in due course.
“Project” means the project described in the Term Sheet.
“Qualified Exchange Agreement” means any interest rate exchange between the Water Authority and a counterparty which, when entered into by the Water Authority, satisfies the requirements of NMSA 1978, § 6-18-8.1.
“Rate Covenant” means the covenants in the Loan Agreement relating to charging rates for use of the System to pay Debt Service Requirements.
“Rate Stabilization Fund” means the Rate Stabilization Fund for System Obligations previously established by the Water Authority and continued in Section 13 of this Resolution.
“Resolution” means this Resolution No. R-24-____ adopted by the Governing Body of the Water Authority on April 17, 2024, approving the Loan Agreement and pledging the Net Revenues to the payment of the Loan Agreement Payments as shown on the Term Sheet and the Final Loan Agreement Payment Schedule, as supplemented from time to time in accordance with the provisions hereof.
“Senior Obligations” means the outstanding “Senior Obligations” set forth in Exhibit A and additional obligations designated as Senior Obligations, in any ordinance or resolution of the Water Authority relating to those obligations, and any other System Obligations hereafter issued with a lien on the Net Revenues on a parity with the lien of the Outstanding Senior Obligations, including any such obligations shown on the Term Sheet.
“State” means the State of New Mexico.
“Subordinate Obligations” means the “Subordinate Obligations” set forth in Exhibit A, and all other bonds and other obligations of the Water Authority hereafter issued with a lien on the Net Revenues subordinate to the lien of Senior Obligations and superior to the lien of the Super Subordinate Obligations, including any such obligations shown on the Term Sheet.
“Super Subordinate Obligations” means the “Super Subordinate Obligations” set forth in Exhibit A, and all bonds and other obligations of the Water Authority hereafter issued with a lien on the Net Revenues subordinate to the liens of the Senior Obligations and the Subordinate Obligations on the Net Revenues, including any such obligations shown on the Term Sheet.
“System” means the public utility owned by the Water Authority and designated as the Water Authority’s water system and sanitary sewer system consisting of all properties, real, personal, mixed or otherwise, now owned or hereafter acquired by the Water Authority, through purchase, construction or otherwise, including all extensions, enlargements and improvements of or to the water and sanitary sewer system and used in connection therewith or relating thereto, and any other related activity or enterprise of the Water Authority designated by the Governing Body as part of the water and sanitary sewer system, whether situated within or without the geographical limits of the Water Authority.
“System Obligations” means all bonds and other similar indebtedness payable solely or primarily from Net Revenues, including, without limitation, the Senior Obligations, the Subordinate Obligations and the Super Subordinate Obligations.
“Term Sheet” means Exhibit “A” to the Loan Agreement.
“Variable Rate Obligations” means System Obligations, including reimbursement obligations pursuant to a Credit Facility, the interest rate on which is subject to change from time to time.
“Water Authority” means the Albuquerque Bernalillo County Water Utility created by NMSA 1978, § 72-1-10 as a joint agency of the City of Albuquerque, New Mexico and the County of Bernalillo, New Mexico and operating under the name Albuquerque Bernalillo County Water Utility Authority.
Section 2. Rules of Construction. For purposes of this Resolution, unless otherwise expressly provided or unless the context requires otherwise:
A. All references in this Resolution to designated Sections and other subdivisions are to the designated Section and other subdivisions of this Resolution.
B. The words “herein”, “hereby”, “hereof”, “hereunder”, “hereinabove”, “hereafter” and “herewith” and other words of similar import in this Resolution refer to this entire Resolution and not solely to any particular section or paragraph of this Resolution in which such word is used.
C. All accounting terms not otherwise defined in this Resolution have the meanings assigned to them in accordance with Generally Accepted Accounting Principles.
D. Words of the masculine gender shall be deemed and construed to include correlative words of the feminine and neuter genders, and vice versa.
E. The headings used in this Resolution are for convenience of reference only and shall not define or limit the provisions of this Resolution.
F. Terms in the singular include the plural and vice versa.
Section 3. Ratification. All action heretofore taken (not inconsistent with the provisions of this Resolution) by the Governing Body and officers of the Water Authority directed toward the acquisition and completion of the Project, the pledge of the Net Revenues to payment of amounts due under the Loan Agreement, and the authorization, execution and delivery of the Loan Agreement shall be, and the same hereby is, ratified, approved and confirmed.
