Res 1860 - Clean Water Agr R98414
COUNCIL BILL NO. 2674
RESOLUTION NO. 1860
A RESOLUTION ENTERING INTO CLEAN WATER STATE REVOLVING FUND LOAN
AGREEMENT NO. R98414 WITH THE STATE OF OREGON AND AUTHORIZING THE
CITY ADMINISTRATOR TO SIGN SUCH AGREEMENT.
WHEREAS, the City of Woodburn has determined that the City needs to accomplish
wastewater collection, treatment and disposal upgrades and watershed enhancement
projects in order to comply with the City's National Pollution Discharge Elimination System
permit, and
WHEREAS, the State of Oregon acting by and through its Department of
Environmental Quality is authorized to enter into Clean Water State Revolving Fund loan
agreements and disburse funds pursuant to OAR 340-054-0065(2), and
WHEREAS, the City has applied for wastewater collection, treatment and disposal
upgrade and watershed enhancement project assistance in order to comply with the City's
National Pollution Discharge Elimination System permit, and
WHEREAS, the State of Oregon, Department of Environmental Quality, has
reviewed the city's application and determined that the wastewater collection, treatment
and disposal upgrades and watershed enhancement projects are feasible and merit
funding, and
WHEREAS, the State of Oregon, Department of Environmental Quality, requires a
loan reserve of 100% times one-half of the average annual debt service based on the final
repayment schedule and that the City shall create a segregated loan reserve account that
shall be held in trust for the benefit of the Department of Environmental Quality, and
WHEREAS, the State of Oregon acting by and through its Department of
Environmental Quality, is willing to provide a loan of $4,093,175 to the City of Woodburn to
be used for the City's wastewater collection, treatment and disposal upgrade and
watershed enhancement project, NOW THEREFORE;
THE CITY OF WOODBURN RESOLVES AS FOLLOWS:
Section 1. That the City of Woodburn enter into Clean Water State Revolving Fund
Loan Agreement No. R98414 which is affixed as Attachment "A", and by this reference
incorporated herein, with the State of Oregon acting by and through its Department of
Environmental Quality, for a loan of $4,093,175 to be used for the City's wastewater
collection, treatment and disposal upgrade and watershed enhancement project.
Page 1-
COUNCIL BILL NO. 2674
RESOLUTION NO. 1860
Section 2. That the City Administrator of the City of Woodburn is authorized to sign
Clean Water State Revolving Fund Loan Agreement No. R98414 on behalf of the City.
Section 3. That the City authorizes the establishment of a Loan Reserve that
equals100% times one-half of the average annual debt service based on the final
repayment schedule and the creation of a segregated loan reserve account that shall be
held in trust for the benefit of the Department of Environmental Quality.
Section 4. That the City Attorney is hereby authorized and directed to render an
opinion letter related to the Clean Water State Revolving Fund Loan Agreement No.
R98414 in the form prescribed by the State of Oregon Department of Environmental
Quality.
City Attorney
1)/IC':'1
te
Approved as to form:
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Passed by the Council
Submitted to the Mayor
Approved by the Mayor
Filed in the Office of the Recorder
July 9, 2007
Jul y 11, 2007
Jul y 11, 2007
Jul y 11, 2007
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ATTEST: (\ \ Ct-Lk L~,-,""",::j-
Mary\Tenliant, Recorder
City of Woodburn, Oregon
Page 2 - COUNCIL BILL NO. 2674
RESOLUTION NO. 1860
CLEAN WATER STATE REVOLVING FUND
LOAN AGREEMENT
No. R98414
BETWEEN
THE STATE OF OREGON
ACTING BY AND THROUGH ITS
DEPARTMENT OF ENVIRONMENTAL QUALITY
AND
CITY OF WOODBURN
OREGON DEPARTMENT OF ENVIRONMENTAL QUALITY
CLEAN WATER STATE REVOLVING FUND
PAGE 2
T ABLE OF CONTENTS
ARTICLE 1: THE LOAN - SPECIFIC TERMS....................................................................................3
ARTI CLE 2: G EN ERAL LOAN PROV ISION S ... ...... ........... ........... ...... ....................... ........... ...............4
ARTlCLE 3: GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS ................................7
A RTI C L E 4: C ON D IT ION S TO LOAN. ...... ...... ...... ........... ..... ...... ............................. ........... ........... ....8
ARTI(~LE 5: COVENANTS OF BORROWER ....................................................................................10
ARTICLE 6: REPRESENTATIONS, WARRANTIES, COVENANTS AND CONDITIONS RELATING TO
CONSTRlI CTI ON PROJ ECTS ON L Y ........... ........... ...... ....................... ........... ..............14
ARTICLE 7: DISCLAIMERS BY DEQ; LIMITATIONS ON DEQ's LIABILITY ................................17
ARTI CLE 8: DE FA U LT AND REM EDI ES.. ...... ...... ..... ........... ...... ....................... ...... ........... ........... ...18
A RT I C LE 9: DE FI N IT IONS.... ...... ..... ...... ...... ..... ...... ........... ............................. ................. ........... ...19
ARTICLE 10: MISCE LLAN EOllS.. ..... ...... ........... ...... ........... ....................... ...... ............................ ...21
ApPENDIX A: REPAYMENT SCHEDULE .........................................................................................25
ApPENDIX B: ESTIMATED CWSRF LOAN DISBURSEMENT SCHEDULE .....................................26
ApPE N D IX C: MBE/WB E A FFI RMA TIV E STEPS.. ........... ........................................ ........... .........2 7
ApPENDIX D: ApPLICABLE FEDERAL AUTHORITIES AND LAWS ("CROSS-CUTTERS") ............28
CiTY 01 WOODBURN: R98414
GENN7914,DOC (09/27/06)
LOAN AGREEMENT
OREGON DEPARTMENT OF ENVIRONMENTAL QUALITY
CLEAN WATER STATE REVOLVING FUND
PAGE 3
THIS LOAN AGREEMENT is made and entered into as of the date it is fully executed by both
parties (and in the case of the State, approved by the Attorney General's Office, if required) and
is by and between the State of Oregon, acting by and through its Department of
Environmental Quality CDEQ"), and the Borrower (as defined below). Unless the context
requires otherwise, capitalized terms not defined below shall have the meanings assigned to them
by ARTICLE 9 of this Loan Agreement. The reference number for the Loan made pursuant to
this Loan Agreement is Loan No. R98414.
DEQ agrees to make, and Borrower agrees to accept, the Loan on the terms and subject to the
conditions set forth below.
ARTICLE 1: THE LOAN - SPECIFIC TERMS
DEQ agrees to make the Loan on the following terms and conditions:
(A)
BORROWER:
City of Woodburn.
(B)
BORROWER'S ADDRESS:
City of Woodburn
270 Montgomery Street
Woodburn, Oregon 97071
Fax 503-982-5242
(e)
LOAN AMOUNT:
$4,093,175.
(D) TYPE AND PllRPOSE OF LOAN. The Loan is a "Revenue Secured Loan" made by
DEQ pursuant to OAR Section 340-054-0065(2) for the purpose of financing the Project. The
Loan is also a "Sponsorship Option" loan, made pursuant to OAR Section 340-054-0024(3).
(E) PROJECT TITLE:
and a water resource activity.
Wastewater Collection, Treatment and Disposal Upgrades,
(F) DESCRIPTION OF THE PROJECT: Upgrades to the wastewater collection, treatment
and disposal systems, as well as watershed enhancement projects per the Borrower's application
#98411-07.
(G) INTEREST RATE: One and 53/100 percent (1.53%) per annum. Calculation of
interest is also discussed in ARTICLE 2(E) and in ARTICLE 2(F)(4) of this Agreement.
(H) REPAYMENT PERIOD: Twenty (20) years after the Completion Date.
(I) TERMS OF REPAYMENT: An interest-only payment within six months after the
Project Completion Date and thereafter semi-annual payments of principal and interest in
accordance with Appendix A and ARTICLE 2(F) of this Agreement.
(J) PLEDGE: The Borrower hereby grants to DEQ a security interest in and
irrevocably pledges its Net Operating Revenues to pay the amounts due under this Loan
Agreement. The Net Operating Revenues so pledged and hereafter received by the Borrower
CITY m WOODBlIRN: R98414
(JENN7914,DOC (09/27/06)
LOAN AGREEMENT
OREGON DEPARTMENT OF ENVIRONMENTAL QUALITY
CLEAN WATER STATE REVOLVING FUND
PAGE 4
shall immediately be subject to the lien of such pledge without physical delivery or further act,
and the lien of the pledge shall be superior to all other claims and liens whatsoever, to the fullest
extent permitted by ORS 288.594. The Borrower represents and warrants that the pledge of Net
Operating Revenues hereby made by the Borrower complies with, and shall be valid and binding
from the date of this Agreement pursuant to, ORS 288.594. The Borrower covenants with DEQ
and any assignee of this Agreement that except as otherwise expressly provided herein, the
Borrower shall not issue any other obligations which have a pledge or lien on the Net Operating
Revenues superior to or on a parity with the pledge herein granted without the written permission
of DEQ. This Loan is a parity obligation with all other CWSRF loans between DEQ and the
Borrower; provided, however, that this provision shall not affect the priority that prior CWSRF
loans are entitled to in relation to any loans between Borrower and any third parties. This Loan is
subordinate to the following loans from the Oregon Economic and Community Development
Department: Loan #B91202, with a 6/30/2005 balance of $346,578; Loan #G98002, with a
6/30/2005 balance 01'$393,010.
