HomeMy WebLinkAbout2010 Ordinance No. 028•
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BY AUT HORITY
ORDINANCE NU. ,,fl
SER IES OF 20 10
COUNC IL BILL NO. 24
INTRO DUCED BY COUNC IL
MEMBE R WILSON
AN ORDINANCE OF TH E CITY OF ENGLEWOO D AU THORIZ ING
A D AP PROVING A LEASE-PURCHASE FIN ANCING FOR TH E
FUNDING OF ENl::RGY CONSE RV ATION MEASURES EXPECTED
TO REDUCE ENER GY CONSUMPTION N :iJ RESULT IN COST
SAVINGS TO THE CITY, AND DECLAR INC, AN EMERG ENCY.
WHEREAS , the City of Englewood, Colorad o (the "City"), is a home rule municipality
of the State of Co lorado (the "State") duly organi zed and operating und er the Home Rul e Chart er
of the City (th e "Charter") and the co nstituti on and laws of th e State ; and
WHEREAS , pursuant to Section 30 nf the Charter, tl1 e City Coun cil of !he City (the
"Co un cil") has all munic f:-a t legisl ati ve powers as conferr ed by ge neral law, exc ':pl as provided
by th e Charter ; and
WH EREAS, the Co uncil has, by separa te Coun cil action, auth ori zed an d approved the
exec uti on of an Energy Performance Contract (the "E PC") bet wee n th e Cit y and Ameresco, In c.
(th e "Co ntracto r"), pursu ant to which th e Co ntrac tor is to sell , in stall and se rvi ce ce rtai n energy
effic ien cy equipment of a specified type or cl ass desc ribed in the EPC and pro vi de oth er services
(co ll ectively, tr ~ "Energy Co nserva tion Measures "). for th e purpose of ac hi ev in g utility cos t
redu cti ons an d guaranteed energy savi ngs all as more spec ifi call y set fo rth in the EPC ; and
WHEREAS , the Ene rgy Conservation Measures to be m•d e to variou s publi c buildings
of the Ci ty wi ll lowe r the electrical, natura l gas and wn trj usage in th e buildings and wi ll crea te a
cost savi ngs to th e City which is guara nt eed by th e C@ tracto, as more spec ifi ca ll y set fo rth in
the EPC : and
WH EREA S, pursuant to the Charter and Section 3 1-15-101 of the C,:i lorado Revi sed
Statut es, th e City has th e power to acquire , hold, lease anrl di spo se of property, bo th rea l nnd
personal , mul the Co un cil desires to spread the cost of th e capita l improvements se t forth in th e
EPC ove r a peri od no t to exceed sevent een yea rs; mid
WH EREAS, due 1° \'aried locations and nature of the Energy Co nserva ti on Measures, a
alt ernative asse t of the City is to be substit uted as th e capita l a;;,.; (the "Lensed Property") whic h
is to be lensed by th e City, tl1 e va lu e of such asset bein g sp p1oxi matel y equ al to th e amount
ncces', try (o finan ce the EPC and relat ed cos ts, all as more <,"-,iri ca ll y set fortl, ;n the Lease
Docu,,.•sn ts (defi ned hereafter); and
4835 2241-4086 .3
WHEREAS , the Cit y has appl ied for, and rece ived notificatio n of award from the •
Governo r's Energy Office, of vo lum e ca p all ocation fo r the issu ance of "qu alifi ed energy
conservati on bo nds" (also kn ow n as "QECBs"), which all oca ti on will res ult in a fod era l sub sid y
fo r a sign ifican t porti on of th e. int eres t costs rela tin g to th e lease-purchase fi nanc i11 g auth ori zed
purs uant to Ut is Ordinance; and
WHE REAS, th e Cit y has rece ived a pro posa l fro m Hut chinso n, Shockey, Erl ey & Co . fo r
th e pri vate pl acement of the lease-purchase fin anci ng an d Sti fe l, Nico laus & Co mp any,
In corporated is actin g as fi nancial advi so r to th e Cit y; an d
WHE REAS, th e City intends to enter int o a lease agreeme nt , pursuant to which th e Lease
Pro perty is to leased to a third-p art y fo r a lump -s um renta l payment to be used to fin ance the
EPC and related cos ts, and a fin anc ing lease, pursuant to whi ch th e City intend s to lease back th e
Leas ed Propert y (s uch lease agreement , finan cin g lease an d ancill ary docum ent s and certifi cates
refe rred to as th e "Lease Doc ttme nts"); and
WHEREAS, pu rs uant to the Lease Doc uments, co pies of whi ch have been rev iewed by
City staff and made avail abl e to Co un cil , th e de tai ls of the fi nancing are full y se t forth , and th e
fi nancial obli gati on of th e Cit y under the Lease Docum ents shall co nstitute curr entl y bud get ed
expe nditures of th e City whi ch are exp ected to be offset by th e savin gs reali zed by th e City from
th e Energy Conserva ti on Measures; and
WH EREAS , the Co un cil is des iro us offin anc in g th e .E nergy Conservatio n Meas ures;
NOW , TH EREFORE, BE IT ORD AIN ED BY THE CITY COUNC IL OF THE CITY
OF ENGLEWOO D, COLO RADO , AS FOLLO WS:
Section I. Approval of Lease Pu rc ha se Terms. Th e City Co un cil hereby approves th e
lease-purchase of th e Le ased Propert y fo r th e ant ount not to exceed $1,500,000 , with aggrega te
annu al payme nts no t to exceed $ J 75,000 over annu al term s which shall not exceed sixtee n
ca lend ar years. Th e Ci ty Co uncil hereby de lega tes to Ute Mayor, or in the absence th ereof, Ut e
Mayor Pro Tern , th e auth ori ty to determi ne the net effective ra te fo r th e lease-purc hases, whic h
rate shall not be in excess of8 .0% pe r ann um and the fm al tem1s of th e Lease Doc uments.