Section 4. Authorization of the Project and the Loan Agreement. The acquisition and completion of the Project and the method of funding the Project through execution and delivery of the Loan Agreement and the other documents related to the transaction are hereby authorized, ordered and approved. The Project is for the benefit and use of the Water Authority and the public whom it serves.
Section 5. Findings. The Water Authority hereby declares that it has considered all relevant information and data and hereby makes the following findings:
A The Project is needed to meet the needs of the Water Authority and the public whom it serves.
B. Moneys available and on hand for the Project from all sources other than the Loan Agreement are not sufficient to defray the cost of acquiring and completing the Project.
C. The Net Revenues may lawfully be pledged to secure the payment of amounts due under the Loan Agreement.
D. It is economically feasible and prudent to defray, in whole or in part, the costs of the Project by the execution and delivery of the Loan Agreement.
E. The Project and the execution and delivery of the Loan Agreement in the Maximum Principal Amount pursuant to the DWSRLF Act to provide funds for the financing of the Project are necessary or advisable in the interest of the public health, safety, and welfare of the residents and the public served by the Water Authority.
F. The Water Authority will acquire and complete the Project, in whole or in part, with the net proceeds of the Loan.
G. Other than as described on the Term Sheet, the Water Authority does not have any outstanding obligations payable from Net Revenues which it has incurred or will incur prior to the initial execution and delivery of the Loan Agreement.
H. The Interest Rate on the Maximum Principal Amount does not exceed the maximum rate permitted by law.
Section 6. Loan Agreement - Authorization and Detail.
A. Authorization. This Resolution has been adopted by the affirmative vote of at least a majority of all of the members of the Governing Body. For the purpose of protecting the public health, conserving the property, and protecting the general welfare and prosperity of the public served by the Water Authority and acquiring and completing the Project, it is hereby declared necessary that the Water Authority, pursuant to the DWSRLF Act, execute and deliver the Loan Agreement evidencing a special limited obligation of the Water Authority to pay the Maximum Repayable Principal Amount of seven hundred seventy thousand dollars ($770,000) and interest thereon and to accept a loan subsidy in the Maximum Forgiven Principal Amount of three hundred thirty thousand dollars ($330,000) and the execution and delivery of the Loan Agreement is hereby authorized. The Water Authority shall use the proceeds of the Loan Agreement (i) to finance the acquisition and completion of the Project and (ii) to pay the Administrative Fee of the Loan Agreement. The Project will be owned by the Water Authority.
B. Detail. The Loan Agreement shall be in substantially the form of the Loan Agreement presented at the meeting of the Governing Body at which this Resolution was adopted. The Loan shall be in an amount not to exceed the Maximum Principal Amount of one million one hundred thousand dollars ($1,100,000), consisting of the Maximum Repayable Principal Amount and the Maximum Forgiven Principal Amount. The Loan Agreement Payments shall be payable as set forth in the Final Loan Agreement Payment Schedule as set forth in the Loan Agreement.
Section 7. Approval of Loan Agreement. The form of the Loan Agreement as presented at the meeting of the Governing Body at which this Resolution was adopted, is hereby approved. Authorized Officers are hereby individually authorized to execute, acknowledge and deliver the Loan Agreement with such changes, insertions and omissions as may be approved by such individual Authorized Officers, and the Executive Director is hereby authorized to affix the seal of the Water Authority on the Loan Agreement and attest the same. The execution of the Loan Agreement by an Authorized Officer shall be conclusive evidence of such approval.
Section 8. Special Limited Obligation. Amounts due pursuant to the Loan Agreement shall be solely secured by a senior lien (but not an exclusive senior lien) on the pledge of the Net Revenues herein made and as set forth in the Loan Agreement. The Loan Agreement, together with interest thereon and other obligations of the Water Authority thereunder, shall be a special, limited obligation of the Water Authority, payable solely from the Net Revenues as provided in this Resolution, and the Loan Agreement shall not constitute a general obligation of the Water Authority, the City, the County, or the State, and the holders of the Loan Agreement may not look to any general or other fund of the Water Authority for payment of the obligations thereunder. Nothing contained in this Resolution nor in the Loan Agreement, nor any other instruments, shall be construed as obligating the Water Authority (except with respect to the application of the Net Revenues) or as imposing a pecuniary liability or a charge upon the general credit of the Water Authority, nor shall a breach of any agreement contained in this Resolution, the Loan Agreement, or any other instrument impose any pecuniary liability upon the Water Authority or any charge upon its general credit. The Loan Agreement shall never constitute an indebtedness of the Water Authority within the meaning of any State constitutional provision or statutory limitation and shall never constitute or give rise to a pecuniary liability of the Water Authority or a charge against its general credit. Nothing herein shall prevent the Water Authority from applying other funds of the Water Authority legally available therefor to payments required by the Loan Agreement, in its sole and absolute discretion.