(K) ANNUAL FEE: An annual fee of 0.5 % of the Outstanding Loan Amount (as
determined prior to the posting of the payment due on that date) is due during the Repayment
Period commencing with the second payment date hereunder and annually thereafter.
ARTICLE 2: GENERAL LOAN PROVISIONS
(A) AGREEMENT OF DEQ TO LOAN. DEQ agrees to loan the Borrower an amount not
to exceed the Loan Amount, subject to the terms and conditions of this Loan Agreement, but solely
from funds available to DEQ in the Water Pollution Control Revolving Fund for its Clean Water
State Revolving Fund program. This Loan Agreement is given as evidence of a Loan to the
Borrower made by DEQ pursuant to ORS Chapters 190,287,288, and 468, and OAR Chapter 340,
all as amended from time to time, consistent with the express provisions hereof.
(B) Av AILABILlTY OF FUNDS. DEQ's obligation to make the Loan described in this
Agreement is subject to the availability of funds in the Water Pollution Control Revolving Fund
for its CWSRF program, and DEQ shall have no liability to the Borrower or any other party if
such funds are not available or are not available in amounts sufficient to fund the entire Loan
described herein. Funds may not be available ahead of the estimated schedule of disbursements
submitted by the Borrower, which is attached as Appendix B. This schedule may be revised
from time to time by the parties without the necessity of an amendment by replacing the then
current Appendix B with an updated Appendix B which is dated and signed by both parties.
(C) DISBlJRSEMENT OF LOAN PROCEEDS.
(I) Proiect Account(s). Loan proceeds (as and when disbursed by DEQ to the
Borrower) shall be deposited in a Project account(s). The Borrower shall maintain
Project account(s) as segregated account(s). Funds in the Project account(s) shall only be
used to pay for Project costs, and all earnings on the Project account(s) shall be credited
to the account(s).
CITY OF WOODBURN: R98414
GENN79I 4,DOC (09/27/06)
LOAN AGREEMENT
OREGO]\. DEPARTMENT OF ENVIRONMENTAL QUALITY
CLEAN WATER STATE REVOLVING FUND
(2) Documentation of Expenditures. The Borrower shall provide DEQ with
written evidence of materials and labor furnished to and performed upon the
Project and such receipts for the payment of the same, releases, satisfactions and other
signed statements and forms as OEQ may reasonably require. DEQ will disburse funds to
pay Project costs only after the Borrower has provided documentation satisfactory to DEQ
that such Project costs have been incurred and qualify for reimbursement hereunder.
PAGE 5
(3) Adiustments and Corrections. DEQ may at any time review and audit
requests for disbursement and make adjustments for, among other things, ineligible
expenditures, mathematical errors, items not built or bought, unacceptable work and other
discrepancies. Nothing in this Agreement requires DEQ to pay any amount for labor or
materials unless DEQ is satistied that the claim therefor is reasonable and that the
Borrower actually expended and used such labor or materials in the Project. In addition,
DEQ shall not be required to make any disbursement which would cause the total of all
disbursements made hereunder (including the requested disbursement) to be greater than
the total estimated cost of the work completed at the time of the disbursement, as
determined by DEQ.
(4) Contract Retainage Disbursement. DEQ will not disburse Loan proceeds to
cover contractor retainage unless the Borrower is disbursing retainage to an escrow account
and provides proof of the deposit, or until the Borrower provides proof that it paid retained
funds to the contractor.
(D) AGREEMENT OF BORROWER TO REPAY. The Borrower agrees to repay all
amounts owed on this Loan as described in ARTICLE 1(1) and ARTICLE 2(F) in U.S. Dollars in
immediately available funds at the place listed for DEQ in ARTICLE lO(A). In any case, the
Borrower agrees to repay all amounts owed on this Loan within the Repayment Period.
(E) INTEREST. Interest will accrue at the rate specified in ARTICLE 1 (G) from the
date that a disbursement hereunder is mailed or delivered to the Borrower or deposited into an
account of the Borrower. Interest will accrue using a 365/366 day year and actual days elapsed until
the Final Loan Amount is determined and the tinal repayment schedule is prepared and thereafter
on a 360-day year basis and actual days elapsed.
(F) LOAN REPAYMENT.
(1) Preliminary Repayment Schedule; Interim Payments. The attached
Appendix A is a preliminary repayment schedule based on the estimated date of the first
disbursement hereunder and Loan Amount. Until the final repayment schedule is effective,
the Borrower shall make the payments set forth in the preliminary repayment schedule.
(2) Final Repayment Schedule. After the Borrower has submitted its final
request tor Loan proceeds and DEQ has made all required disbursements hereunder, DEQ
will determine the Final Loan Amount and prepare a final payment schedule that provides
tor level semi-annual installment payments of principal and interest (commencing on the
next semi-annual payment date), each in an amount sufficient to pay accrued interest to the
date of payment and to pay so much of the principal balance as to fully amortize the then
Outstanding Loan Amount over the remaining Repayment Period. This final repayment
CITY 01 WOODBURN: R98414
GENN7914.DOC (09/27/06)
LOAN AGREEMENT
OREGON DEPARTMENT OF ENVIRONMENTAL QUALITY
CLEAN WATER STATE REVOLVING FUND
PAGE 6
schedule, when signed and dated by the parties, will replace the preliminary payment
schedule as Attachment A without the necessity of an amendment to this Agreement.
(3) Crediting of Scheduled Payments. A scheduled payment received before
the scheduled repayment date will be applied to interest and principal on the scheduled
repayment date, rather than on the day such payment is received. Scheduled payments
will be applied first to fees due, if any, and then to interest, according to the applicable
repayment schedule, and then to principal.
(4) Crediting of Unscheduled Payments. All unscheduled payments, including
any prepayments and partial payments, will be applied first to fees due, if any, and then to
accrued unpaid interest (which will be computed as otherwise provided in this Agreement,
except that interest from the last payment date will be calculated using a 365/366 day year
and actual days elapsed), and then to principal. In the case of a Loan prepayment that does
not prepay all of the principal of the Loan, DEQ will determine, in its sole discretion, how
it will apply such Loan prepayment to the Outstanding Loan Amount. After a partial
payment, DEQ may, in its sole and absolute discretion, reamortize the Outstanding Loan
Amount at the same interest rate for the same number of payments to decrease the Loan
payment amount; provided, however, that nothing in this Agreement requires DEQ to
accept any partial payment or to reamortize the Outstanding Loan Amount if it accepts a
partial payment.
(5) Final Payment. The Outstanding Loan Amount, all accrued and unpaid
interest, and all unpaid fees and charges due hereunder are due and payable no later than
twenty (20) years after the Completion Date.
(G) PREPAYMENT.
(1) Optional Prepayment. The Borrower may prepay any amount owed on this
Loan without penalty on any business day upon 24 hours prior written notice. Any
prepayment made hereunder will be applied in accordance with ARTICLE 2(F)(4).
(2) Refinancing of Loan by the Borrower. If the Borrower refinances the portion
of the Project tinanced by this Loan or obtains an additional grant or loan that is intended to
finance the portion of the Project financed by this Loan, it will prepay the portion of the
Loan being refinanced by the additional grant or loan.
(3) Ineligible Uses of the Proiect. If the Borrower uses the Project for uses
that are other than those described in ARTICLE l(F) ("ineligible uses"), the Borrower
shall, upon demand by DEQ, prepay an amount equal to the Outstanding Loan Amount
multiplied by the percentage (as determined by DEQ) of ineligible use of the Project.
Such prepayment shall be applied against the most remotely maturing principal
installments and shall not postpone the due date of any payment(s) hereunder.
CITY Of- WOODBURN: R 98414
UENN7914,DOC (09/27/06)
LOAN AGREEMENT
OREGON DEPARTMENT OF ENVIRONMENTAL QUALITY
CLEAN WATER STATE REVOLVING FUND
PAGE 7
(H) LATE PAYMENT FEE. The Borrower agrees to pay immediately upon DEQ's
demand a late fee equal to five percent (5 %) of any payment (including any loan fee) that is not
received by DEQ on or before the tenth (10th) calendar day after such payment is due
hereunder.
(I) TERMINATION OF LOAN AGREEMENT. Upon performance by the Borrower of all
of its obligations under this Loan Agreement, including payment in full of the Final Loan Amount,
all accrued interest and all fees, charges and other amounts due hereunder, this Loan Agreement
\vill terminate, and DEQ will release its interest in any collateral given as security under this Loan
Agreement.
ARTICLE 3: GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS
(A) REPRESENTATIONS AND WARRANTIES OF THE BORROWER. The Borrower
represents and warrants to DEQ that:
(1) It is a duly formed and existing municipal corporation of the State of Oregon
and has full corporate and other powers to enter into this Loan Agreement.
