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HomeMy WebLinkAbout2015 Ordinance No. 035ORDINANCE NO. Ob SERIES OF 2015 BY AUTHORITY COUNCIL BILL NO. 32 INTRODUCED BY COUNCll, MEMBER WILSON AN ORDINANCE OF THE CllY OF ENGLEWOOD, COLORADO APPROVING THE REFINANCING OF A LEASE-PURCHASE AGREEMENT FOR THE ENGLEWOOD CMC CENTER SITE TO PRODUCE AN AGGREGATE SAVINGS TO THE CITY, AUTHORIZING AND APPROVING THE DOCUMENTATION RELATING TO THE REFINANCING; AND DECLARING AN EMERGENCY. 11 b iv WHEREAS, the City of Englewood (the "City"), in the County of Arapahoe and State of Colorado (the "State"), is a legally and regularly created, established, organized and existing municipal corporation under the provisions of Article XX of the Constitution of the State of Colorado and the home rule charter of the City (the "Charter"); and WHEREAS, pursuant to Article I, Section 3 of the Charter, the City is authorized to enter into one or more leases or lease-purchase agreements for land, buildings, equipment and other property for governmental or proprietary purposes; and • WHEREAS, in order to refinance, among other things, the renovation of the Englewood Civic Center and the construction, acquisition and installation of various public improvements in and around the Englewood Civic Center, there were previously executed in the aggregate principal amount of $18,880,000 Refunding Certificates of Participation (Civic Center Project), Series 2005 (the "2005 Certificates,,), evidencing undivided interests in the right to receive revenues payable by the City under a Master Lease Purchase Agreement dated as of October 1, 2005 (the "2005 Lease"), which 2005 Certificates (i) were delivered under a Mortgage and Indenture of Trust, as amended and restated dated as of October 1, 2005 (the "2005 Indenture"), by and between the Englewood Environmental Foundation, Inc., a Colorado non-profit corporation (the "Corporation") and UMB Banlc, n.a ., as successor trustee thereunder (the "2005 Trustee"), (ii) are presently outstanding in the aggregate principal amount of $10,460,000, (iii) bear interest at rates ranging from 3.90% to 4.50% per annum, and (iv) are currently subject to optional redemption upon 30-days prior notice to the holders of the 2005 Certificates; and WHEREAS, based upon discussions with Public Financial Management, Inc., as the City's financial advisor, the City has determined that a material savings can be realized by the City through the payment and cancellation of the outstanding 2005 Certificates with proceeds generated from the issuance of Refunding Certificates of Participation (Civic Center Project), Series 2015 (the "2015 Certificates") pursuant to a Mortgage and Indenture of Trust between the Corporation and the Trustee (the "2015 Indenture") which is secured by a mortgage on the Civic Center Building located at 1000 Englewood Parkway in the City, and a request for proposals has been distributed to banks and financial institutions for consideration by the City in connection with the refinancing; and 4849-9S92-4773. I 1 WHEREAS, the 2015 Certificates, if and when issued, will evidence undivided interests in the right to receive certain revenues payable by the City under a Lease Purchase Agreement by • and between the City and the Corporation (the "2015 Lease"), which 2015 Lease will be substantially similar to, and replace, the 2005 Lease (all capitalized terms used and not otherwise defined in the recitals hereof shall have the respective meanings assigned in the 2015 Lease); and WHEREAS, the Base Rentals and Additional Rentals (both as defined in the 2015 Lease) payable by the City shall constitute currently appropriated expenditures of the City and shall not constitute a debt or multiple fiscal year direct or indirect debt or other financial obligation whatsoever of the City or a mandatory charge or requirement against the City in any Fiscal Year (defined in the 2015 Lease) beyond the Fiscal Year for which such payments have been appropriated; and WHEREAS, the 2015 Certificates shall evidence undivided interests in the right to receive Lease Revenues (defined in the 2015 Indenture), shall be payable solely from the Trust Estate (defined in the 2015 Indenture) and no provision of the 2015 Certificates, the 2015 Indenture, or the 2015 Lease shall be construed or interpreted (a) to directly or indirectly obligate the City to make any payment in any Fiscal Year in excess of amounts appropriated for such Fiscal Year; (b) as creating a debt or multiple fiscal year direct or indirect debt or other financial obligation whatsoever of the City within the meaning of Article XI, Section 6 or Article X, Section 20 of the Colorado Constitution or any other constitutional or Charter limitation or provision; (c) as a delegation of governmental powers by the City; (d) as a loan or pledge of the credit or faith of the City or as creating any responsibility by the City for any debt or liability of any person, company or corporation within the meaning of Article XI, Section l of the Colorado Constitution; or (e) as a donation or grant by the City to, or in aid of, any person, company or corporation within the meaning of Article XI, Section 2 of the Colorado Constitution; and WHEREAS, there have been presented to the City forms of the 2015 Lease and the 2015 Indenture; and WHEREAS, Section 11-57-204 of the Supplemental Public Securities Act, constituting Title 11, Article 57, Part 2, Colorado Revised Statutes, as amended (the "Supplemental Act"), provides that a public entity, including the City, may elect in an act of issuance to apply the provisions of the Supplemental Act; and WHEREAS, the City Council desires to authorize the necessary actions and documents, and otherwise