HomeMy WebLinkAbout2008 Ordinance No. 056•
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ORDI NAN CE NO .~
SER IES OF 20 08
DY AUTHOR ITY
COUNC IL BILL NO . 67
INTRODUCED BY COUN CIL
MEMBER McCAS LIN
AN EME RGENCY ORDINANCE AUTHORIZING THE ISSUANCE AND
SALE BY THE CITY OF ENGLEWOOD, COLORA DO OF A REVENUE
BOND (DENVER AREA COUNC IL , BOY SCOUTS OF AME RI CA
PROJ ECT) SERIES 2008 IN AN AGG REGAT E PRIN CIPAL AMOUNT NOT
TO EXCEE D $7,000,000 FOR TH E PURP OSE OF FINANC!NG CERTA IN
FACILI TIES AN D IMPROV EMEN TS ; APPROVING A RE LATED
FINANCI NG AGREEMENT AND A BOND TO BE IS SUE D THEREi.iNDER
AN D AU THORI ZING TH E EXECU TION OF SUCH FINANCING
AGREEMENT, BOND AND OTHER RELAT ED DOCUMENTS ; MAK ING
FTNDINGS AND DETERMINATION S WITH RESPECT TO SUCH
FINANCING AND THE BON D; AND REPEALING ALL ACTION
HERETOFORE TAKEN IN O NFLI CT HER EWITH AND DECLARING AN
EMERGENCY.
WHEREAS , the City of E ,,;1 ,,wood, Co lorad o (the "C ity") is a lega ll y and regularl y
crea ted, estab li shed, organi zed and va lidly ex isting home rul e city, municip al corporation and
political subdi vis ion under the provis ion s of Article XX of tlie Constituti o11 of th e State of
Co lorado (th e "S tate") and the home rul e chart er of the City (th e "C harter"); and
WHEREAS , th e City is authori zed by (a) Sec ti on I 05 of th e City', Charrer by ordin ance
and with o~t an election , to is sue sec urities fo r any public purpose payable in whole from any
so urce ol' reven ues oth er th an ge nera l ad va lorem taxes and (b) part I of art icl e 3 of titl e 29 ,
Co lorado Rev ised Statu tes ("CRS "), kn own as th e Co unt y and Municipality Development
Rev enu e Bond Act (the "Bond Act"), to issue bond s to finance ur refinan ce any land , building or
oth er improvement and all real and personal properties used fo r or in connectio n with certain
faci liti es desc ribed in th e Act, inclu <l in g manu facturi 11g, indu strial , co mm ercia l, agricu ltural or
busines s enterprises ; and
WHER EAS , repr ese ntati ves of Den ver Area Co un cil , Boy Scou ts of America , a Co lorado
nonp rofi t co rp orati on (t he "Corporatio n") and an organizati on desc rib ed und er Sectio n 50I(c)(3)
of the Int ernal Reven ue Co de of I 986, as amend ed (the "Code"), have req uested th at th e City
iss ue it s reve,:ue bond s lo finan ce certai n faci li ties and imp roveme nt s located in Bo uld er Co unt y,
Co lorado and th e Cit y of Lakewood, Co lorado (the "Projec ts"); and
WHEREAS , Bou ld er Coun t;, and th e Cit y of Lakewood have each delegated their
respect ive au th orit y io the Ci ty of Engle wood to issue bond s und er th e Bond Act as pennitt ed by
Subsectio n 29-3-104(2) of th e Act; an d
WHEREAS , the Cit y ha s co nsidered th e requ est of th e Co rporation and has con clud ed
that th e fina nci ng of the l'rojects promote s the publi c hea lth , we lfare , safety, co nveni e, .:c and
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prosperit y of the City and the Stu tc of Co lorado , and th nt th e Cit y shoul d issue it s re ve nue bond
to provide such financing, s ubject to th e co nditi ons se t fo nh here in ; an d •
WHEREAS , th e City will iss ue, sell and del ive r it s Revenue Bond (D enver Arca Co uncil ,
Boy Sco ut s of Ameri ca Proj ect) Series 2008 (th e "Bond") in a prin cipal amount not to exceed
$7,000 ,000, and loa n the proceeds thereof to the Co rp ora ti on , pursuant to th e tenn s of :;
Finan cing Agree ment to be dated its dat e of execution and deli very (th e "F inan ci ng A1,..-ee ment")
amo ng the City, the Co rpora ti on and Co lorado State Bank and Trust (the "P urchaser "), to fin ance
the Project s; and
WHEREAS , the Bond will be priv atel y placed wi :h the Purchaser pursuant to th e tenn s
of the Financing Agreement; and
