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HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 12/07/2010 - FIRST READING OF ORDINANCE NO. 123, 2010, APPROPRI DATE: December 7, 2010 SUMMARYAGENDA ITEM STAFF: Josh Birks, John Voss, FORT COLLINS CITY COUNCIL Christina Vincent SUBJECT First Reading of Ordinance No. 123, 2010,Appropriating Funds from the City's Stormwater Reserves for Transfer to the Fort Collins Urban Renewal Authority for the Purpose of Providing a Loan for the Northeast College Corridor Outfall Project. EXECUTIVE SUMMARY The first step in the development of the Northeast College Corridor Outfall(NECCO) project was the acquisition of an approximately 10-acre parcel for the regional detention pond, designed to accept regional stormwater flows as well as stormwater from development adjacent to the pond. The project is part of the Stormwater Master Plan and the Storm Drainage Fund and the Urban Renewal Authority are proposing to fund the project. The Stormwater Utility had budgeted $896,462 to purchase the pond and required easements to manage regional stormwater flows. The total purchase price of the parcel and an additional easement for both regional and adjacent stormwater flows, based on a City funded appraisal and less an easement being reserved by the property owner, was $1,222,934. This left a project budget shortfall of$326,472,which relates specifically to the cost associated with the land necessary to detain stormwater from adjacent development. The Fort Collins Urban Renewal Authority(URA)is seeking a loan from the City's Storm Drainage Fund Reserves to close the acquisition cost gap. BACKGROUND / DISCUSSION In 2004,the City of Fort Collins was approached by the North Fort Collins Business Association, expressing concerns about the economic viability of the North College Avenue Corridor. Due to the lack of transportation infrastructure improvements and severe utility deficiencies (including stormwater management)there was an inability to grow new businesses and encourage reinvestment in the area. The North College Plan Area assists in removing these barriers and provides a funding mechanism to aid much needed private investment. The North College Infrastructure Funding Plan (Funding Plan), approved by City Council on May 4,2010(Resolution 2010-023), provides a framework to guide efforts by the Urban Renewal Authority (URA), the City, and other stakeholders. The primary objective of the Funding Plan is to identify various strategies to assemble funding for public infrastructure projects needed in the North College Avenue corridor area. The Funding Plan helps to implement the adopted North College Plan Area. It is part of an ongoing continuum of City efforts to stimulate and support revitalization in collaboration with citizens in the area. THE PROJECT The NECCO project has been designed by the City of Fort Collins stormwater engineers to provide a unified regional stormwater detention and water quality system. When complete, the $10 million project will provide these services for the east side of College Avenue in the North College Urban Renewal Area and along the proposed realignment of Vine Drive. The construction of NECCO will resolve an existing Adequate Public Facilities issue in the area. In addition, the system will provide economies of scale to adjacent properties owners, potentially reducing their overall cost to mitigate stormwater impacts of development. The first phase of the NECCO project is to construct the primary backbone. The NECCO primary backbone, from the designated regional detention pond east to Vine Drive, was listed in the Funding Plan as one of four"very high" priority projects. The URA and City staff have been working with Utilities staff to identify effective methods for funding this project since June 2009. In June 2010, the Council Finance Committee previewed and generally supported a strategy to begin the development of the NECCO primary backbone by acquiring 9.4 acres of land for the regional detention pond. The financing approach was subsequently supported unanimously by the Water Board (August 19, 2010) and North College Citizen Advisory Group. December 7, 2010 -2- ITEM 13 The NECCO primary backbone consists of two main components: • A detention pond designed to hold both regional stormwater and stormwater from adjacent development;and • An outfall pipe extending east from the detention pond returning water to the dry creek south and east of Vine Drive near the Airpark area. The acquisition of land for the detention pond is the first expenditure in the development of the primary backbone. A portion of the costs, specifically relating