(2) This Agreement has been duly authorized and executed and delivered by
an authorized officer of the Borrower and constitutes the legal, valid and binding
obligation of the Borrower enforceable in accordance with its terms.
(3) All acts, conditions and things required to exist, happen and be
performed precedent to and in the issuance of this Agreement have existed, have
happened, and have been performed in due time, form and manner as required by law.
(4) Neither the execution of this Loan Agreement, the consummation of the
transactions contemplated hereby, nor the fulfillment of or compliance with any of the
terms and conditions of this Loan Agreement will violate any provision of law, or any
order of any court or other agency of government, or any agreement or other
instrument to which the Borrower is now a party or by which the Borrower or any of
its properties or assets is bound. Nor will this Loan Agreement be in conflict with,
result in a breach of, or constitute a default under, any such agreement or other
instrument, or, except as provided hereunder, result in the creation or imposition of any
lien, charge or encumbrance of any nature whatsoever upon any of the property or
assets of the Borrower.
(5) This Loan Agreement does not create any unconstitutional indebtedness.
The Loan Amount together with all of the Borrower's other obligations does not, and will
not, exceed any limits prescribed by the Constitution, any of the statutes of the State of
Oregon, the Borrower's charter, or any other authority.
(6) The Project is a project which the Borrower may undertake pursuant to
Oregon law and for which the Borrower is authorized by law to borrow money.
CITY 01 WOOD81IRN: R98414
(iENN7914.DOC (09/27/06)
LOAN AGREEMENT
OREGO]\. DEPARTMENT OF ENVIRONMENTAL QUALITY
CLEAN WATER STATE REVOLVING FUND
(7) The Borrower has full legal right and authority and all necessary licenses
and permits required as of the date hereof to own, operate and maintain the Facility and
the Project, other than licenses and permits relating to the Facility or the Project which
the Borrower expects to and shall receive in the ordinary course of business, to carry on
its activities relating thereto, to execute and deliver this Agreement, to undertake and
complete the Project, and to carry out and consummate all transactions contemplated by
this Agreement.
PAGE 8
(8) The information contained herein which was provided by the Borrower is
true and accurate in all respects, and there is no material adverse information relating to
the Project or the Loan, known to the Borrower, that has not been disclosed in writing to
DEQ.
(9) No litigation exists or has been threatened that would cast doubt on the
enforceability of the Borrower's obligations under this Loan Agreement.
(10) The estimated Completion Date of the Project is October 31, 2010.
(11) The estimated total Costs of the Project are $4,093,175.
(12) The Borrower is in compliance with all laws, ordinances, and
governmental rules and regulations to which it is subject, the failure to comply with which would
materially adversely affect the ability of the Borrower to conduct its activities or undertake or
complete the Project or the condition (financial or otherwise) of the Borrower or the Project.
(B) CONTINUING REPRESENTATIONS OF THE BORROWER. The representations of
the Borrower contained herein shall be true on the closing date for the Loan and at all times
during the term of this Agreement.
(C) REPRESENTATIONS AND WARRANTIES OF DEQ. OEQ represents and warrants
that the Director has power under ORS Chapter 468 and OAR Chapter 340, Division 54, to enter
into the transactions contemplated by this Loan Agreement and to carry out DEQ's obligations
thereunder and that the Director is authorized to execute and deliver this Loan Agreement and to
make the Loan as contemplated hereby.
ARTICLE 4: CONDITIONS TO LOAN
(A) CONDITIONS TO CLOSING. DEQ's obligations hereunder are subject to the
condition that on or prior to July 19, 2007, the Borrower will duly execute and deliver to DEQ
the following items, each in form and substance satisfactory to DEQ and its counsel:
(1)
Borrower;
this Agreement duly executed and delivered by an authorized officer of the
(2) a copy of the ordinance, order or resolution of the governing body of the
Borrower authorizing the execution and delivery of this Agreement, certified by an
authorized officer of the Borrower;
CITY OF WOODBURN: R98414
GENN7914.DOC (09/27/06)
LOAN AGREEMENT
OREGON DEPARTMENT OF ENVIRONMENTAL QUALITY
CLEAN WATER STATE REvOL VING FUND
(3) an opinion of the legal counsel to the Borrower to the effect that:
PAGE 9
(a) The Borrower has the power and authority to execute and deliver and
perform its obligations under this Loan Agreement;
(b) This Loan Agreement has been duly executed and acknowledged
where necessary by the Borrower's authorized representative(s), all required
approvals have been obtained, and all other necessary actions have been taken, so
that this Loan Agreement is valid, binding, and enforceable against the Borrower in
accordance with its terms, except as such enforcement is affected by bankruptcy,
insolvency, moratorium, or other laws affecting creditors rights generally;
(e) To such counsel's knowledge, this Loan Agreement does not violate
any other agreement, statute, court order, or law to which the Borrower is a party or
by which it or any of its property or assets is bound; and
(d) The Net Operating Revenues used as security for the Loan will not
constitute taxes that are limited by Section 11 b, Article XI of the Oregon
Constitution; and
(4) such other documents, certificates, opinions and information as DEQ or its
counsel may reasonably require.
(B) CONDITIONS TO DISBlIRSEMENTS. Notwithstanding anything in this Agreement
to the contrary, DEQ shall have no obligation to make any disbursement to the Borrower under
this Agreement unless:
(1) No Event of Default and no event, omission or failure of a condition which
would constitute an Event of Default after notice or lapse of time or both has occurred
and is continuing;
(2) All of the Borrower's representations and warranties in this Agreement are
true and correct on the date of disbursement with the same effect as if made on such date;
and
(3) The Borrower submits a disbursement request to DEQ that complies with the
requirements of ARTICLE 2(C);
provided, however, DEQ shall be under no obligation to make any disbursement if:
(1) DEQ, the SRF and CWSRF Program have not received sufficient funding,
appropriations and other expenditure authorizations to allow DEQ, in the exercise of its
reasonable administrative discretion, to make the disbursement and there are insufficient
moneys in the accounts or funds to be used to cover the disbursement, as determined by
DEQ in the reasonable exercise of its administrative discretion, to permit DEQ to make
the disbursement; or
(2) there has been a change in any applicable state or federal law, statute, rule or
regulation so that the Project is no longer eligible for the Loan.
CiTY OF WOODBURN: R98414
(iENN7914.DOC (09/27/06)
LOAN AGREEMENT
OREGON DEPARTMENT OF ENVIRONMENTAL QUALITY
CLEAN WATER STATE REVOLVING FUND
PAGE 10
ARTICLE 5: COVENANTS OF BORROWER
(A) GENERAL COVENANTS OF THE BORROWER. Until the Loan is paid in full, the
Borrower covenants with DEQ that:
(1) The Borrower shall use the Loan funds only for payment or reimbursement
of the Costs of the Project in accordance with this Loan Agreement. The Borrower
acknowledges and agrees that the Costs of the Project do NOT include any Lobbying costs
or expenses incurred by Borrower or any person on behalf of Borrower and that Borrower
will not request payment or reimbursement for Lobbying costs and expenses.
(2) If the Loan proceeds are insufficient to pay for the Costs of the Project in
full, the Borrower shall pay from its own funds and without any right of reimbursement
from DEQ all such Costs of the Project in excess of the Loan proceeds.
(3) The Borrower is and will be the owner of the Facility and the Project and
shall defend them against the claims and demands of all other persons at any time
claiming the same or any interest therein.
(4) The Borrower shall not sell, lease, transfer, or encumber or enter into any
management agreement or special use agreement with respect to the Facility or any
financial or fixed asset of the utility system that produces the Net Operating Revenues
without DEQ's prior written approval, which approval may be withheld for any reason.
Upon sale, transfer or encumbrance of the Facility or the Project, in whole or in part, to a
private person or entity. this Loan shall be immediately due and payable in full.
(5) Concurrent with the execution and delivery of this Loan Agreement, or as
soon thereafter as practicable, the Borrower shall take all steps necessary to cause the
Project to be completed in a timely manner in accordance with all applicable DEQ
requirements.
(6) The Borrower shall take no action that would adversely affect the eligibility
of the Project as a CWSRF project or cause a violation of any Loan covenant in this
Agreement.
(7) The Borrower shall undertake the Project, request disbursements under
this Loan Agreement, and use the Loan proceeds in full compliance with all applicable
laws and regulations of the State of Oregon, including but not limited to ORS Chapter
468 and Oregon Administrative Rules Sections 340-054-0005 to 340-054-0065, as they
may be amended from time to time, and all applicable federal authorities and laws and
regulations of the United States, including but not limited to Title VI of the Clean Water
Act as amended by the Water Quality Act of 1987, Public Law 100-4, the federal cross-
cutters listed at Appendix D (attached hereto and by this reference made a part hereof)
and regulations of the U.S. Environmental Protection Agency, all as they may be
amended from time to time.
CITY 01 WOODBlJRN: R98414
(jENN7914.DOC (09/27/06)
LOAN AGREEMENT
OREGO]\ DEPARTMENT OF ENVIRONMENTAL QUALITY
CLEAl\ WATER STATE REVOLVING FUND
PAGE 11
(8) The Borrower shall keep the Facility in good repair and working order at all
times and operate the Facility in an efficient and economical manner. The Borrower shall
provide the necessary resources for adequate operation, maintenance and replacement of the
Project and retain sufficient personnel to operate the Facility.