WHER EAS, the City is auth ori zed by th e Supplemental Public Securities Act, Aniclc 57
of Title 11 , CRS (th e "Publi c Securities Act"), to delegate to an y of it s members, chief executive
officer or chief fin anc ia l officer the auth orit y to sign a contract fo r the purch ase of securities or
to accept a bindin~•. bid fo r sec urities and , in addition , ma y delegate the following detenninations ,
among others , to ,·.!r.h member or officer without any requirement th at the iss uin g auth orit y
approve such detenninations : (a) th e rate of interest on securities ; (b) the co ndition s on which
and the price s at which the applicable securitie s ma y be red ee med before maturity; (c) tlle
existence and amount of any capitalized int eres t or reserve fund s; (d) the pri ce at which the
securities will be sold ; (c) th e principal amount and denomination s of the securities; (f) the
amount of principal maturing in any panicular year ; and (g) the dates on which principal and
interest shall be paid ; and
WH EREAS, the City here by det ennines tlmt it is in the Cit y's bes t interest to delegate to
it s Direc tor of Finance and Administrative Services (the "Director of Finance") cenain of the
specific powers enumerated in th e Public Securities Act as provided in thi s Ordinance ; and
WHEREAS , th ere ha ve been presen ted to th e City Co uncil at thi s meet ing the proposed
fom1 of the Financing Agreement, which includes th e fonn of th e Bond; and
WHEREAS , the City Cou ncil has det ennined that in order to co mplete the iss uance of
the Bond to all ow the Corpora ti on to complete the Proj ects befo re th e onse t of weather that will
prohibit construction , it is hereby declared that an emergen cy exists and tl1at thi s Ordinance is
necessary for the immedi ate preservat ion of the publi c peace , hea lth and sa~ ty;
NOW , THEREFORE, BE IT ORDAINED BY THE t'ITY COUNC IL OF THE CITY
OF ENGLE WO OD, COLORA DO :
Secti on l. Legal Authorization . The Cit y is a legall y, duly and regularly cre ated ,
established , orgwized und va li dly existing home rul e city, muni cipal co rp orn ti on and political
subdivi sion und er the provisions of rti cle XX of the Consti tuti on of the State an d th e Charter of
the Cit y and is authorized und er the Bond Act to iss ue and se ll th e Bond , fo r th e purp ose , in th e
mann er anJ upon the tenn s and co nditi ons set fonh in thi s Ordinan ce and in th e Financing
Agreement.
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Sect ion 2. Determinations and Findir.gs. The fo ll ow in g dctcnninations and
finding s arc hereby made in accord ance wi th the Bond Act , including Secti ons 29-3 -1 I 3, 29-3 -
114 and 29-3 -1 20 of the Bond Ac t:
(a) The Financing Agreement ob li gates the Co rporati on to pa y the amo unt
necessary in eac h year to pay the pri ncipal of und th e interest on the Bond. The
maximum amoun t necessa ry in each year to pa y the prin cipa l o f and th e intere st on th e
Bond has been submitt ed to th e Ci ty by th e Purchaser fo r th e purposes of thi s Ordinance .
(b) In th e Financing Ab'l'eemcnt , th e Co rpora tion has cove nan ted to mai nt ai n,
or cause to be maintained, the Project s in good repair and to carry , or cause to be carried ,
all proper in surance with respect theret o.
(c) The re ve nues and other amounts payable under the Financing Agreement
arc sufficient to pa y, in addition to all other requirements of the Financing Agreement
and thi s Ordinance, all sums referred to in paragra phs (a) and (b) of thi s Section 2.
(d) The revenu es and other amounts payable und er the Fin ancing Agreement
are sufficient to pa y, in addition to all other requirements of the Financing Agreement
and this Ordinance all taxes, if any , or payments in lieu of taxes , if any, levicll upon the
Projects .