to regional stormwater, will be reimbursed from the City's Storm Drainage Fund. The remaining cost of the project will be recaptured when development occurs on adjacent property either through Tax Increment revenues or direct contributions by the development. THE ACTION In order to facilitate the strategic acquisition of 9.4 acres for the construction of a detention pond, the URA will utilize the City's Interfund Borrowing program to provide $326,472 of gap funds. The Interfund Borrowing program was formally added to the City's investment policies in 2008. The program enables the City to use a portion of its investment portfolio to assist City Departments and related entities(e.g., the Downtown Development Authority, and the Urban Renewal Authority)to access funds at a competitive interest rate while still providing a market based yield to the City investment portfolio. Ordinance No. 123,2010,creates a loan agreement between the City's Storm Drainage Fund Reserves and the URA for$326,472. The terms of the loan are 10 years interest only at 2.5 percent,with the principal amount due at the end of Year 10. The borrowed funds will be returned to the City's Storm Drainage Fund to offset monies used to acquire the 9.4 acres in July that were intended for other stormwater projects. The loan agreement is consistent with the City's Interfund Borrowing program because there is a clear nexus between the lender (the City's Storm Drainage Fund Reserves) and the NECCO project. FINANCIAL / ECONOMIC IMPACTS The City will use$326,472 of reserves in the Stormwater Drainage Fund to provide a loan to the Fort Collins Urban Renewal Authority(URA). The URA will make interest payments annually for a term of 10 years. The entire loan is due in full at the end of those 10 years. ENVIRONMENTAL IMPACTS The NECCO pond will provide water quality treatment to the entire region, generally east of College Avenue from the proposed realignment of Vine Drive north to Willox Street. The portion of the project funded by the Stormwater Utility will provide water quality treatment and volume control for all existing properties served by the pond while the URA funded portion is sized to provide water quality treatment and volume control for all new and proposed development within its watershed. STAFF RECOMMENDATION Staff recommends adoption of the Ordinance on First Reading. BOARD / COMMISSION RECOMMENDATION At its August 19, 2010 meeting, the Water Board unanimously voted to recommend that Council approve the Ordinance to appropriate$326,472 from the Storm Drainage Fund Reserves for the purpose of making a loan to the URA. December 7, 2010 -3- ITEM 13 A preliminary presentation of the project and resolution was given to Council Finance Committee on June 14, 2010. No action was taken. PUBLIC OUTREACH The North College Citizen Advisory Group(CAG)voted unanimously at its September 2,2010 meeting to recommend that the URA Board authorize borrowing $326,472 from Stormwater reserves to fund the acquisition shortfall for the Northeast College Corridor Outfall regional pond. ATTACHMENTS 1. Location map 2. Water Board Minutes, August 19, 2010 3. CAG Minutes, September 2, 2010 4. Council Finance Committee Minutes, June 14, 2010 ATTACHMENT 1 orthProjects COLLEGE / WILLOX IMPROVEMENTS N . COLLEGE MARKETPLACE WILLOX LN . UNION PLACE & HABITAT = Z v • r N o m 0o r C/l ft%J m m C C m rn v v VALLEY STEEL KAUFMAN & ROBINSON HICKORY ST. NEW LOCATION CONIFER ST. JAX N . COLLEGE ==* T IMPROVEMENTS NECCO POND a L: A C rri VINE DR . LOCATION OF RM12 ATTACHMENT Water Board Meeting August 19, 2010 twV„uuureu'years, he suggests staff may want to participate with FEM o develop better mapping of the area, regardless of what the Board recommends. B rd Member Pillard referred to the"willing buyer/willing seller" program. St confirmed it is st available. A set amount of funding is not reserved for this type of activ' , but staff. contin s to be interested in participating in it as the level of reserves permi Vice Chai rson Balderson noted his concern that we are seeking to c nge the regulations yet again when t Board had compelling reasons to vote for the change om 0.1-foot rise floodway to 0.5-foot rise odway in 2007. Board Member Phela agreed with Vice Chairperson Balders s concern. Board Member Eccleston ted this is the chance for the and to follow through on what staff was asked to do, but he also es this as a much bigger cture. He encourages Council to pull in resources from other departme who could further alyze some aspects of this decision. Board Member Brown feels it is ris and the p is all incurs costs from putting structures in the floodplain. There are other