HomeMy WebLinkAbout2005 Ordinance No. 011•
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ORDINANCE NO . JL
SERIES OF 2005
BY AUTHORI TY
COUNC IL BILL NO . 6
IN TRO DU CED BY COUNC IL
MEMBER WOLOSYN
AN ORDINANCE OF THE CITY OF ENGLEWOOD COLORADO AUTHORlZING
AND APPROVING A MASTER LEASE PURCHASE AGREEMENT BET WEEN
THE CITY AND THE ENGLEWOOD EN VIRONMENTAL FOUNDATION, IN C.,
WHICH REPLACES AN EXISTING LEASE FOR THE PURCHASE OF THE
ENGLEWOOD CIV IC CENTER SITE AND REDUCES THE AGGREGATE
RENTAL PAYMENTS MADE BY THE CITY FOR SUCH PURPOSE ;
ACKNOWLEDGING DOCUMEI', rs EFFECTING THE REFUNDING OF
CERTIFICATES OF PARTICIPATION , SERIES 1998, AND ISSUAN CE OF
CERTIFICATES OF PARTICIPAT ION, SERIES 2005, WHICH EVIDENCE
INTERESTS Ill THE RIGHT TO RECEIVE CERTAIN REVENUES PAYABLE BY
THE CITY UNDER THE MASTER LEASE !'URCHASE AGREEMENT;
PROVIDING DETAILS AND AUTHORIZING AND APPROVING RELATED
DOCUMENTATION IN CONNECTION WITH SUCH LEASE-PURCHASE
REFUNDING; AND DECLARING AN EMERGENCY.
WHEREAS, the City of Englewood (the "City"), in the County of Arapahoe and
State of Colorado (the "Stale"), is a legally and regularly created, established, organized
and existing municipal corporation under the provisions of Article XX of the
Constitutior of the Stale of Co lorado and the home rule chartec of the City (the
"C harter "); and
WHEREAS , pursuant to Article I, Sccli n 3 of the Charier, the Ci ty is authori ze d to
enter into one or more leases or lease-purchase agreements for land, buildi ngs ,
eq uipment and other pro pe rt y for governmenta l or proprietary purposes ; and
WHEREAS , under a Lea se Purchase Agreement , dated December I, 1998 , by and
between the Ci ty and th e Englewood Environmen tal Found ati on, inc ., n Co lorado non-
profit co rporation (the "Corporation") (th e "1998 Lease") reco rded in the records of
tho Clerk and Recorder of Arapahoe County in Book 231 at Page I, on Dece mb er 31,
1998 , the City is currently lease-purchasin g certain rea l property comprising
approximately two acres and on whi ch is loca ted th e Englewood Civi c Cen ter (the
"Lea se d Property "); and
WH EREAS, pursuant to tha • certain ~fortgagc and Indenture of Trust , dated
Decemb er I, 1998 (the "1998 Indenture "), by and betw ee n the Co rp orat ion and The
Bank of Cherry Creek, N .A ., as predecessor co rporation to America n National Bank , as
tru stee (the "Trustee"), re co rd ed in th e record s of th e Clerk and Recorder o f Arapahoe
Co unty in Book 356 al Page I on Dece mber 3 1, 1998, th e Corpora ti on issued
$2 I ,530,000 in agg regate principal amount of Certificate s of Parti cipation (Civic
Center Project), Series 1998 , ev iden cing undivided interests in the righl to recei ve
certain rev enue s payable by th e Cit y under the 1998 Lease (the "1998 Ce rtificate s");
and
WHEREAS, to redu ce the aggregate rent al payments to be made by the Ci ty
pursua nt to the 1998 Lea se and effec t a material savings to the City and it s inhabitant s,
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th ere has bee n prese nted to th e Ci ty by the Cor pora ti on and Stife l, Nico laus &
Compa ny, In c ., Hanifcn Imh off Divi sion a pro po sa l for th e rcfu ndi11 g of lhc 1998
Ce rtifi ca tes th ro ugh lh c issuan ce of Refundi ng crti fic ;:itcs of Parti ci pation , Se ries 2005
(t he "2005 Ccrtificatef') pursua nt to a Mortgage and In de nture of Trust be twee n th e
Co rporation and th e Tru stee (th e "2005 In de nture "); and
WHEREAS , th e 2005 Ce rtifi ca tes , if and when iss ued, wi ll evide nce undiv ided
in terest s in the ri ght to receive cert ai n re ven ue s pa yab le by th e City under a Maste r
Lease Purchase Agreemen t by and be twee n th e Cit y and the Co rporat ion (the "2005
Lease"), which 2005 Lea se wi ll rep lace the 1998 Lease (a ll capitali zed terms use d and
not oth erwise defined in the reci tals her eof shall have th e res pec tive mea nin gs ass ign ed
in the 2005 Lease); and
WHEREAS, in order to effec t th e refu ndi ng of th e 1998 Ce rtificate s pursuant to
Section 4.03 of the I 998 Ind enture, th e City must exe rcise it s opti on to purcha se the
Lease d Property und er the 1998 Lease throuf.'h mon eys made avai lab le throu gh the
