Agenda 09/28/2004 - Laserfiche WebLink

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August 24, 2004 WHEREAS, Blue Ridge has obtained a commitment from American National Bank and Trust Company (the "Bank") to provide the necessary irrevocable stand-by letter of credit provided that each constituent member of Blue Ridge secures such letter of credit with a loan guaranty covering such member's respective share of Blue Ridge's total credit commitment to PJM; and WHEREAS, the City of Martinsville's respective share is an amount not greater than One Hundred Ninety Thousand Dollars ($190,000); and WHEREAS, there has been presented to this meeting a form of loan guaranty agreement ("the "Guaranty") provided by the Bank. THEREFORE, BE IT ORDAINED by the Council of the City of Martinsville, Virginia: 1. Authorization of Guaranty. The Council hereby authorizes the City of Martinsville to provide a loan guaranty for the account of Blue Ridge to secure the full and prompt repayment by Blue Ridge for draws made under an irrevocable stand-by letter of credit to be issued by the Bank; provided, however, that the loan guaranty from the City of Martinsville shall not be in excess of One Hundred Ninety Thousand Dollars ($190,000) and shall be for a term extending not longer than December 31,2006. Such guaranty shall constitute an indebtedness authorized to be issued pursuant to Chapter 1 Section 2-7 of the City Charter for purposes of the City's electric system. To evidence such arrangement, the City Manager, is hereby authorized and directed to execute and deliver to the Bank the Guaranty for the account of Blue Ridge. The Guaranty shall be in substantially the form presented to this meeting, which is hereby approved, with such completions, omissions, insertions or changes not inconsistent with this Ordinance as may be approved by the City Manager, the execution thereof by the City Manager to constitute conclusive evidence of such officer's approval of such completions, omissions, insertions or changes. It is further authorized that up to two additional current Blue Ridge constituent municipal members may be added to this Guaranty with the sum of guaranty coverage for these members not to exceed Nine Hundred Sixty One Thousand Dollars ($961,000) upon the condition there be no increase in the amount of the City of Martinsville's loan guaranty. 2. Pledge of Full Faith and Credit. The full faith and credit of the City of Martinsville is irrevocably pledged for the payments due under the Guaranty. Unless other funds are lawfully available and appropriated for timely payment under the Guaranty, the Council shall levy and collect an annual ad valorem tax, over and above all other taxes authorized or limited by law and without limitation as to rate or amount, on all locally taxable property in the City of Martinsville sufficient to pay when due the payments under the Guaranty. 3. Effective Date. An emergency exists and this Ordinance shall take effect immediately upon its passage.