pieces the T le Bottom Line to weigh in on. Chairperson Janett will support the motio ting her understanding that it's a cost to someone who wants to make the most economic e of eir property. When agreeing to allow fill in the floodplain, the water goes somewhe Ise,and a eighbor who is impacted is not compensated for the damages. It also impacts in structure suc s bridges and streets, the community's ability to travel,and safety respo e by fire and polic It's a balancing act for how best to protect aspects such as life saf and infrastructure. Vote on the motion by roll all: Pillard- Aye Connor—Aye Eccleston—Aye Phelan —Nay Balderson—Na Janett—Aye Brown—A Motio asses with 5 for, 2 against. (The reasons for nay votes by Vice Chairpers Balderson and and Member Phelan are noted above). * Board Member Pillard left the meeting at 4:34 p.m. Northeast College Corridor Outfall (NECCO)Protect Financing Economic Advisor Josh Birks presented this agenda item. Mr. Haukaas noted this project is part of the Stormwater Master Plan for the Stormwater utility, who is funding a part of the project with the Urban Renewal Authority(URA) funding the other portion. The purpose of the project is to provide a unified regional stormwater and water quality system on the east side of College Avenue north of the Poudre River. As the area east of College continues to develop and Water Board Minutes 5 August 19, 2010 redevelop, an amount of unmitigated stormwater is anticipated. This project would resolve an existing Adequate Public Facilities deficiency. The purchase price is approximately$1.4 million. Every utility has the right to use reserves for loans on investments at a higher interest rate than it is making at the bank or hold in savings accounts earning a bank interest rate. The Board is requested to authorize appropriating $326,472 as a 10-year loan to the URA on an interest-payments-only basis with the principal due at the end of the loan or paid at points in the life of the loan without penalty for early pre- payment. The principal would remain available upon request if needed and accessible within two weeks of request. The seller is providing some of the land and using the land for his own retention and detention stormwater until he can make use of the outfall structure. Does this project handle all future development or will other parties still have to build their own ponds? It anticipates a certain level of future development. Motion: Board Member Brown moved that the Water Board recommends that City Council appropriate$326,472 for the purpose of making the loan from the Stormwater reserves to the Urban Renewal Authority for a term of 10 years interest only. Board Member Phelan seconded. Vote on the motion: It passed unanimously 011-2012 Budget Update 'ties Executive Director Brian Janonis encouraged Board members to attend a spec' get sessi'oh4pr boards and commissions on September 13 at 6:30 p.m. at the Drake r. The budget is completed, and staff will seek recommendation from the Bo the September meeting. Press Release Water Resources Manager De Bode addressed a Jul `Cash for Grass" press release sent out recently by the Save The Pou oup about the cept of incentivizing citizens to convert from irrigated grass to xeriscape landsc ' . It de some comparisons to the cost of storage between such a conversion compared to the of enlarging Halligan Reservoir. Mr. Bode provided information to the Board comp g do per acre foot realized by converting to xeriscaping ($43,560) versus the cos enlarging Ha ' n ($4,600). Also,Gary Wockner made a ment to Council Tuesday ni about the City of Fort Collins being the top diverter of er from the Poudre River. A list of t op ten diverters was shared with the Board. Committee etin s At the r'pirnt Engineering Committee meeting, members were asked to pilot us f the Triple Bot Line Analysis (TBLAM) form for the Stormwater program. Water Board Minutes 6 August 19, 2010 ATTACHMENT 3 Fort Collins Urban Renewal Authority North College Citizen Advisory Group(CAG) Regular Meeting Minutes 281 N. College Ave.,Conference Rm. A September 2,2010 7:30a m CAG member attendance: Don Butler, Grant Sherwood, Bob Brown,Neil McCaffrey, Greg Woods, Brigitte Schmidt(PnZ Liaison and sustains from voting), Mark Sheeley, Ron Laurtenheiser,Jim Eddy Not Present: Dean Hoag(Chair) Guests: Mr. Butler—No Public Comment City Staff: Christina Vincent, Emily Wilson,Josh Birks, Clark Mapes, Ken Waido L Call to Order at 7:32a 11. Agenda Item 1: Josh Birks following up on his July NECCO Presentation • Josh Birks presented in July the North East College Corridor Outfall(NECCO)project.Now at the point where City Staff is asking