HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 03/06/2007 - FIRST READING OF ORDINANCE NO. 041, 2007, AUTHORIZ ITEM NUMBER: 15
AGENDA ITEM SUMMARY DATE: March 6, 2007
FORT COLLINS CITY COUNCIL
STAFF: Chuck Seest
SUBJECT
First Reading of Ordinance No. 041, 2007, Authorizing the Execution and Delivery by the City of
an Amended and Restated Site Agreement and Lease Agreement, a Continuing Disclosure
Undertaking,an Official Statement,and Related Documents,Concerning the Leasing of the Mason
Office Building and the Mason Street Parking Structure; Ratifying Action Previously Taken; and
Providing Other Matters.
RECOMMENDATION
Staff recommends adoption of the Ordinance on First Reading.
FINANCIAL IMPACT
The total amount of Certificates of Participation("COPS") to be authorized will be approximately
$15.4 million for refunding of the outstanding 1998 and 1999 COPS in the amounts of$12.5 million
and $2.1 million respectively. This refunding will lower the interest rates from 5.07% and 5.60%
on the 1998 and 1999 COPS,respectively,to a combined rate of 4.50% -4.75%. The net cashflow
savings from this refunding are estimated to be approximately$700,000.
This refunding is being considered at this time for two reasons:
1. The interest rate environment appears to be showing greater volatility and a bias towards
tightening and
2. The General Fund could utilize the savings to alleviate the challenging revenue environment
the City faces over the next two years.
The refunding transaction was evaluated from a standpoint of both maximizing the overall savings
as well as addressing the short-term budgetary challenges confronting the City's General Fund.
After reviewing a variety of projections on the refunding, staff selected a structure that would
frontload a majority of the savings and alleviate the General Fund's expenditures for debt service
by an estimated$500,000 in 2007.
The annual payments for the COPS will be approximately$1.6 million per year for the next 11 years.
The annual payments may change due to fluctuations in interest rates. The source for repayment of
the annual payments will be the City's General Fund and interest earnings.
March 6, 2007 -2- Item No. 15
EXECUTIVE SUMMARY
Adoption of this Ordinance will approve and authorize the legal documents necessary to complete
a lease purchase certificate ofparticipation transaction to effectively refund the 1998 and 1999 COPS
that were originally issued for the construction of the City's Mason Street Parking Structure,the 215
North Mason Office Building and an off-site Police Facility.
ORDINANCE NO. 041, 2007
AN ORDINANCE AUTHORIZING THE EXECUTION AND
DELIVERY BY THE CITY OF AN AMENDED AND
RESTATED SITE AGREEMENT AND LEASE AGREEMENT,
A CONTINUING DISCLOSURE UNDERTAKING, AN
OFFICIAL STATEMENT, AND RELATED DOCUMENTS,
CONCERNING THE LEASING OF THE MASON OFFICE
BUILDING AND THE MASON STREET PARKING
STRUCTURE; RATIFYING ACTION PREVIOUSLY TAKEN;
AND PROVIDING OTHER MATTERS.
WHEREAS, the City of Fort Collins, Colorado (the "City") is a duly organized
and existing home rule municipality of the State of Colorado, created and operating pursuant to
Article XX of the Constitution of the State of Colorado and the home rule charter of the City(the
"Charter"); and
WHEREAS, the City is authorized by Article XX, Section 6 of the Colorado
Constitution, its Charter and part 8 of article 15 of title 31, Colorado Revised Statutes, 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 property; and
WHEREAS, the City and Fort Collins Capital Leasing Corporation, a Colorado
non-profit corporation (the "Corporation") have previously entered into a Site Agreement dated
as of August 1, 1998 (the "1998 Site Agreement"), pursuant to which the City leased the Mason
office building and the Mason Street parking Structure to the Corporation; and
WHEREAS, the City and the Corporation simultaneously entered into a Lease
Agreement dated as of August 1, 1998 (the "1998 Lease") pursuant to which the City became a
subtenant of the Mason office building and the Mason Street parking structure (collectively, the
1998 Leased Property"); and
WHEREAS, the City and the Corporation have previously entered into a Site
Agreement, dated as of August 15, 1999 (the"1999 Site Agreement") pursuant to which the City
leased an offsite police facility to the Corporation; and
WHEREAS, the City and the Corporation simultaneously entered into a Lease
Agreement dated as of August 15, 1999 (the "1999 Lease") pursuant to which the City became a
subtenant of the offsite police facility(the"1999 Leased Property"); and
WHEREAS, the City Council of the City has determined and now hereby
determines that it is in the best interests of the City and its inhabitants that the City enter into an
Amended and Restated Site Agreement, dated as of April 1, 2007 (the "Site Agreement") and an
Amended and Restated Lease Agreement, dated as of April 1, 2007 (the "Lease") with respect to
the Mason office building and the Mason Street parking structure for the purpose of restructuring