Section 2. Approval of Lease Docum ent s. The Lea se Doc um ents , in s ubs tanti all y the
form and wiUt sub stantia ll y the co nt ent prese nt ed to the ity, arc in all res pects ap proved ,
au th orized and co nfirmed .
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Section 3. Execution and Delivery of Do cum ents. The Mayor or, in th e absence
thereo f, th e Mayo r Pro Tern is hereby auth ori zed and directed to exec ut e th e Lease Doc um rn ts,
and the signa tu re of th e Mayor or Mayo r Pro Te rn shall co nclu sive ly dctcm1ine acce pt ance of the
fi nal form an d co nt en t of th e Leas e Doc um ent s an d th e va lid exec uti on of th e Lease Documen ts
by th e City. Additionall y, the Ma yor, othe r officia ls and empl oyees of the City are hereby
authori zed and di rec ted to exec ut e and deli ver fo r an d on behalf of the City any and all add iti onal
agreem enls, certifi cates , doc um ent s and other pa pers a,d to perform nil ot her nets that they mny
deem necessary vr ap pro priate in ord er to implement and ca rr y out th e financ in g auth orized and
co nt emplated by this Ord inance, incl udi ng but not limi ted to an Intern al Reven ue Service Form •
803 8-TC .
48)5-2241408( J
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Section 4. Designation of Lease-Pu rchase Financing as a "Qualified Energy
Conservation Bond ". The City hereb y elects to design ate th e Lease Docume nts as a "Qualified
Energy Co nserva ti on Bond " wi thin the meaning of Section 54D of the Interna l RevenJe Code of
1986 , as amended .
Section 5. Declarations and Findings . The Cit y Co uncil hereby determin es and
dec lares Uia t the respective renta l payments und er th e Lease Doc um ents (the "Rent al Payment s")
represent U1 e fair valu e of th e use of the Lea sed Pro pert y, and th at the Purchase Pri ce (as defined
in th e Lease Dccument s) represe nts tl1e fair pur chase pri ce of th e Leased Propert y. The City
Co un cil hereby determines and decl ares th at the Rental Paym ents do not ex ceed a reasonable
am ount so as to pla ce the City under an eco nomi c or practical compu lsion to appropriate moneys
to mal-.e payments und er th e Lease Docum ents or to exerci se its option to purchase th e Lea sed
Pro perty pursuant to the Lease Doc~ments. In makin g such determinati ons, th e City Co uncil has
given consideration to th e current market va lue of the Leased Prop ert y, th e cos t of acquiring th e
Leas ed Property , U1e option of th e City to purchase the Le ased Pro perty , and the expected
eventual vestin g of full title to the Lea sed Property in U1 e City . Th e City Council hereby
determines and decl ares th at the duration of the Lease Documents, including all option al renewal
term s, auth ori zed under thi s Ordinance, do es not exceed the weighted average m,, :fe of the
Leased Property. The Cit y has received an all ocati on from th e St ate during the current ca lendar
year of authori zation lo iss ue Qualified Energy Conservation Bond s in an amount equal to not
less th an the aggregate prin cip al Emount auth ori zed pursuan t to this Ordinance, and has not
previous ly iss ued an y bond s or other obligations pursuant to such authori zati on. The City
Coun cil hereby determines and declares that I 00 % of th e ava ilabl e proceed s under the lease
fin anc ing auth ori zed herein arc to be used for th e Energy Conserva ti on Me asure s and relat ed
cos ts, which are a qu alifi ed co nser,ati on purp ose.