the CAG for a recommendation of staff s recommendation(to support or not support). This motion could help in NECCO moving forward. Birks asks the group to discuss and make a recommendation. • Discussion on the implication of this project to secure the major regional pond on the URA: It would require significant engineering. • Discussion of Cons: Tax increment financing discussion. • Question is raised,"Is this the same water board that is causing problems with the floodplain?" Birks explains this issue is separate from the floodplain. • Special Improvement District discussion: The Pond is only one piece of infrastructure. • Discussion on the streets mater plan: There is a URA plan and a North College Infrastructure Funding Plan to take into consideration. • Loan amount$326,000 for a 10 year term. • Question raised on how is the loan repaid: Birks explains how this would happen by letting the development occur and how the tax increment would be used to pay off the loan. There is also an option of using tax increment to pay for principal and interest. $460,000 being brought in from the URA. MOTION: Ron Laurtenheiser motioned to recommend the NECCO project to the URA Board in the amount of$326,000 loan for the purpose of the funding of the outfall of the Northeast Regional Detention Pond. SECOND:Neil McCaffrey seconded the motion. With an 8-0 vote,the North College Citizen Advisory Group unanimously recommend the NECCO project to the URA Board to support the authorization of$326,000 loan for the purpose of the funding of the outfall of the Northeast Regional Detention Pond. II: New Business—F000dplain Topic 1. Floodplam— e Hot Topic is the possible floodplain revisions. Dean talked to Darin this week expressing concerns an ill be bringing someone from stQrW water i. Discussion on why the project did r e G before going to Council ssion on all the entities nee ined in a discussion on ATTACHMENT 4 City ®(� Finance Administration `®� 5Y� 215 N. Mason Fort CoUnins 970.221. PO Box 580 Fort Collins,CO 80522 970.221.6788 970.221.6782-fax fcgov.com Council Audit Et Finance Committee Minutes 6/14/10 10:30 a.m. - 12:00 p.m. Council Attendees: Mayor Doug Hutchinson, Mayor Pro Tern Kelly Ohlson, Ben Manvel City Staff Attendees: Darin Atteberry, Chuck Seest, John Voss, Kraig Ecton, Steve Mason, Josh Birks, Ann Turnquist, DeLynn Coldiron, Steve Dusch, Diane Jones, Christina Vincent, Heather Shepherd Others: David May, Chamber of Commerce; Kevin Duggan, Coloradoan; and John Gallager, Red Oak Consulting.. Approval of the Minutes from the May 17, 2010 Meeting Ben Manvel moved to approve the minutes and Doug Hutchinson seconded the motion. Minutes were approved unanimously. NECCO Project Update (Northeast College Corridor Clutfall) Josh Birks stated this topic will be coming forward as an urban renewal item to Council. Project background: * provides a unified regional storm water and water quality system. * resolves existing adequate public facilities deficiency * total cost of approximately $10 million. * phased-initial phase=Backbone or regional pond and primary outfall. * listed as a very high priority in the North College infrastructure funding plan. Proposal is for the URA to consider lending the $325,000 to purchase the pond today. Impact to the URA would be: * incur financing charges of approximately $5,000 annually (based on 10 year treasury bill) * when future adjacent infill development occurs, the URA will be reimbursed for $325,000 and any financing charges incurred. Pros Cons Regional stormwater and water quality - more URA bridges timing gap at approx $5000 cost efficient use of land. annually Adjacent parcels have seen significant Reimbursement depends on infill dev. on development interest adjacent parcels. Resolves an APF deficiency rated "very high" Fart Collins Doug Hutchinson suggested that it would be beneficial to get a summary of the benefits of this project to the City's economic health. Kelly Ohlson said more time is needed to review the data before making an informed decision. He also asked why there is no mention of environmental factors of this area. Ben Manvel requested getting more detailed numbers on how much money is coming from stormwater, etc. This topic may be revisited at the August Council.Finance Committee meeting. ee Studv Update .n Atteberry said the purpose of the study is for the City to ensure we are using our res ces according to best practices. John Ga er suggested reviewong section 1.2 in the document prepared for C mittee members, a it is an overall summary. City Policy: Fees cover 80% of costs. * 87% in 2007 * 60% in 2008 * 44% in 2009 Building permit and plan revie