2008-039-RES-Authorizing the city manager to execute an irrevocable standby letter fo credit to the office of rural community affairs (orca)

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RESOLUTION NO. 2008-039 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PARIS, TEXAS, AUTHORIZING THE CITY MANAGER TO EXECUTE AN IRREVOCABLE STANDBY LETTER OF CREDIT TO THE OFFICE OF RURAL COMMUNITY AFFAIRS (ORCA); MAKING OTHER FINDINGS AND PROVISIONS RELATED TO THE SUBJECT; AND DECLARING AN EFFECTIVE DATE. WHEREAS, on September 10, 1999, the City of Paris was awarded Contract No. 719068 by the Office of Rural Community Affairs (ORCA) granting $399,520 for infrastructure construction to support 38 homes in the Eastgate subdivision; and, WHEREAS, because less than 51% of the 35 homes actually built were sold to low- to-moderate owner-occupants, the City is in non-compliance with this contract requirement; and, WHEREAS, the City has been given until December 31, 2008 to correct this problem and as a condition of this extension the City of Paris is to execute an irrevocable standby letter of credit in the amount of $393,520 payable to ORCA guaranteeing repayment if the non-compliance issue is not settled by the deadline given; and, WHEREAS, if deadline is not met, ORCA will exercise its right under the letter of credit, and Liberty National Bank will pay the $393,520 to ORCA; and, WHEREAS, it is deemed appropriate that the City of Paris execute an irrevocable standby letter of credit to ORCA in order to have time to attempt to correct this problem and the same should be approved. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PARIS, THAT: Section 1. The findings set out in the preamble to this resolution are hereby in all things approved. Section 2. The City Council of the City of Paris approves and authorizes the City Manager to execute on behalf of the City of Paris an Irrevocable Standby Letter of Credit payable to the Office of Rural Community Affairs in the amount of $393,520 in substantially the form of Exhibit A attached hereto. Section 3. This resolution shall be effective immediately upon passage.