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HomeMy WebLinkAbout2007 Ordinance No. 006• • • ORDINANCE NO . (e___ SERIES OF 2007 BY AUTHORITY COUNCll. BILL NO . 7 INTRODUCED BY COUNCll. MEMBER WOODWARD AN ORDINANCE AUTHC,RJZING THE ISSUANCE AND SALE OF THE CITY OF ENGLEWOOD, C0LORAI)() REVENUE BOND (JEFFERSON HU.LS PROJECT) SERIES 2007, IN A TOTAL PRINCIPAL AMOUNT NOT TO EXCEED $2,000,000 .v0; MAKING DETERMINATIONS AS TO SUFFICIENCY OF REVENUES AND AS TO OTHER MATTERS RELATED TO THE PROJECT AND APPROVING THE FORM A."ID AUTHORIZING THE 1'XECUTION OF CERTAIN DOCUMENTS RELATING THERETO AND DECLARING AN EMERGENCY . WHEREAS , the City of Englewood, Colorado (the "Issuer"), is authorized by the provisions of the County and Municipality Development Revenue Bond Act, article 3 of title 29, Colorado Revised Statutes, as amended (the "Act"), to issue revenue bonds for the purpose of financing projects to be located within eight miles of the nearest point of the Issuer's corporate limits for the purposes enumerated in the Act, to enter into finan,:ing agreements with others for the purpose of providing revenues to pay such bonds, and further to secure the payment of such bonds ; and WHEREAS , the Act provides that title to any project may at all times remain in the name of the use r of the project ; and WHEREAS, the Jefferson Hills Corporation, a Colorado nonprofit corporation (the "Borrower', and an organization described in Section 501(c)(3) of the Internal Revenue Code of I 986, as amended (the "Code"), has requested that the Issuer iss ue its revenue bond in accordance with the Act, such bond to be designated the City of Englewood, Colorado, Revenue Bond (Jefferson Hills Project) Series 2007 (the "Bond"), the proceeds of which shall be loaned by the lss•Jer to the Borrower for the purposes of (i) refinancing a previous loan which provided funds to finance the purchase of a new facility located at 1290 South Potomac Street in Aurora, Colorado and (ii) paying certain costs of issuance relating to the Bond; and WHEREAS, a Financing Agreement, to be dated as of February I, 2007 (the "Agreement"), among the Issuer, the Borrower and FirstBank of Colorado (the "Brulk") has been submitteJ to the Englewood City Counci l (the "Council', and filed in the office of the Englewood City Clerk (the "Clerk"), and is there available for pu~lic inspection; and WHEREAS, the City Council desires at this time to authorize the issuance of the Bond , for the purpose of financi ng the Project ; and WHEREAS, the Borrower has informed the Issuer that the Project is located within eight miles of th e nearest point of the Issuer's corporate limit; and WHEREAS, a public hearing coaccrning the proposed Bond and the nature and location of the Project is scheduled to be held on February 5, 2007 , and such public hearing, together with the written appmval of the issuance of the Bond and the financing of the Project, in accordance with Section 147(!) of the Internal Revenue Code of 1986 will be required as condition to the issuance and sale of the Bond ; and 9 b ii WHEREAS , it is necessary or desirable to authorize the issuance of the Bond by Ordinance and • to approve the fonn and authorize the execution of the Agreement. NOW THEREFORE BE IT ORDAINED BY THE COUNCIL OF THE CITY OF ENGLEWOOD AS FOLLOWS: ~. Determinations . It is hereby found, determined and declared , that: (a) The financing of the Project will promote the public health, welfare, safety, convenience and prosperity and promote and develop trade or other economic activity by inducing a non,profit corporation lo locate , expand or remain in the Issuer and the Stale of Colorado to secure and maintain a balanced and stable economy for the Issuer and the State of Colorado . (b) The maximum amounts nec,~sary in each year to pay the principal of and interest on the Bond and the interest rate or rates lo be borne by the Bond is as provided in the Agreement. (c) The payments required in the Agreement to be made are sufficient lo pay the principal of and interest on the Bond when due , and to pay all other costs required in the Agreement to be paid , including all sums referred to in paragraphs (b), (d) wid (c) of this section . (d) The Agreement provides that the Borrower sha ll maintain the Project in good rep ai r and carry all proper insurance with respect thereto . (e) The Agreement requires that the Borrower pay the taxes and other governmental charges, if any, with respect to the Project, including laxes and charges which the taxing entities specified in C.R.S. Section 29-3-120 arc entitled to receive, and sufficient revenues • (f) The Issuer hereby certifies that the rea sona bl y anticipated aggregate amount of tax- exempt obligations which will be issued by the Issuer and all subordi nate entities of the Issuer during the calendar year 2007 (excluding the portion of obligations iss ued to currently refund any obligation to the extent