fees. * valuation based on 2006 IBC * fees based on 1982 UBC Planning development review fees * established in 1993 * updated through 2002 CPI Over-the-counter permit fees * City policy: charge reasonable e. Kelly Ohlson asked why 1982 i e year that UBC fees are sed on. The response was that about a year ago, this topic as mentioned and investigate ut at that time, it was determined that is was n a good time to raise fees. Darin Atteberry aske by the City wouldn't have raised fees perio ally over time and Mike Freeman said that . terms of the total mix of City fees, Fort Collins h remained competitive wit ther comparable Cities. These fees had been reviewe ver the years and it was a consc' us decision not to raise fees, for that reason. Also there is 'mit on the percentage ount the City can actually charge in fees, and if it had been rai several times Cit ould have been charging over 100% on fees. Kell hlson proposed having a schedule for these fee amounts to be reviewed by Cit ouncil (e ry two or three years) and not just staff review. ORDINANCE NO. 123, 2010 OF THE COUNCIL OF THE CITY OF FORT COLLINS APPROPRIATING FUNDS FROM THE CITY'S STORMWATER RESERVES FOR TRANSFER TO THE FORT COLLINS URBAN RENEWAL AUTHORITY FOR THE PURPOSE OF PROVIDING A LOAN FOR THE NORTHEAST COLLEGE CORRIDOR OUTFALL PROJECT WHEREAS, the Fort Collins Urban Renewal Authority (the "URA") was created on January 5, 1982 to prevent and eliminate conditions related to certain blight factors in the City; and WHEREAS, the City Council, by Resolution 2004-152, has made findings required by Colorado Revised Statutes, Part 1 of Title 31, Article 25 and declared the area described in Resolution 2004-151 as blighted and approved the Urban Renewal Plan for the North College Avenue Corridor (the "Plan"); and WHEREAS, on August 15, 2006, the City Council adopted Resolution 2006-082 authorizing an intergovernmental agreement between the City and the URA whereby the City will provide support services to the URA and will advance funds to the URA so long as the advance of such funds is evidenced in writing by a promissory note; and WHEREAS, the Northeast College Corridor Outfall Project (the "NECCO") includes the acquisition of a parcel of land approximately 10 acres in size for a regional detention pond designed to accept regional stormwater flows as well as stormwater from development adjacent to the pond within the North College Urban Renewal Area; and WHEREAS, NECCO is part of the Stormwater Master Plan and the $1,222,934 purchase of the 10-acre parcel is being funded by the City's Stormwater Utility, which is contributing $896,462, and the URA, which is contributing $326,472; and WHEREAS, the URA will not have sufficient tax increment revenues in 2011 to fund its contribution to the NECCO; and WHEREAS, City staff therefore recommends that the City lend the URA the funds needed for that purpose; and WHEREAS, on September 2, 2010, the North College Citizen Advisory Group voted in favor of the URA borrowing $326,472 from the City to fund its contribution to the NECCO; and WHEREAS, there are sufficient prior year reserves in the Storm Drainage Fund Reserves to fund a loan to the URA for the purpose of purchasing the 10-acre parcel of land for the above- described detention pond,; and WHEREAS, because the NECCO improvements are a utilities infrastructure improvement, City staff presented an agenda item to the Water Board on August 19, 2010, seeking a recommendation of the Water Board with regard to the proposed loan from Storm Drainage Fund Reserves, and Water Board members voted unanimously to support that proposal; and WHEREAS, Article X, Section 6 of the City Charter states that net operating revenues of the City's utilities may be expended only for renewals, replacements, extraordinary repairs, extensions, improvements, enlargements, embitterments to such utility, or other specific utility purpose determined to the Council to be beneficial to the ratepayers of said utilities; and WHEREAS, City staff believes that the use of stormwater reserves as a funding source for a loan to the URA in this situation will be beneficial to the ratepayers of the City's Stormwater Utility because the overall stormwater system will become more efficient; and WHEREAS, staff has prepared a proposed promissory note and loan agreement titled "Loan Agreement Between the City of Fort Collins and the Fort Collins Urban Renewal Authority for NECCO" (the "Loan Agreement") attached hereto as Exhibit "A" and incorporated herein by this reference; and WHEREAS, the City Manager recommends funding the loan to the URA from the Stormwater prior year reserves; and WHEREAS, Article V, Section 