Section 9. Disposition of Proceeds; Completion of Acquisition and Completion of the Project.
A. Accounts. The Water Authority hereby consents to creation of the Debt Service Account to be held and maintained by the NMFA as provided in the Loan Agreement.
The proceeds derived from the execution and delivery of the Loan Agreement shall be disbursed promptly upon receipt of an Approved Requisition (as defined in the Loan Agreement).
Until the acquisition and completion of the Project or the date of the Final Requisition, the money disbursed pursuant to the Loan Agreement shall be used and paid out solely for the purpose of acquiring and completing the Project in compliance with applicable law and the provisions of the Loan Agreement.
B. Prompt Completion of the Project. The Water Authority will complete the Project with all due diligence.
C. Certification of Completion of the Project. Upon the acquisition and completion of the Project, the Water Authority shall execute and send to the NMFA a certificate stating that the completion of and payment for the Project has been completed.
D. NMFA Not Responsible for Application of Loan Proceeds. The NMFA shall in no manner be responsible for the application or disposal by the Water Authority or by its officers of the funds derived from the Loan Agreement or of any other funds herein designated.
Section 10. Deposit of Net Revenues; Distributions of the Net Revenues and Flow of Funds.
A. Deposit of Net Revenues. Net Revenues shall be paid directly by the Water Authority to the NMFA in an amount sufficient to pay Loan Agreement Payments, and other amounts due under the Loan Agreement, as provided in Section 5.2 of the Loan Agreement.
B. Termination on Deposits to Maturity. No payment shall be made into the Debt Service Account if the amount in the Debt Service Account totals a sum at least equal to the total amount of Loan Agreement Payments and any other amounts due under the Loan Agreement, in which case moneys in such account in an amount at least equal to such Loan Agreement Payments and other amounts due shall be used solely to pay such obligations as the same become due, and any moneys in excess thereof in such accounts shall be transferred to the Water Authority and used as provided in Section 10.C of this Resolution.
C. Use of Surplus Revenues. After making all the payments required to be made by this section, any moneys remaining in the Debt Service Account shall be transferred to the Water Authority on a timely basis and applied to any other lawful purpose, including, but not limited to, the payment of any Senior Obligations, Subordinate Obligations, or Super Subordinate Obligations, or for purposes authorized by the Water Authority, the Constitution and laws of the State, as the Water Authority may from time to time determine in its sole discretion.
Section 11. Senior Lien on Net Revenues. The Loan Agreement shall be issued with a senior lien (but not an exclusive senior lien) on the Net Revenues on parity with the lien of the Senior Obligations on the Net Revenues and a lien superior to the liens of the Subordinate Obligations and the Super Subordinate Obligations on the Net Revenues. The Net Revenues are hereby authorized to be pledged, and are hereby pledged, and the Water Authority grants a security interest therein, for the payment of the Loan Agreement Payments, and any other amounts due under the Loan Agreement, subject to the uses thereof permitted by and the priorities set forth in this Resolution and the Loan Agreement. The Loan Agreement constitutes an irrevocable senior lien (but not an exclusive senior lien) on the Net Revenues as set forth herein and therein, and the Water Authority shall not create a lien on the Net Revenues superior to that of the Loan Agreement without the express prior written approval of the NMFA.
Section 12. Authorized Officers. Authorized Officers are hereby individually authorized and directed to execute and deliver any and all papers, instruments, opinions, affidavits and other documents and to do and cause to be done any and all acts and things necessary or proper for carrying out this Resolution, the Loan Agreement and all other transactions contemplated hereby and thereby. Authorized Officers are hereby individually authorized to do all acts and things required of them by this Resolution and the Loan Agreement for the full, punctual and complete performance of all the terms, covenants and agreements contained in this Resolution and the Loan Agreement including but not limited to, the execution and delivery of closing documents in connection with the execution and delivery of the Loan Agreement.
Section 13. Funds and Accounts.
A. Joint Water and Sewer Fund. The Water Authority shall continue the Joint Water and Sewer Fund as a separate, distinct and segregated fund. As long as the Loan Agreement is outstanding, all Gross Revenues shall continue to be set aside and credited to the Joint Water and Sewer Fund.
