HomeMy WebLinkAbout1999 Resolution No. 051RESOLUTION NO. £1_
SERIES OF 199~
A RESOi,1JT!0N FOR A SUPPLEMENTAL APPROPRIATION AND TRANSFER OF
FUNDS .FROM THE 1999 BUDGET TO THE ENGLEWOOD URBAN RENEW AL
AU'i'HOHITY (EURA).
WHEREAS, the EUR.~ was created to aid in the revitalization of blighted location, in the
City of Englewood; and
WHEREAS , the Englewood City Council arproved Council Bill No. 8, Seriea of 1983 which
provide1 for operating staff, equipment, and related support for the EURA; and
WHEREAS, Section 4 of the EURA Agreement providea that ':U addition to providing
staff employees for the EURA, the City will provide the EURA with such other servicea &11
may be required in order to perform its public functions, including, but not limited to,
accounting , treasury, management. procurement, personnel services, engineering services,
planning services and legal services; and
WHEREAS, in 19P5 EURA isaued tax increment debt to aid in the aa,embling of land to
revitalize various areas in the City; and
WHEREAS , in 1991 EURA was not able to meet its full scheduled debt service payment
and the bonds were deemed in default ; and
WHEREAS, the Truatee representing the bondholders accelerated the payme10t of the
entire principal and this action forced compounding of interest on the outstanding principal
and unpaid interest which has increased the tsx increment debt payable to $31 ,815,137 aa
of December 31 , 1997; and
WHEREAS, on N,vember 26, 1997, on behalf of the bondholders of EURA. a lawsuit was
filed against the EUIIA, the City and the County Asassaor for breach of contract; ani
WHEREAS, the Trustee is seeking to force the extension of the life of the tsx increment
beyond the statutory 26 year limit until tne principal and interest are paid in full; and
WHEREAS , the EUJ.!A has yery limited assets and no funding sources to defend itself
against thi q laweuiti 81Jd
WHEREAS, the EURA requested $50,000 to defend itself in this lawsuit in 1998 and
City Council approved Reso lution No . 87, 1998; and
WHEREAS, toe EURA is requesting an additional $25,000 to continue its legal defense ;
an4
WHEREAS, the paBBage of this Resolution will appropriate ~dditional funds needed Co1·
the EURA to defend itself in the lawsuit which was file~ on November 26, 1997 by the
Tn11tee on behalf of the bondholders against tho EURA, the City and the County Aoaesaor
for breech of contract;
NOW , THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
ENGLEWOOD, COLORADO, THAT :
&l:tilm.J.. The City of Englewood 1999 Budget ia hereby amended aa followa :
GENERAL FUND :
6?urce of Funds :
Unreeerved/Undesignated Fund Balance
Uea of Funde ·
Tran.Cera out to EURA for payment of
legal fees for defenae of lawsuit
ENGLE.WOOD URBAN RENEWAL AUTHORITY FUND:
Source of Funda :
Transfer in from General Fund
Ueee of Funds ·
Payment of legal services fees
for defenae of lawsuit
$25,000
$25,000
$25 ,000
$2~.ooo
llllmsm..2. The City Manager and the Director of Financial Services ara hereby authorized
to make the obove change• to the 1999 Budget of the City of Englewood .
ADOPTED AND APPROVED this 19th day of April , 1999.
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I, Loucriahia A. Ellis, City Clerk for the City of Englewood ,
above ia a true copy of Resolution NoSf. Series of 1999.
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COUNCIL COMMUNICATION
Date Agendaltem 9ubJect Resolution for a
supplemental appropriation and
transfer of funds from the
April 19, 1999 11 C i11' General Fund to the Englewood
Urban Renewal Authority for
legal services
I Initiated By
Department of Financial Services
I Staff Source
Frank Gryglewicz, Director of Financial Services
COUNCIL GOAL AND PREVIOUS COUNCIL ACTION
Previous City Councils created and supported the EURA. The EURA was created to aid In the
:evitallzatlon of blighted locations in the City of Englewood . In 1985 the EURA Issued tax increment
debt to aid in the assembling land to revitalize various areas in the City. In June of 1991, the Authority
was not able to meet its full scheduled debt service payment, and the bonds were deemed in defautt.
The Trustee representing the bondholders accelerated the payment of the entire principal. Thia action
forced compounding of interest on the outstanding principal and unpaid interest. This has Increased
the tax increment debt payable to $31 ,815,137 as of December 31, 1997.
On November 26, 1997 the Trustee, on behalf of the bondholders, filed a lawsuit against the Authority,
the City of Englewood, and the County Assessor for breach of contract. The Trustee is seeking to
force the extension of the life ol the tax increment beyond the statutory 25 year limit until the principal
and interest are paid in full.
The Authority has very limited assets and no funding sources to defend itsett against th:s lawsuit.
Therofore, the EURA is requesting $50,000 to defend itself in this lawsuit. The City Cliuncil ap~rovet.!
Council Bill Number 8, Series of 1983 on February 22, 1983. This Council Bill provided for o~eratlntt
staff, equipment , and related support for the EURA. Section 4 of the agreement provid'3s that the Cit,,
of Englewood "In addition to providing staff employees for the .A.uthority, tne City will provide the
Authority with such other services as may be required in order to perform its public functions, including,
but not limlted to, accounting, treasury, management, procurement, personnel services , engineering
services, planning services, and legal services." The agreement does require the City to provide legal
services as requested in the attached resolution .
On August 13, 1998, City Council approved Resolution 87 , Series of 1998 a transfer and appropriation
of funds from tha General Fund to the EURA Fund for payment ol legal expenses.
RECOMMl:NDED ACTION
Staff recommends City Council approve the attached resolution appropriating and transferring funds to
the EUR!..
The sources and uses of these funds are: .,
GENERAL FUND:
OGURCE OF FUNDS:
Unreserved/Unde&lg1111ted F:ind Balance $25,000
USE OF FUNDS:
Transfers out to the EURA Fund $25 ,000
ENGLEWOOD URBAN RENEWAL AUTHORITY :
SOURCE OF FUNDS :
Transfer In from General Fund $25,000 b
USE OF FUNDS:
Payment of legal services fees to defend aga inst lawsuit $25 ,000
l O JAC;
l'lNANCIAL IMPACT
This appropnati on and transfer will reduce the General Fund unreserved/undeslgnated fund balance by
$25,000.
UST OF ATTACHMENTS
Proposed resolution
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