9, of the City Charter permits the City Council to appropriate by ordinance at any time during the fiscal year such funds for expenditure as may be available from reserves accumulated in prior years, notwithstanding that such reserves were not previously appropriated. NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT COLLINS as follows: Section 1. That there is hereby appropriated from Storm Drainage Fund Reserves the sum of THREE HUNDRED TWENTY SIX THOUSAND FOUR HUNDRED SEVENTY TWO DOLLARS ($326,472) for expenditure as a loan to the Fort Collins Urban Renewal Authority. Section 2. That the use of this $326,472 in Stormwater prior year reserves for the purpose of funding a loan to the URA, according to the terms and conditions of the Loan Agreement, will serve a specific utility purpose for the ratepayers of the City's Stormwater Utility and will be beneficial to the ratepayers in that the overall stormwater system will be more efficient. Section 3. That the Loan Agreement is hereby approved, and the City Manager is authorized to execute said agreement, subject to such modifications in form or substance as the City Manager may, in consultation with the City Attorney, deem desirable and necessary to protect the City's interests. -2- Introduced, considered favorably on first reading, and ordered published this 7th day of December, A.D. 2010, and to be presented for final passage on the 21st day of December, A.D. 2010. Mayor ATTEST: City Clerk Passed and adopted on final reading on the 21st day of December, A.D. 2010. Mayor ATTEST: City Clerk -3- EXHIBIT A LOAN AGREEMENT BETWEEN THE CITY OF FORT COLLINS AND THE FORT COLLINS URBAN RENEWAL AUTHORITY FOR FUNDING THE NORTHEAST COLLEGE CORRIDOR OUTFALL PROJECT THIS LOAN AGREEMENT (the "Agreement") made this day of December, 2010, by and between the CITY OF FORT COLLINS, COLORADO, a municipal corporation, (the "City"), and FORT COLLINS URBAN RENEWAL AUTHORITY, a public body corporate and politic of the State of Colorado, (the "Borrower"). RECITALS A. Borrower is an urban renewal authority for the City, created pursuant to Colorado Revised Statutes Part 1 of Title 31, Article 25, as amended (the "Act"). B. Borrower was created on January 5, 1982 to prevent and eliminate conditions related to certain "blight factors" in the community. The Act gives the Borrower broad powers to carry out its statutory mandate. Included are the powers to enter into contracts, borrow or lend funds and to acquire property, among others. Urban renewal projects may be financed in a variety of ways and urban renewal authorities are authorized to borrow money, issue bonds, and accept grants from public or private sources. C. By Resolution 2004-151, the City Council for the City (the "City Council") found and declared the area described therein (the "Area") to be a blighted area as defined in the Act, and appropriate for inclusion in an urban renewal project. D. By Resolution 2004-152, the City Council made findings and approved the urban renewal plan (the "Plan") for the North College Avenue Corridor. E. By the Intergovernmental Agreement approved by City of Fort Collins Resolution 2006-082, the City may advance funds to the Borrower in support of its activities so long as any such advance of funds is evidenced in writing in the form of a loan memorialized by a promissory note, which transaction shall not be valid until first having been approved by both the City Council and the URA Commission. F. Borrower will incur certain costs relating to its partnership with the City Stormwater Utility to design, install, construct and finance public improvements in the Northeast College Corridor Outfall (the "Project") which is located in the Area, and has requested and applied to City for a loan to provide funding for these costs not to exceed Three Hundred Twenty Six Thousand Four Hundred Seventy Two Dollars ($326,472) and City is willing to make a loan on the terms and conditions hereinafter set forth (the "Loan"). 