Section 6. Obligations of the City . No prov ision of thi s Ordinance or the Lease
Documents shall be co nstru ed as creati ng or co nstituting a genera l obli gat ion or a mult ipl e-fi sca l
year direct or indi rect ind ebtedn ess or oth er financial ob li ga ti on whatsoever o f th e Cit y nor a
mand ator y pa)ment ob li gat ion of th e Cit y in any ensuing fi sca l year beyo nd any fi sca l year
during wh ich the Lease Doc ument s shall be in effect.
Section 7. Ratifi caiion qf Prior Actions . All actio ns heretofo re taken (no t in co nsistent
wi U1 the provisio ns of thi s Ord in ance) by th e City Co un cil or by the office rs and empl oyees of
Uie City regarding th e acqui si ti o1o or lease-purchase of the Leased Property, or dire cted towa rd
sa ti sfaction of th e City's obligation s under the Lea se Docum ent s, arc hereby ratified , approved
and co nfinn ed .
Section 8. Scvcrability . It is her by express ly declared th at all provi sion s hereo f and
U1 eir application are int end ed to be and arc severab le. In order to impl ement such intent , if any
provis ion hereof or the appli cati on th ereof is determined by a co urt or ad mini strati ve body to be
inva li d or unenforcea bl e, in whole or in part , such detcn11inati on sha ll not affect, impair or
invalidate any other prov ision hereof or th,· applicati on of the provisio n in qu es ti on to any other
si tu atio n; and if any provi sion hereof or th e application th ereof is determined by a co urt or
admini strati ve body to be va lid or enfo rcea bl e onl y if its applicati on is :i mited, it s app li catio n
• shall be limit ed as required to mu st full y implement its purp ose.
483 5-2241-4086.J
Section 9. Repealer . All ordinances , or part s thereof, inconsistent or in ~o nflict
herewith are hereb y repealed to the extent on ly of such inconsistency or co nfli ct.
Section 10. Emergency Declaration and Effective Date . The QECB all oca tion award
by the Governor's Energ y Office requ ires sc heduled milestones which mu st be comple ted to
retain such allocation . The designation of the lease-purchase financing as a QECB will result in
a federal sub sidy for a significant portion of the interest costs . In ord er to meet the requ irement
that the financing be closed by August I, 20 10, an emergency is declared to exist. This
Ordinance shall be effect iv e immediately upon final pass ag,~ and be publi shed within seven days
afte r publication following final passage.
Introdu ced, re"d in full as an Emergency Elill for an Ordinance and passed on first
reading on the 6th day of July, 20 I 0.
Publi shed as an Emergency Bill for an Ordinance on the 9th day of July, 2010.
Pub li shed as an Emergency Bill for an Ordinance on the City's offic ial websit e beginning on
the 7'h day of July, 20 10 for th i,ty (30) days.
Read by title as an Emergt:ncy Ordin ance and pass ed on final reading on the 19th day of
July, 20 10.
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Pub li shed by title as an Emerge ncy Ordinance in the Ci ty's official new spaper as •
Ordinance N ,.a , Series of2010, ~n the 23 rd da y of July, 20 10 .
Published by title as an Emergency Ordinance on th e City's officia l website beginning on the 21st
day of Ju ly, 2010 for thi rty (30) days.
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I, Loucri shia A. Elli s. Cit y Clerk of the Cit y of Englew ood , Co lorad o, hereby ce rtify that tli e
above and foregoing is a tru e co py of th e Emergency Ord ' • pa ssed on fi nal reading and
publi shed by title as Ordinance No.,&':', ~cri es of 20 10.
4835 •22 41-4086 3 4
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COUNCI L COMMUNICATION
Date : Agen da Item: Subject :
Jul y 6, 20 10 11 a iv An Eme rgency Bill for an O rd inan ce fo r th e Leas e-
Purchase of Energy-Sav in g Equip ment for th e City
of Englewood
In itiated By: I Staff So urce :
Fin ance and Admi nis trative Se rv ices Departm ent Frank Gryg lew icz, Direc tor
COUNCI L GOAL AND PREVIOUS COUNCIL ACTION
Ci ty Coun cil has di scusse d energy cons erva ti on and "green " projec ts num erous tim es in th e pas t.
Co uncil has dis cussed th e projects ide nlifi ed for lease at Stud y Seaso n w ith ,,aff an d re pres entatives
of Amere sco.
Co un cil app rove d a moti on ap proving an Ene rgy Perform ance Agr ee ment w ith Amere sco Jun e .,·1,
2010.
