Honolulu City Council Policy Resolutions(Link to original Word Processing Version)
WHEREAS, pursuant to that certain Contract for the Design,
Construction, Testing of a Solid Waste Disposal and Resource
Recovery Facility dated as of July 3, 1985 (the "Construction
Contract") between the City and County of Honolulu (the "City")
and Honolulu Resource Recovery Venture ("HRRV"), the City has
undertaken the construction of a solid waste disposal and energy
and materials recovery project ("H-Power"); and
WHEREAS, pursuant to Section 46-19.1, Hawaii Revised
Statutes, and proceedings of the City Council duly taken, the
City has heretofore issued and is currently issuing general
obligation bonds and bond anticipation notes to finance H-Power;
and
WHEREAS, pursuant to Section 46-85, Hawaii Revised Statutes,
the City and HRRV entered into that certain Contract for Waste
Processing and Disposal Services dated as of July 3, 1985 (the
"Service Contract"), providing for HRRV to operate and maintain
H-Power and to provide waste processing and disposal services to
the City; and
WHEREAS, federal and state environmental regulations and
laws have increased the costs of proper and environmentally safe
processing and disposal of solid waste, including H-Power; and
WHEREAS, existing provisions of federal tax law create tax
incentives for private investors to acquire facilities for the
processing and disposal of solid waste; and
WHEREAS, the acquisition of H-Power by private investors
will result in a reduction to the City of the costs of H-Power;
and
WHEREAS, the sale of H-Power by the City to private
investors on terms which will not deprive the City of the
availability of H-Power is in the best interest of the residents
of the City and County; and
WHEREAS, Section 46-19.1, Hawaii Revised Statutes, in effect
provides, among other things, that if the governing body of a
county shall find that the sale of a facility for the processing
and disposal of solid waste, or the generation of electric
energy, or both, will not deprive the county of the availability
of the facility and will result in a reduction to the county of
the costs of the facility, such county may sell such a facility
financed pursuant to said Section 46-19.1 at competitive or
negotiated sale at such price and upon such terms as the
governing body shall approve by resolution; now, therefore,
BE IT RESOLVED by the Council of the City and County:
1. That the City Council hereby finds and determines: the
sale of H-Power upon the terms and conditions provided
in the documents approved by this resolution will not
deprive the City of the availability of H-Power and
will reduce the costs to the City of H-Power.
2. That the City Council hereby approves the entering into
and the execution and delivery by the Mayor and
Director of Finance of the Ground Lease between theCity and The Connecticut Bank and Trust Company,
National Association (the "Owner Trustee") as trustee
for Ford Motor Credit Company (the "Owner
Participant"), in the form presented to the City
Council at the meeting at which this resolution is
adopted, together with such changes as the Mayor and
Director of Finance shall approve upon the advice of
counsel; that the City Council hereby further ratifies,
validates, confirms and approves the Ground Lease and
the terms, provisions and conditions thereof, including
without limitation the lease of the site on which H-Power is situated from the City to the Owner Trustee
for a period of 35 years with rights to extend and the
grant to the City of an option to purchase H-Power 20
years from the date of commercial operation of H-Power;
and that the execution by the Mayor and Director of
Finance of any ground lease between the City, the Owner
Trustee, the Owner Participant, and HRRV, shall be
conclusive evidence that such ground lease is the
ground lease approved hereby and complies with all
requirements of this section.
3. That the City Council hereby approves the sale of H-Power to the Owner Trustee on behalf of the Owner
Participant at a purchase price of $312,500,000
consisting of $80,014,468 in cash and $232,485,523 in
the form of a note secured, among other things, by a
mortgage on and security interest in H-Power. The
Mayor and Director of Finance are hereby authorized to
deliver a Deed and Bill of Sale in substantially the
form presented to the City Council at the meeting at
which this resolution is adopted, together with such
changes as the Mayor and Director of Finance shall
approve upon the advice of Counsel. H-Power shall be
sold pursuant to the Participation and Assignment
Agreement approved in paragraph 6 hereof and the
interest of the City in H-Power shall be secured as
provided in the Installment Sale Agreement approved in
Paragraph 4 hereof and the Mortgage and Security
Agreement and mortgage note approved in Paragraph 5
hereof.
4. That the City Council hereby approves the entering into
and the execution and delivery by the Mayor and
Director of Finance of the Installment Sale Agreement
between the City and the Owner Trustee, in the formpresented to the City Council at the meeting at which
this resolution is adopted, together with such changes
as the Mayor and Director of Finance shall approve upon
the advice of counsel; that the City Council hereby
further ratifies, validates, confirms and approves the
Installment Sale Agreement and the terms, provisions
and conditions thereof, including without limitation
the terms and provisions upon which the balance of the
purchase price for H-Power will be paid to the City by
the Owner Trustee; and that the execution by the Mayor
and Director of Finance of any installment sale
agreement between the City and the Owner Trustee shall
be conclusive evidence that such installment sale
agreement is the installment sale agreement approved
hereby and complies with all requirements of this
section.