the City's payments pursuant to the Lease so as to effect certain financial benefits for the City
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(the "Refunding") and in order to exercise the City's option to purchase the Corporation's
interest in the 1999 Leased Property; and
WHEREAS, the Site Agreement will replace and supercede in its entirety the
1998 Site Agreement and the Lease will replace and supercede in its entirety the 1998 Lease; and
WHEREAS, upon the exercise of the City's option to purchase the Corporation's
interest in the 1999 Leased Property, the 1999 Site Agreement and the 1999 Lease will be
terminated, and the Corporation's interest in the 1999 Leased Property will be conveyed to the
City in accordance with the provisions of the 1999 Lease; and
WHEREAS, pursuant to the Lease, and subject to the right of the City to
terminate the Lease and other limitations as therein provided, the City will pay certain
recalculated Base Rentals and Additional Rentals (as such terms are defined in the Lease) in
consideration for the right of the City to use the 1998 Leased Property (defined in the Lease as
the"Leased Property"); and
WHEREAS, the City's obligation under the Lease to pay Base Rentals and
Additional Rentals (both as defined in the Lease) shall be from year to year only; shall constitute
currently budgeted expenditures of the City; shall not constitute a mandatory charge or
requirement in any ensuing budget year; and shall not constitute a general obligation or other
indebtedness or multiple fiscal year financial obligation of the City within the meaning of any
constitutional, statutory or Charter limitation or requirement concerning the creation of
indebtedness or multiple fiscal year financial obligation, nor a mandatory payment obligation of
the City in any ensuing fiscal year beyond any fiscal year during which the Lease shall be in
effect; and
WHEREAS, the Corporation and The Bank of Cherry Creek, N.A. (now known
as American National Bank) previously entered into a Trust Indenture, dated as of August 1,
1998 (the "1998 Indenture") pursuant to which certain Lease Certificates of Participation, Series
1998 (the"1998 Certificates") were executed and delivered; and
WHEREAS, the Corporation and The Bank of Cherry Creek, N.A. previously
entered into a Trust Indenture, dated as of August 15, 1999 (the "1999 Indenture") pursuant to
which certain Lease Certificates of Participation, Series 1999 (the "1999 Certificates") were
executed and delivered; and
WHEREAS, the Corporation and American National Bank, as trustee (the
"Trustee"), will enter into an Amended and Restated Mortgage and Indenture of Trust, dated as
of April 1, 2007 (the "Indenture") which will replace and supercede the 1998 Indenture and will
replace and supercede the Leasehold Deed of Trust, Assignment of Rents, Security Agreement
and Financing Statement, dated as of August 1, 1998, from the Corporation, as grantor, to the
Public Trustee of Latimer County, Colorado, as grantee, for the benefit of The Bank of Cherry
Creek, N.A.; and
WHEREAS, pursuant to the Indenture there will be issued Refunding Certificates
of Participation, Series 2007, dated as of their date of delivery in the aggregate principal amount
of not to exceed $16,000,00 (the"2007 Certificates"); and
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WHEREAS, the net proceeds of the 2007 Certificates will be used to refund and
defease all of the outstanding 1998 Certificates and 1999 Certificates; and
WHEREAS, the 2007 Certificates shall evidence assignments of the rights to
receive certain Revenues (as defined in the Lease), shall be payable solely from the sources
therein provided and shall not directly or indirectly obligate the City to make any payments
beyond those appropriated for any fiscal year during which the Lease shall be in effect; and
WHEREAS, there has been presented to the City Council and are on file at the
City offices the following: (i) the proposed form of the Site Agreement; (ii) the proposed form
of the Lease; (iii) the proposed form of the Continuing Disclosure Certificate to be provided by
the City (the "Disclosure Certificate"); and (iv) the Preliminary Official Statement (the
"Preliminary Official Statement") relating to the 2007 Certificates; and
WHEREAS, Section 11-57-204 of the Supplemental Public Securities Act,
constituting Title 11, Article 57, Part 2, Colorado Revised Statutes (the "Supplemental Act"),
provides that a public entity, including the City, may elect in an act of issuance to apply all or
any of the provisions of the Supplemental Act.
BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT COLLINS,
COLORADO:
Section 1. Ratification and Approval of Prior Actions. All action heretofore
taken (not inconsistent with the provisions of this ordinance) by the City Council or the officers
or agents of the City Council or the City relating to the Site Agreement, the Lease, the
completion of the Refunding and the exercise by the City of its option to purchase the
Corporation's interest in the 1999 Leased Property is hereby ratified, approved and confirmed.