(e) The issuance of the Bond will effectuate the public purposes of th e City
and carry out the purposes of the Bond Act.
(f) In order to complete th e issuance of the Bond to allow the Co rporation to
co mplete th e Projects before the onset of weather that will prohibit co nstruction , it is
detennined that an emergency exists and that thi s Ordinance is necessary for the
immediate preservation of the public peace , hea lth and safe ty .
(g) The Ci ty Co uncil has been infonned th at, after reasona ble noti ce was
given in accordance with applicable law, a publi c hearin g was held with respect to the
proposed iss uance of the Bond s and the financing of the Proj ec ts. After being infom1ed
of the res ults of such hearing and for purposes of the public approval requirement o f
Section 14 7(f) of the Code , the financing of the Projects and th e issuance of the Bond are
hereb y appro ved.
Section 3. Authorization of Issuance of Bond . To defray the cos t of the Projects
(in cludin g in cident al expenses incurred in iss uin g th e Bond), a single reve nue bond designated
"City of Englewood , Co lorado , Revenue Bond (Denver Area Co un cil , Boy Sco uts of Ameri ca
Project) Series 2008" in a principal amount not to exceed $7 ,000 ,000 is hereb y authori zed to be
iss ued by th e Ci ty. The Bond , when issued , shall be in such actual ptincipal amo unt , bear such
dat ~ and interest rate, mature and co nt ai n such oth er tcnn s an d conditions as se t forth in the
Financing Agreement. The maximum net ~ffect ive interest rate on the Bond shall not cxce<'d
12.00 % per an num . Sec ti on 11 -57-204 of th e Public Securities Act provides that a public entity ,
inc luding th e Cit y, may elec t in an act of issuan ce to appl y all or any of the provisions of the
Publi c Securities Ac t. The City hereb y elects to app ly all of the Publi c Sec uritie s Act to th e
Bond . In 1he eve111 any porti on of 1h c Pro.1ec1s may 1101 be currentl y fin anccablc , 1hc bond s
auth ori zed hereunder ma y be iss ued in one or more series. •
Secti on 4. Sa le of Bond . The pla cement and sale of th e Bond pursuant to the term s
of the Financing Agreemen t are in all respe cts approved , authori zed and con finned . The Mayor
(or Mayor Pro Tem) is auth ori zed and directed to execute the Bond , the Cit y Clerk is authorized
and directed to affix the sea l of the Cit y and to attest the Bond , and eac h is aut horized to deliver
the Bond for and on behalf of the Cit y to the Purchas er pursuant to the Financing Agreeme nt.
The Bond shall be so ld to th e Purchaser for the purchase pri ce as se t forth in th e Financing
Agreement (subject to th e limitatio ns set fort h herein).
Sectio n 5. Delegation . Pursuant to the term s of the Public Securities Act , the
Director of Finance is hereb y delegated the authority to establish: (i) th e interest rate of the Bond
and the payment dates therefore, provided that the net effec ti ve interest rate for th e Bond sha ll
not exceed 12.00%; (ii) the prior redemption provision s for the Bond , provided , any redemption
premium thereon sha ll not exceed 4% of the principal amount to be redeemed ; (iii) the origin al
issue di scount or premium th ereo n shall not exceed 3% of the aggregate principal amount of the
Bond ; and (iv) the date on which the Bond shall mature.
Sec ti on 6. Approval and Authorization of Documents. The Fi nancing Agreeme nt
is in all respects approved, authorized and co nfirmed . The Mayor (or Mayor Pro Tern) is
authorized and directed to execute, and the City Clerk is authorized and directed to affix the sea l
of th e City and to attest, the Financing Agreement in substant iall y the fo rm and content as
present ed to the Ci ty on this date , subj ec t to th e approval of co un sel to the City and the Director
of Finance with respect to the Fi nan cing Agreement, but with such changes , modifications ,
addit ions and deletion s th erein as shall to th em seem necessary, desirable or appropriate , their
execu ti on thereof to constit ute conclusive evider ,f their ap prov al of any and all changes ,
mod ifi cations , additions and deletions from the founs th ereof as before this date.