(9) Interest paid on this Loan Agreement is not excludable from gross income under
Section 103(a) of the United States Internal Revenue Code of 1986, as amended (the
"Code"). However, the DEQ may have funded this Loan with the proceeds of state bonds
that bear interest that is excludable from gross income under the Section 103(a) of the
Code. Section 141 of the Code requires that the state not allow the proceeds of the state
bonds to be used by private entities (including the Federal government) in such a way that
the state bonds would become "private activity bonds" as defined in Section 141 of the
Code. To protect the state bonds the Borrower agrees that it shall not use the Loan
proceeds or lease, transfer or otherwise permit the use of the Project by any private person
or entity in any way that that would cause this Loan Agreement or the state bonds to be
treated as "private activity bonds" under Section 141 of the Code and the regulations
promulgated under that section of the Code.
(B) DEBT SERVICE COVERAGE REQUIREMENT; WASTEWATER RATE COVENANT;
REPORTING.
(1) Debt Service Coverage Requirement. The Borrower shall maintain
wastewater rates and charge fees in connection with the operation of the Facility that are
adequate to generate Net Operating Revenues in each fiscal year sufficient to pay (i) all debt
service (excluding debt service on the Loan), (ii) all other financial obligations imposed in
connection with prior lien obligations of the Borrower, and (iii) an amount equal to the debt
service coverage factor of 105% multiplied by the debt service payments due under this
Loan Agreement in that fiscal year; provided, however, the amount required under (i) shall
include any amounts required by DEQ to provide coverage satisfactory to DEQ on prior lien
obligations or new lien obligations the Borrower may incur that DEQ determines are
inadequately secured or otherwise may adversely affect the ability of the Borrower to repay
the Loan.
(2) Wastewater Rate Adjustments. The Borrower shall review its wastewater
rates and fees at least annually. If, in any tiscal year, the Borrower fails to collect fees
sufficient to meet the debt service coverage requirement described in ARTICLE 5(B)(1), the
Borrower shall promptly adjust its wastewater rates and fees to assure future compliance
with such coverage requirement. The Borrower's adjustment of the wastewater rates and
fees does not constitute a cure of any default by the Borrower of the debt service coverage
requirement set forth in ARTICLE 5(B)(1). The Borrower's failure to adjust rates shall not,
at the discretion of DEQ, constitute a default if the Borrower transfers to the fund that holds
the Net Operating Revenues unencumbered resources in an amount equal to the revenue
deficiency to the Facility that produces the Net Operating Revenues.
(3) Reporting Requirement. By December 31 of each year the Borrower shall
provide DEQ with a report that demonstrates the Borrower's compliance with the
requirements of this ARTICLE 5(B). If the audit report described in ARTICLE 5(F)
CITY 01 W(XmBURN: R98414
(;ENN7914,!X>c (09/27/06)
LOAN AGREEMENT
OREGON DEPARTMENT OF ENVIRONMENTAL QUALITY
CLEAN WATER STATE REVOLVING FUND
PAGE 12
identifies the Net Operating Revenues and contains a calculation demonstrating whether the
Borrower satistied the requirements of this ARTICLE 5(B), that audit will satisfY the
requirements of this ARTICLE 5(B)(3).
(C) LOAN RESERVE REQlIIREMENT; LOAN RESERVE ACCOUNT.
(1) Loan Reserve Requirement. The Loan reserve requirement equals 100%
times one-half of the average annual debt service based on the final repayment schedule.
Until the Final Loan Amount is calculated, the Loan Reserve Requirement is $121,650.
The Borrower shall deposit the Loan reserve requirement amount into the Loan Reserve
Account no later than the date the tirst payment is due hereunder.
(2) Loan Reserve Account. The Borrower shall create a segregated Loan
Reserve Account that shall be held in trust for the benefit of DEQ. The Borrower
hereby grants to DEQ a security interest in and irrevocably pledges the Loan Reserve
Account to pay the amounts due under this Loan Agreement. The funds in Loan Reserve
Account so pledged and hereafter received by the Borrower shall immediately be subject
to the lien of such pledge without physical delivery or further act, and the lien of the
pledge shall be superior to all other claims and liens whatsoever, to the fullest extent
permitted by ORS 288.594. The Borrower represents and warrants that the pledge of the
Loan Reserve Account hereby made by the Borrower complies with, and shall be valid
and binding from the date of this Agreement pursuant to, ORS 288.594. The Borrower
shall use the funds in the Loan Reserve Account solely to pay amounts due hereunder until
the principal, interest, fees, and any other amounts due hereunder have been fully paid.
(3) Additional Deposits. If the balance in the Loan Reserve Account falls below
the Loan reserve requirement, the Borrower shall promptly deposit from the first Net
Operating Revenues available after payment of the amounts due hereunder (unless the
Borrower has previously made such deposit from other money of the Borrower) an amount
sufficient to restore the balance up to the Loan reserve requirement.
(D) INSURANCE. At its own expense, the Borrower shall, during the term of this
Agreement, procure and maintain insurance coverage (including, but not limited to, hazard, Hood
and general liability insurance) adequate to protect DEQ's interest and in such amounts and against
such risks as are usually insurable in connection with similar projects and as is usually carried by
entities operating similar facilities. The insurance shall be with an entity which is acceptable to
DEQ, The Borrower shall provide evidence of such insurance to DEQ. Self insurance maintained
pursuant to a recognized municipal program of self-insurance will satisfY this requirement.
(E) INDEMNIFICATION. The Borrower shall, to the extent permitted by law and the
Oregon Constitution. indemnifY. save and hold the State, its officers, agents and employees
harmless from and (su~iect to ORS Chapter 180) defend each of them against any and all claims,
suits. actions. losses. damages, liabilities. cost and expenses of any nature whatsoever resulting
/i"om. arising out o{or relating to the acts or omissions of the Borrower or its officers, employees.
subcontractors or agents in regard to this Agreement or the Project.
ell y m WOODBURN: R98414
GENN7914,DOC (09/27/06)
LOAN AGREEMENT
OREGON DEPARTMENT OF ENVIRONMENTAL QUALITY
CLEAN WATER STATE REVOLVING FUND
PAGE 13
(F) THE
REQUIREMENTS.
BORROWER'S
FINANCIAL
RECORDS;
FINANCIAL
REPORTING
(1) Financial Records. The Borrower shall keep proper and complete books
of record and account and maintain all fiscal records related to this Agreement, the
Project, and the Facility in accordance with generally accepted accounting principles,
generally accepted government accounting standards, the requirements of the
Governmental Accounting Standards Board, and state minimum standards for audits of
municipal corporations. The Borrower must maintain separate Project accounts in
accordance with generally accepted government accounting standards promulgated by the
Governmental Accounting Standards Board. The Borrower will permit DEQ and the
Oregon Secretary of State and their representatives to inspect its properties, and all work
done, labor performed and materials furnished in and about the Project, and DEQ, the
Oregon Secretary of State and the federal government and their duly authorized
representatives shall have access to the Borrower's fiscal records and other books,
documents, papers, plans and writings that are pertinent to this Agreement to perform
examinations and audits and make excerpts and transcripts and take copies.
(2) Record Retention Period. The Borrower shall retain and keep accessible
tiles and records relating to the Project for at least three (3) years (or such longer period as
may be required by applicable law) after Project completion as determined by DEQ and
financial tiles and records until all amounts due under this Loan Agreement are fully repaid,
or until the conclusion of any audit, controversy, or litigation arising out of or related to this
Agreement, whichever date is later.
(3) Audit. Federal enabling legislation and applicable regulations require an
audit of each CWSRF Loan. The Borrower agrees to provide to DEQ the following which
DEQ agrees to accept as adequate to meet this federal audit requirement.
(a) As soon as possible, but in no event later than six (6) months
following the Project Completion Date, a full and complete accounting of the Costs
of the Project, including but not limited to documentation to support each cost
element and a summary of the Costs of the Project and the sources of funding; and
(b) As soon as possible, but in no event later than nine (9) months after
the end of each tiscal year, a copy the Borrower's annual audit report.
(4) Single Audit Act Requirements. The CWSRF Program receives
capitalization grants through the Catalog of Federal Domestic Assistance (CFDA) No.
66.458: Capitalization Grants for State Revolving Funds and is subject to the regulations
of the U.S. Environmental Protection Agency. The CWSRF Program is subject to the
U.S. Office of Management and Budget Circular A-133, "Audits of States, Local
Governments. and Non-Profit Organizations" implementing the Single Audit Act of 1996
('"Circular A-133"). As a sub-recipient of a federal grant, the Borrower is subject to
Circular A-133 to the extent that Loan proceeds include federal capitalization grant funds.
DEQ will notify the Borrower of the sources of the Loan funds at the end of each fiscal
year, and to the extent required, the Borrower is responsible for compliance with the
requirements of Circular A-133.