REC O MMENDED ACTION
Sta ff reco mm ends City Co uncil approve th e atta ched emerg ency bill fo r an ordin ance au th orizin g
and approving leas e-purchase fin ancin g for th e fundin g of energy conserv:,ti on meas ures w hi ch ar e
ex pec ted to redu ce energy consump ti on wi ll save enough money to pay th e annual lea!a
pay ments.
BACKG R0UND, ANALYSIS, AND ALTERNATIVES IDENTI FIED
Co un ci l and City staff have id entifi ed energy conse rvat ion and "g ree n" projects num erous tim es as
a way to redu ce energy use and expendi tures. The City selet ted Am eresco to rev iew, audi t, and
reco mm end equipment and oth er changes th at w ill fu rth er th e goa l of red ucing er,ergy
consum pti on and provi de for more sust ain abl e energy sav ing projects. Ameresco ide11tifi ed energy
cons erva tion mea sures fo r eleve n pub li c City bui ldin gs th at will lower the use of gas, elec tricity, and
wa ter by at leas t 20 perce nt.
The projec ts ide ntified for leas in g are sprea d ou t ove r eleve n huilul ngs whi ch make th em difficult to
ide ntify and us,, as co llat eral so th e City's bond att orn ey and inves tm ent adv is or re qu es ted th e Cit y
sub stitut e ano the r Ci ty asse t as co ll ateral. Th e asse t will be ,ease d back ICI the City. Th e asse t w ill
be identified in th e lease do cum ent. Alt hough th is places rh e substitu te co ll ateral at some ri sk, it is
hi ghl y unlikely the Ci ty wi ll default on thi s obliga tion as the sav ings fr om the project arc guarantee d
to re du ce ex penditures in an amou nt th at wi ll pay th e 1,,ase payme nts.
The City appli ed fo r and rece ived nutifica ti on of an awa rd fro m th e Gove rn or's Energy O ffi ce of
vo lum e ca p all ocati on fo r th e iss uan ce of "qualifi ed energy co ns erval on bonds (QEC Bs). Th is
all oc al io n pro\ ides ,1 fede ral subsidy for a signifl ca nl p o rt ion 0 1 th e in teres t ccsts rp lJt ing to th e
leas e-p ur ch,1 ~e au th o ri zt:!d b \ thi s ordinan ce.
The Ci ty re l
lease-purd1l1,
m thi s m att er.
J ,:1 1>roposal fro m Shocke), [rl e, ,"11 n Compan) fo r th e pri va te plc1 ccm e11 t of th e
,d i IL :ng. and Stne l, Nicolaus and ( · 0mpanv ;._ ,1c ti ng a..; unancial ,td vi..;o r tn the Ci ty
The amount of th e lec1St.:•p ur ch,1sL' 1s c,1pped at $1,S00,000, annua l paym ents are capped ,:1 1
S 17-,000, 111,, I rm wi ll 110 1 e,ce,•cl sixt ee n ( 16 , ,car s, a,1d th e in teres t rat e w,11 not c, eecl eig ht
pe rcent. it \ stafl beli eves th e acttMI amou nt oi th e pro,~c t wil l be S 1,404,4 28 less utilit y re ba tes of
S 11 7,989 for a net cos t o f S 1,286,439. Th e ac tual term o f th e leas e is e\Oec ted to ba fi it ee n ( 15)
, ea rs and th e ac tu al in t res t rJ te will be less th an eight p e rcent.
This em en;e ncy bi ll for an ord1na11 e ,1lso des igna tes the Lease Docum ent.., as., "Qu;-ilifi t d Energy
Conserv 111 0 11 Bond " in rega rd s to SeLtion 540 of th e Int rnal Revenue Cvde.
This b ill is p re ented 10 C it y Coun r il as iln em ergency to protec t tl ie Cit y ag.1i11o;t un exp ecl ecl
in teres t rat e c h, 1ges. The ity e,pec ts to close o n th is lease by Jul ) 23 , ~(' 10. \ov in g th e closing
up\\ ill in surf' es tim a ted int ere st r,11 s arP pre,;el'\ e d ~11 th ei r relative !) low levels. Th e p rojPc t is
exp ected to tak e c1ppr o ,imately 14 m o nths to com plete.
FINA NCIAL IMPACT
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This acti o n shoul d h e "bud ge t neut r.1 1" as the annuill SJ\ ings 1rom impl m nt in g th e energy sav in g •
proj ction sho uld cove r th e l·ost of ann ual le.i.~e payn, 1111 s.
LI ST O F ATTAC HM I HS
Propose d L111 erg1 •11q Bill for ,111 01dm,11Kc
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