Sec ti on 7. All Actions Heretofore Taken . All acti ons (not inconsistent with the
pro visions of this Ord in ance) heretofore taken by the City Co un cil and the officer s of th e City
directed toward the iss uance and sa le of th e Bond ti1erefor are hereby ratified , approved and
confim1ed.
Section 8. Authority to Execute and Deliver AJditional Documents. The officers,
employees and agents of the City shall take all action in co nfonnit y with the Bond Act and th e
Charter nece ssa ry or reaso nabl y required to effectuate the iss uance of the Bond and shall take nil
ac ti on necessary or de sirable in co nfonnity with th e Bond Act and the Charter to acco mpli sh the
financing of the Projects and for ca rr ying out , giving effect to and consummating the tran sac tions
contemp lated by thi s Ordinance and the Finan,.-.,;, Agreement , including without limitation the
execution , delivery and filing of' any doc ument s, statem ent s or reports with the United States
Intern al Re ve nue Serv ice or witl:. th e Secretary of' the United States Treasury or his or her
delegatee necessa ry to mai ntain the exclusion of interes t on the Bond from gross income for
federal inco me tax purposes and th e execution and delivery of' any closing document s to be
delivered in co nne cti on with the sa le and delivery of th e Bond .
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Se cti on 9. Bond is a Limited Obligation . Th e Bond shall be a special , limited
ob ligati on of the Cit y pa yab le solel y from th e receipt s and reve nu es of the Cit y derived und er th e
Financing Agreement that are speci fi ca ll y pledged therefor. The Bond shall neve r cons titute a
debt or indebtedness of th e Cit y, th e State or any cou nt y, municipality or politi cal subdi vision of
the State within th e meaning of any provi sion or limitati on of the Cons titution or statu tes of the
State or the Charter or of any politi ca l subdivi sion of th e State; and the Bond shall never
co nstitute nor give rise to uny pecuniary liabilit y of, or a charge aga in st the general credit or
taxing powers of, th e City , the Sta te or any co unt y, municipality or political subdiv ision of the
State. The Bond shall not constitute a "multiple fiscal year direct or indirect debt or other
financial obligati on" o f the Cit y under Article X, Section 20 of the Colorado Constitution.
Section I 0. No Pecuniary Liability. Nothing contained in thi s Ordinance concerning
the Bond, or in the Bond or th e Financing Agreement , shall give rise to a pecuniary liability of,
or a charge upon the general credit or taxing powers of, the City, the State or any county,
municipality or political subdivision of the State . The breach by any party of any agreement
contained in this Ordinance , the Bond or the Financing Agreement shall not impose any
pecuniary liability upon , or any charge upon the general credit or taxing powers of, the City, the
State or any county, municipality or political subdivision of the State , none of which ha s the
power to pay out of its general fund , or otherwise contribute, any part of the financing of the
Projects , or power to operate the financ ed facilities as a business or in any manner.
Section 11 . Limi ration of Rights. With the exception of any rights herein expressly
conferred , nothing expressed or mentioned in or to be implied from the Ordinance or the Bond is
intended or shall be construed to give to any person, other than the City , the Corporution or the
Purchaser , any legal or equitable right, remedy or claim under or with respect to thi s Ordinance
or any covenants, conditions and provisions herein contained; this Ordinance and all of the
covenants, conditions and provisions hereof being intended to be and being for the sole and
exclusive benefit of the City, the Corporation and the Purchase r as herein provided.
Secti,m 12. Pledge of Reve~ues. The creation, perfection , enforcement, and priority
of the pledge of revenues to sec ure or pay the Bond as provided he:ein and in the Financing
Agreement sha ll be governed by Sectio,, 11 -57 -208 of the Public Securities Act and this
Ordinance. "i'he pledged revenues for the payment of the Bond , as received by or otherwise
credited to the City, shall immediately be subject to the lien of such pledge without any physical
del ive ry, filing or further ac t. The lien of such pledge on the reve nues shall have priority over
any or all other ob ligations and liabiliti es of the City. The lien of such pledge shall be valid ,
binding and enforceable as against all persons having claims of any kind in tort, contract or
otherwise against the Ci ty irrespect iv e of whether such persons have notice of such liens.