The designation of the Preliminary Official Statement by the Financial Officer of the City (the
"Financial Officer") as a "nearly final Official Statement" for purposes of Rule 15c2-12 of the
U.S. Securities and Exchange Commission is hereby ratified, approved and confirmed.
Section 2. Finding of Best Interests. The City Council hereby finds and
determines, pursuant to the Constitution, the laws of the State of Colorado and the Charter, that
the Refunding and the exercise of the City's option to purchase the Corporation's interest in the
1999 Leased Property under the terms and provisions set forth in the Site Agreement, the Lease
and the Indenture is necessary, convenient and in furtherance of the City's purposes and is in the
best interests of the inhabitants of the City and the City Council hereby authorizes and approves
the same.
Section 3. Supplemental Act: Parameters. The City Council hereby elects to
apply all of the Supplemental Act to the Site Agreement and the Lease and in connection
therewith delegates to each of the Mayor or the Financial Officer of the City the authority to
independently make any determination delegable pursuant to Section 11-57-205(1)(a-i),
Colorado Revised Statutes, in relation to the Site Agreement and the Lease, and to execute a sale
certificate (the "Sale Certificate") setting forth such determinations, subject to the following
parameters and restrictions: (a) the aggregate principal amount of the Base Rentals relating to
the 2007 Certificates shall not exceed $16,000,000; (b) the maximum net effective interest rate
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on the interest component of the Base Rentals relating to the 2007 Certificates shall not exceed
4.75%; (c) the Site Agreement Term and the Lease Term for the Site Agreement and the Lease,
respectively, shall not be longer than 20 years; and (d) the purchase price of the 2007 Certificates
shall not be less than 99%.
Further, each of the Mayor or the Financial Officer of the City is independently
authorized by the City Council to execute and deliver a commitment for the issuance of a
municipal bond insurance policy on the 2007 Certificates, if any, with a bond insurer, and enter
into any related documents or agreements to secure the payment of principal of and interest on
the 2007 Certificates, subject to the provisions of this ordinance, the Sale Certificate and the
Supplemental Act.
Section 5. Approval of Documents. The Site Agreement, the Lease and the
Disclosure Certificate, in substantially the forms presented to the City Council and on file with
the City, are in all respects approved, authorized and confirmed, and the Mayor of the City is
hereby authorized and directed for and on behalf of the City to execute and deliver the Site
Agreement, the Lease and the Disclosure Certificate in substantially the forms and with
substantially the same contents as presented to the City Council, provided that such documents
may be completed, corrected or revised as deemed necessary by the parties thereto in order to
carry out the purposes of this ordinance.
Section 6. Approval of Official Statement. A final Official Statement, in
substantially the form of the Preliminary Official Statement presented to the City Council and on
file with the City, is in all respects approved and authorized. The Mayor is hereby authorized
and directed, for and on behalf of the City, to execute and deliver the final Official Statement in
substantially the form and with substantially the same content as the Preliminary Official
Statement on file with the City, with such changes as may be approved by the Financial Officer.
The distribution of the Preliminary Official Statement and the final Official Statement to all
interested persons in connection with the sale of the 2007 Certificates is hereby ratified,
approved and authorized.
Pursuant to Section 3 hereof, the Mayor and the Financial Officer shall each have
the independent authority to determine if the 2007 Certificates will be sold pursuant to a public
sale or whether the 2007 Certificates will be sold by negotiated sale. If it is determined that the
2007 Certificates shall be sold by public sale, the City Council hereby authorizes the preparation,
use and distribution of a Notice of Public Sale (a "Notice of Sale") that will set forth the terms of
the sale of the 2007 Certificates.
Section 7. Authorization to Execute Collateral Documents. The City Clerk is
hereby authorized and directed to attest all signatures and acts of any official of the City in
connection with the matters authorized by this ordinance and to place the seal of the City on any
document authorized and approved by this ordinance. The Mayor and City Clerk and other
appropriate officials or employees of the City are hereby authorized to execute and deliver for
and on behalf of the City any and all additional certificates, documents, instruments and other
papers, and to perform all other acts that they deem necessary or appropriate, in order to
implement and carry out the transactions and other matters authorized by this ordinance. The
approval hereby given to the various documents referred to above includes an approval of such
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additional details therein as may be necessary and appropriate for their completion, deletions
therefrom and additions thereto as may be approved by bond counsel prior to the execution of the
documents. The execution of any instrument by the aforementioned officers or members of the
City Council shall be conclusive evidence of the approval by the City of such instrument in
accordance with the terms hereof and thereof.