issuance of th e 2005 Cert ificate s and th e cxc c-Jtio n and deli very of the 2005 Lease; and
WHEREAS, pursuant to an escrow agre err·,·" (the "Escrow Agree ment") by and among
the Corporati on and the Tru ste e, the net ,,,:,cceds of the 2005 Certifica tes will be
deposited with th e Trustee in a tru st acco unt and invested in non ca11a .. 'r. direc t
obligations of th e United States of Americ a, the ma turing pri ncip a an ~ inte re st on
which will be sufficient to defca se the 1998 Ce rtifi ca te s pursuant ,., 1he term s of the
1998 Indenture; and
WH EREAS, payment of the principal of an d intere st on th e 200 5 Ce rt;fic ates wh en
du e will be insured by a financi nl guara nty ins uran ce poli cy issued simult aneous ly with
the delivery of th e 2005 Certificates by MBII, In surance Corporatio n; an~
WH ERE \S, the Base Rent als (defined in ,he 2005 Le ase) an d Additiona l Rent als
/defi ned in th e 2005 Lease) pay able by the City sha ll co nstitut e currentl y ap pro pri ated
«per.ditures of th e Cit y; and
WHERE AS, no provi sion of th e 2005 Ce rtifi cates , th e 2005 Indenture , or the
2005 LelS e shall be co nstrued or int erpret ed (a) to direc tl y or indirec tl y obli ga te the
Ci ty to make any paymen t in any Fi sca l Year in excess of amount s approp ri ated for
such Fi sca l Year; (b) as crea tin g a debt or multiple fisca l yea r direct or indirec t debt or
oth er financi al obligati on wha tsoeve r of the City within the meaning 0f Articl e XI,
Sec ti on 6 or Arti cle X, Sec tion 20 of th e Co lora do Co nstituti on or any oth er
constituti onal or statut ory limi ta 1i on or provi:;io n; (c) as a delega ti on of
gove rnmental powers by th e Ci ty; (d) as a loa n or pl edge of the credit or fai th of th e
Ci ty or as cre atin g any responsibi lity by the Ci ty for any debt or li abilit y of any
perso n, co mpany or corpora ti on within th e meanin g of Art icle X I. 'i..:ctio n I of th e
Co lora do Co nst itution ; or (c) as a do na ti ot or gra nt by th e Ci ty 1 1, ur in aid of, any
person, co mpany or co rporat ion with in the meanin g of Artic le Xi. Sectio n 2 of th e
Co lorado Co nstit •.:~:on; and
WH EREAS, the Cit y ha s , .n pre sent ed with form s of th e 2005 Le ase, the 2005
Ind enture, I c Escro w Agreemen t, a Ce rti ficate Purchase Agree men t, pursuanl to
whic h the 2llQ5 Ce rt ificates arc to be sold to Sti fe l, Ni col au s & Co mpan y, In c.,
Hani fc n Imh off Di vision (the "Ce rtificate Purchase Agreement "), an d of a
Pr elimin ary Officia l Statement rela tin g to the offe r and sa le of th e 2005 Ce rt ifi ca tes
(the "Pr e limina ry O ffi cial Stat cm,n t"J; and
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WHEREAS , th e Ci ty Council desi res to au thori ze th e ac 1i ons ~md documen ts
fl t'{ i.!S sa ry and otherwi se proceed with th e k ,1sc -purch as c refi nanci ng in orde r to redu ce
to agg rega te rent al payme nt s sc hed uled to be made by th e Cit y:
NOW, THEREFORE, BE IT OR L• ~INED BY Tl-IE CITY COUNC IL OF
THE CITY OF ENG LEW OOD, COLO RADO :
~-Authorization or Lease Purchase Agreement. The 2005 Lease,
in subs tantiall y th e fvr m and wi th suh,t.i nt ia ll y 1hc co nt en t prese nt ed to th e Cit y, is
in all res pects ap prov ed , authori zed and co nfmncd . If an:1 only ir th e exec uti on and
del ive ry of th e 2005 Lease re sults ill n re du ctiry n of no t less than $300,000 of th e
agg regate Ba se Rental s (as defined in th,• 1998 Lease) sc heduled to be paid und er th e
1998 Lease, the Mayor, or in th e ,b,cnce th ereof, the Ma yo r Pro Te rn of the Cit y
Co uncil, is auth ori ze d and dire cted, fo r r, peri od of 225 days followi ng th e effec ti ve
date of thi s Ordinanc e, to exec ute ti,, 20 05 Le ase in substantiall y the fo rm and with
sub stantia ll y the sa me conten t as th e form thereof prese nt ed to th e Ci ty, fo r and o n
be half of th e Cit y, but with such ch anges there in as the Mayo r may, on th e advi se of
th e City Attorney , de em necessary or appropriate . Subject to the co ndi tions se t
forth in thi s Section , the Cit y Co un ci l hereb y approves th e ic Js ing of th e Leased
Property by the City under the term s and co nditi ons of th e 2005 Lea se.
