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HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 06/15/2004 - FIRST READING OF ORDINANCE NO. 100, 2004, APPROVIN ITEM NUMBER: 15 AGENDA ITEM SUMMARY DATE: June 15, 2004 FORT COLLINS CITY COUNCIL STAFF: Byrne/Krcmarik/ Stokes SUBJECT First Reading of Ordinance No. 100, 2004, an Ordinance Approving and Authorizing the City of Fort Collins, Colorado, to Enter into a Site Agreement Between the City and Fort Collins Capital Leasing Corporation, a Lease Agreement Between the Corporation and the City, a Certificate Purchase Agreement among the Corporation,the City and George k.Baum&Company and a Financial Guaranty Agreement Between the City and the Certificate Insurer and Approving a Trust Indenture Between the Corporation and the Trustee, a Leasehold Deed of Trust from the Corporation to the Public Trustee of Latimer County for the Benefit of the Trustee and a Preliminary Official Statement and a Final Official Statement Relating to Certain Lease Certificates of Participation, Series 2004B. RECOMMENDATION Staff and the Natural Resources Advisory Board recommend adoption of the Ordinance on First Reading. FINANCIAL IMPACT The total amount of Certificates of Participation ("COPS")to be authorized will be approximately $15.3 million for the land conservation in compliance with the City Council approved Land Conservation Focus Area Map and the Natural Areas Program's Framework for Land Conservation. The annual payments for the COPS will be approximately $1.45 million per year for the next 15 years. Both the size of the transaction and the annual payments may change due to fluctuations in interest rates. The source for repayment of the acquisitions is the City's dedicated quarter cent sales and use tax for open space which has been extended to 2030 and the City's share of the Latimer County open space tax which has been extended to 2018. EXECUTIVE SUMMARY By adoption of this Ordinance,Council would approve and authorize the legal documents necessary to complete a lease purchase certificate of participation transaction for land conservation in compliance with the City Council approved Land Conservation Focus Area Map and the Natural Areas Program's Framework for Land Conservation. With the proceeds from the transaction, the Program will acquire the Bobcat Ridge Natural Area,acquire the Andrijeski property,and reimburse the City for the acquisition of the Soapstone Ranch. The total amount of land to be acquired and June 15, 2004 -2- Item No. 15 conserved through these transactions is 18,318 acres with a value of$11.6 million. The Program will have an additional $3.4 million for other projects. The use of COPS is a cost efficient and effective way to maximize the land conservation efforts of the Natural Areas Program.The cost of these primarily regional conservation projects, which were acquired to take advantage of"once in a life time opportunities," will be spread over fifteen years. The proceeds from the COPS will be focused almost exclusively on local and community separator conservation projects,where much of the land will either be too expensive to conserve in the future or simply not longer available for conservation. BACKGROUND The Council has passed resolutions revising the Natural Areas Policy Plan to add a"regional"focus to the Plan and approved the Land Conservation Focus Areas Map that provides a general guide for future land conservation. The Natural Areas Program has a Framework for Land Conservation for the next ten years, 2004 — 2013, which calls for spending the approximate $60 million in land conservation funds as follows: 1/3 on Local Conservation; 1/3 on Regional Conservation; and 1/3 on the conservation of Community Separators. Funding for the payment of the lease payments will come from previous voter-approved revenue sources. In 1992,Fort Collins voters approved a citizen-initiated quarter cent sales and use tax levy dedicated to natural areas. The term of this tax was five years. In 1997, as part of 'Building Community Choices," voters extended a major portion of the 1992 levy for natural areas and trails through 2005. hi 2002, voters approved another citizen-initiated measure, which extended the quarter cent levy from January 2006 to December 