1 G. Tax increment financing for the Project is specifically permitted pursuant to Section 7 of the Plan. NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained, the parties agree as follows: Section 1. The Loan. After the effective date of this Agreement (the "Effective Date"), the adoption of the required resolutions or ordinances by the City and Borrower, and the execution of a promissory note and other documents as may reasonably be required, the City will loan the Borrower the sum of Three Hundred Twenty Six Thousand Four Hundred Seventy Two Dollars ($326,472) from the City's investment portfolio (the "Loan"). Section 2. Interest. Interest on the Loan will accrue at a rate equal to 2.50%. Section 3. Pav� ment. Principal and accrued interest will be due and payable by the Borrower to the City as follows: For years 0 through 9 (Interest Only Payment Term): there will be annual interest only payments. The anniversary of ten years from the Effective Date (Balloon Payment): all remaining interest and principal will be due and payable. The payment schedule, under which Borrower must make its payments, is in Exhibit A, attached and incorporated into this Agreement. Borrower, in its sole discretion, may prepay all or any portion of the Loan at any time and that prepayment will be without any prepayment penalty. If a prepayment is made, the funds will go first toward any interest which has accrued and the balance then applied to the reduction of principal. Section 4. Tracking. Borrower agrees to maintain a separate payable line-item within its accounting system to track the Loan. Section 5. Alternative Financing. The Parties contemplate that at some point in the future the Borrower will obtain alternative financing (e.g. bond financing) and will diligently pursue that financing with a goal to reducing the outstanding balance of the Loan. Section 6. Notice. Any notice required to be delivered in writing will be accomplished by personal delivery or mailing postage prepaid by the United States Postal Service, or other commercial carrier to the following addresses: If to the City City of Fort Collins 2 Director of Finance PO Box 580 Fort Collins, CO 80522-0580 If to the Borrower Fort Collins Urban Renewal Authority Director of Advance Planning PO Box 580 Fort Collins, CO 80522-0580. Section 7. Entire Agreement. This Agreement will be construed according to its fair meaning, as if prepared by both Parties, and constitutes the entire understanding and agreement of the Parties related to the matters addressed in this Agreement. CITY: CITY OF FORT COLLINS, COLORADO, a municipal corporation By: Douglas P. Hutchinson, Mayor ATTEST: By: Wanda Krajiceck, City Clerk APPROVED AS TO FORM: By: Assistant City Attorney BORROWER: FORT COLLINS URBAN RENEWAL AUTHORITY, a public body corporate and politic of the State of Colorado. By: Executive Director 3 Table 1 Payment Schedule NECCO Interfund Loan from Stormwater Reserves to URA Payments YEAR Principal Interest Total Balance (P&I) Year 0 (S326,472) Year 1 $0 $8,162 $8,162 (S326,472) Year 2 $0 $8,162 $8,162 ($326,472) Year 3 $0 $8,162 $8,162 (S326,472) Year4 $0 $8,162 $8,162 (S326,472) Year 5 $0 $8,162 $8,162 (S326,472) Year6 $0 $8,162 $8,162 ($326,472) Year 7 $0 $8,162 $8,162 ($326,472) Year 8 $0 $8,162 $8,162 ($326,472) Year 9 $0 $8,162 $8,162 ($326,472) Year 10 $326,472 $8,162 $334,634 $0 Total $326,472 $81,618 $408,090 Source:City of Fort Collins-Economic Health Hd2009W ECCO&New vne SIO1Modelsu1122_Pml_Schedule.xlslPmts EXHIBIT PROMISSORY NOTE $326,472 December 2010 FOR VALUE RECEIVED, FORT COLLINS URBAN RENEWAL AUTHORITY, a public body corporate and politic of the State of Colorado ('Borrower"), promises to pay to the order of THE CITY OF FORT COLLINS, COLORADO, a municipal corporation ("Lender"), at its office at 300 LaPorte Avenue, Fort Collins, Colorado 80524, in lawful money of the United States of America the principal amount of Three Hundred Twenty Six Thousand Four Hundred Seventy Two Dollars ($326,472). This Promissory Note is issued pursuant to the Loan Agreement between the City of Fort Collins and the Fort Collins Urban Renewal Authority for Funding the Northeastern College Corridor Outfall Project dated December , 2010, between Borrower and Lender(the "Loan Agreement'). Capitalized terms used herein but not defined herein have the meanings given such terms in the Loan Agreement. The obligations of Borrower evidenced by this Promissory Note are payable in accordance with the terms and conditions of the Loan Agreement. The rate of interest borne by this Promissory Note is a fixed rate equal to 2.50% per annum ("Interest Rate"). Final payment of all unpaid Principal and accrued interest will be due and payable on the Maturity Date. The annual interest rate of this Promissory Note is computed on a 360 day year basis, multiplied by the actual number of days elapsed. The Loan may be drawn 100% upon execution of the Loan Documents, or in part from time to time, but not more frequently than monthly. This Promissory Note shall mature on the tenth anniversary of the Effective Date of the Loan Agreement. At such time all unpaid principal, interest, default interest, fees and charges owing under this Note shall be deemed payable in full. Unless otherwise agreed or required by applicable law, payments will be applied first to any accrued