HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 04/17/2001 - SECOND READING OF ORDINANCE NO. 51, 2001, AMENDING AGENDA ITEM SUMMARY ITEM NUMBER: 15
FORT COLLINS CITY COUNCIL DATE: April 17, 2001FROM
Alan Krcmarik
SUBJECT :
Second Reading of Ordinance No. 51, 2001, Amending Ordinance No. 36, 1992, Authorizing the
Issuance of City of Fort Collins, Colorado, Downtown Development Authority Tax Increment
Revenue Refunding Bonds, Series 1992.
RECOMMENDATION:
Staff recommends adoption of the Ordinance on Second Reading.
EXECUTIVE SUMMARY:
This Ordinance,which was unanimously adopted on First Reading on March 20,2001,increases the
security for Series 1992 Downtown Development Authority Tax Increment Revenue Bonds,and also
makes equivalent changes to the remaining 1992 issue bonds so that they remain comparable in their
terms to the refunding bonds.
AGENDA ITEM SUMMARY ITEM NUMBER: 21
DATE: March 20, 2001
FORT COLLINS CITY COUNCIL
STAFF:
Alan Krcmarik
SUBJECT:
First Reading of Ordinance No. 51, 2001, Amending Ordinance No. 36, 1992, Authorizing the
Issuance of City of Fort Collins, Colorado, Downtown Development AuthorityJax Increment
Revenue Refunding Bonds, Series 1992.
RECOMMENDATION:
Staff recommends adoption of the Ordinance on First Reading.
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FINANCIAL IMPACT:
Adoption of this Ordinance will increase the security for Brae�s 1992 Dow n Development Authority Tax Increment
Revenue Bonds, some of which will remain outstandin Nissuance o e refunding bonds also before the Council
in Ordinance No. 51 , 2001. In essence,the 1992 DDA bonds" on city status with the City's Sales and Use Tax
Revenue Bonds. Originally the City had the right to remove the ple. es and use tax revenues to back the bonds when
certain conditions were met,and to have the bo ds' ' n those reven ome subordinate to other prior bonds in certain
ircumstances. The elimination of these r 5 xeep bond i costs for the refunding issue to a minimum
and will help the bonds get the most co petitive (lowe 't `st interest' s ariestimated savings of approximately
$25,000. This Ordinance will make m ivalent changes to t " arcing 199 pe bonds so that they remain comparable
in their terms to the refunding bonds'' he changes do not affe e CiTy sales tax bonds as future bonds will need voter
approval of the debt due to Article ection 20 of the State Co q ttution.
EXECUTIVE SUMMA a
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The 1992 Downtown Develop thority TaxIncrement Bonds (the "1992 Bonds") carry a
contingent pledge of the City of Fotls°o eS'and use tax revenue. According to Ordinance No.
36, 092,the City may release the contingent pledge of the sales and use tax revenues if the annual
tax increment revenues reach 140bo of the annual debt service for two consecutive years. In addition,
the cJ- currently has the right t(r,have the lien of the 1992 Bonds upon those sales and use tax
revenues subordinated to the lien'
f prior sales and use tax bonds, if the ratio of the total of those
revenues#a the total of debt th�;ievenues are pledged to secure falls to 5 to 1 or below. During
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discusstonswtth the bond in urer for the Series 2001 Tax Increment Refunding Bonds, staff has
learned that'the}n St cosf e ective refunding will be accomplished by removing the City's rights
i to release the conttnge t pledge of the sales and use tax revenues and to subordinate the lien of the
1992 Bonds to that of prior sales and use tax revenue bonds. The Ordinance amends the 1992 bond
ordinance to carry out these changes with respect to the 1992 Bonds that will remaining outstanding
after the issuance of the new refunding bonds proposed in Ordinance No. 50, 2001. This will keep
the 1992 Bonds that remain outstanding subject to the same terms as the newly issued bonds. Based
on this action, the bond insurer will provide a more competitive (lower cost) premium on the new
irefunding bonds. With the insurer's backing, the City is assured of the widest market for the sale
of its bonds.
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