B. Debt Service Fund and Accounts. The Water Authority shall continue the Debt Service Fund as a separate, distinct and segregated fund for the deposit of Net Revenues for the payment of System Obligations, including the Loan Agreement.
C. Rate Stabilization Fund. The Water Authority shall continue the Rate Stabilization Fund as a separate, distinct and segregated fund.
Section 14. Amendment of Resolution. Prior to the Closing Date, the provisions of this Resolution may be supplemented or amended by resolution of the Governing Body with respect to any changes which are not inconsistent with the substantive provisions of this Resolution. After the Closing Date, this Resolution may be amended, only with the prior written consent of the NMFA, by Authorized Officers of the Water Authority without receipt of the Governing Body of any additional consideration only when such amendment does not affect the terms of payment of the loan component of the Loan Agreement.
Section 15. Resolution Irrepealable. After the Closing Date, this Resolution shall be and remain irrepealable until all obligations due under the Loan Agreement shall be fully discharged, as herein provided.
Section 16. Severability Clause. If any section, paragraph, clause or provision of this Resolution shall for any reason be held to be invalid or unenforceable, the invalidity or unenforceability of such section, paragraph, clause or provision shall not affect any of the remaining provisions of this Resolution.
Section 17. Repealer Clause. All bylaws, orders, ordinances, resolutions, or parts thereof, inconsistent herewith are hereby repealed to the extent only of such inconsistency. This repealer shall not be construed to revive any bylaw, order, resolution or ordinance, or part thereof, heretofore repealed.
Section 18. General Summary for Publication. Pursuant to the general laws of the State, the title and a general summary of the subject matter contained in this Resolution shall be published in substantially the following form:
[Form of Notice of Adoption of Resolution for Publication]
Albuquerque Bernalillo County Water Utility Authority
Notice of Adoption of Resolution
Notice is hereby given of the title and of a general summary of the subject matter contained in a resolution, duly adopted and approved by the Board of the Albuquerque Bernalillo County Water Utility Authority (the “Water Authority”) on April 17, 2024.
The title of the Resolution is:
Resolution
A RESOLUTION AUTHORIZING THE EXECUTION AND DELIVERY OF A LOAN AND SUBSIDY AGREEMENT (“LOAN AGREEMENT”) BY AND BETWEEN THE ALBUQUERQUE BERNALILLO COUNTY WATER UTILITY AUTHORITY, NEW MEXICO (THE “WATER AUTHORITY”) AND THE NEW MEXICO FINANCE AUTHORITY (“NMFA”), in the total amount of one million one hundred thousand dollars ($1,100,000) ($770,000 LOAN AMOUNT/$330,000 PRINCIPAL FORGIVENESS SUBSIDY) EVIDENCING A SPECIAL LIMITED OBLIGATION OF THE WATER AUTHORITY TO PAY A MAXIMUM REPAYABLE PRINCIPAL AMOUNT OF NO MORE THAN Seven hundred seventy thousand dollars ($770,000), TOGETHER WITH INTEREST, AND ADMINISTRATIVE FEES, AND TO ACCEPT A LOAN SUBSIDY OF NO MORE THAN THREE HUNDRED AND THIRTY THOUSAND DOLLARS ($330,000), FOR THE PURPOSE OF FINANCING THE COSTS OF EXTENDING AND IMPROVING THE WATER AUTHORITY’S JOINT WATER AND SEWER SYSTEM (THE “SYSTEM”) by conducting a lead service line replacement project and associated activities directly connected to planning, designing and replacing of lead service lines INCLUDING AN inventory/survey to determine If lead exists in the System lines and shall include drinking water facility construction project work necessary to complete the Project (“PROJECT”), AND SOLELY IN THE MANNER DESCRIBED IN THE LOAN AGREEMENT; PROVIDING FOR THE PLEDGE AND PAYMENT OF THE LOAN SOLELY FROM A SENIOR LIEN (BUT NOT AN EXCLUSIVE SENIOR LIEN) ON THE net revenues of the system; APPROVING THE FORM OF AND OTHER DETAILS CONCERNING THE LOAN AGREEMENT; RATIFYING ACTIONS HERETOFORE TAKEN; REPEALING ALL ACTION INCONSISTENT WITH THIS RESOLUTION; AND AUTHORIZING THE TAKING OF OTHER ACTIONS IN CONNECTION WITH THE EXECUTION AND DELIVERY OF THE LOAN AGREEMENT.