proceed with, the lease-purchase refinancing of the Civic Center Building in order to reduce the future aggregate rental payments scheduled to be made by the City; NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF ENGLEWOOD, COLORADO: Section 1. Authorization of the Lease Purchase Agreement The 2015 Lease, in substantially the fonn and with substantially the content presented to the City, is in all respects approved, authorized and confirmed. If and only if the execution and delivery of the 2015 Lease (i) results in a present value savings of not less than six percent, expressed as a percentage change in the aggregate amount of the Base Rentals (as provided in the 2005 Lease and the 2015 Lease) and computed based upon the arbitrage yield for the 2015 COP to the date of delivery o f 4849-9S92-4773.l 2 ... the 2015 COP, assuming semi-annual compounding, (ii) does not extend beyond calendar year 2023 and (iii) does not provide for Base Rentals in any calendar year that would exceed the Base Rentals currently set forth in the 2005 Lease, the Mayor, or in the absence of thereof, the Mayor Pro Tern of the City Council, is authorized and directed, for a period of 120 days following the effective date of this Ordinance, to execute the 2015 Lease in substantially the form and with substantially the same content as the form thereof presented to the City, for and on behalf of the City, but with such changes therein as the Mayor may, on the advise of the City Attorney, deem necessary or appropriate. Subject to the conditions set forth in this Section, the City Council hereby approves the leasing of the Leased Property by the City under the terms and conditions of the 2015 Lease. Section 2. Approval of Refmancing and Related Documents. The City Council approves the refinancing of the 2005 Certificates by the Corporation and all necessary actions relating to such refinancing, including without limitation the conditional call of the 2005 Certificates subject to the issuance of the 2015 Certificates. The City Council elects to apply all of the provisions of the Supplemental Act. The appropriate officers and officials of the City are hereby authorized and directed to execute and file an Internal Revenue Service Form 8038-G in connection with the refinancing, and to execute and deliver any and all additional certificates, documents, instruments, request for proposals award and other papers, and to perform all other acts that they deem necessary or appropriate, in order to implement and carry out the transactions and other matters authorized by this Ordinance, and execution by the parties thereto shall constitute the City's approval of such documents and certificates in the form so executed. Section 3. Consent to Assignment and Sale of Proportionate Interests. The City Council hereby acknowledges and consents to the assignment by the Corporation of all rights, title and interest of the Corporation, pursuant to the 2015 Indenture, in, to and under the 2015 Lease to the Trustee, and the delegation by the Corporation of all duties of the Corporation under the 2015 Lease to the Trustee. The City Council hereby acknowledges and approves the assignment or sale of proportionate interests in rights to receive certain payments under the 2015 Lease. Section 4. Year to Year Obligations of the City. No provision of this Ordinance, the 2015 Lease, the 2015 Indenture or the 2015 Certificates shall be construed or interpreted (a) to directly or indirectly obligate the City to make any payment in any Fiscal Year in excess of amounts appropriated for such Fiscal Year; (b) as creating a debt or multiple fiscal year direct or indirect debt or other financial obligation whatsoever of the City within the meaning of Article Xl, Section 6 or Article X, Section 20 of the Colorado Constitution or any other constitutional or statutory limitation or provision; (c) as a delegation of governmental powers by the City; (d) as a loan or pledge of the credit or faith of the City or as creating any responsibility by the City for any debt or liability of any person, company or corporation within the meaning of Article Xl, Section 1 of the Colorado Constitution; or ( e) as a donation or grant by the City to, or in aid of, any person, company or corporation within the meaning of Article Xl, Section 2 of the Colorado Constitution. Section 5. Reasonableness of Rentals. The City Council hereby determines and declares that the Base Rentals, which shall not exceed $1,500,000 annually, represent the fair value of the use of the Leased Property, and that the Purchase Option Price, which shall not exceed $11,000,000, represents the fair purchase price of the Leased Property. The City Council 4849-9592-4773.l 3 hereby determines and declares that the Base Rentals do not exceed a reasonable amount so as to A place the City under an economic or practical compulsion to appropriate moneys to make W payments under the 2015 Lease or to exercise its option to purchase the Leased Property pursuant to the 2015 Lease. In making such determinations, the City Council has given consideration to the current market value of the Leased Property, the cost of acquiring, constructing or equipping property similar to the Leased Property, the uses and purposes for which the Leased Property is being and will be employed by the City, the benefit to the citizens and residents of the City by reason of the use of the Leased Property purs_uant to the terms and provisions of the 2015 Lease, the option of the City to purchase the Leased Property, and the expected eventual vesting of full title to the Leased Property in the City. The City Council hereby determines and declares that the leasing of the Leased Property pursuant to the 2015 