OrYOI WOODBURI\i: R98414
CiFNN79 I 4. DCX' (09/27106)
LOAN AGREEMENT
OREGO:'\i DEPARTMENT OF ENVIRONMENTAL QUALITY
CLEAN WATER STATE REVOLVING FUND
PAGE 14
(G) MBE, WOE AND SBRA AFFIRMATIVE STEPS. Pursuant to the affirmative steps
described in Appendix C, the Borrower shall make a good faith effort to promote fair share
awards to Minority Business Enterprises ("MBE"), Women's Business Enterprises ("WBE"), and
Small Businesses in Rural Areas ("SBRA") on all contracts and subcontracts awarded as part of
the Project.
(H) PROJECT ASSURANCES. Nothing in this Loan Agreement prohibits the Borrower
from requiring more assurances, guarantees, indemnity or other contractual requirements from any
party performing Project work.
ARTICLE 6: REPRESENTATIONS, WARRANTIES, COVENANTS AND CONDITIONS RELATING TO
CONSTRUCTION PROJECTS ONLY
(A) THE BORROWER'S REPRESENTATION AND WARRANTY REGARDING COSTS
ALREADY INCURRED.
(1) The Borrower represents and warrants to DEQ that, as of the date of this
Loan Agreement, the Costs of the Project actually incurred by the Borrower for
construction, do not exceed $ -0-.
(2) The Borrower acknowledges that OEQ is relying upon the Borrower's
representation regarding the amount of Costs of the Project incurred by the Borrower for
construction prior to the date of this Loan Agreement as set forth in ARTICLE 6(A)(1) above to
determine what portion of the Loan qualifies as a "refinancing" under the EP A's Clean Water State
Revolving Fund regulations, 40 C.F.R. Part 35, that may be disbursed on a reimbursement basis.
(B) CONDITION TO DISBURSEMENTS. DEQ's obligation to make disbursements
hereunder is further conditioned on the following:
(1) The Borrower's plans, specifications and related documents for the Project
shall be reviewed and approved by OEQ.
(2) The Borrower has submitted documentation satisfactory to DEQ that the
disbursement is for work that complies with plans, specifications, change orders and
addenda approved by DEQ.
(3) The Borrower has submitted a copy of the awarded contract and bid
documents (including a tabulation of all bids received) to DEQ for the portion of the
Project costs that will be funded with the disbursement.
(C) GENERAL PROVISIONS. The Borrower covenants with DEQ that:
(1) Construction Manual. Unless stated otherwise in this Agreement, the
Borrower shall comply with the requirements set forth in the current version of the
Manual. DEQwill provide the Borrower with a copy of the Manual upon request.
CITYO! WUOIlBURN: R98414
CiENN7914,IX>C (09/27/06)
LOAN AGREEMENT
OREGON DEPARTMENT OF ENVIRONMENTAL QUALITY
CLEAN W ATER STATE REVOLVING FUND
(2) Plans and Specifications. The Borrower shall obtain DEQ's review
and approval of the Borrower's plans, specifications, and related documents for the
Project prior to any disbursement of Loan proceeds hereunder.
PAGElS
(3) Change Orders. The Borrower shall submit all change orders to DEQ.
The Borrower shall not use any Loan proceeds to pay for costs of any change order that
DEQ has not approved in writing. This ARTICLE 6(C)(3) shall not prevent the Borrower
from using funds other than Loan proceeds to pay for a change order before DEQ approves
it, but the Borrower bears the risk that DEQ will not approve the change order.
(4) Inspections; Reports. The Borrower shall provide inspection reports
during the construction of the Project as required by DEQ to ensure that the Project
complies with approved plans and specifications. Qualified inspectors shall conduct
these inspections under the direction of a registered civil, mechanical or electrical
engineer, whichever is appropriate. DEQ or its representative(s) may enter property
owned or controlled by the Borrower to conduct interim inspections and require progress
reports sufficient to determine compliance with approved plans and specifications and
with the Loan Agreement, as appropriate.
(5) Asbestos and Other Hazardous Materials. The Borrower shall ensure that
only persons trained and qualified for removal of asbestos or other Hazardous Materials will
remove any asbestos or Hazardous Materials, respectively, which may be part of this
Project.
(6) Operation and Maintenance Manual. The Borrower shall submit to DEQ a
draft Facility operation and maintenance manual before the Project is fifty percent (50%)
complete. The Borrower shall submit to DEQ a final Facility operation and maintenance
manual that meets DEQ's approval before the Project is ninety percent (90%) complete.
(7) Proiect Performance Certification. The Borrower shall submit to DEQ draft
performance standards before the Project is fifty percent (50%) complete. The Borrower
shall submit to DEQ final performance standards that meet DEQ's approval before the
Project is ninety percent (90%) complete. The Borrower shall submit to DEQ the following
done in accordance with the Manual: (i) no later than 10.5 months after the Initiation of
Operation (as that term is defined in OAR 340-054-0010(26)), a performance evaluation
report based on the approved performance standards; (ii) within one year after the Project's
Initiation of Operation, Project performance certification statement; and (iii) within two (2)
months of submission of such Project performance certification statement, a corrective
action plan for any Project deficiencies noted in said statement.
(8) Alterations After Completion. The Borrower shall not materially alter the
design or structural character of the Project after completing the Project without DEQ's
written approval.
(9) Proiect Initiation of Operations.
(a) The Borrower shall notify DEQ of the Initiation of Operation no
more than thirty (30) days after the actual Project Completion Date.
CITY 01" W(XmBlJRN: R98414
GENN79I 4,DOC (09/27/06)
LOAN AGREEMENT
OREGO~ DEPARTMENT OF ENVIRONMENTAL QUALITY
CLEAJ\ WATER STATE REVOLVING FUND
PAGE 16
(b) [fthe Project is completed, or is completed except for minor
items, and the Project is operable, but DEQ has not received a notice of
Initiation of Operation from the Borrower, DEQ may assign an Initiation of
Operation date.
(10) Final Proiect Evaluation Report. One year following the Initiation of
Operations, the Borrower shall submit to DEQ a Final Project Evaluation Report
for the watershed enhancement projects, which shall include the following:
(a) An overall description of the work accomplished.
(b) An assessment of aquatic and terrestrial habitat improvements which
may have resulted from the Project, including changes in species populations.
(c) An assessment of water quality changes resulting from the Project.
(d) An assessment of changes in basin run-off rates, Pudding River and
Mill Creek storm induced t10w rates, and downstream t100ding resulting from the
Project.
(e) A description of the contracts, agreements or other mechanisms put in
place to assure ongoing maintenance of the improvements.
(t) A discussion of the knowledge gained in conduct of the Project that
would be important to incorporate in subsequent similar projects.
(D) PROVISION ApPLICABLE TO CONTRACTS AND SUBCONTRACTS AWARDED FOR
THE PROJECT
(1) Davis-Bacon Requirements. The Project is not subject to the wage rate
requirements of the Davis-Bacon Act, as amended, 40 U.S.C. ss276a to 276a-5 (1994).
llowever, all contracts and subcontracts awarded as part of the Project shall comply with the
requirements of the Prevailing Wage Ratesfor Public Works Projects in Oregon established
under ORS 279C.800 through 279C.870 and OAR 839-025-0000 through 839-025-0540.
(2) Retainage. The Borrower shall require a five percent (5%) retainage in all of
its contracts related to the Project for an amount greater than One Hundred Thousand
Dollars ($100,000).
ARTICLE 7: DISCLAIMERS BY DEQ; LIMITATION OF DEQ's LIABILITY
(A) DISCLAIMER OF ANY WARRANTY. DEQ EXPRESSLY DISCLAIMS ANY
REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, INCLUDING BUT NOT
[JMITED TO ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A
P ARTICULAR PURPOSE, REGARDING THE PROJECT, THE QUALITY OF MATERIALS
SUPPLIED TO AND THAT BECOME A PART OF THE PROJECT, THE QUALITY OF THE
WORKMANSHIP PERFORMED UPON THE PROJECT, OR THE EXTENT AND STAGE OF
COMPLETION OF THE PROJECT. No such warranty or guarantee shall be implied by virtue of
any inspection or disbursement made by DEQ. Any inspection done by the DEQ shall be for its
sole benefit.
Cllym WOODBURN: R98414
GENN7914,QOC (09/27/06)
LOAN AGREEMENT
OREGON DEPARTMENT OF ENVIRONMENTAL QUALITY
CLEAN WATER STATE REVOLVING FUND
PAGE 17
(B) DISCLAIMER OF LIABILITY OF DEQ. DEQ EXPRESSLY DISCLAIMS
I ,lABILITY OF ANY KIND OR CHARACTER WHATSOEVER FOR PAYMENT OF LABOR
OR MATERIALS OR OTHERWISE IN CONNECTION WITH THE COMPLETION OF THE
PROJECT OR CONTRACTS ENTERED INTO BY THE BORROWER WITH THIRD
PARTIES FOR THE COMPLETION OF THE PROJECT. All Project costs of labor, materials
and construction, including any indirect costs, shall be the responsibility of and shall be paid by
the Borrower.
(e) NONLlABILITY OF STATE.