~-Approval of Ofliclal Statement and Miscellaneous Documents .
The City Co un cil hereby ratifie s and approves th e di stribution and use of th e
rrclimin ary Offici al Statement made avai lab le to !he Cit y Co uncil and, in th e eve nt
1hc co nditi ons se t forth in Section I of thi s Ordinance arc met , authori zes and directs
th e preparation of a final Official Sta tement fo r use in co nnect ion wi th the sale o f
the 2005 Ce rtifi ca tes, with such change s the rein as arc appro ved by th e Cit y (which ,
once executed by the appropriat e Cit y offi cial , sh all const itute conc lu sive evide nce of
appro va l of the City). Th e ap propri ate office rs and officials of th e Ci ty arc here by
aut ho ri ze d and directed to execu te an undertaking to facilitate com pli ance wi th
Sec urities and Excha nge Comm iss ion Ruic 15c2 -1 2 (17 C.F .R. § 240.15c2 -1 2), 10
exec ute and file an Intern al Reve nue Service Form 803 8-G in con nec ti on with th e
re fi na nci ng, and to exe cut e and del ive r all of the docum ent s and ce rt ificates necessary
or de sirable to effectuate th e issuance of the 20 05 Ce rtific ates by th e Co rpora ti on
and th e tra nsac tion s co nt emp lated hereby and/o r relatin g to th e sa le or assig nm en t by
the Corpo rati on of proporti onate int eres ts in ri ght s to rece ive c,•rtai n pa yme nt s
und er th e 2005 Lease, and exec uti on by th e partie s th ereto shall consti lut c th e Ci ty's
approva l of such document s and ce rtifi cates in th e fo rm so exec ut ed.
Sec ti on 3. Consent to Ass ignment and Sa le of Proportionate Intere sts.
The Cit y Co uncil hereby acknow ledges and conse nt s to th e as signme nt by th e
Co rp orat ion of all rig ht s, 1i1 \c and in ,crcs t of th e Co rpora ti on, pursuant to th e 2005
In de nture, in , to and unde r 1h c 2005 Lease to the Tru ste e, and the dele ga ti on by th e
Co rp ora ti on of all duties of th e Corpora ti on und er the 2005 L a~e to th e Trustee .
The Ci ty Co un ci l hereby acknowledges and approves th e ass ignment or sale o f
proportiona te int eres ts in rig ht s to re ceive cert a:n paymen ts under th e 2005 Lease.
~-Exe rcise of Option Under 1998 Le ase. In 1he eve nt th at th e 2005
Lea se is cxcc uh.:d and deli ve red pur suant to th e term s of thi s Ordinance , the Cit y
hereby ex ercises it s opti on to purcha se th e Leased Property und er th e 1998 Lease
throu gh mon eys made ava il ab le throu gh !he iss uance of th e 2005 Ce rtifi ca tes .
