HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 09/07/1999 - SECOND READING OF ORDINANCE NO. 136, 1999, APPROVI AGENDA ITEM SUMMARY ITEM NUMBER: 11
DATE: September 7, 1999
FORT COLLINS CITY COUNCIL STAFF:
Alan Krcmarik
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SUBJECT : j
Second Reading of Ordinance No. 136, 1999, Approving and Authorizing the City to Enter into
Agreements in Connection with the Execution and Delivery of Lease Certificates of Participation
for Street and Recreational Improvements.
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RECOMMENDATION:
Staff recommends adoption of the Ordinance on Second Reading.
EXECUTIVE SUMMARY:
The GID and Golf Fund projects will be financed through the use of a non-profit corporation,the
Fort Collins Capital Leasing Corporation. This is similar to the financing used for the parking
structure and future City office building. Through a lease-leaseback arrangement,the City will lease a
the existing police station(a 24,220 square foot building located at the southeast corner of LaPorte a
Avenue and Howes Street) and the adjacent parking lot to the Fort Collins Leasing Corporation
under a 30-year site lease. The Corporation will then lease the properties back to the City for a term
of 20 vears. The actual financing will be accomplished through the sale of certificates of '
participation(COPS).Upon payment in full of the Certificates of Participation,the site lease will be
terminated. Ordinance No. 136, 1999, was unanimously adopted on First Reading on August 17,
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1999.
As of the date of the First Reading,the City had not yet awarded a bid to the successful bidder. This
Ordinance has been revised on Second Reading to reflect the successful bidder and the actual pricing
of the deal.
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AGENDA ITEM SUMMARY ITEM NUMBER: 16DATE: August 17, 1999
FORT COLLINS CITY COUNCIL STAFF:
Alan Krcmarik
!
SUBJECT:
First Reading of Ordinance No. 136, 1999, Approving and Authorizing the City to Enter into
Agreements in Connection with the Execution and Delivery of Lease Certificates of Participation
for Street and Recreational Improvements.
RECOMMENDATION:
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Staff recommends adoption of the Ordtnan ce Readin
FINANCIAL IMPACT:
The City will finance the improvements with approximately$3.3 5 million in tax-exempt certificates
of participation lease financing. Approximately$1.1 million will be used for improvements in the
City's General Improvement FDtsTii'ct (Grip) A ably "$2:25 million will be used for
replacement of the Collindale Golf Course irr. a o vs
d acquisition and improvements
at SouthRidge Golf Course. The annuaiTaymadts (n the certi sates of participation will average
about$262,000. The Golf Fund wffoay its shg' a of&impro ments from a surcharge fee that was
implemented in 1998. After 2003 the Golf Fund will have an additional$140,000 available annually
when the debt service for SouthRidge is retired. The GID will pay its share of the improvements
from property tax revenues.
EXECUTIVE SUMMARY:
The GID and Golf Fund projects will be financed through the use of a non-profit corporation, the
Fort Collins Capital Leasing Corporation. This is similar to the financing used for the parking
structure and future City office building. Tinvagh a-laase-leasebackmtrangement,the City will lease
the existing police station(a 24;220 square footlbuild �ioca at the southeast comer of LaPorte
Avenue and Howes Street) and the adjacent pai'kitI lot to th ort Collins Leasing Corporation
under a 30-year site lease. The CorporationvAll theri4ease the-properties back to the City for a term
of 20 years. The actual financing will be accomplished through the sale of certificates of i
participation(COPS).Upon payment in full of the Certificates of Participation,the site lease will be iJ+
terminated.
The financing term will be 20 years. The avenge life of the COPS is expected to be between ten and
eleven years. The City expects to pay interest on the lease semi-annually, at an estimated rate of
5.50%. Principal payments will be made annually.
The Bank of Cherry Creek was selected to serve as the trustee for this transaction. The Trustee will
be assigned all rents to the Corporation from the City and the Trustee will make payments to the
investors that purchase the certificates of participation in the lease purchase transaction.
DATE: August 17, 1999 2 ITEM NUMBER: 16
The COPS will be paid through an annual appropriation. This financing technique does not entail
a multiple year fiscal obligation of the City under Article X, Section 20, of the State Constitution,
because the City's lease payments to the non-profit corporation will be subject to annual
appropriation. Nor,under state law,will the COPS constitute debt of the City. Therefore,the City
is not required to obtain voter approval in order to finance capital projects or equipment using lease
purchase financing.
BACKGROUND:
Golf Improvements r.
Approximately $1.2 million of the lease purchaseir0+ceeds 111 "11 be used to replace the existing
irrigation system at Collindale C'rolfCourse�e work willdone between October 1999 and
March 2000. The existing irrigation system was installed in 1970 and is now deteriorating rapidly.