(1) The State and its officers, agents and employees shall not be liable to the
Borrower or to any other party for any death, injury, damage, or loss that may result to
any person or property by or from any cause whatsoever, arising out of any defects in the
plans, design drawings and specifications for the Project, any agreements or documents
between the Borrower and third parties related to the Project or any activities related to
the Project. DEQ shall not be responsible for verifying cost-effectiveness of the Project,
doing cost comparisons or reviewing or monitoring compliance by the Borrower or any
other party with state procurement laws and regulations.
(2) The Borrower hereby expressly releases and discharges DEQ, its officers,
agents and employees from all liabilities, obligations and claims arising out of the Project
work or under the Loan, subject only to exceptions previously agreed upon in writing by
the parties.
(3) Any tindings by DEQ concerning the Project and any inspections or analyses
of the Project by DEQ are for determining eligibility for the Loan and disbursement of Loan
proceeds only, Such tindings do not constitute an endorsement of the feasibility of the
Project or its components or an assurance of any kind for any other purpose.
(4) Review and approval of Facilities plans, design drawings and specifications
or other documents by or tor DEQ does not relieve the Borrower of its responsibility to
properly plan, design, build and etlectively operate and maintain the Facility as required by
law, regulations, permits and good management practices.
ARTICLE 8: DEFAULT AND REMEDIES
(A) EVENTS OF DEFAULT. The occurrence of one or more of the following events
constitutes an Event of Default, whether occurring voluntarily or involuntarily, by operation of law
or pursuant to any order of any court or governmental agency:
(1) The Borrower fails to make any Loan payment within thirty (30) days after
the payment is scheduled to be made according to the repayment schedule;
CITY OF WOODBURN: R98414
GENN7914.DOC (09/27/06)
LOAN AGREEMENT
OREGON DEPARTMENT OF ENvIRONME:\ITAL QUALITY
CLEAN WATER STATE REVOLVING FUND
PAGE 18
(2) Any representation or warranty made by the Borrower hereunder was untrue
in any material respect as of the date it was made;
(3) The Borrower becomes insolvent or admits in writing an inability to pay its
debts as they mature or applies for, consents to, or acquiesces in the appointment of a
trustee or receiver for the Borrower or a substantial part of its property; or in the absence of
such application, consent, or acquiescence, a trustee or receiver is appointed for the
Borrower or a substantial part of its property and is not discharged within sixty (60) days; or
any bankruptcy, reorganization, debt arrangement or moratorium or any dissolution or
liquidation proceeding is instituted by or against the Borrower and, if instituted against the
Borrower, is consented to or acquiesced in by the Borrower or is not dismissed within
twenty (20) days;
(4) As a result of any changes in the United States Constitution or the
Oregon Constitution or as a result of any legislative, judicial, or administrative action, any
part of this Loan Agreement becomes void, unenforceable or impossible to perform in
accordance with the intent and purposes ofthe parties hereto or is declared unlawful;
(5) The Borrower defaults in the performance or observance of any covenants
or agreements contained in any loan documents between itself and any lender or lenders,
and the default remains uncured upon the expiration of any cure period provided by said
loan documents; or
(6) The Borrower fails to cure non-compliance in any material respect with
any other covenant, condition, or agreement of the Borrower hereunder, other than as
set forth in (1) through (5) above within a period of thirty (30) days after DEQ provides
notice of the noncompliance.
(B) REMEDIES. If DEQ determines that an Event of Default has occurred, DEQ may,
without further notice:
(1) Declare the Outstanding Loan Amount plus any unpaid accrued interest,
fees and any other amounts due hereunder immediately due and payable;
(2) Cease making disbursement of Loan proceeds or make some
disbursements of Loan proceeds and withhold or refuse to make other disbursements;
(3) Appoint a receiver, at the Borrower's expense, to operate the facility
that produces the pledged revenues and collect the Gross Revenues
(4) Set and collect utility rates and charges;
(5) Pay, compromise or settle any liens on the Facility or the Project or pay
other sums required to be paid by the Borrower in connection with the Project, at DEQ's
discretion, using the Loan proceeds and such additional money as may be required. If DEQ
pays any encumbrance, lien, claim, or demand, it shall be subrogated, to the extent of the
amount of such payment, to all the rights, powers, privileges, and remedies of the holder of
ellYOI WOODBURN: R98414
GENN79 I 4. DOC (09/27/06)
LOAN AGREEMENT
OREGOJ\ DEPARTMENT OF EJ\VIRONMENTAL QUALITY
CLEAN WATER STATE REVOLVING FUND
PAGE 19
the encumbrance, lien, claim, or demand, as the case may be. Any such subrogation rights
shall be additional cumulative security for the amounts due under this Loan Agreement;
(6) Direct the State Treasurer to withhold any amounts otherwise due to the
Borrower from the State of Oregon and, to the extent permitted by law, direct that such funds be
applied to the amounts due DEQ under this Loan Agreement and be deposited into the SRF;
(7) Pursue any other legal or equitable remedy it may have.
ARTICLE 9: DEFINITIONS
(A) "BORROWER" means the public agency (as defined in ORS 468.423(2)) shown as
the .'Borrower" in Article I(A) of this Agreement.
(B) "COMPLETION DATE" means the date on which the Project is completed. If the
Project is a planning project, the Completion Date is the date on which DEQ accepts the planning
project. [fthe Project is a design project, the Completion Date is the date on which the design
project is ready for the contractor bid process. If the Project is a construction project, the
Completion Date is the date on which the construction project is substantially complete and ready
for Initiation of Operation.
(C) "COSTS OF THE PROJECT" means expenditures approved by DEQ that are
necessary to construct the Project in compliance with DEQ's requirements and may include but
are not limited to the following items:
(1) Cost of labor and materials and all costs the Borrower is required to pay
under the terms of any contract for the design, acquisition, construction or installation of the
Project;
(2) Engineering fees for the design and construction of the Project.
(3) The costs of surety bonds and insurance of all kinds that may be required or
necessary during the course of completion of the Project;
(4) The legal, tinancing and administrative costs of obtaining the Loan and
completing the Project; and
(5) Any other costs approved in writing by DEQ.
(D) "CWSRF PROGRAM" or "CWSRF" means the Clean Water State Revolving
Fund Loan Program, a loan program administered by DEQ under ORS 468.423 to 468.440.
(E) "DEQ" means the Oregon Department of Environmental Quality.
(F) "DIRECTOR" means the Director of DEQ or the Director's authorized
representati ve.
CITY OF WOODBlJRN: R98414
(iENN7914.DOC (09/27/06)
LOAN AGREEMENT
OREGON DEPARTMENT OF ENVIRONMENTAL QUALITY
CLEAN WATER STATE REVOLVING FUND
PAGE 20
(G) "F ACILlTY" means all property owned or used by the Borrower to provide
wastewater collection, treatment and disposal services, of which the Project is a part.
(H) "FINAL LOAN AMOUNT" means the total of all Loan proceeds disbursed to the
Borrower under the Loan Agreement, determined on the date on which the Borrower indicates that
no further Loan funds will be requested, all eligible expenditures have been reimbursed from the
r .oan proceeds, or all Loan proceeds have been disbursed hereunder, whichever occurs first.
(I) "GROSS REVENUES" means all fees and charges resulting from operation of the
Facility and any interest earnings thereon; provided however, Gross Revenues does not include: the
proceeds of any grants; the proceeds of any borrowings for capital improvements; the proceeds of
any liability insurance; or the proceeds of any casualty insurance which the Borrower intends to and
does utilize for repair or replacement of the Facility or a part thereof.
(J) "HAZARDOlIS MATERIALS" means and includes flammable explosives, radioactive
materials, asbestos and substances defined as hazardous materials, hazardous substances or
hazardous wastes in the Comprehensive Environmental Response, Compensation, and Liability
Act. as amended by the Superfund Amendments and Reauthorization Act (42 U.S.C. Section 9601,
et seq.), the Hazardous Materials Transportation Act (49 U.S.C. Section 1801, et seq.) and the
Resource Conservation and Recovery Act (42 U.S.c. Section 6901, et seq.), and regulations
promulgated thereunder.
(K) "INITIATION OF OPERATIONS" means the date on or after the Project Completion
Date on which the Project actually commences operation.
(L) "LOAN" means the loan made pursuant to this Loan Agreement.
(M) "LOAN AGREEMENT" or "AGREEMENT" means this loan agreement and its
exhibits, appendices, schedules and attachments (which are by this reference incorporated
herein), and any amendments thereto.
(N)
hereunder.
"LOAN AMOUNT" means the maximum amount DEQ agrees to loan the Borrower
(0)
"LOAN RESERVE ACCOUNT" means the account described in ARTICLE 5(C)(2).
(P) "LOBBYING" means influencing or attempting to influence a member, officer or
employee of a governmental agency or legislature in connection with the awarding of a government
contract, the making of a government grant or loan or the entering into of a cooperative agreement
with such governmental entity or the extension, continuation, renewal, amendment or modification
of any of the above.
(Q) "MANl1AL" means CWSRF Manual for Construction Projects.
(R) "NET OPERATING REVENUES" means the Gross Revenues less the Operating
Expenses for the Facility.
