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HomeMy WebLinkAbout2025 Ordinance No. 0424902-7726-6000.1 ORDINANCE NO. 42 COUNCIL BILL NO. 36 SERIES OF 2025 INTRODUCED BY COUNCIL MEMBER NUNNENKAMP AN ORDINANCE AUTHORIZING A LEASE-PURCHASE FINANCING FOR ENERGY PERFORMANCE IMPROVEMENTS AND OTHER COST- SAVINGS MEASURES; APPROVING A SITE LEASE, A LEASE PURCHASE AGREEMENT, AND RELATED TRANSACTION DOCUMENTS TO COMPLETE THE FINANCING; APPROVING A CONTRACT WITH ENERGY SYSTEMS GROUP TO COMPLETE THE IMPROVEMENTS; AND PROVIDING OTHER DETAILS IN CONNECTION WITH THE FINANCING. WHEREAS, City of Englewood, Colorado (the “City”), is a home rule municipality of the State of Colorado (the “State”) duly organized and operating under the Home Rule Charter of the City (the “Charter”) and the constitution and laws of the State; and WHEREAS, pursuant to Section 3 and Section 30 of the Charter, the City Council of the City (the “Council”) has all municipal legislative powers as conferred by general law, except as provided by the Charter, including the power to acquire, hold, lease and dispose of property, both real and personal as provided in Section 31-15-101 of the Colorado Revised Statutes; and WHEREAS, an investment grade audit has been performed for the City analyzing certain utility cost savings and facility improvement measures, including but not limited to the installation of new HVAC systems, roof-mounted solar photovoltaic systems, high efficiency transformers and other cost-saving capital measures for City facilities (collectively, the “Projects”) and the annual savings to be realized by the City by undertaking the Projects are expected to offset the amortized financing costs of such Projects; and WHEREAS, the City Council of City (the “Council”) has determined it is in the best interests of the City and its residents that the City finance the Projects by means of a lease-purchase financing; and WHEREAS, over two million dollars of the cost of the Projects are to benefit the Malley Senior Recreation Center, 3380 S Lincoln Street in the City (the “Malley Center”) and, to avoid encumbrances being recorded against various parts of multiple City facilities, the Council has determined that the Malley Center will serve as the leased property for the lease-purchase financing (the “Leased Property”); and WHEREAS, Stifel, Nicolaus and Company, Incorporated, acting as municipal advisor to City, has assisted the City in requesting bids or proposals from banks or similar financial institutions to act as lender (the “Financing Bank”) for the proposed lease-purchase financing (as described below, the “Lease Financing”), which bids have been received and ranked based upon proposed interest costs, related fees and prepayment options and presented to Council; and WHEREAS, in connection with such lease-purchase financing, the City shall convey a long-term leasehold interest in the Leased Property pursuant to a Site Lease (the “Site Lease”) Docusign Envelope ID: F187F2BD-E65F-4C72-AECE-F7D03CF8911E 2 4902-7726-6000.1 between the City, as lessor, and the Financing Bank, as lessee, for a lump-sum payment to the City to be determined as provided herein, and contemporaneously with the execution and delivery of the Site Lease, sublease the Leased Property back from the Financing Bank pursuant a Lease Purchase Agreement (the “Lease Purchase Agreement”) between the Financing Bank, as sublessor, and the City, as sublessee for renewal terms not to exceed twenty years (which period will not exceed the average useful life of the Projects or the Leased Property); and WHEREAS, the City has determined that entering into the Site Lease and the Lease Purchase Agreement is in the best interests of the City and its residents; and WHEREAS, the Base Rentals and Additional Rentals (both as defined in the Lease Purchase Agreement) payable by the City under the Lease Purchase Agreement shall constitute currently appropriated expenditures of the City and shall not constitute a debt or multiple fiscal year direct or indirect obligation whatsoever of the City or a mandatory charge or requirement against the City in any fiscal year beyond the fiscal year for which such payments have been appropriated; and WHEREAS, no provision of the Site Lease or the Lease Purchase Agreement shall be construed or interpreted (a) to directly or indirectly obligate the City to make any payment in any fiscal year in excess of amounts appropriated for such fiscal year; (b) as creating a debt or multiple fiscal year direct or indirect debt or other financial obligation whatsoever of the City within the meaning of Article XI, Section 6 or Article X, Section 20 of the Colorado Constitution or any other constitutional or statutory limitation or provision; (c) as a delegation of governmental powers by the City; (d) as a loan or pledge of the credit or faith of the City or as creating any responsibility by the City for any debt or liability of any person, company or corporation within the meaning of Article XI, Section 1 of the Colorado Constitution; or (e) as a donation or grant by the City to, or in aid of, any person, company or corporation within the meaning of Article XI, Section 2 of the Colorado Constitution; and WHEREAS, the Council has been presented with forms of the Site Lease and the Lease Purchase Agreement; and WHEREAS, the Council desires to authorize and otherwise proceed with the lease- purchase financing. NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF ENGLEWOOD, COLORADO, AS FOLLOWS: Section 1: Authorization of Leasehold Conveyance Pursuant to Site Lease. The Council hereby approves the conveyance to the Financing Bank of the leasehold interest in the Leased Property in exchange for a lump sum rental payment (the “Financed Amount”), which shall not exceed an aggregate principal amount of $4,000,000. The duration of the Site Lease shall not extend beyond twenty years from the effective date of the Site Lease. The Council determines and declares that the amount of the Financed Amount represents fair and adequate consideration to the City for the sale and conveyance of the leasehold interest in the Leased Property. Section 2: Lease Document Authorization. The Site Lease and the Lease Purchase Agreement, in substantially the form and with substantially the content presented at this meeting Docusign Envelope ID: F187F2BD-E65F-4C72-AECE-F7D03CF8911E 3 4902-7726-6000.1 of the Council, are in all respects approved, authorized and confirmed, and the Mayor is authorized and directed to execute the Site Lease and the Lease Purchase Agreement in substantially the forms and with substantially the same content as the forms thereof presented at this meeting of the Council, for and on behalf of the City but with such changes therein as the Mayor, upon advice of the City Attorney, may deem necessary or appropriate, as evidenced by the execution thereof, including incorporation of the terms to be determined by the Mayor in accordance with the provisions hereof. The Council hereby approves the leasing of the Leased Property by the City from the Financing Bank for the dollar amount determined by the Mayor, in accordance with and subject to the provisions of Section 3 hereof. Section 3: Parameters Relating to Lease Financing. The Council hereby delegates to the Mayor the authority to determine the final terms of the Lease Financing subject to the following parameters: annual Base Rentals, as set forth in the Lease Agreement, shall not exceed $355,000 in any Fiscal Year and the maximum number of optional renewal terms of the Lease Purchase Agreement shall not extend beyond December 31, 2040. The aggregate amount of the Base Rentals payable under the Lease Agreement shall not exceed a total of $5,500,000. The net effective interest rate for the Lease Financing shall not exceed a rate of 4.31% per annum, except in the event of a determination of taxability, as provided in the Lease Agreement. Section 4: Execution of Miscellaneous Documents. The City Clerk or, in the absence thereof, the designee of the City Clerk, is hereby authorized and directed to attest all signatures and acts of any official of the Council or the City in connection with the matters authorized by this Ordinance, and to place the seal of the City on the Site Lease and the Lease Agreement and all other additional certificates, documents and other papers associated with the transactions and other matters authorized by this Ordinance. The Mayor, the Finance Director and other officials, employees and agents of the City are hereby authorized to execute and deliver for and on behalf of the City any and all additional agreements (including, if necessary, an escrow agreement), certificates, documents and other papers and to perform all other acts that they may deem necessary or appropriate in order to implement and carry out the transactions and other matters authorized or contemplated by this Ordinance. Any action authorized by this Ordinance to be taken by the Mayor may, in the absence of the Mayor, be taken by the Mayor Pro-Tem. The costs associated with or related to the lease-purchase financing which are not otherwise paid from proceeds of the Financed Amount shall be paid from legally available revenues of the City. Section 5: Obligations of the City. No provision of this Ordinance, the Site Lease or the Lease Purchase Agreement shall be construed as creating or constituting a general obligation or multiple-fiscal year direct or indirect indebtedness or other financial obligation whatsoever of the City nor a mandatory payment obligation of the City in any ensuing fiscal year beyond any fiscal year during which the Lease Purchase Agreement shall be in effect. The term of the Lease Purchase Agreement shall not extend beyond one year, subject to annual renewal as provided therein, and the City shall have no obligation to make any payment except in connection with the payment of the Base Rentals and Additional Rentals in accordance with the provisions of the Lease Purchase Agreement. Section 6: Declarations and Findings. The Council hereby determines and declares that the Base Rentals in an amount not to exceed the amounts set forth in Section 3 hereof represent the fair value of the use of the Leased Property, and that the Purchase Option Price (as defined in Docusign Envelope ID: F187F2BD-E65F-4C72-AECE-F7D03CF8911E 4 4902-7726-6000.1 the Lease Purchase Agreement) represents the fair purchase price of the Leased Property. The Council hereby determines and declares that the Base Rentals will not exceed a reasonable amount so as to place the City under an economic or practical compulsion to appropriate moneys to make payments under the Lease Purchase Agreement or to exercise its option to purchase the Leased Property pursuant to the Lease Purchase Agreement. In making such determinations, the Council has given consideration to the current market value of the Leased Property, the cost of acquiring, constructing or equipping property similar to the Leased Property, the uses and purposes for which the Leased Property is being and will be employed by the City, the benefit to the citizens and residents of the City by reason of the use of the Leased Property pursuant to the terms and provisions of the Lease Purchase Agreement, the option of the City to purchase the Leased Property, and the expected eventual vesting of full title, including al leasehold interests, to the Leased Property in the City. The Council hereby determines and declares