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HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 09/04/2001 - ITEMS RELATING TO APPROPRIATION OF THE PROCEEDS FR AGENDA ITEM SUMMARY ITEM NUMBER: 20 A-B DATE: September 4, 2001 FORT COLLINS CITY COUNCIL STAFF: Alan Krcmarik/ Jerry P. Brown SUBJECT: Items Relating to Appropriation of the Proceeds from Lease Financing for the Public Safety and Recreational Improvements. RECOMMENDATION: Staff recommends adoption of the Ordinances on First Reading. FINANCIAL IMPACT: Through a lease financing transaction, the City will be able to acquire or construct $2,865,000 of improvements to the Collindale Golf Course Clubhouse and acquire or construct a $1,000,000 off site facility for use by the Police Department. The annual payments are estimated to be about $324,000. The Golf Fund will make annual payments of approximately $230,000 for its share of the improvements over 20 years. The payments, approximately $90,000, for the Police Building will be made from the General Fund. Ordinance No. 141, 2001, appropriates the proceeds from the lease for the Golf improvements and for financing issuance costs and Ordinance No. 142, 2001, appropriates the proceeds for the Police building improvements and for financing issuance costs. EXECUTIVE SUMMARY: A. First Reading of Ordinance No. 141, 2001, Appropriating Proceeds in the Golf Enterprise Fund from the Lease Financing of Golf Course Improvements, Including the Replacement of the Collindale Golf Course Clubhouse. This Ordinance appropriates $2,865,000 in the Golf Fund. The funds will be used to acquire and construct a clubhouse facility at the Collindale Golf Course and to pay for the costs associated with the lease financing. B. First Reading of Ordinance No. 142, 2001, Appropriating Unanticipated in the Capital Projects Fund to Be Used to for the Purchase of a Police Facility. This Ordinance appropriates $1,000,000 in the Capital Projects Fund for the acquisition and construction of improvements to a Police facility and to pay for the costs associated with the lease financing. On August 21, 2001, Council unanimously adopted Ordinance No. 130, 2001 on First Reading. The Finance Department will receive pricing bids on the lease transaction on September 7 through a competitive process. The Financial Officer will present the rates on the financing and DATE: September 4,2001 2 ITEM NUMBER: 20 A-B any changes to the financing documents to the Council at the time of Second Reading on September 18. These Ordinances appropriate the proceeds from the lease transaction. The Collindale Golf Course Clubhouse Project will be accounted for as a Capital Project within the Golf Fund. The Police building will be accounted for in the Capital Projects Fund. The Agenda Item Summary from August 21, 2001, is included as background information in support of the two Ordinances. ORDINANCE NO. 141, 2001 OF THE COUNCIL OF THE CITY OF FORT COLLINS APPROPRIATING PROCEEDS IN THE GOLF ENTERPRISE FUND FROM THE LEASE FINANCING OF GOLF COURSE IMPROVEMENTS INCLUDING THE REPLACEMENT OF THE COLLINDALE GOLF COURSE CLUBHOUSE WHEREAS,the Golf Board and the Golf Division have studied the condition of the current Collindale Golf Course clubhouse and recommend replacement of the existing 30-year old, 7,700 square foot clubhouse with a new 14,644 square foot, bi-level, modern clubhouse building on the same site; and WHEREAS,the existing Collindale Clubhouse building had an original life expectancy of no more than 35 years and construction of the building was done very inexpensively with many elements constructed minimally or substandard; and WHEREAS,the estimated cost of replacing the Collindale Golf Course Clubhouse and other golf course improvements is $2,865,000, with work on the clubhouse to be completed between December 2001 and the fall of 2002; and WHEREAS, by the adoption of Ordinance 130, 2001, the City Council has authorized the execution and delivery of various agreements in connection with the lease financing of the above- described improvements; and . WHEREAS,the appropriation of the proceeds of the lease financing is necessary to complete the construction of the replacement of the Collindale Golf Course Clubhouse and other golf course improvements, and to pay costs associated with said financing; and WHEREAS,Article V, Section 9 of the Charter of the City of Fort Collins permits the City Council to make supplemental appropriations by ordinance at any time during the fiscal year provided that the total amount of such supplemental appropriations,in combination with all previous appropriations for that fiscal year, does not exceed the current estimate of actual and anticipated revenues to be received during the fiscal year; and WHEREAS, it is the desire of the Council to appropriate the sum of $2,865,000 in unanticipated revenue in the Golf Fund, representing proceeds from the lease financing described herein,to be used for the replacement of the Collindale Golf Course Clubhouse and other golf course improvements, and the payment of costs associated with said lease financing. NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT COLLINS that there is hereby appropriated for expenditure from unanticipated revenue in the Golf Fund the amount of TWO MILLION EIGHT HUNDRED SIXTY FIVE THOUSAND DOLLARS ($2,865,000)upon receipt of the proceeds from the lease financing described in Ordinance No. 130, 2001, for the purpose of replacing the Collindale Golf Course Clubhouse, and other golf course improvements, and for the costs associated with