Irrigation systems are built for a life of 20 to 25 years. The plan calls for a state-of-the art electronic
system that will be computerized to provide more efficient water coverage, new pipes, new heads
and new controllers. A consultant will be hired for approximately $40,000 to design and manage
the new system.
Over$2 million of golf course repairs,improvements and enhancements have been identified. The
first option for the approximately $lmillion of the financing is slated for land acquisition and
improvements to the SouthRidge Goff Course. e lams tii cgiare approximately 35 to 40 acres
of land east of Fairway 11 to replace existing h es 2 aiid 1 improved safety and playabiliTy
purposes. It may also be possible to rep ce egist�hole 12 approved through the public and
planning processes. City Golfs are negotiating with the lan'd owner regarding the acquisition
price. If negotiations cannot be reached, the Golf program will fund several other high priority
projects. They are listed below in priority order.
1. SouthRidge Clubhouse Patio/Golf Cart Storage/Basement Remodel Project- $250,000
2. SouthRidge Course Field Restroom - $50,000
3. Collindale Maintenance Buildings Upgrade - $50,000
4. Collindale Maintenance Area Paving and Clubhouse Area Parking Lot Repaving- $30,000
5. SouthRidge Enlargement of�$ e 0
6. SouthRidge Rain Shelters- 20,000
7. SouthRidge Drinking Fountains- $2 00
8. SouthRidge Maintenance Area Paving- ,000
9. SouthRidge Replace# 7 Bridge - $15,000
10. SouthRidge Replace# 3/4 Bridge - $15,000
11. Golf Cart Path Paving at SouthRidge, Collindale, and City Park Nine- $100,000
12. Additional Protective Netting at SouthRidge, Collindale, and City Park Nine- $200,000
13. City Park Nine Chemical Storage Building- $12,000
14. Computerized Pro Shops and Automated Tee Time Reservation System at SouthRidge,
Collindale, and City Park Nine - $90,000
15. Collindale Course Field Restroom- $53,000
The total proceeds available for the golf improvements will be $2,215,000.
DATE: August 17, 1999 3 ITEM NUMBER: 16
General Improvement District
The GID will be using lease purchase proceeds to continue to improve the deteriorating
infrastructure in the Downtown area. The deterioration of the infrastructure(brick pavers,irrigation
systems, benches and canopies) has become a major source of concern due to safety and
functionality. Loose brick pavers pose a potential safety/liability situation for pedestrians and the
City.
The east side of the Oak Street and College Avenue intersection is a good example of the future
improvements. This intersection was redone in 1998 and is aesthetically pleasing, functional and
easily maintained. The other coterie ons slated fo improvements, in priority order, are:
Mountain and College: Pavement eplac nertt, and street cape
Oak and College(West): Pavement replacement
LaPorte and College: Pavement replacement and streetscape
Preliminary design and engineering will occur in 1999. Construction of the improvements is
scheduled for the early part of 2000.
Financing Plan
All of the figures in the table are"su ctzo change c" rfaitgesin market conditions.
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,. GID _J _1, Golf _) Total % of Total
Sources of Funds $1,100,000 $2,250,000� $3,350,000 100.00%
Uses of Funds
Construction Costs
Construction $1,030.000 1,603,250 $2,633,250 78.60%
Contingency 55,000 111,750 166,750 4.98%
Land Costs _ 500,000 500,000 14.93%
Total Construction Costs 1,085,000 , 2,215,000 ; � 3,300,000 98.51%
Financing Costs °
Cost of Issuance 15,000 35,000 50,000 1.49%
Accrued Interest -- -- --
Total Financing Costs 15,000 35,000 50,000 1.49%
Total Project Cots $1,100,000 $2,250,000 $3,350,000 100.00%
Sources of Eoavment
The Golf Fund will repay the bonds from proceeds of a $1.00 surcharge fee on each 9-hole golf
round and$2.00 surcharge fee on each 18-hole round that was implemented in 1998. The surcharge
fees are expected to raise $180,500 in annual revenue for the Golf capital projects. Additionally,
DATE: August 17, 1999 4 ITEM NUMBER: 16
beginning in 2003,the SouthRidge debt service will be retired thus providing an additional$140,000
annual for repayment of the lease-purchase. j
The GID will repay the bonds from property tax revenues. The District currently receives
approximately $185,000 per year in property tax revenues, automobile ownership tax, and interest
earnings. The lease payments will be about$160,000 per year.
Recommendation
Staff recommends adoption of this financing on first reading. „Due to Article X, Section 20,
financing of public improvements hastbecome more complex.{.The use of lease-purchase financing
is now the most efficient means by whichmuniciiWities4hay financing projects. Staffhas combined
the two types of improvements into one financialiransaction to lye on the costs of issuance and the
administration of the financing. There is a critical need for both the downtown improvements and
the golf course improvements.