that the leasing of the Leased Property pursuant to the Lease Purchase Agreement will result in facilities of comparable quality and meeting the same requirements and standards as would be necessary if the acquisition of the Leased Property were performed by the City other than pursuant to the Lease Purchase Agreement. The Council hereby determines and declares that the duration of the Lease Purchase Agreement, including all optional renewal terms, authorized under this Ordinance, will not exceed the weighted average useful life of the Projects or the Leased Property. Section 7: Ratification of Prior Actions. All actions heretofore taken (not inconsistent with the provisions of this Ordinance) by the Council or by the officers and employees of the City directed toward satisfaction of the City’s obligations under the Site Lease and the Lease Purchase Agreement are hereby ratified, approved and confirmed. Section 8; Approval of Contract to Complete the Projects. The City Council of the City of Englewood, Colorado hereby approves and authorizes execution of the Energy Performance Contract with Energy Service Company, Energy Systems Group, LLC to complete the Projects. The Mayor is authorized and directed to execute the Energy Performance Contract in substantially the form and with substantially the same content as the form thereof presented at this meeting of the Council, for and on behalf of the City but with such changes therein as the Mayor, upon advice of the City Attorney, may deem necessary or appropriate. Section 9: Severability. It is hereby expressly declared that all provisions hereof and their application are intended to be and are severable. In order to implement such intent, if any provision hereof or the application thereof is determined by a court or administrative body to be invalid or unenforceable, in whole or in part, such determination shall not affect, impair or invalidate any other provision hereof or the application of the provision in question to any other situation; and if any provision hereof or the application thereof is determined by a court or administrative body to be valid or enforceable only if its application is limited, its application shall be limited as required to most fully implement its purpose. Section 10: Repealer. All ordinances, or parts thereof, that are inconsistent with or in conflict with this Ordinance, are hereby repealed to the extent of such inconsistency or conflict. Section 11; Publication. Publication of this Ordinance may be by reference or in full in the City’s official newspaper, the City’s official website, or both. Publication shall be effective upon the first publication by either authorized method. Manuals, Municipal Code, contracts, and Docusign Envelope ID: F187F2BD-E65F-4C72-AECE-F7D03CF8911E 5 4902-7726-6000.1 other documents approved by reference in any Council Bill may be published by reference or in full on the City’s official website; such documents shall be available at the City Clerk’s office and in the City Council meeting agenda packet when the legislation was adopted. Section 12; Actions Authorized to Effectuate this Ordinance. The Mayor is hereby authorized and directed to execute all documents necessary to effectuate the approval authorized by this Ordinance, and the City Clerk is hereby authorized and directed to attest to such execution by the Mayor where necessary. In the absence of the Mayor, the Mayor Pro Tem is hereby authorized to execute the above-referenced documents. The execution of any documents by said officials shall be conclusive evidence of the approval by the City of such documents in accordance with the terms thereof and this Ordinance. City staff is further authorized to take additional actions as may be necessary to implement the provisions of this Ordinance, and has the authority to correct formatting and/or typographical errors. Section 13: Effective Date. This Ordinance shall become effective thirty days after publication following final passage. [The balance of this page is intentionally blank.] Docusign Envelope ID: F187F2BD-E65F-4C72-AECE-F7D03CF8911E 6 4902-7726-6000.1 Introduced, read in full, and passed as on first reading on the 7th day of July, 2025. Published by Title as a Bill for an Ordinance on the City’s official website on the 8th day of July, 2025. Published as a Bill for an Ordinance on the City’s official website beginning on the 3rd day of September, 2025 for thirty (30) days. ___________________________ Othoniel Sierra, Mayor ATTEST: _________________________________ Stephanie Carlile, City Clerk I, Stephanie Carlile, City Clerk of the City of Englewood, Colorado, hereby certify that the above and foregoing is a true copy of a Bill for an Ordinance, introduced, read in full, and passed on first reading on the 7th day of July, 2025. ___________________________ Stephanie Carlile, City Clerk Introduced and passed on first reading on the 7th day of July, 2025; and on second reading, in identical form to the first reading, on the 2nd day of September, 2025. Othoniel Sierra, Mayor ATTEST: _________________________________ Stephanie Carlile, City Clerk I, Stephanie Carlile, City Clerk of the City of Englewood, Colorado, hereby certify that the above and foregoing is a true copy of an Ordinance, introduced and passed in identical form on first and second reading on the dates indicated above; and published two days after each passage on the City’s official website for at least thirty (30) days thereafter. The Ordinance shall become effective thirty (30) days after first publication on the City’s official website. Stephanie Carlile Docusign Envelope ID: F187F2BD-E65F-4C72-AECE-F7D03CF8911E 7 4902-7726-6000.1 Docusign Envelope ID: F187F2BD-E65F-4C72-AECE-F7D03CF8911E