2030. In addition to the City sales tax, the City also receives a portion of a Larimer County sales and use tax levy to fund open space,natural areas, wildlife habitat, parks, and trails. This tax was approved by county voters in 1996, and extended in 1999 to the year 2018. The Projects Pulliam (also known as the Bobcat Ridge Natural Area) The Pulliam property, now designated as the Bobcat Ridge Natural Area, is located just west of Masonville in the Foothills Focus Area on the Natural Areas Land Conservation Map. This unique ranch is one of the few remaining large undeveloped parcels of foothills properties in close proximity to Fort Collins. The ranch has high ecological, geological, and recreational values. In 2003,City staff negotiated Purchase&Option Agreements with the two Pulliam Trusts for twelve tracts of land which total approximately 2,604 acres to be acquired for the Natural Areas Program. The City purchased 5 of the 12 tracts, a total of 819 acres, in December 2003. The City has a lease and option to purchase the remaining 7 tracts (1,785 acres) for the sum of $3,898,379 (appraised value of approximately $4,204,579 less donation of $306,200 for a net cost to the City of $3,898,379). June 15, 2004 -3- Item No. 15 Andrijeski Property The Natural Areas Program has negotiated the purchase of approximately 159 acres and water rights from the Andrijeski Trusts for Natural Lands/Land Conservation purposes. The property is located at 1425 North Overland Trail,west of Overland and south of Michaud Lane. The property is within the Growth Management Area of the City of Fort Collins with both water and sewer service available. Most of the property is irrigated farm land, with significant wetland and habitat values. The property is scheduled to close in August 2004. The purchase price of the property is$2,500,000, with $700,000 allocated to water rights which are being purchased by other City Departments, $400,000 for the farmstead and water rights on a separate 5.1 acre parcel which will be resold, and $1,400,000 for the approximately 154 acres of unimproved land which will be kept as a local natural area. Soapstone Ranch On May 20,2004,the Natural Areas Program acquired the Colorado portion of the Soapstone Ranch, approximately 12,579 acres in fee lands and State Land Board lease property totaling approximately 3,800 acres, together with a covenant limiting development on the Wyoming portion of Soapstone Ranch adjacent to Colorado. Soapstone Ranch is located between City-owned Meadow Springs Ranch(operated by City Utilities Service Area)and Red Mountain/Big Hole Ranch,currently under negotiation by City land conservation partners as a part of the Larimie Foothills:Mountains to Plains Project. The acquisition and conservation of the Colorado portion of the Soapstone Ranch supports the City's ten-year Land Conservation Framework. The Ranch will be leased for grazing for the next one and a half years,with future grazing anticipated subject to the finalized management plan,which will accommodate controlled public access. The purchase price of the ranch was$7,280,396,which included the covenant limiting development on approximately 3,000 acres in Wyoming. The appraised value of the Colorado land was $6,300,000. Other Projects There is a balance of approximately$3.4 million available for other projects. Alternatively,staff can downsize the issue prior to second reading. June 15, 2004 -4- Item No. 15 ANTICIPATED SOURCES AND USES OF LEASE CERTIFICATE FUNDS Natural Areas Acquisition and Conservation Costs Sources New Issue Certificates of Participation $15,010,000 Accrued Interest and Premium 290.000 Total Sources $15,300,000 Uses of Proceeds Project Funds $15,000,000 Cost of Issuance 49,000 Certificate Sales Costs 92,000 Lease Certificate Insurance 121,000 Surety Bond 36,000 Contingency 2,000 Total Uses $15,300,000 All of the figures above are based on market estimates as of June 3, 2004. Interest rates will undoubtedly change between now and the sale of the certificates. The total size of the transaction may have to be resized when the final information is available. ATTACHMENT Exhibit 1: Area map showing the locations of the three projects. ORDINANCE NO. 100, 2004 AN ORDINANCE APPROVING AND AUTHORIZING THE CITY OF FORT