said lease financing. Introduced, considered favorably on first reading and ordered published this 4th day of September, A.D. 2001, and to be presented for final passage on the 18th day of September, A.D. 2001. Mayor ATTEST: City Clerk Passed and adopted on final reading this 18th day of September, A.D. 2001. Mayor ATTEST: City Clerk ORDINANCE NO. 142, 2001 OF THE COUNCIL OF THE CITY OF FORT COLLINS APPROPRIATING PROCEEDS IN THE CAPITAL PROJECTS FUND FROM THE LEASE FINANCING OF POLICE FACILITY IMPROVEMENTS WHEREAS,the Fort Collins Police Department works in conjunction with other local law enforcement agencies including the Loveland and Colorado State University Police Departments and the Larimer County Sheriff's Department; and WHEREAS, the aforementioned agencies having been looking for a facility that would provide a central location for the multi-agency cooperation; and WHEREAS,a site has been identified which includes the land and building,with sufficient space to meet the needs of the participating agencies; and WHEREAS,the estimated cost for acquisition of the aforementioned off-site police facility, including some remodeling costs, is $1,000,000; and WHEREAS,on August 21,2001,the City Council approved on first reading Ordinance No. 130,2001,approved on second reading of even date herewith,authorizing the execution and delivery of various agreements in connection with the lease financing of said off-site police facility and other city improvements,thereby providing a mechanism to secure funding for improvements associated with public safety, and to pay costs associated with said financing; and WHEREAS, Article V, Section 9 of the Charter of the City of Fort Collins (the "Charter") permits the City Council to make supplemental appropriations by ordinance at any time during the fiscal year,provided that the total amount of such supplemental appropriations,in combination with all previous appropriations for that fiscal year,do not exceed the then current estimate of actual and anticipated revenues to be received during the fiscal year; and WHEREAS, it is the desire of the Council to appropriate the sum of $1,000,000 in unanticipated revenue in the Capital Projects Fund, representing the proceeds from the lease financing described above, to be used for the acquisition of an off-site police facility, and the payment of costs associated with said lease financing. NOW, THEREFORE,BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT COLLINS that there is hereby appropriated for expenditure from unanticipated revenue in the Capital Projects Fund, Off-Site Police Facility capital project, the sum of ONE MILLION DOLLARS ($1,000,000) upon receipt of the proceeds from the lease financing described in Ordinance No. 130, 2001, to be used for the acquisition of a police facility and for the costs associated with said lease financing. Introduced, considered favorably on first reading and ordered published this 4th day of September, A.D. 2001, and to be presented for final passage on the 18th day of September, A.D. 2001. Mayor ATTEST: City Clerk Passed and adopted on final reading this 18th day of September, A.D. 2001. Mayor ATTEST: City Clerk AGENDA ITEM SUMMARY ITEM NUMBER: 23 DATE: August 21, 2001 FORT COLLINS CITY COUNCIL Alan Krcmarik STAFF: Jerry P. Brown SUBJECT: First Reading of Ordinance No. 130, 2001, Approving and Authorizing the City to Enter into Agreements in Connection with the Execution and Delivery of Lease Certificates of Participation for Public Safety and Recreational Improvements. i RECOMMENDATION: Staff recommends adoption of the Ordinance on First Reading p� 2 s y N m= FINANCIAL IMPACT: The City will finance the improvements with approximately $3.865 million in tax-exempt certificates of participation lease financing. Approximately $1.0 million will be used to acquire an off-site City Police facility. Approximately $2.865 million will be used for replacement of the Collindale Golf Course Clubhouse and other Golf Course improvements. The annual payments on the certificates of participation will average about $324,000. The Golf Fund will pay most of its share of the'improvements from a surcharge fee that will be implemented in 2002. After 2003, the Golf Fund will have up to an additional $140,000 available annually when the debt service for the SouthRidge Golf Course is retired. The source of payment for the Police facility will come from the City's General Fund. The structure will also receive federal grant monies. Second Reading of this Ordinance will be on September 18, due to pricing considerations. EXECUTIVE SUMMARY: This Ordinance authorizes the City to execute and deliver lease purchase certificates of participation to provide funds to acquire a facility for the Police Department and to construct a new clubhouse at the Collindale Golf Course and to make additional Golf Course improvements. The Police Department 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 City office building. Through a sale-leaseback arrangement, the City will transfer the properties to the Fort Collins Leasing Corporation. The Corporation will then lease the properties back to the City for a term of 20-years. The actual financing will be accomplished through the sale of certificates of participation (COPS). Upon payment in full of the COPS the site lease will be terminated. The average life of the COPS is expected to be between 13 and 15 years. The City expects to pay interest on the lease semi-annually, at an estimated rate of 5.50% for the first 10 years at which time the rate will be reset for an additional 10-year period. Principal payments will be made annually. DATE: August 21, 2001 2 ITEM NUMBER: 23 The City will select a 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 COPs in the lease purchase transaction. 