the amount of the refunding obligation does not exceed the outstanding amount of the refunded ob!igalion) will not exceed $10,000,000 . Acco rdingl y, the Issuer hereby designates the Bond for purposes of Section 265(b)(3) of the Code as a "qualified tax-exempt obligation." Section 2. Issuance and Sale of Bond . The Issuer shall issue its Revenue Bond (Jefferson Hills Project) Series 2007 , to be in registered form and to be dated as provided in the Agreement , in a total principal amount not to exceed $2 ,000,000.00, for the purposes, in the forms and upon the terms set forth in this Ordinance and the Agreement , including the form of the Bond as set forth in the Agreement. The Bond shall be payable in the manner and to the persons set forth in the Agreement and the fonn of the Bond set forth therein . The maximum net effective interest rate authorized for the Bond shall not exceed 12% per annwn, until the date of maturity no later than March 1, 2022 . _8ec!ionl. Approvals and Authorizations. The fonn of the Agreement , including the form of the Bond (collectively, the "Is.suer Documents") are hereby approved . The Mayor of the City of Englewood, Colorado and the Clerk arc hereby •~•ho1"..zcd and directed to execute the Issuer Documents and to affix the seal of the Issuer thereto, and furth a execute and authenticate such other documents, instruments or certificates as arc deemed necessary or desirable by bond counsel in order to issue and • secure the Bond . Such documents are to be executed in substantially the fonn hereinabove approved, provided that such documents may be completed, corrected, or revised as deemed necessary by the parties thereto in order to carry out the purposes of this Ordinance. Copies of all of the documents shall be • • • delivered, filed and recorded as provided therein . The rights, title and interest of the Issuer in the Agreement when executed, shall, by the tcnns thereof, have been assigned to the FirstBank . The proper officers of the Issuer arc hereby authorized and directed to prepare and furnish to bond counsel certified copies of all proceedings and records of the Issuer relating to the Bond and such other affidavits and certificates as may be required to show the facts relating to the authorization and issuance thtreof, as such facts appear from the books and records in such officers' custody and control. The approval hereby given to the various documents referred lo above includes the approval of such additional details therein as may be necessary and appropriate for their completion and such modif ::ations thereof, delet it .IS there from, and additions thereto as may be approved by bond counsel prior to the execution of the documents. The execution of any instrument by the appropriate officers of the Issuer herein authorized shall be conclusive evidence of the approval by the Issuer of such instrument in accordance with the ter.tw 11ereof. Section 4. Nature of Obligation. Under the pro visions of the Act, and as provided in the Agreement and the Bond, the Bond shall be a special, limited obligation of the Issuer payable so lely from , and secured by a pledge of, the revenues derived from the Agreement , and any deed of trust provided by the Borrower . The Issuer will not pledge any of its property or secure the payment of the Bond with its propeny . The Bond and the interest thereon shall never constitute the debt or indebtedness or a multi- year fi scal obligation or the financial obligution of the State of Colorado or any political subdivision thereof, including the Iss uer, within the meaning of any provision or limitation of the Colorado Constitution or statutes of th , State of Colorado , and shall not constitute or give rise to a pecuniary liability of the Issuer, its agents, employees or officers , or a charge against its general credit or taxing powers. In entering into the Issuer Documents, the Issuer will not obligate itself, except with respect to the application of the revenues derived from the Agreement and the Bond proceeds. The Issuer will not pay out of its general fund or otherwise contribute any pan of the cost of finan cing the Project. No costs are to be borne by the Issuer in connection with the issuance of the Bond. The Agreement provides that all fees and expenses of the Issuer shall be paid by the Borrower . Section S. Bond Printing and Related Matters . The Mayor and Clerk of the Iss uer arc hereby authorized and directed lo execute the Bond and the Borrower shall arrange for the printing of the Bond. The Borrower shall pay for all costs in connection with the preparati on and printing of the Bond and no such costs are to be borne by the Issuer. The Bond will be purchased by the Bank in accordance with the Agreement. Section 6. Bond Ordinance lrrepealable . After the Bond is issued, this Ordinance shall constitute an irrevocable contract between the Issuer and the holder(s) of the Bond and shall be