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~-Year lo Yea r Obligations ur lh c Cit y, No provision of th is
Ordina nce , the 2005 Lease, 1h c Cc rtili ca1c Purdrn sc Ag reement, th e Escrow
Agrccmc n1. th e Co mr,1i1 mc 111 , th e 2005 Ind en ture, th e 2005 Ce rtifi cates, th e
Pre lim in ary Offic ial Statemen t, or the fi nal Ofli cial ta lcmcnt sha ll be co nstru ed o r
int erpreted (a) to direc tl y or in di rec tl y ob ligate th e Cit y to make any pa yment in any
Fi scal Yea r in excess of ;u11011111 s app 1Jpria1 cd fo r such Fi sca l Yea r; (b) as crea tin g a
deb t or muhi plc fisca l yea r direc t or indirect deb t or ot her fin ancia l obliga ti on
what soeve r of th e City \,,ithin the mea nin g of Art ic le XI, Sec tio n 6 or Artic le X,
Secti on 20 of th e Co lorado Co nstituti on 'J r any oth er co nstitut iona l or statu tory
limit ati on or provisi on; (c ) as a del ega ti on of gove rnmental powers by the Cit y; (d) as
a loa n or pledge of th e cre dit or fa ith of the Ci ty or as crea tin g any res ponsibilit y by
th e Cit y fo r any deb t or liabili ty of any pe rson, co mp any or co rp oration within th e
meaning of Article XI, Sec ti on I of th e Co lorado Co nstitution ; or (c) as a do nati on
or gran t by the City to, or in aid of, any person, co mp any or corporati on wi thi n th e
mea ning of Article XI, Sec ti on 2 of the Co lorad o Co nstitut io n.
~ Declarations a nd Findings . The Cit y Co un cil hereby de tcm,in cs
and declares th at the Ba se Rent als, whi ch shall not exce ed $1,575,000 ann ually.
represent the fai r valu e of the use of the Le ased Propert y, and th at th e Purcha se
Opt ion Pri ce, which shnll not excee d $2 1,000 ,0 00 , repre se nts th e fa ir purcha se pri ce
of the Leas ed Prop erty . The Cit y Co un cil hereby determines and declares th at the
Base Rent als do not exceed a reaso nable amount so as to place the City under an
eco nom ic or prac ti ca l compulsi on to a ppropri ate-mon eys to make payments und er
th e 20 05 Le as e CJ i to exerci se it s op tio n to purchas e the Leased Property pursuant t o
th e 2005 Lease. In mak in g such de term ina ti ons, the City Council has given
co nsideration to i,1 e current market val ue of the Lea sed Pro pert y, the cos t of
acq uir ing , co nstru ct ing or equipping prop ert y simil ar to the Leased Prop erty, the uses
and purpos es for whi ch the Lease d Property is be ing and wi ll be emp loye d by th e
Cit y, the be nefi t to th e citize ns and res ide nts of the Ci ty by reason of the use of th e
Le ase d Property purs uant to the tenns and provisions of the 2005 Lease, the opti or.
of th e Ci ty to purc hase-the Lease d Pro perty , and th e expected even tu al ve sting of
full title to the Lea sed Prop ert y in the City . The Cit y Co unci l hereby determines and
dec lare s that the leasing of the Lea sed Pro pert y pur s uant to th e 2005 Lease wi ll re s ult
in facilitie s of co mp arable quillity and meeting lh e sa me requ ire ment s and stand ard s as
wou ld be nece ssary if the ac qui sil ion of th e Leased Property were pc rfonncd by t he
Ci ty oth er than purs uant to th e 2005 Lea se. The Ci ty Co unci l here by determin es and
declares th at th e dura ti on of ihe 2005 Lease, including all opti onal renewa l ter ms,
authorized un der th is Ordinan ce, docs no t exceed th e wcig hti.:d average use ful life of
the Le ased Property .
Sec ti on 7. Ratification of Prior Actions. All ac ti ons heretofo re tak en (no t
inco nsistent wi th the provisio ns of thi s Ordin ance} by th e Cit y Cou nci l and by th e
office rs and emp loyees of the Cit y direc ted toward th e lease purcha se fina ncing fo r
th e purp oses herein se t fort h arc hereby ratified, approv ed and co nfirm ed.
S1:c ti on 8. Headin gs. The headings to the va ri ous se cti ons and parag rap hs t o
thi s Ordinance have bee n in ser ted so lely fo r the conve ni ence o f th e rcadl'1, arc not a
part of thi s Ordin ance, and shall not be use d in any mann er to interpret thi s
Ordi na nce .