Section 13. Immunity of Officers . Pursuant to Sec ti on 11 -57-209 of the Public
Securities Act, if a member of the City Co un ci l, or any office r or agent of the Ci ty acts in good
faith, no civil recourse shall be available against suc h co un ci l member , officer, or agent for
payment oflhe principal of or interest on the Bond. No reco urse for the payment of any part of
the principal of, premium , if any, or interest on the Bond for th e satisfac ti on of any liability
arising from, founded upon or existing by rea so11 of the iss ue , purchase or ow nersh ip of th e Bond
• shall be had agai nst any officia l, officer, counci l member or agent of th e City or th e State , all
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such li abilit y to be expre ss ly rel eased and wai ved as a co nditi on of and as a pan of the
con siderati on for th e is. uc, sale and pu rchase of th e Bond. •
Sec ti on 14 . Limitations on Actions . In acco rd ance wi th the Publi c Sec uriti es
Ac t, no ac ti on shall be bro ught question in g the lega lit y of any co nt rac t, Fi nancin g Agreeme nt ,
mon ga ge , trust ind enture, proceed in g relatin g to the Bond or th e fin ancin g of th e Projects on
and afte r th irt y (30) days fro m th e effec tive date of thi s Ordinan ce .
Secti on 15. Count erpa rt s. Thi s Ordinance ma y be simultaneou sly exec ut ed in
severa l co unt erpart s, eac h of whic h shell be an ori gi nal and all of whi ch shall co nstitute hut one
and th e same in strument.
Secti on 16. Caption s. The cap ti ons or head ings in thi s Ordinance arc for conveni ence
onl y and in no way ·lefine, limit or describe th e sco p~ or int ent of any provis ions or sec ti ons of
thi s Ordin ance.
Sec ti on 17. Validity of Bond . The Bond shall con tain a rec it al th at such Bond is
issued pursuant to the Bond Act and th e Public Securities Act , and such recital shall be
co nclusive ev id ence of its va lidit y and of th e reg ul arity of it s iss uance .
Secti on 18. Irrepealahillty. After th e Bo nd is iss ued, thi s Ordinance shall be and
rem ai n irrepe alab le until th e Bond and the interes t thereo n shall have been full y paid , canceled
and discharged .
Secti on 19. Rep ealer; Suspension of Rules for Emergency Musure. All •
ordin ances, re so luti ons, bylaw s, orders and other in struments , or part s th ereo f, inconsistent
here with are here by repea led to the exten t onl y of su,,h in co nsi stency . This reper :tr shall not be
const,ued to rev ive any ordinance , reso lu tion , bylaw , order or other in strument , or part thereof,
heretofore repealed. All rul es of the Ci ty Co un cil, if any, th at might pre vent th e fin al pas sage
and adoption of this Ordinan ce as an emergency meas ure at thi s meeting of th e City Co un cil be,
and th e same hereby are , su~?en ded.
Secti on 20. Severabili ty. If any sec ti on, puragraph , clause or provi sion of th is
Ordi nunce shall for any reaso n be held to be in va lid or un enforceab le, the invalidit y or
un enforccab ility of such secti on, paragraph , cl ause or prov ision shall not afl cct an y of th e
remaining prov isions of th is Ordin ance .
Secti on 21. Qualified Tax-Ex empt Obligations. Th e City hereby designat es the
Bond as a "q ualifi ed tax -exemp t obligati on" fo r the purposes se t fo nh in Sec ti on 265(b)(3) of th e
Code.
Secti on 22. Emerge ncy Claus e; Effective Dnte and Di sposition . Fo r th e reaso ns
stated in th e ecital s to thi s Ordina nce , it is declared th at nn ~mcrge ncy exi sts an d it is necessa ry
for th e im med iate preservatio n of th e publi c hea lth or safe ty fo r thi s Ordi nance to take effect
imm ed iately up on it s adopti on. Thi s Ordinan ce was passed on fir st readin g as an emergenc y
meas ure by the un anim ous uffi nn ativc vo te of the quorum of th e City Co un cil present at the
meetin g at whi ch it was int rodu ce d and passed on seco nd reading as an emerg~ncy meas ure by •
th e unanim ous affim in ti vc vo te of th e quorum of th e Ci•y Co un cil present 111 th e seco nd mee tin g.
