HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 07/05/2011 - SECOND READING OF ORDINANCE NO. 075, 2011, APPROPRDATE: July 5, 2011
STAFF: Mike Freeman
Christina Vincent
AGENDA ITEM SUMMARY
FORT COLLINS CITY COUNCIL 11
SUBJECT
Second Reading of Ordinance No. 075, 2011, Appropriating Prior Year Reserves in the Water Fund for the Purpose
of Providing a Second Loan to the Fort Collins Urban Renewal Authority for the North College Marketplace Project.
EXECUTIVE SUMMARY
This Ordinance, unanimously adopted on First Reading on June 7, 2011, authorizes a loan in the amount of $3 million
from the City to the Urban Renewal Authority (URA) to fulfill the remaining reimbursement obligation for the North
College Marketplace granted by the URA Board in September 2008. The first appropriation for $5 million was received
in April 2009 for Off Site Street Infrastructure, Wetlands Mitigation, and Demolition/Site Preparation. The requested
loan amount from the City of Fort Collins’ Water Fund Reserves to the URA will be $3 million and reimbursed to the
project for the On-Site public improvements. Staff originally intended to request the funds from the City’s General Fund
reserves however, after discussions with the Finance department, Utilities and the Attorney’s office, the request
changed to the Utilities Water Fund reserves to ensure the URA was not overburdening the General Fund reserves.
Utilities anticipates that significant capital project needs in the future and ongoing systemic adjustment of Water Utility
revenues and operating costs may necessitate water rate increases in the future. The proposed loan of Water Fund
reserves is not expected to create additional need for rate increases or to cause the reserves to fall below required
levels, assuming that staff-projected rate increases are implemented. The Ordinance provides that it is the Council’s
intent that in the event that unexpected capital projects needs or timing results in an increased need for reserves in
the Water Fund, the Council would provide replacement funds in order to repay the loan to the Water Fund to meet that
need It is anticipated that the URA will issue bonds within the next few years, and in that event, the loan from the
Water Fund would be repaid at that time.
STAFF RECOMMENDATION
Staff recommends adoption of the Ordinance on Second Reading.
ATTACHMENTS
1. Copy of First Reading Agenda Item Summary - June 7, 2011
(w/o attachments)
COPY
COPY
COPY
COPY
ATTACHMENT 1
DATE: June 7, 2011
STAFF: Mike Freeman
Christina Vincent
AGENDA ITEM SUMMARY
FORT COLLINS CITY COUNCIL 23
SUBJECT
First Reading of Ordinance No. 075, 2011, Appropriating Funds from the City’s General Fund Reserves for Transfer
to the Fort Collins Urban Renewal Authority for the Purpose of Providing a Second Loan for the North College
Marketplace Project.
EXECUTIVE SUMMARY
The Urban Renewal Authority (URA) is seeking a loan in the amount of $3 million from the City to fulfill the remaining
reimbursement obligation for the North College Marketplace granted by the URA Board in September 2008. The first
appropriation for $5 million was received in April 2009 for Off Site Street Infrastructure, Wetlands Mitigation, and
Demolition/Site Preparation. The requested loan amount from the City of Fort Collins’ General reserves to the URA
will be $3 million and reimbursed to the project for the On-Site public improvements. The URA will utilize the City’s
Interfund Borrowing program that was formally added to the City’s investment policies in 2008. This program enables
the City to use a portion of its investment portfolio to assist City Departments and related entities (e.g., the URA) to
access funds at a competitive interest rate while still providing a market based yield to the City investment portfolio.
BACKGROUND / DISCUSSION
The City and the URA entered into an intergovernmental agreement on August 15, 2006 allowing the City to advance
fund to the URA in support of its activities. Any such advance of funds shall be evidenced in writing in the form of a
loan memorialized by a promissory note or a grant, which transaction shall not be valid until first having been approved
by both the City Council and the URA Commission.”
On September 16, 2008 the URA Board approved Resolution No. 011, authorizing a Redevelopment Agreement
between the URA and the developer to provide financial assistance for the North College Marketplace. It was
determined at that time that the URA would need to borrow the funds to pay for the public improvements and then bond
against that amount in the future. The City loaned the URA funds in the amount of $5 million on April 21, 2009 for those
public improvements associated with the first three line items of Exhibit C of the Redevelopment Agreement
(Attachment 1).
Below are the line items listed in Exhibit C for the initial appropriation of $5 million:
Off Site Street Infrastructure $ 2,812,620
Demolition, Property Clean up and Site Preparation Cost $ 366,650
Wetlands Mitigation, Landscaping, Unsuitable Materials and
Payment to the Wetlands’ Reserve Fund $ 1,763,206
Contingency (initial amount) $ 57,524
$ 5,000,000
The remaining line items listed in Exhibit C are requested for this appropriation of $3 million:
On Site Utilities (Sanitary, Storm, Water, Dry) $1,022,861
Gateway/Landscaping/Pedestrian Connection/Grading/
North South Circulation and College Avenue Public Access
Easement/Paving of Grape Street $1,702,128
Relocation Assistance (Up to 1,000 per residence) $ 10,000
Contingency (remaining) $ 265,011
$3,000,000
Exhibit C from the Redevelopment Agreement lists the public improvements included as potential eligible costs
(Attachment 1).