Lease will result in facilities of comparable quality and meeting the same requirements and standards as would be necessary if the acquisition of the Leased Property were performed by the City other than pursuant to the 2015 Lease. The City Council hereby determines and declares that the duration of the 2015 Lease, including all optional renewal terms, authorized under this Ordinance, does not exceed the weighted average useful life of the Leased Property. Section 6. Ratification of Prior Actions. All actions heretofore taken (not inconsistent with the provisions of this Ordinance) by the City Council and by the officers and employees of the City directed toward the lease purchase financing for the purposes herein set forth are hereby ratified, approved and confirmed. Section 7. Headings. The headings to the various sections and paragraphs to this Ordinance have been inserted solely for the convenience of the reader, are not a part of this Ordinance, and shall not be used in any manner to interpret this Ordinance. Section 8. Severability. It is hereby expressly declared that all provisions hereof and their application are intended to be and are severable. In order to implement such intent, if any provision hereof or the application thereof is determined by a court or administrative body to be invalid or unenforceable, in whole or in part, such determination shall not affect, impair or invalidate any other provision hereof or the application of the provision in question to any other situation; and if any provision hereof or the application thereof is determined by a court or administrative body to be valid or enforceable only if its application is limited, its application shall be limited as required to most fully implement its purpose. Section 9. Repealer. All orders, bylaws, ordinances, and resolutions of the City, or parts thereof, inconsistent or in conflict with this Ordinance, are hereby repealed to the extent only of such inconsistency or conflict. Section 10. Declaration of Emergency and Effective Date. The City Council has been advised that in order for the City to secure a Base Rentals savings due to lower interest rates currently present in the market, and recognizing that market interest rates are changing materially from day to day, it is necessary to execute and deliver the 2015 Lease, and facilitate the refinancing of the 2005 Certificates, soon as possible; therefore, the Council hereby finds and determines that this Ordinance is necessary for the immediate preservation of public property, health, peace and safety and shall be in full force and effect immediately upon final passage by • the Council. 4849-95924773.1 4 -. • • Introduced, read in full, and passed as an emergency ordinance on first reading, on the 6th day of July, 2015. Published by Title as an emergency Bill for an Ordinance in the City's official newspaper on the 9th day of July, 2015 Published as an emergency Bill for an Ordinance on the City's official website beginning on the 8th day of July, 2015. Read by title and passed on final reading as an emergency ordinance on the 20th day of July, 2015. ~ Published by title as an emergency ordinance in the City's official newspaper as Ordinance No . .22.., Series of 2015, on the 23rd day ofJuly, 2015. Published by title as an emergency ordinance on the City's official website beginning on the 22nd day of July, 2015 for thirty (30) days. ' Randy P. Penn, Mayor I, Loucrishia A. Ellis, City Clerk of the City of Englewood, Colorado, hereby certify that the above and foregoing ~ yrue copy of the emergency Ordinance passed on final reading and published by title as Ordinance No~ Series of 2015. · ·uti- 4849-9592-4773. l 5 ~ - • . ·, ~, Memorandum: To: From: Date: Subject: Honorable Mayor and Members of the City Council Eric A. Keck, City Manager 1July 2015 2005 Certificate of Participation Refund Parameters Ordinance The City Council will be required to adopt an emergency ordinance that will facilitate the refinancing of a lease-purchase agreement for the Englewood Civic site. Currently the City's agreement with the Englewood Environmental Foundation (EEF) for the lease of the Civic Center requires an annual lease payment which a portion thereof is then utilized to pay the debt service on Certificates of Participation. The current COPs are refundable at this point in time as they are Series 2005 Certificates that are "callable" every ten years. We currently owe $10,460,000 at an interest rate of 4 .5% per annum . The refinancing of the 2005 Certificates of Participation can occur as of 1 June 2015. The refunding of the COPs will facilitate considerable savings to the City over the life of the remaining lease which is set to expire in 2023. The emergency ordinance that will be before the Council on 6 July 2015 enunciates the terms by which the refunding of the 2005 Certificates will transpire. The language of the ordinance allows for the Council to enunciate the parameters for the refinancing to occur including the authorization of a new lease-purchase agreement with the savings realized in the debt; allows for the Mayor or Mayor Pro Tern to sign the improved lease agreement; approves the refinancing and related documents that will approve the refinancing; and provide the necessary protection that the City would require a transaction of this type. Approval of this emergency ordinance is crucial to the success of the COP refunding. Staff respectfully requests that the Garrett Rule be suspended so that the Council can both hear and act on the ordinance on the same evening. Thank you for your time and consideration of this important matter. If you should have any questions or comments, please do not hesitate to contact me. 11 a iii