5. That the City Council hereby approves the entering into
and the execution and delivery by the Mayor and
Director of Finance of the Mortgage and Security
Agreement between the City and the Owner Trustee, in
the form presented to the City Council at the meeting
at which this resolution is adopted, together with such
changes as the Mayor and Director of Finance shall
approve upon the advice of counsel; that the City
Council hereby further ratifies, validates, confirms
and approves the Mortgage and Security Agreement and
the mortgage note appended thereto, and the terms
provisions and conditions thereof, including without
limitation the vesting of the mortgage and security
interest of the City in H-Power; and that the execution
by the Mayor and Director of Finance of any mortgage
and security agreement between the City and the Owner
Trustee shall be conclusive evidence that such mortgage
and security agreement is the mortgage and security
agreement approved hereby and complies with all
requirements of this section.
6. That the City Council hereby approves the entering into
and the execution and delivery by the Mayor and
Director of Finance of the Participation and Assignment
Agreement between the City and the Owner Trustee, the
Owner Participant, and HRRV, in the form presented to
the City Council at the meeting at which this
resolution is adopted, together with such changes as
the Mayor and Director of Finance shall approve uponthe advice of counsel; and that the City Council hereby
further ratifies, validates, confirms and approves the
Participation and Assignment Agreement and the terms,
provisions and conditions thereof, including without
limitation the sale of H-Power, the circumstances under
which the City may be required to repurchase H-Power
and under which the City shall have options to purchase
H-Power (other than the option provided in the Ground
Lease approved in Paragraph 3 hereof), the requirements
for the City to provide solid waste to the Owner
Trustee in the event HRRV is not providing services
under the Service Contract and to continue to pay the
Owner Trustee for such services, the warranties and
representations of the City to the other parities to
said agreement, the agreement of the City not to
terminate the Service Contract in certain
circumstances, the limitation of payments by the City
from moneys on deposit in the City and County of
Honolulu Solid Waste Disposal Facility Special Fund
(herein referred to as the "Operating Fund") created by
Ordinance No. 85-90 and the covenant of the City to
impose, prescribe and collect, or to authorize and
require the imposition, prescription and collection of,
rates, rentals, fees or charges for the use and
services of, and the facilities and commodities
furnished by, the City's solid waste disposal system
and to revise, or require revision of, the rates,
rentals, fees or charges from time to time whenever
necessary, so as to produce sufficient funds, together
with any moneys on deposit in the Operating Fund
(including, without limitation, energy product
revenues, recovered materials revenues, earnings on
investment of moneys in the Operating Fund and moneys,
if any, transferred to the Operating Fund by the City),
to permit the payment when due of its obligations
thereunder. The obligations of the City under the
Participation and Assignment Agreement shall be payable
solely from moneys on deposit in the Operating Fund.
The City Council covenants that it will impose,
prescribe and collect, or authorize and require the
imposition, prescription and collection of, rates,
rentals, fees or charges for the use and services of,
and the facilities and commodities furnished by, the
City's solid waste disposal system and will revise, or
require revision of, the rates, rentals, fees or
charges from time to time whenever necessary, so as toproduce sufficient funds, together with any moneys on
deposit in the Operating Fund to permit the payment
when due of its obligations under the Participation and
Assignment Agreement. The City reserves the right to
appropriate available moneys to the Operating Fund from
time to time which, together with any moneys on deposit
therein, shall permit the payment when due of the
City's obligations under the Participation and
Assignment Agreement. The obligations of the City
under the Participation and Assignment Agreement are
payable from the Operating Fund and are not a general
or moral obligation of the City and the full faith and
credit of the City are not pledged to the payment of
such obligations. The execution by the Mayor and
Director of Finance of any participation and assignment
agreement between the City, the Owner Trustee, the
Owner Participant, and HRRV, shall be conclusive
evidence that such participation and assignment
agreement is the participation and assignment agreement
approved hereby and complies with all requirements of
this section.
7. That the City Council hereby approves the entering into
and the execution and delivery by the Mayor and
Director of Finance of the Supplement to Contract for
Waste Processing and Disposal Services and Contract for
the Design, Construction, Testing of a Solid Waste
Disposal and Resource Recovery Facility between the
City and HRRV (herein referred to as the "Supplemental
Service Contract"), in the form presented to the City
Council at the meeting at which this resolution is
adopted, together with such changes as the Mayor and
Director of Finance shall approve upon the advice of
counsel; and that the City Council hereby further
ratifies, validates, confirms and approves the
Supplemental Service Contract and the terms, provisions
and conditions thereof, including without limitation
the payment, in addition and supplemental to the
payments required under the Service Contract, of a
supplemental service fee in consideration of the added
value to the City derived from the sale of H-Power by
the City and the lease of H-Power by HRRV pursuant to
the Lease Agreement referred to in Paragraph 11 hereof
equal, except in certain circumstances, to payments
required to be made by HRRV to the Owner Trustee under
said Lease Agreement, the limitation of payments by theCity to the Operating Fund and the covenant of the City
that it will impose, prescribe and collect, or to
authorize and require the imposition, prescription and
collection of, rates, rentals, fees or charges for the
use and services of, and the services and commodities
furnished by, the City's solid waste disposal system
and will revise, or require revision of, the rates,
rentals, fees or charges from time to time whenever
necessary, so as to produce sufficient funds, together
with any moneys on deposit in the Operating Fund
(including without limitation, energy product revenues,
recovered materials revenues, earnings on investment of
moneys in the Operating Fund and moneys, if any,
transferred to the Operating Fund by the City) to
permit the payment when due of its obligations under
the Service Contract and the Supplemental Service
Contract. The supplemental service fee shall be
payable solely from moneys on deposit in the Operating
Fund or form a draw on the letter of credit or line of
credit pursuant to Article VII of the Service Contract.