COPY
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June 7, 2011 -2- ITEM 23
FINANCIAL / ECONOMIC IMPACTS
The Project was determined by the URA Board to be a qualified project for tax increment financing and consistent with
the North College URA Plan as well as the North College Corridor Plan. Over the remaining life of the plan area, the
project will generate an estimated $15.5 million in property tax increment. This action approves the loan agreement
between the City and URA to finance the commitment made by the URA Board for the North College Marketplace.
URA funding for the Project’s second appropriation amount totals $3,000,000. This loan is a 20-year term loan.
STAFF RECOMMENDATION
Staff recommends adoption of the Ordinance on First Reading.
ATTACHMENTS
1. Exhibit C to the North College Marketplace Redevelopment Agreement – List of estimated costs for public
improvements.
2. Powerpoint presentation
ORDINANCE NO. 075, 2011
OF THE COUNCIL OF THE CITY OF FORT COLLINS
APPROPRIATING FUNDS FROM THE CITY’S GENERAL FUND RESERVES
APPROPRIATING PRIOR YEAR RESERVES IN THE WATER FUND
FOR TRANSFER TO THE FORT COLLINS URBAN RENEWAL AUTHORITY
FOR THE PURPOSE OF PROVIDING A LOAN
TO THE FORT COLLINS URBAN RENEWAL AUTHORITY FOR THE
NORTH COLLEGE MARKETPLACE 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 1908 North College, LLC (the “Developer”) owns property in the Plan area
and has nearly completed the construction of the North College Marketplace on property located
northeast of the intersection of North College Avenue and East Willox Lane (the “Project”); and
WHEREAS, the Project included the construction and installation of public infrastructure
such as street and utility improvements as well as gateway, landscaping and pedestrian
improvements within the North College Urban Renewal Area; and
WHEREAS, on September 16, 2008, the Board of Commissioners of the URA adopted
Resolution No. 011 approving a financial assistance agreement with the Developer; and
WHEREAS, the URA must borrow funds to pay for its portion of the improvements related
to the Project as provided in Resolution No. 011, and has opted to borrow these funds in two phases;
and
WHEREAS, on May 5, 2009, the City Council adopted Ordinance No. 046, 2009, approving
a loan in the amount of $5,000,000 for Phase One of the funding; and
WHEREAS, City staff has been advised, and has confirmed, that the Developer is nearing
completion of the Project, and the URA is therefore in need of obtaining the second phase of
funding; and
WHEREAS, the City Manager recommends providing this funding thethrough a loan to the
URA from the General FundWater Fund Reserves and it is the desire of the City Council to
appropriate the sum of $3,000,000 from General FundsWater Fund Reserves for transfer to the
URA, as a loan (the “URA Loan”).
WHEREAS, City staff has prepared a proposed promissory note (the “Note”) and loan
agreement in the form entitled “Loan Agreement Between the City of Fort Collins and the Fort
Collins Urban Renewal Authority for Funding the North College Marketplace Project (Phase Two)”
(the “Loan Agreement”) attached hereto as Exhibit A and incorporated herein by this reference; and
WHEREAS, Article V, Section 12, of the City Charter permits the City Council to provide
direction as to the investment of City funds; and
WHEREAS, while the lending of these funds does not fit within the categories of approved
investments established in the Investment Policy approved by the City Council in 2008, the City
Council finds that, based on the interest rate and other conditions in the Loan Agreement, the URA
Loan is a suitable investment for City funds; and
WHEREAS, the URA Loan will not necessitate any increase in water rates above those
already projected by staff, and after investing the Water Fund reserves in the URA Loan, the Water
Fund will still have a sufficient balance of reserve funds to meet reserve fund requirements,
assuming that the projected rate increases are implemented; and
WHEREAS, in the event that the timing of, or unanticipated need for, Water Utility capital
improvements results in a need for the URA Loan funds to be restored to the Water Fund, it is the
intent of the Council to provide a replacement funding source for the URA Loan; and
WHEREAS, the City has funds available in its General Fund Reserves to fund the loan to
the URA and finds it is in the best interests of the City to authorize execution of the Loan Agreement
and certain related documents; 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 GeneralWater Fund Reserves an
amount not to exceed THREE MILLION DOLLARS ($3,000,000) for expenditure as a loan to the
Fort Collins Urban Renewal Authority.
Section 2. That the use of this sum for the purpose of funding a loan to the URA,
according to the terms and conditions of the Note and Loan Agreement, will provide necessary
improvements to public infrastructure and will be beneficial for all City citizens.
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Section 3. That the Note, Loan Agreement and related documents are hereby approved
on substantially the terms and conditions contained therein, subject to modifications in form or
substance as the Mayor may, in consultation with the City Attorney, deem to be desirable and
necessary to protect the interests of the City.
Introduced, considered favorably on first reading, and ordered published this 7th day of June,
A.D. 2011, and to be presented for final passage on the 5th day of July, A.D. 2011.
_________________________________
Mayor
ATTEST:
_____________________________
City Clerk
Passed and adopted on final reading on the 5th day of July, A.D. 2011.
_________________________________
Mayor
ATTEST:
_____________________________
City Clerk
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