COLLINS, COLORADO, TO ENTER INTO A SITE AGREEMENT BETWEEN THE CITY AND FORT COLLINS CAPITAL LEASING CORPORATION, A LEASE AGREEMENT BETWEEN THE CORPORATION AND THE CITY, A CERTIFICATE PURCHASE AGREEMENT AMONG THE CORPORATION, THE CITY AND GEORGE K. BAUM & COMPANY AND A FINANCIAL GUARANTY AGREEMENT BETWEEN THE CITY AND THE CERTIFICATE INSURER AND APPROVING A TRUST INDENTURE BETWEEN THE CORPORATION AND THE TRUSTEE, A LEASEHOLD DEED OF TRUST FROM THE CORPORATION TO THE PUBLIC TRUSTEE OF LARIMER COUNTY FOR THE BENEFIT OF THE TRUSTEE AND A PRELIMINARY OFFICIAL STATEMENT AND A FINAL OFFICIAL STATEMENT RELATING TO CERTAIN LEASE CERTIFICATES OF PARTICIPATION SERIES 2004B. WHEREAS, the City of Fort Collins, Colorado (the "City"), has need for and desires to provide certain real property for City purposes; and WHEREAS, the City is authorized by Colo. Const. art. XX, §6, Chapter 23, Article IV, Division 2 of the Code of the City of Fort Collins (the "City Code") and part 7 of article 15 of title 31, Colorado Revised Statutes, as amended, to lease City property as lessor; and WHEREAS, the City is authorized by Colo. Const. art. XX, §6 and part 8 of article 15 of title 31,Colorado Revised Statutes,as amended,to enter into rental or leasehold agreements in order to provide necessary land,buildings,equipment and other property for governmental or proprietary purposes, and such agreements may include options to purchase and acquire title to such leased or rented property; and WHEREAS,Fort Collins Capital Leasing Corporation,a Colorado nonprofit corporation(the "Corporation"),has offered to lease certain real property(the"Site")from the City pursuant to a Site Agreement, dated its delivery date (the "Site Agreement"), between the City, as lessor, and the Corporation, as lessee, and to lease the Site to the City under a Lease Agreement, dated its delivery date (the "Lease"), between the Corporation, as lessor, and the City, as lessee; and WHEREAS,the Corporation proposes to acquire its interest in the Site with the proceeds of Lease Certificates of Participation,Series 2004B,dated their delivery date,in the aggregate principal amount of$15,300,000 (the "Series 2004B Certificates") evidencing assignments of proportionate interests in its right to receive rental payments and certain other revenues under the Lease; and WHEREAS, in order to provide security for the payment of the principal of and interest on the Series 2004B Certificates,the Corporation proposes to assign its interest in the Site(the"Leased Property") and its right to receive rental payments and certain other revenues under the Lease to a national banking association selected by the Corporation, as trustee (the "Trustee"), under a Trust Indenture, dated its delivery date (the "Indenture"), between the Corporation, as grantor, and the Trustee, as trustee, and a Leasehold Deed of Trust, Security Agreement and Financing Statement, dated its delivery date (the 'Deed of Trust"), between the Corporation, as grantor, and the Public Trustee of Latimer County, as grantee, for the benefit of the Trustee, as beneficiary; and WHEREAS, a municipal bond insurer selected by the Corporation and the City (the "Certificate Insurer") has offered to provide a surety bond in lieu of a cash reserve otherwise required as security for the Series 2004B Certificates pursuant to a Financial Guaranty Agreement, dated its delivery date (the "Financial Guaranty Agreement"), between the City and the Certificate Insurer; and WHEREAS,neither the Lease nor the Financial Guaranty Agreement constitutes a"multiple- fiscal year direct or indirect debt or other financial obligation" of the City within the meaning of Colo.Const. art.X, §20(4)(b)and may therefore be entered into without voter approval in advance; and WHEREAS, George K. Baum&Company(the "Underwriter") has offered to purchase the Series 2004B Certificates pursuant to a Certificate Purchase Agreement,dated its execution date(the "Purchase Agreement"), among the Corporation, the City and the Underwriter; and WHEREAS the forms of the Site Agreement, the Lease, the Indenture, the Deed of Trust, the Financial Guaranty Agreement,the Purchase Agreement and the Preliminary Official Statement relating to the Series 2004B Certificates(the'Preliminary