A general summary of the subject matter of the Resolution is contained in its title. This notice constitutes compliance with NMSA 1978, § 6-14-6, as amended.
[End of Form of Notice of Adoption for Publication.]
PASSED, AND ADOPTED THIS 17TH DAY OF APRIL, 2024.
BY A VOTE OF ___ FOR AND ___ AGAINST.
_______________________________
Chair
ATTEST:
_________________________
Executive Director
Exhibit A
ALBUQUERQUE BERNALILLO COUNTY WATER UTILITY AUTHORITY
OUSTANDING SYSTEM OBLIGATIONS
(As of April 1, 2024)
|
Senior Obligations |
Senior Obligations Authorizing Legislation |
Original Principal Amount ($) |
Principal Amount Outstanding ($) |
|
New Mexico Finance Authority Drinking Water Revolving Fund Loan Agreement (2009) |
O-09-9 & R-09-24 |
1,010,000 |
174,023 |
|
Joint Water and Sewer System Improvement and Refunding Revenue Bonds Series 2013B |
O-13-2 & R-13-13 |
55,265,000 |
2,420,000 |
|
Senior Lien Joint Water and Sewer System Refunding Revenue Bonds, Series 2014A |
O-14-2 and R-14-10 |
97,270,000 |
32,550,000 |
|
Senior Lien Joint Water and Sewer System Refunding and Improvement Revenue Bonds, Series 2015 |
O-15-2 & R-15-6 |
211,940,000 |
122,120,000 |
|
Senior Lien Joint Water and Sewer System Refunding and Improvement Revenue Bonds, Series 2017 |
O-16-2 & R-16-13 |
87,970,000 |
61,760,000 |
|
Senior Lien Joint Water and Sewer System Improvement Revenue Bonds, Series 2018 |
O-18-7 & R-18-20 |
75,085,000 |
52,305,000 |
|
New Mexico Finance Authority Drinking Water Revolving Fund Loan Agreement DW-4877 (2019) |
O-19-1 & R-19-4 |
3,430,081 |
2,631,966 |
|
Senior Lien Joint Water and Sewer System Improvement Revenue Bonds, Series 2020 |
O-19-3 & R-19-26 |
69,440,000 |
57,440,000 |
|
Drinking Water State Revolving Fund Loan Agreement DW-5028 (2020) |
O-20-1 & R-20-3 |
1,515,000 |
1,471,447 |
|
Senior Lien Joint Water and Sewer System Refunding Revenue Bonds, Taxable Series 2020A |
O-20-2 & R-19-26 |
47,800,000 |
35,200,000 |
|
Senior Lien Joint Water and Sewer System Improvement Revenue Bonds, Series 2021 |
R-21-21 |
73,255,000 |
73,255,000 |
|
Senior Lien Joint Water and Sewer System Improvement Revenue Bonds, Series 2023 |
R-23-18 |
113,425,000 |
113,425,000 |
|
|
|
Total |
555,002,436 |
|
Subordinate Obligations |
Subordinate Obligations Authorizing Legislation |
Original Principal Amount ($) |
Principal Amount Outstanding ($) |
|
2008 NMFA Drinking Water Loan |
O-08-4 & R-08-13 as amended by F/S O-14-2 |
12,000,000 |
4,214,651 |
|
Subordinate Lien Joint Water and Sewer System Refunding Revenue Bonds, Series 2014B |
O-14-2 & R-14-10 |
87,005,000 |
17,205,000 |
|
Water Project Fund Loan/Grant Agreement No. WPF-5103 (2021) |
R-20-26 |
800,000 |
763,556 |
|
Water Project Fund Loan/Grant Agreement No. WPF-5401 (2021) |
R-21-31 |
800,000 |
800,000 |
|
Water Project Fund Loan/Grant Agreement No. WPF-5402 (2022) |
R-22-7 |
770,827 |
770,827 |
|
Water Project Fund Loan/Grant Agreement No. WPF-5659 (2023) |
R-22-31 |
200,000 |
200,000 |
|
Water Project Fund Loan/Grant Agreement No. WPF-5660 (2023) |
R-22-32 |
710,000 |
710,000 |
|
|
|
Total |
24,664,034 |
|
Super Subordinate Obligations |
Super Subordinate Obligations Authorizing Legislation |
Original Principal Amount($) |
Principal Amount Outstanding($) |
|
Water Project Fund Loan/Grant Agreement No. WPF-5935 (2024) |
R-23-48 |
370,000 |
370,000 |
|
|
|
Total |
370,000 |