interest, then to principal; then to any late charges; and then to any unpaid collection costs. If Lender refers this Note to an attorney for collection or seeks legal advice following a default beyond all cure periods alleged under this Note, or the Lender is the prevailing party in any action instituted on this Note, or if any other judicial or non-judicial action, suit or proceeding is instituted by Lender or any future holder of this Note, and an attorney is employed by Lender to appear in any such action or proceeding, or to reclaim, seek relief from a judicial or statutory stay, sequester, protect, preserve or enforce Lender's interest in this Note, the Loan Documents or any other security for this Note (including, but not limited to, proceedings under federal bankruptcy law or in connection with any state or federal tax lien); then Borrower promises to pay reasonable attorneys' fees and reasonable costs and expenses incurred by Lender and/or its attorney in connection with the above-mentioned events. If not paid within ten (10) days after such fees become due and written demand for payment is made, such amount shall be due on demand or may be added to the principal, at the Lender's discretion. Should any payment or installment hereunder be not paid when the same becomes due and payable, Borrower recognizes that the Lender will incur extra expenses for both the administrative cost of handling delinquent payments and the cost of funds incurred by Lender after such due date as a result of not having received such payment when due. Therefore, Borrower shall, in such event, without further notice, and without prejudice to the right of Lender to collect any other amounts provided to be paid herein, including default interest or to declare a default hereunder, pay to Lender to cover such expenses incurred as a result of any installment payment due being not received within ten (10) days of its due date, a "late charge" of five percent(5%) of the amount of such delinquent payment. Except as otherwise provided herein, the Borrower waives presentment and demand for payment, notice of acceleration or of maturity, protest and notice of protest and nonpayment, bringing of suit and diligence in taking any action to collect sums owing hereunder,and agrees . that its liability on this Note shall not be affected by any release or change in any security for the payment of this Note or release of anyone liable hereunder. No extension of time for the payment of this Note, or any installment or other modification of the terms made by the Lender with any person now or hereafter liable for the payment of this Note, shall affect the original liability under this Note of the Borrower, even provided the Borrower is a party to such agreement. In no event whatsoever shall the amount paid, or agreed to be paid, to the holder of this Note for the use, forbearance or retention of the money to be loaned hereunder ("Interest") exceed the maximum amount permissible under applicable law. If the performance or fulfillment of any provision hereof or of any of the Loan Documents or any agreement between Borrower and the Lender of this Note shall result in Interest exceeding the limit for interest prescribed by law, then the amount of such Interest shall be reduced to such limit. If, from any circumstance whatsoever, the Lender of this Note should receive as Interest, an amount which would exceed the highest lawful rate, the amount which would be excessive Interest shall be applied to the reduction of the principal balance owing (or, at the option of the Lender, be paid over to Borrower) and not to the payment of Interest. If any provision hereof or any of the Loan Documents shall, for any reason and to any extent, be invalid or unenforceable, then the remainder of the document or instrument in which such provision is contained and any of the other Loan Documents shall not be affected thereby but instead shall be enforceable to the maximum extent permitted by law. Borrower and Lender hereby knowingly, voluntarily, and intentionally waive any rights they may have to a trial by jury in respect of any litigation based hereon or arising out of, under or in connection with this note or any course of conduct, course of dealing, statements (whether oral or written) or actions of the other party. - 2 - This Promissory Note shall be construed in accordance with the laws of the State of Colorado. IN WITNESS WHEREOF, Borrower has duly executed this Promissory Note as of the day and year first above written. BORROWER: FORT COLLINS URBAN RENEWAL AUTHORITY, a public body corporate and politic of the State of Colorado. By: Executive Director 3 -