CITY Of' WOODBURN: R98414
(iENN7914,DOC (09/27/06)
LOAN AGREEMENT
OREGON DEPARTMENT OF ENVIRONMENTAL QUALITY
CLEAN WATER STATE REVOLVING FUND
PAGE 21
(S) "OPERA TING EXPENSES" means all direct and indirect expenses incurred for
operation, maintenance and repair of the Facility, including but is not limited to administrative
expenses, legal, financial and accounting expenses, insurance premiums, claims (to the extent that
monies are not available from insurance proceeds), taxes, engineering expenses relating to
operation and maintenance, payments and reserves for pension, retirement, health, hospitalization,
and sick leave benefits, and any other similar expenses to be paid to the extent properly and directly
attributable to operations of the Facility. Operating expenses include an appropriate amount for
reserves for repair and replacement of the Facility based on the expected life of the collection,
treatment and disposal facilities.
(T) "OllTSTANDlNG LOAN AMOUNT" means, as of any date, the sum of all
disbursements to the Borrower hereunder less the sum of all Loan principal payments received by
DEQ.
(U) "PROJECT" means the facilities, activities or documents described in ARTICLE
I(E) and (F).
(V) "REPAYMENT PERIOD" means the repayment period specified in ARTICLE l(H)
which shall not in any event exceed twenty (20) years after the Completion Date.
(W) "SRF" means the Water Pollution Control Revolving Fund established under ORS
468.427, also known as the State Revolving Fund.
(X) "STATE" means the State of Oregon.
ARTICLE 10: MISCELLANEOUS
(A) NOTICES. All notices, payments, statements, demands, requests or other
communications under this Loan Agreement by either party to the other shall be in writing and shall
be sufficiently given and served upon the other party if delivered by personal delivery, by certified
mail, return receipt requested, or by facsimile transmission, and, if to the Borrower, delivered,
addressed or transmitted to the location or number listed in ARTICLE l(B), and if to DEQ,
delivered, addressed or transmitted to:
Clean Water State Revolving Fund Loan Program
Water Quality Division
Department of Environmental Quality
811 S.W. Sixth Avenue
Portland, Oregon 97204-1390
Fax (503) 229-6037
or to such other addresses or numbers as the parties may from time to time designate. Any notice or
other communication so addressed and mailed shall be deemed to be given five (5) days after
mailing. Any notice or other communication delivered by facsimile shall be deemed to be given
when receipt of the transmission is generated by the transmitting machine. To be effective against
DEQ, such facsimile transmission must be confirmed by telephone notice to DEQ's CWSRF
Program Coordinator. Any notice or other communication by personal delivery shall be deemed to
be given when actually delivered.
CITY OF WOODBURN: R98414
GENN7914.DOC (09/27/06)
LOAN AGREEMENT
OREGON DEPARTMENT OF ENVIRONMENTAL QUALITY
CLEAN WATER STATE REVOLVING FUND
PAGE 22
(B) WAIVERS AND RESERVATION OF RIGHTS.
(1) DEQ's waiver of any breach by the Borrower of any term, covenant or
condition of this Loan Agreement shall not operate as a waiver of any subsequent breach of
the same or breach of any other term, covenant, or condition of this Loan Agreement. DEQ
may pursue any of its remedies hereunder concurrently or consecutively without being
deemed to have waived its right to pursue any other remedy.
(2) Nothing in this Loan Agreement affects DEQ's right to take remedial
action, including, but not limited to, administrative enforcement action and action for
breach of contract against the Borrower, if the Borrower fails to carry out its obligations
under this Loan Agreement.
(C) TIME Is OF THE ESSENCE. The Borrower agrees that time is of the essence under
this Loan Agreement.
(D) RELATIONSHIP OF PARTIES. The parties agree and acknowledge that their
relationship is that of independent contracting parties, and neither party hereto shall be deemed
an agent, partner, joint venturer or related entity of the other by reason of this Loan Agreement.
(E) No THIRD PARTY BENEFICIARIES. DEQ and the Borrower are the only parties to
this Loan Agreement and are the only parties entitled to enforce the terms of this Loan
Agreement. Nothing in this Loan Agreement gives, is intended to give, or shall be construed to
give or provide any benefit or right not held by or made generally available to the public, whether
directly, indirectly or otherwise, to third persons unless such third persons are individually
identified by name herein and expressly described as intended beneficiaries of the terms of this
Loan Agreement. Any inspections, audits, reports or other assurances done or obtained, or
approvals or consents given, by DEQ are for its benefit only for the purposes of administering
this Loan and the CWSRF Program.
(F) ASSIGNMENT. DEQ shall have the right to transfer the Loan or any part thereof,
or assign any or all of its rights under this Loan Agreement, at any time after execution of this
Loan Agreement upon written notice to the Borrower. Provisions of this Loan Agreement shall
inure to the benefit of DEQ's successors and assigns. This Loan Agreement or any interest
therein may be assigned or transferred by the Borrower only with DEQ's prior written approval
(which consent may be withheld for any reason), and any assignment or transfer by the
Borrower in contravention of this ARTICLE lO(F) shall be null and void.
(G) DEQ NOT REQUIRED TO ACT. Nothing contained in this Loan Agreement requires
DEQ to incur any expense or to take any action hereunder in regards to the Project.
(H) FllRTHER ASSlIRANCES. The Borrower and DEQ agree to execute and deliver any
written instruments necessary to carry out any agreement, term, condition or assurance in this Loan
Agreement whenever a party makes a reasonable request to the other party for such instruments.
(I) V AUDlTY AND SEVERABILITY; SURVIVAL. If any part, term, or provision of this
Loan Agreement or of any other Loan document shall be held by a court of competent jurisdiction
CITY OF WOODBURN: R98414
GENN7914,DOC (09/27/06)
LOAN AGREEMENT
OREG01\ DEPARTMENT OF ENVIRONMENTAL QUALITY
CLEAN WATER STATE REVOLVING FUND
PAGE 23
to be void, voidable, or unenforceable by either party, the validity of the remaining portions, terms
and provisions shall not be affected, and all such remaining portions, terms and provisions shall
remain in full force and effect. Any provision of this Agreement which by its nature or terms is
intended to survive termination, including but not limited to ARTICLE 5(E), shall survive
ternlination of this Agreement.
(J) No CONSTRUCTION AGAINST DRAFTER. Both parties acknowledge that they are
~ach represented by and have sought the advice of counsel in connection with this Loan Agreement
and the transactions contemplated hereby and have read and understand the terms of this Loan
Agreement. The terms of this Loan Agreement shall not be construed against either party as the
drafter hereo f.
(K) HEADINGS. All headings contained herein are for convenience of reference only
and are not intended to define or limit the scope of any provision of this Loan Agreement.
(L) ATTORNEYS' FEES AND EXPENSES. In any action or suit to enforce any right or
remedy under this Agreement, the prevailing party shall be entitled to recover its reasonable
attorneys' fees and costs, to the extent permitted by law.
(M) LAWS GOVERNING; VENllE; JURISDICTION. This Agreement shall be governed by
and construed in accordance with the laws of Oregon without regard to principles of conflicts of
law. Any claim, action, suit or proceeding (collectively, "Claim") between DEQ (and/or any other
agency or department of the State of Oregon) and the Borrower that arises from or relates to this
Agreement shall be brought and conducted solely and exclusively within the Circuit Court of
Marion County for the State of Oregon; provided, however, if a Claim must be brought in a federal
forum, then it shall be brought and conducted solely and exclusively within the United States
District Court for the District of Oregon. In no event shall this ARTICLE 10(M) be construed as a
waiver by the State of Oregon of any form of defense or immunity, whether it is sovereign
immunity, governmental immunity, immunity based on the Eleventh Amendment to the
Constitution of the United States or otherwise, from any Claim or from the jurisdiction of any court.
BORROWER, BY EXECUTION OF THIS AGREEMENT, HEREBY CONSENTS TO THE IN
PERSONAM JURISDICTION OF SAID COURTS.
(N) COlINTERPARTS. This Loan Agreement may be executed in any number of
counterparts, each of which is deemed to be an original, but all together constitute but one and the
same instrument.
(0) E~T1RE AGREEMENT; AMENDMENTS. This Loan Agreement constitutes the entire
agreement between the Borrower and DEQ on the subject matter hereof, and it shall be binding on
the parties thereto when executed by all the parties and when all approvals required to be obtained
by DEQ have been obtained. This Loan Agreement, including all related Loan documents and
instruments, may not be amended, changed, modified, or altered without the written consent of the
parties.