and remain irrcpeal able until the Bond , both principal and interest, shall be fully paid, cancelled and di scharged . Section 7. Ratification . All actions heretofore taken by the Issuer and by the officers thereof or on their behalf not inconsistent herewith directed toward the financing of the Project and the issuance and sale of the Bond are hereby ratified, approved and confirmed . ~-&eoa. All act,, orders, ordinances, °' parts thereof, taken by the Issuer and in conflict with this Ordinance, arc hereby repealed except that this repealer shall not be construed so as to revive any act, order, ordinance, or pan thc,:eofherctoforc repealed . ~-Q!hr.i:...M!!lm. By the pa ssage of this Ordinance, the City Council docs not intend to approve, nor is it approving hereby, any matters relating to licensing, permitting, subdivision zoning, planning or landscaping of the Project. ~-~-If any paragraph, clause, section or provi,,on of this Ordirumce, • excep! Section 4 hereof, is judicially adjudged invalid or unenforceable, such Judgment shall not affect , impair or invalidate the remaining paragraphs, clauses, sections or provisions hereof. ~-Emergcpcy Dcclaratjop . The City COLncil re.ognizcs thai market int.:.rest rates are changing materially from day to day, that the Agreement is schedule,;l to beco m effective February 23, 2007 and that the Borrower desires to effect the refinancing of i" loans an<! ensure its currently negotiated rate is not required to be reset at greater costs to the Borrower; therefore, the City Council nereby finds and determines that this Ordinance is necessary for the immediate preservation of public property, health, peach and safety and shall be in full force and effect immediately upon final passage by the City Co uncil. ~-Effectjvc Date . This Ordinance shall be effective immediately after final adoption . Introduced, read in full, and passed as an emergency bill for •n ordinance on first read' .,g on the 5th day ofFebruary, 2007 . Published as an Emergency Bill for an Ordinance on the 9th day ofFebruary, 2007. A Public Hearing was held on February 5~, 2007 . Read by title and passed on final reading as an Emergency Ordinance on the 20th day of February , 2007 . Published by title as Emergency Ordinance No . (ti_, Series of 2007, on the 23rd day of February , 2007 . I, Loucrishia A. Ellis, City Clerk of the City of Englewood, Colorado, hereby certify that the above and foregoing is a~e copy of the Emergency Ordmance passed final reading and published by title as Ordinance No . .JR__, Senes of 2007 . ~/~. Loucrishia A. Elhs • • • • • COUNCIL COMMUNICATION Date: Asenda Item: Subject: February 5, 2007 11 a II A Bill for an Ordinance authorizing and approving the Issuance of Private Activity Bonds to refund debt for Jefferson Hi lls (a youth treatment facility) Initiated By: Finance and Administrative Services Department I Staff Source: Frank Gryg\ewi cz, Director COUNCIL GOAL AND PREVIOUS COUNCIL ACTION City Coun ci l discussed the request to issue Private Activity Bonds at the Janu ary 6, 2007 Study Session . Council agreed to allow staff to move forward on the issuance of these bond 5 for Jeffe r.on Hills. RECOMMENDED ACTION Staff recommends the City Council approve the attached bill for an ordinance approving the issuance of Private Activity Bonds . BACKGROUND, ANALYSIS, AND ALTERNATIVES IDENTIFIED This bill for an ordinance allows the City to issue on behalf of Jefferson Hills in a total principal amount not to excee d $2,000,000 in Private Activity Bonds . The bonds issued for Jefferson Hills are Pri va te Activity Bonds . This typ e of bond may be issued under certain circumstances by a va riP.ty of entities, including those with 501 (c)3 status . The issu er uses the City's tax exempt status to issue debt that pays tax-exempt Interest over the life of bonds if strict restrictions are adhered to. The tax exempt status lowers the cost of borrow ing, and therefore may provide an incenti ve to non-p rofi t organizations to take on projects or provide services that might not otherwis e be und ertaken . Although the issuer uses the tax exempt status of the City of Englewood, the Cir, Joes not take on any res ponsibility for the repayment of debt or pledge its credit. The City does risk of lo ss of reputation and nuisance lawsuits in the event of a default. oth the City Attorney and outside bo nd Counsel have reviewed the proposed changes and have given their approval. Wellsford has guaranteed their bond rating will . ,ot drop below investment grade . FINANCIAL IMPACT Jefferson Hills Is solely responsible for the repayment of this debt. The City of Englewood does not pledge Its credit nor does It make any pledge, guarantee, or take any responsibility regarding the repayment of th is debt. The City will collect \ 12 ,500 to cover administrative expenses associated with this issuance . LIST Of ATTACHME NTS Propos~d Bill for an Ordinance • • •