AN ORDINANCE OF THE CITY OF YAMHILL AUTHORIZING A LOAN AND GRANT FROM THE WATER FUND BY ENTERING INTO A LOAN CONTRACT WITH THE OREGON ECONOMIC DEVELOPMENT DEPARTMENT, AND DECLARING AN EMERGENCY.

WHEREAS, the City of Yamhill is a "municipality" within the meaning of Oregon Revised Statutes 285B.560(3).

WHEREAS, Oregon Revised Statutes 285B.560 through 285B.599 (the "Act") authorizes any municipality to file an application with the Oregon Economic Development Department ("the Department") to obtain financial assistance from the Water Fund.

WHEREAS, the City of Yamhill has filed an application with the Department to obtain financial assistance for a "water project" within the meaning of the act.

WHEREAS, the Department has approved the City of Yamhill's application for financial assistance from the Water Fund pursuant to the Act.

WHEREAS, the City of Yamhill is required, as a prerequisite to receipt of financial assistance from the Department, to enter into a Financial Assistance Award Contract and a Loan Agreement with the Department in substantially the form attached hereto as Exhibits "A" and "B".

WHEREAS, the project described in Exhibit "A" to the Loan Agreement (the "Project") is a "water project" within the meaning of the Act which is needed by and is in the public interest of the City of Yamhill.

WHEREAS, notice relating to the City of Yamhill's consideration of the adopting of this Ordinance was published at least once in a newspaper of general circulation within the City of Yamhill. Such notice was published at least 14 days in advance of the adoption of this Ordinance; NOW THEREFORE;

THE CITY OF YAMHILL ORDAINS AS FOLLOWS:

SECTION 1. Loan and Grant Authorized. The Governing Body authorizes the Mayor to execute the Financial Assistance Award Contract, and Loan Agreement (the financing documents), and such other documents as may be required to obtain financial assistance including a loan and grant from the Department on the condition that the principal amount of the loan from the Department to the City of Yamhill is not in excess of $500,000 with a grant of $500,000. The proceeds of the loan and grant from the Department shall be applied solely to the "Costs of the Project" as such term is defined in the Loan Agreement.

SECTION 2. Security. Amounts payable, if any, by the City of Yamhill shall be payable from the sources described in Section 2.05 of the Loan Agreement and Oregon Revised Statutes 285B.581(2) which include:

• any sources of funds that are legally available to the Municipality;



• the revenues, if any, of the Project, including special assessment revenues, if any, and



• the Municipality's general fund including the general revenues of the Municipality, other funds which may be available for such purpose and the Municipality's taxing power within the restrictions of Article XI, Section 11 and 11b of the Constitution of the State of Oregon. The obligation of the Municipality to make payments pursuant to the Loan Agreement is a full faith and credit obligation of the Municipality that is not subject to annual appropriation.

SECTION 3. Additional Documents. The City Recorder is hereby authorized to enter into any agreements and to execute any documents or certificates which may be required to obtain financial assistance from the Department for the Project pursuant to the Financial Assistance Award Contract and Loan Agreement.

SECTION 4. Tax-Exempt Status. The Municipality covenants not to take any action or omit to take any action if the taking or omission would cause interest paid by the Municipality pursuant to the Loan Agreement not to quality for the exclusion from gross income provided by Section 103(a) of the Internal Revenue Code of 1986, as amended. The City Recorder of the Municipality may enter into covenants on behalf of the Municipality to protect the tax-exempt status of the interest paid by the Municipality pursuant to the Loan Agreement and may execute any Tax Certificate, Internal Revenue Service forms or other documents as shall be required by the Department of their bond counsel to protect the tax-exempt status of such interest.

SECTION 5. Reimbursement Bonds. The City of Yamhill may reimburse expenditures for the Project with amounts received from the Department pursuant to the Financing Documents. Additionally, the City of Yamhill understands that the Department may fund or reimburse itself for the funding of amounts paid to the city of Yamhill pursuant to the Financing Documents with the proceeds of bonds issued by the State of Oregon pursuant to the Act. This Ordinance shall constitute "official intent" within the meaning of Section 1.150-2 of the Income Tax Regulations promulgated by the United States Department of the Treasury with respect to the funding or the reimbursement for the funding of the costs of the Project by the City of Yamhill or the State with proceeds of the City of Yamhill's loan pursuant to the Financing Documents and with the proceeds of any bonds issued by the State of Oregon pursuant to the Act.

SECTION 6. Declaration of Emergency. The Governing Body declares that an emergency exists in order that there be no delay in financing the Project as provided in this Ordinance. Therefore, this Ordinance shall be in full force and effect from and after passage by the Governing Body.

INTRODUCED AND ADOPTED by the City of Yamhill Council and signed by me in authentication of its passage this 26^th day of January , 2000.