CITY OF WOODBLiRN: R98414
(iENN7914,DOC (09/27/06)
LOAN AGREEMENT
OREGON DEPARTMENT OF ENVIRONMENTAL QUALITY
CLEAN WATER STATE REVOLVING FUND
CITY OF WOODBURN
PAGE 24
By:
Authorized Officer
Typed Name:
Title:
ST A TE OF OREGON ACTING BY AND TH ROliGH ITS
DEPARTMENT OF ENVIRONMENTAL QUALITY
By:
Lauri G. Aunan, Water Quality Administrator
Approved for Legal Sufficiency
By the Attorney General's Office
Date
Lynn T. Nagasako, Senior AAG
Date
Date
CITY OF WOODBURN: R98414
GENN7914.DOC (09/27/06)
LOAN AGREEMENT
OREGON DEPARTMENT OF ENVIRONMENTAL QUALITY
CLEAN WATER STATE REVOLVING FUND
PAGE 25
ApPENDIX A: REPAYMENT SCHEDULE
Due - - - - - - - - - - -- -- - P A YME NT - - - - - - - - -- -- -- - Principal
Date Pmt# Principal Interest Fees Total Balance
4,093,175
4/1/2011 1 0 116,400 0 116,400 4,093,175
10/1/2011 2 90,472 31,313 20,466 142,251 4,002,703
4/1/2012 3 91,164 30,621 0 121,785 3,911,539
10/1/2012 4 91,862 29,923 19,558 141,343 3,819,677
4/1/2013 5 92,564 29,221 0 121,785 3,727,113
10/1/2013 6 93,273 28,512 18,636 140,421 3,633,840
4/1/2014 7 93,986 27,799 0 121,785 3,539,854
10/1/2014 8 94,705 27,080 17,699 139,484 3,445,149
4/1/2015 9 95,430 26,355 0 121 ,785 3,349,719
10/1/2015 10 96,160 25,625 16,749 138,534 3,253,559
4/1/2016 11 96,895 24,890 0 121 ,785 3,156,664
10/1/2016 12 97,637 24,148 15,783 137,568 3,059,027
4/1/2017 13 98,383 23,402 0 121,785 2,960,644
10/1/2017 14 99,136 22,649 14,803 136,588 2,861,508
4/1/2018 15 99,894 21,891 0 121,785 2,761,614
10/1/2018 16 100,659 21 , 126 13,808 135,593 2,660,955
4/1/2019 17 101,429 20,356 0 121 ,785 2,559,526
10/1/2019 18 102,205 19,580 12,798 134,583 2,457,321
4/1/2020 19 102,986 18,799 0 121,785 2,354,335
10/1/2020 20 103,774 18,011 11 ,772 133,557 2,250,561
4/1/2021 21 104,568 17,217 0 121,785 2,145,993
10/1/2021 22 105,368 16,417 10,730 132,515 2,040,625
4/1/2022 23 106,174 15,611 0 121,785 1,934,451
10/1/2022 24 106,986 14,799 9,672 131,457 1,827,465
4/1/2023 25 107,805 13,980 0 121,785 1,719,660
10/1/2023 26 108,630 13,155 8,598 130,383 1,611,030
4/1/2024 27 109,461 12,324 0 121,785 1,501,569
10/1/2024 28 110,298 11 ,487 7,508 129,293 1,391,271
4/1/2025 29 111 ,142 10,643 0 121,785 1,280,129
10/1/2025 30 111 ,992 9,793 6,401 128,186 1,168,137
4/1/2026 31 112,849 8,936 0 121,785 1,055,288
10/1/2026 32 113,712 8,073 5,276 127,061 941,576
4/1/2027 33 114,582 7,203 0 121,785 826,994
10/1/2027 34 115,458 6,327 4,135 125,920 711,536
4/1/2028 35 116,342 5,443 0 121,785 595,194
10/1/2028 36 117,232 4,553 2,976 124,761 477,962
4/1/2029 37 118,129 3,656 0 121,785 359,833
10/1/2029 38 119,032 2,753 1,799 123,584 240,801
4/1/2030 39 119,943 1,842 0 121,785 120,858
10/1/2030 40 120,858 925 604 122,387 0
TOTALS 4,093,175 772,838 219,771 5,085,784
REQUIRED LOAN RESERVE: $ 121,650
CITY OF WOODBURN: R98414
GENN7914,DOC (09/27/06)
LOAN AGREEMENT
OREG01\ DEPARTMENT OF ENVIRONMENTAL QUALITY
CLEAN WATER STATE REVOLVING FUND
ApPENDIX B: ESTIMATED CWSRF LOAN DISBURSEMENT SCHEDULE
Loan funds are expected to be available based on the following Project schedule:
10/07 -12/07: $250,000
1/08 - 3/08: $250,000
4/08 - 6/08: $250,000
7/08 - 9/08: $100,000
10/08 -12/08: $300,000
1/09 - 3/09: $300,000
4/09 - 6/09: $300,000
7/09 - 9/09: $300,000
10/09 - 12/09: $600,000
1/10 - 3/10: $600,000
4/10- 6/10: $400,000
7/10 - 9/10: $300,000
10/10- 12/10: $143,175
PAGE 26
CITYOJ WOODBURN: R98414
CiENN79I 4,lXX' (09/27/06)
LOAN AGREEMENT
OREGON DEPARTMENT OF ENVIRONMENTAL QUALITY
CLEAN WATER STATE REVOLVING FUND
ApPENDIX C: MBE/WBE AFFIRMATIVE STEPS
PAGE 27
At a minimum a recipient or prime contractor must take six affirmative steps to demonstrate
good faith etTort to utilize minority (MBE), women-owned (WBE) and small (SBE) businesses.
The six steps are:
1) The bidder includes qualified small, minority and women's businesses on solicitation lists;
2) The bidder assures that small, minority, women's businesses are solicited whenever they are
potential sources;
3) The bidder divides total requirements, whenever economically feasible, into smaller tasks or
quantities to permit maximum participation by small, minority or women's businesses;
4-) The bidder establishes delivery schedules whenever the requirements of the work permit, which
will encourage participation by small, minority and women's businesses;
5) The bidder uses the services and assistance of the Small Business Administration (hrtp://pro-
net.sba.gov) and the Minority Business Development Agency of the U.S. Department of
Commerce (http://www.mbda.gov) to identify appropriate small, minority and women
businesses; and
6) I f the bidder awards contracts/procurements, the bidder will require the subcontractors to take
all of the affirmative action steps described above. (40 CFR Section 35. 3145(d))
Forms for documenting compliance with these requirements may be found at Tab 6 of the
Manual for Construction Projects. Please note that these requirements apply to any procurement
of construction, supplies, equipment or services.
Additional resources available to recipients and contractors include the following:
EP A Office of Small and Disadvantaged Business Utilization:
Phone: 206 - 553 - 2931
Web Site: www.epa.gov / osdbu
Oregon Office of Minority, Women and Emerging Small Business
350 Winter Street N.E., Room 300
Salem, OR 97301-3878
Phone: 503 947 - 7922
Web Site: www.cbs.state.or.us/omwesb
CITY OF WOODBl JRN: R98414
CiENN79I 4,DOC (09/27/06)
LOAN AGREEMENT
OREGON DEPARTMENT OF ENVIRONMENTAL QUALITY
CLEAN WATER STATE REVOLVING FUND
PAGE 28
ApPENDIX D: ApPLICABLE FEDERAL AUTHORITIES AND LAWS ("CROSS-CUTTERS")
ENVIRONMENTAL LEGISLATION:
Archaeological and Historic Preservation Act of 1974, PL 93-291.
Clean Air Act, 42 U.S.C. 7506(c).
Coastal Barrier Resources Act, 16 U.S.c. 3501, et seq.
Coastal Zone Management Act of 1972, PL 92-583, as amended.
Endangered Species Act 16 U.S.c. 1531, et seq.
Executive Order 11593, Protection and Enhancement of the Cultural Environment.
Executive Order 11988, Floodplain Management.
Executive Order 11990, Protection of Wetlands.
Farmland Protection Policy Act, 7 U.S.c. 4201, et seq.
Fish and Wildlife Coordination Act. PL 85-624, as amended.
National Historic Preservation Act of 1966, PL 89-665,as amended.
Safe Drinking Water Act, Section 1424(e), PL 92-523, as amended.
Wild and Scenic Rivers Act, PL 90-542, as amended.
Federal Water Pollution Control Act Amendments of 1972, PL 92-500.
ECONOMIC LEGISLATION:
Demonstration Cities and Metropolitan Development Act of 1966, PL 89-754, as amended.
Section 306 of the Clean Air Act and Section 508 of the Clean Water Act, including
Executive Order 11738, Administration of the Clean Air Act and the Federal Water
Pollution Control Act with Respect to Federal Contracts, Grants or Loans.
SOCIAL LEGISLATION:
The Age Discrimination Act of 1975, Pub. L. No. 94-135, 89 Stat. 713,42 U.S.C. 96102 (1994).
Civil Rights Act of 1964, Pub. L. No. 88-352, 78 Stat. 252, 42 U.S.C. 92000d (1988).
Section 13 of PL 92-500; Prohibition against Sex Discrimination under the Federal Water Pollution
Control Act.
Rehabilitation Act of 1973, Pub. L. No. 93-1123, 87 Stat. 355,29 U.S.c. 9794 (1988), including
Executive Orders 11914 and 11250).
MISCELLANEOUS AUTHORITY:
Uniform Relocation and Real Property Acquisition Policies Act of 1970, PL 92-646.
Executive Order 12549 and 40 CFR Part 32, Debarment and Suspension.
Disclosure of Lobbying Activities, Section 1352, Title 31, U.S. Code.
CITY OF WOODBURN: R98414
CiENN7914,[)()c (09/27/06)
LOAN AGREEMENT