.:i!;i;tion 9. Sc \'crnb i lity . It is hereby ex pre ss ly de clared th at all prov is ions
hereof and the ir applic ation arc int ended to be and arc severable. In ord er t o
im1,lemcnt such in tent. if any provi sio n i1crcof or th e app licatio n th ereo f is
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dctcnnin cd by a co urt or adminis trati ve body 10 be invalid or uncnforccaL lc, in whole
or in pan , such determination shall not affec t, imp air or invalidate any oth er
provis ion hc.rc of or the appli ca ti on o f the pro vision in ques tion to an y oth e r
situati on; and if any pro visio n here of or the applic ati on th ereof is dctc rmir.cd by a
court or admini stra tive bod y to be vali d or enfo rceab le only if it s app li ca ti on is
limited, its applicati o n shall be limi ted as required to most [ull y imp lement it s
purpose.
~-Repealer. All ord ers, bylaws , ordin ances, and re so lut ion s o f th e
City, or part s thereof, inc onsistent or in co nfli ct wit h thi s Ordin ance, arc hereb y
repeal ed to th e ex tent on ly of such incon sis tency or co nfli ct.
~ Declaration of Emergency and Effective Date. The City Council
1ecognizes that market inte rest rates are ,:hangi ng materia lly from day to day and
th at the Jelivery of the 2005 Lease shortly afte r th e marketing and sa le of th e 2005
Certifi ca te s will result in th e lowest Base Rentals possible, thereby increasin g General
Fund revenues available fo r other City purposes; therefo re, the Co un cil hereby find s
and determines that thi s Ordinan ce is necessary for the immed iate preservation of
public property, he al th , peace and safety and sha ll be in fu ll force and effec t
immediately upon fina l pa ssage by th e Co un cil.
Introduced, read in full, and pass ed on firs t readin g as an emergency ordinance on the
7th day of March, 2005 .
Published as an Emergen cy Bill for an Ordinan ce on the I Ith day of Marc h, 2005 .
Read by titl e and pa ss ed o n fin al readi ng as an Eme rgency Ordin ance o n th e 2 111
day of March , 2005 .
Publi shed by title as an Emergency Ordinance No. I/_, Serie s of 2004 , on the
25th day of March , 20 051.
I, Lo ucri shia A. Elli s, City Clerk o f th e City of Englewood, Col orado, he reby
certify th at th e above and fore go ing is n true co py of the Em ergenc y Ordinan ce
passe d on fina l readi ng and p ubl is hed by title as O rdinance No . , Serie s of 2005 .
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COUNCIL COMMUNICAT ION
DATE : AGENDA ITEM : SUHJECT:
March ;, was 11 a iii An Em erge ncy Ordin ance Approvin g a
replaceme nt M as ter Lease Purchase Agreemen t
between the City of Eng lewood and th e
Eng lewood Environm ental Foundation
INITIATED BY:
Department of Finance an d Admini stra tive Serv ices
I STAFF SOURCE:
Frank Gryglewicz, Director
COUNCIL GOAL AND PREVIOUS COUNCIL ACTIO N
The Council approved th e origin al l ease between th e City of Engl ewood and th e Engle wood
Environmental Fou ndation in 1998.
RECOMMENDED ACTION
Staff recommends Council approve th e att ac hed Emergency Bill fo r an Ordina nce authorizing a
master lease purchase agree m ent betwee n th e City of Engl ewood and th e Englewood
Environrlental Foundati on.
BACKGROUND, ANALYS IS, AND ALTERNATIVES IDENTIFIED
Th e City of Engl ewood entered into a mas ter l ease purchase agreemen t w ith th e En gle wood
Enviro nm ent al Fo undati o n and iss u ed $21.5 milli on ($20 million net) to make improvements to
Civic Cent er and the su rro undin g area. Thi s refunding w ill not ex tend the p aymen t peri od, but w ill
provide so m e "up fr ont" savings in 2006. Th e ori gin al term of th e pa yments was for 25 years,
endin g in 2023; paym ents on th e new issue end in 2023 as we ll.
Thi s p roposal is being done as an emerge ncy to reduce th e time and exposure to int eres t rate
changes th at ca n occ ur du ring th e refe rendum peri od if done in th e norm al mann er of approving an
ordi nance.
FINANCIAL IMPACT
Annual pa ym ent s w ill 11 0 1 decrease significan tl y b ut a on e lime sav in gs of be twee n $400,000 an d
$700,000 w ill occ ur in 2006.
LIST OF ATTAC HM ENTS
• Emergency Bill fo r an Ordinance.
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