Section 8. No General Obligation Debt. No provision of this ordinance, the
Site Agreement, the Lease, the Indenture, the 2007 Certificates, the Preliminary Official
Statement, the final Official Statement or the Notice of Sale (if any) shall be construed as
creating or constituting a general obligation or other indebtedness or multiple fiscal year
financial obligation of the City within the meaning of any constitutional, statutory or home rule
charter provision, nor a mandatory charge or requirement against the City in any ensuing fiscal
year beyond the then current fiscal year. The City shall have no obligation to make any payment
with respect to the 2007 Certificates except in connection with the payment of the Base Rentals
(as defined in the Lease) and certain other payments under the Lease, which payments may be
terminated by the City in accordance with the provisions of the Lease. Neither the Lease nor the
2007 Certificates shall constitute a mandatory charge or requirement of the City in any ensuing
fiscal year beyond the then current fiscal year or constitute or give rise to a general obligation or
other indebtedness or multiple fiscal year financial obligation of the City within the meaning of
any constitutional, statutory or Charter debt limitation and shall not constitute a multiple fiscal
year direct or indirect City debt or other financial obligation whatsoever. No provision of the
Site Agreement, the Lease or the 2007 Certificates shall be construed or interpreted as creating
an unlawful delegation of governmental powers nor as a donation by or a lending of the credit of
the City within the meaning of Sections 1 or 2 of Article XI of the Colorado Constitution.
Neither the Lease nor the 2007 Certificates shall directly or indirectly obligate the City to make
any payments beyond those budgeted and appropriated for the City's then current fiscal year.
Section 9. Reasonableness of Rentals. The City Council hereby determines
and declares that the Base Rentals, as recalculated pursuant to the Lease, do not exceed a
reasonable amount so as to place the City under an economic compulsion to renew the Lease or
to exercise its option to purchase the Leased Property pursuant to the Lease. The City Council
hereby determines and declares that the period during which the City has an option to purchase
the Corporation's interest in the Leased Property (i.e., the entire maximum term of the Lease)
does not exceed the useful life of the Leased Property.
Section 10. Exercise of Redemption Option; Direction to Trustee. In order to
effect the Refunding, the City Council has elected and does hereby declare its intent to exercise
on the behalf and in the name of the City its option to redeem the 1998 Certificates on
December 1, 2008 and its option to redeem the 1999 Certificates on the earliest practicable
redemption date after the execution and delivery of the 2007 Certificates. The City hereby
irrevocably instructs the Trustee to give notice of refunding and defeasance to the Owners of the
1998 Certificates and the 1999 Certificates as soon as practicable after the execution and delivery
of the 2007 Certificates, in accordance with the provisions of the 1998 Indenture with respect to
the 1998 Certificates and the 1999 Indenture with respect to the 1999 Certificates.
Section 11. No Recourse against Officers and Agents. Pursuant to Section 11-
57-209 of the Supplemental Act, if a member of the City Council, or any officer or agent of the
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City acts in good faith, no civil recourse shall be available against such member, officer, or agent
for payment of the principal, interest or prior redemption premiums on the 2007 Certificates.
Such recourse shall not be available either directly or indirectly through the City Council or the
City, or otherwise, whether by virtue of any constitution, statute, rule of law, enforcement of
penalty, or otherwise. By the acceptance of the 2007 Certificates and as a part of the
consideration of their sale or purchase, any person purchasing or selling such 2007 Certificate
specifically waives any such recourse.
Section 12. Repealer. All bylaws, orders, resolutions and ordinances of the
City, or parts thereof, inconsistent with this ordinance or with any of the documents hereby
approved are hereby repealed to the extent only of such inconsistency. This repealer shall not be
construed as reviving any bylaw, order, resolution or ordinance of the City, or part thereof,
heretofore repealed.
Section 13. Severability. If any section, subsection, paragraph, clause or
provision of this ordinance or the documents hereby authorized and approved (other than
provisions as to the payment of Base Rentals by the City during the Lease Term, provisions for
the quiet enjoyment of the Leased Property by the City during the Lease Term and provisions for
the conveyance of the Corporation's interest in the Leased Property to the City under the
conditions provided in the Lease) shall for any reason be held to be invalid or unenforceable, the
invalidity or unenforceability of such section, subsection,paragraph, clause or provision shall not
affect any of the remaining provisions of this ordinance or such documents, the intent being that
the same are severable.
Section 14. Charter. Pursuant to Article XX of the State Constitution and the
Charter, all State statutes that might otherwise apply in connection with the provisions of this
ordinance are hereby superseded to the extent of any inconsistencies between the provisions of
this ordinance and such statutes. Any such inconsistency is intended by the City Council and
shall be deemed made pursuant to the Charter.
INTRODUCED, READ, APPROVED ON FIRST READING AND ORDERED
PUBLISHED BY NUMBER AND TITLE ONLY this 61h day of March, 2007.
CITY OF FORT COLLINS, COLORADO
Mayor
(SEAL)
ATTESTED:
City Clerk
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