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. Under state law, the COPS are not considered 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 Approximately $2.865 million of the lease purchase proceeds will be used to lace the clubhouse at Collindale Golf Course and make other G&Gaurse improvements. twork on the clubhouse will be completed between Decemlier 200jpsmt'the fall of 2002. The site plan calls for a modem facility of approximately 14,606 square feet. The Golf Board and the Golf Division staff have studied the condition of the current clubhouse and recommend replacement of the existing 30-year=old, 7,700 square foot clubhouse. The Board and staff recommend the construction of a new 14,644 square foot, bi-level, modern clubhouse building on the same site. The existing Collindale Clubhouse building had art original life expectancy of no more than 35 years. The construction of the building was done very inexpensively as a pre-fabricated design, with many elements constructed minimally or sub-standard, such as the entire electrical system, which does not currently meet Code. It has served its useful life. Over the years the City has upgraded or replaced many of the systems, such as HVAC, plumbing, lighting, etc. Staff and the Golf Board,.find the facility has essentially reached the functional limits of any further improvements. It is not praciicoi6 end a great deal of money on this old building and parking lot, and`now is the appropriate tirri6lp,consider replacing them. The quality of the Golf Course at Co lindale is very high, but the quality of the Collindale Clubhouse is very low. It does not pro '" a positive image, nor is it,the full-service facility customers seem to desire and deserve. The' tect/consultants have estimated the total cost of the project to be $2,650,000; this include' m is related to construction, contingency, furnishings, and all associated fees and charges... additional $215 t300 will be used for other necessary golf course improvements. Drawrngs o t6e pm aosed oject are on display at the Collindale Clubhouse. The new building will be bi-level,`and is a`"'Colorado lodge" look. The Pro Shop will have great visual access of the 1 st and 1 Oth tees and the 9th and 18th greens. The full-service restaurant/bar/lounge/dining area will provide seating for 142 people and 10 bar stools, and the 1,200 square foot patio facing south with seating for 50, are all located on the upper level. The lower level will provide storage for 50 golf carts, limited men's and women's day-use lockers and shower facilities, women's lounge, long-term locker rentals, etc. The building also has more than twice as many restroom facilities, and it will have a snack bar window access to the kitchen from outside for food and beverage service "at the turn". The parking lot will be totally renovated to modem development standards, including multi-modal access accommodations. DATE: August 21, 2001 3 ITEM NUMBER: 23 Police Department Faciliri The remaining $1.0 million will be used to acquire an offsite facility for the Fort Collins Police Department. The facility is located within the Loveland-Fort Collins Industrial Airpark. The site includes an 8,000 square foot building built in 1999. The building has all required utilities and a fire sprinkler system. The site includes paved parking for at least 20 vehicles. The size of the lot is 177 feet by 265 feet. The building interior is mostly open. Part of the financing will be used to ! remodel the interior to add offices for the department. The Fort Collins Police Department works in conjunction with other local police forces, including the Loveland and CSU Police Departments and the Larimer; County Sheriffs Department. This location, which is outside City limits, provides a central location for the multi- agency cooperation. Financing Plan Estimates All of the figures in the table are subject to change due to changes in market conditions. Police Facility Golf Total % of Total Sources of Funds $1,000,000 $2,865,000 $3,865,000 100.00% Uses of Funds Construction $ ----- $2,289,000 $2,289,000 59.22% Contingency 40,0001. 1 160,000 200,000 5.17% Land-Facility Costs 925,000 351,000 1,276,000 33.02% ToEaUConstruction Costs 965,000 2,800,000 3,765,000 97.41% Financing Costs Cost of Issuance 35,000 65,000 100,000 2.59% Accrued Interest Total Financing Costs 35,000 65,000 100,000 2.59% Total Project Costs $1,000,000 $2,865,000 $3,865,000 100.00% 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 will be implemented in 2002. The DATE: August 21, 2001 4 ITEM NUMBER: 23 Golf Board has carefully reviewed the project and proposed financing plan. The Board has also recommended the surcharge. Currently the total fees and charges at the three City Golf Courses rank in the lower 25% of all comparable northern Colorado municipal and public courses, and these new fees will not alter that position in the market. The surcharge fees are expected to raise $180,500 in annual revenue for the Golf capital projects. Additionally, beginning in 2003, the SouthRidge debt service will be retired thus providing a portion of the annual $140,000 for repayment of the COPs. The City will repay the Police Department share of the financing from General Fund revenue and funds received from the federal government for law enforcement. 6 MIA 2