Official Statement")have been filed with the City Clerk. BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT COLLINS, COLORADO: 1. The forms of the Site Agreement,the Lease,the Indenture,the Deed of Trust, the Financial Guaranty Agreement and the Purchase Agreement are hereby approved,together with any revisions thereto as may be considered necessary or desirable by the Financial Officer in consultation with the City Attorney. The preparation and use of the Preliminary Official Statement is in all respects hereby ratified,approved and confirmed. The City is authorized to prepare or cause to be prepared a final Official Statement (the "Official Statement")in connection with the offering and sale of the Series 2004B Certificates. The Mayor is authorized to execute and deliver the Official Statement, and the execution of the Official Statement by the Mayor shall be conclusively deemed to evidence the approval of the form and contents thereof by the City. 2. The City Council (the "Council")hereby finds that the execution of the Site Agreement and the Lease and the lease of the Leased Property as provided therein is in the best interests of the City and its inhabitants. In addition, the determinations set forth in Section 6.5 of the Lease are incorporated herein by this reference as if set forth in full herein. 3. The Mayor and the City Clerk are hereby authorized and directed to execute the Site Agreement, the Lease, the Financial Guaranty Agreement and any other documents or certificates that, in the opinion of the City Attorney, are necessary to effect the transactions contemplated thereby and not inconsistent therewith. The City Manager is hereby authorized to accept and execute the Purchase Agreement on behalf of the City immediately following the marketing of the Series 2004B Certificates and prior to final adoption of this Ordinance, but the Purchase Agreement shall not become effective according to the terms thereof until the effective date of this Ordinance. 4. The City hereby waives any available defense of governmental immunity from liability in tort for any failure to surrender possession of the I-eased Property as provided in the Lease. 5. The Council hereby authorizes the amendment of the Site Agreement and the Lease, and consents to the amendment of the Indenture and the Deed of Trust, to revise the definitions of "Site" and "Leased Property" as provided in the Site Agreement, the Lease, the Indenture and the Deed of Trust. 6. If any section,paragraph,clause or provision of this Ordinance shall for any reason be held to be invalid or unenforceable, the invalidity or unenforceability of such section, paragraph, clause or provision shall not affect any of the remaining provisions of this Ordinance. 7. All action not inconsistent with the provisions of this Ordinance heretofore taken by the City or its officers, and otherwise by the City directed toward the completion of the transactions described herein is hereby ratified, approved and confirmed. 8. All ordinances, resolutions and orders, or parts thereof, of the City inconsistent herewith and with the documents approved hereby are hereby repealed to the extent only of such inconsistency. This repealer shall not be construed as reviving any ordinance, resolution or order, or part thereof. 9. Any inconsistency between the provisions of this Ordinance and those of any applicable statute, including parts 7 and 8 of article 15 of title 31, Colorado Revised Statutes, as amended,is intended by the Council. To the extent of any such inconsistency the provisions of this Ordinance shall be deemed made pursuant to Colo. Const. art. XX, §6 and shall supersede to the extent permitted by law any such conflicting provisions. Introduced, considered favorably on first reading, and ordered published by title only this 15th day of June, A.D. 2004, and presented for final passage on the 6th day of July, A.D. 2004. Mayor ATTEST: City Clerk Passed and adopted on final reading this 6th day of July, A. D. 2004. Mayor ATTEST: City Clerk • C1'oF L Soapstone N ti IQ s C 2 s� 71 1 � Andrijeski Property 5 - w Fort Collins Bobcat Ridge r Ji J G Loveland Legend -Andrijeski Property 0 5 10 City-OMed Natural Areas Miles Roans + Exhibit 1. Lease Certificate of Participation Project Sites