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Thi s Ordinance shall be authenti cated and shall be numbered and recorded in th e o fficial record s
o f th e Cit y. This Ordin ance shall be publi shed in fu ll wi thin se ven (7) da ys of its final adop ti on.
Int rodu ced, read in full , and pa ssed as an Emerge ncy rdinance on fi rst read ing on the 15" day of
Sep tember , 2008.
Published as an Emergency Bill fo r an Ordinance on th e Cit y's offi cial website beginning on the 17th da y
of September , 2008 for th irty (3 0) dn ys.
Publi shed as a Bill for an Eme,gency Ordinance in the City's official newspaper on October 3, 2008 .
R :a d by 111 a and passed on final reading as an Emergency Ordinance on the 6° da y of October, 2008 .
Pub lished in full as an Emergency Ord inance on the I 0th day of Oc tober, 2008 .
Publi shed as an e mergency Ordinance on the City 's officia l web site beg:nning on the 8"' day of October,
2008 fo r tl1irt y (30) days .
I, Lo uerishia A. Ellis, City Clerk of the City of Englewood Co lorad hereby certify that the above and
· foregoi ng is a true copy of an Emergency Ordinance, read i pa sed on final reading on the 6th day
of Octobe r, 2008 .
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COUNCIL COMMUNICATION
Date : Agenda Item: Subject :
September 15, 2008 11 a ii /, bill for an emergency ordinance authorizing and
approving th e issuance of Pri va te Acti vity Bonds for
capital improvements at vario us Boy Scouts of
America sites
Initiated By:
Finan ce and Administrative Services Department
I Staff Source :
Frar,k Gryglewicz, Director
COUNCIL GOAL AND PREVIOUS COUNCIL ACTION
City Council discu ssed the requ est to issue Private Activity Bonds at the August 25, 2008 Study
Session. Council agreed to allow staff to move forward on the issuance of these bonds for the Boy
Scouts of America (BSA).
RECOMMENDED ACTION
Staff recommends that City Council approve the attached bill for an emergency ordin , ,ce
approving the issuance of r rivate Activity Bonds.
BACKGROUND, ANALYSIS, AND ALTERNATIVES IDENTIFltD
This bill for an emergency o rdinan ce allows the City to issue, on behalf of the Boy Scouts of
America, Private Activity Bonds in an amount not to exceed $10 Million. Th e bonds issued for the
BSA are Private Activity Bonds. Th is type of bond ma y be issued under ce rtain circumstances by a
va riety of entities, including th ose with c, · 1 C 3 sta tus . Th e issue r uses th e City's tax exempt status
to issu e debt that pays tax-exempt interest over the life of bonds if strict restrictions are adhered to.
The tax exe mpt status lowers the cost of borrowing, and, therefore, may provide an incentive to
non-profit organization, to take on projects or provide services that might no t otherwise be
undertaken. Although the iss uer uses the tax exempt status of the City of Englewood, th e City does
not take on an y respons ibility for the repayment of debt or pledge its credit. The City does run a
"reputation risk" and nuisance la·,vsui ts in the event of a defaul .
Both th e City A tt orney and ou tsid ~ bond Co unse l hav e reviewed the proposed changes and have
given their approval.
TI1is bill for an o rdin ance is prese nted as ,n emergency to µrese rve interest ,ate.sa nd ex pedite the
process so needed projects can be co•,1 ;-leted as soon as possibl!. /'
FINANCIAL IMP ACT
Th e Boy Scov,s of A merica are so lely res ponsible fo r th e repay ment of thi s ~e bt. Th e City of
En glewood d oes not p led ge its cred it nor does it mak e any pled ge, guarantee, or take any
res po nsi bil ity rega rdi ng th e repay m ent of th is d ebt.
The BSA w ill pay lega l and o ut-o f-p ocket cos ts i ncurred by th e Ci ty; the City w ill coll ect a $5,000 fee
to cove r adm ini stra tive ex penses as soc iated wi th thi s iss uance.
LIST OF ATTACHMENTS
Propo sed Em erge ncy Bill for an Ordinance
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