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ORDINANCE NO. 136, 1999
AN ORDINANCE APPROVING AND AUTHORIZING THE
CITY TO ENTER INTO A SITE AGREEMENT BETWEEN THE
CITY AND FORT COLLINS CAPITAL LEASING
CORPORATION AND A LEASE AGREEMENT BETWEEN
THE CORPORATION AND THE CITY AND APPROVING A
TRUST INDENTURE BETWEEN THE CORPORATION AND
THE BANK OF CHERRY CREEK,N.A., AS TRUSTEE, AND A
LEASEHOLD DEED OF TRUST FROM THE CORPORATION
TO THE PUBLIC TRUSTEE OF LARIMER COUNTY FOR THE
BENEFIT OF THE TRUSTEE RELATING TO CERTAIN
LEASE CERTIFICATES OF PARTICIPATION
WHEREAS, the City of Fort Collins, Colorado (the "City"), has need for and desires to
provide certain real and personal property for City purposes; and
WHEREAS,the City is authorized by Colo. Const. art. XX, § 6, its home rule charter and
Section 23-114 of the City code to lease City property; and
WHEREAS,the City is authorized by Colo. Const. art. XX, § 6, its home rule charter and
part 8 of article 15 of title 31,Colorado Revised Statutes,as amended(the"Act"),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 from the City pursuant to the Site
Agreement,dated as of August 15, 1999(the"Site Agreement"),between the City,as lessor,and the
Corporation, as lessee, and lease such property and improvements thereto back to the City under a
Lease Agreement, dated as of August 15, 1999 (the "Lease"), between the Corporation, as lessor,
and the City, as lessee; and
WHEREAS,the Lease does not constitute a "multiple-fiscal year direct or indirect debt or
other financial obligation"of the City within the meaning of art.X, §20(4)(b)and may therefore be
entered into without voter approval; and
WHEREAS,the Corporation proposes to acquire its interest in such property for lease to the
City with the proceeds of Lease Certificates of Participation (Golf Course Improvements and
Downtown Sidewalks Proiect). Series 1999, dated August 15, 1999, it. the aggregate principal
amount of 55,356;809 S3360,000 (the "Certificates") evidencing assignments of proportionate
interests in its right to receive rental payments under the Lease: and
WHEREAS, in order to provide security for the payment of the principal of and interest on
the Certificates the Corporation proposes to assign its interest in the leased property and its right to
receive rental payments under the Lease to The Bank of Cherry Creek, N.A., as trustee (the
"Trustee"), under a Leasehold Deed of Trust, Assignment of Rents, Security Agreement and
Financing Statement,dated as of August 15, 1999(the"Deed of Trust'),between the Corporation,
as grantor, and the Public Trustee of Larimer County, as grantee, for the benefit of the Trustee, as
beneficiary, and a Trust Indenture, dated as of August 15, 1999 (the "Indenture"), between the
Corporation, as grantor, and the Trustee, as trustee; and
WHEREAS,on August 6, 1999,the Corporation and the City distributed to potential
investors a Request for Proposal to Provide Lease/Purchase Financing (the "Request for
Proposal"),• and
WHEREAS, in accordance with the Request for Proposal, the Corporation and the
City accepted the bid of 1st Choice Bank(the"Bid") to purchase the Certificates: and
WHEREAS the forms of the Site Agreement,the Lease,the Deed of Trust and the Indenture
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 Deed of Trust and the Indenture 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.
2. The City Council (the "Council")hereby finds that the lease of the leased property
as provided in the Lease is in the best interests of the City. 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 and the Lease and any other document that in the opinion of the City Attorney is
necessary to effect the transaction contemplated thereby and not inconsistent therewith.
4. The City hereby waives any available defense of governmental immunity from
liability in tort for any failure to surrender possession of the leased property as provided in the Lease.
5. 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.
6. 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
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. described herein,includine but not limited to the distribution of the Request for Proposal and
the acceptance of the Bid, is hereby ratified, approved and confirmed.
7. 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.
8. Any inconsistency between the provisions of this Ordinance and those of the Act is
intended by the Council. To the extent of any such inconsistency the provisions of this Ordinance
shall be deemed made pursuant to the home rule charter of the City and shall supersede to the extent
permitted by law the conflicting provisions of the Act.
READ, AMENDED, FINALLY
PASSED AS AMENDED ON SECOND READING AND ORDERED PUBLISHED BY
NUMBER AND TITLE ONLY this i 7dt 7th day of 2kagust September, 1999.
CITY OF FORT COLLINS, COLORADO
By:
• (SEAL) Mayor
ATTEST:
City Clerk
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