The City Council covenants that it will impose,
prescribe and collect, or to authorize and require the
imposition, prescription and collection of, rates,
rentals, fees or charges for the use and services of,
and the services and commodities furnished by, the
City's solid waste disposal system and will revise, or
require revision of, the rates, rentals, fees or
charges from time to time whenever necessary, so as to
produce sufficient funds, together with any moneys on
deposit in the Operating Fund to permit the payment
when due of its obligations under the Service Contract
and the Supplemental Service Contract. The City
reserves the right to appropriate available moneys to
the Operating Fund from time to time which, together
with any moneys on deposit therein, shall permit the
payment when due of the City's obligations under the
Service Contract and the Supplemental Service Contract.
The obligations of the City under the Service Contract
and the Supplemental Service Contract are payable from
the Operating Fund and are not a general or moral
obligation of the City and the full faith and credit of
the City are not pledged to the payment of such
obligations. The execution by the Mayor and the
Director of Finance of any supplement to contract for
waste processing and disposal services and contract for
the design, construction, testing of a solid wastedisposal and resource recovery facility between the
City and HRRV, shall be conclusive evidence that such
supplement to contract for waste processing and
disposal services and contract for the design,
construction, testing of a solid waste disposal and
resource recovery facility is the supplement to
contract for waste processing and disposal services and
contract for the design, construction, testing of a
solid waste disposal and resource recovery facility
approved hereby and complies with all requirements of
this section.
8. That the City Council hereby ratifies, validates,
confirms and approves the entering into and the
execution and delivery by the Mayor and Director of
Finance of the Service Contract and the Construction
Contract, each between the City and HRRV and each of
the terms, provisions and conditions thereof.
9. The City Council hereby finds and determines that the
fees payable by the City pursuant to the Service
Contract and the Supplemental Service Contract for the
services and commodities to be provided thereunder,
under the facts and circumstances, are reasonable.
10. That the City Council hereby approves the entering into
and the execution and delivery by the Mayor and
Director of Finance of the Construction Contract
Assignment between the City and the Owner Trustee, in
the form presented to the City Council at the meeting
at which this resolution is adopted, together with such
changes as the Mayor and Director of Finance shall
approve upon the advice of counsel; that the City
Council hereby further ratifies, validates, confirms
and approves the Construction Contract Assignment and
the terms, provisions and conditions thereof, including
without limitation the terms and provisions upon which
the City assigns and transfers to the Owner Trustee all
of the right, title and interest of the City in and to
the Construction Contract and all documents evidencing,
securing and guaranteeing the same; and that the
execution by the Mayor and Director of Finance of any
construction contract assignment between the City and
the Owner Trustee shall be conclusive evidence that
such construction contract assignment is the
construction contract assignment approved hereby andcomplies with all requirements of this section.
11. That the City Council hereby acknowledges and consents
to the sublease of the site on which H-Power is
situated and the lease of H-Power to HRRV by the Owner
Trustee and the terms, provisions and conditions of
that certain Lease Agreement between the Owner Trustee
and HRRV, including the payment of rents thereunder for
which the City will be required to pay a supplemental
service fee under the Supplemental Service Contract
approved in Paragraph 7 hereof, in the form presented
to the City Council at the meeting at which this
resolution is adopted, together with such changes as
the Mayor and Director of Finance shall approve upon
the advice of counsel.
12. That with respect to the documents approved by this
resolution, the Mayor and Director of Finance shall
approve only changes which have no material adverse
effect on the rights and obligations of the City.
13. That the City Council hereby acknowledges and consents
to the HRRV Security Agreement between the Owner
Trustee and HRRV and the respective Liquidated Damages
Guaranty from AMFAC, Inc. and Combustion Engineering,
Inc., granting certain rights and privileges of HRRV to
the Owner Trustee and guaranteeing the payment of
liquidated damages to the Owner Trustee under certain
circumstances.
INTRODUCED BY:
_________________________________
_________________________________
_________________________________
_________________________________
_________________________________
_________________________________
November 2, 1989 _________________________________
ADOPTED this 8 day of November , 1989.
|