HomeMy WebLinkAbout075 - 07/05/2011 - APPROPRIATING PRIOR YEAR RESERVES IN THE WATER FUND FOR THE PURPOSE OF PROVIDING A LOAN TO THE FORT ORDINANCE NO. 075, 2011
OF THE COUNCIL OF THE CITY OF FORT COLLINS
APPROPRIATING PRIOR YEAR RESERVES IN THE WATER FUND
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
I 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 through a loan to the
URA from the Water Fund Reserves and it is the desire of the City Council to appropriate the sum
of$3,000,000 from Water 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,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 Water 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.
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.
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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.
OF FORT CO``
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ATTEST: �;• ;ua
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City Clerk ••OcaL6RPpO
Passed and adopted on final reading on the 5th day of July, A.D. 2011.
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EXHIBIT A
LOAN AGREEMENT BETWEEN THE CITY OF FORT COLLINS
AND THE FORT COLLINS URBAN RENEWAL AUTHORITY
FOR FUNDING THE NORTH COLLEGE MARKETPLACE PROJECT
(PHASE TWO)
THIS LOAN AGREEMENT (the "Agreement") made this day of
2011, 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 the design, installation,
construction and financing of public improvements in the Area (the "Project") and has
requested and applied to City for a loan to provide funding for these costs not to exceed
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Three Million Dollars ($3,000,000) and City is willing to make a loan on the terms and
conditions hereinafter set forth (the "Loan').
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 adoption
of the required resolutions 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 Million Dollars ($3,000,000) from the City's investment
portfolio (the "Loan").
Section 2. Interest. Interest on the Loan will accrue at a rate equal to %.
Section 3. Payment. Principal and accrued interest will be due and payable
by the Borrower to the City on an annual basis from the effective date of the Agreement.
Borrower, in its sole discretion, may prepay all or any portion of the Loan at any time
and 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:
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If to the City
City of Fort Collins
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
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BORROWER:
FORT COLLINS URBAN RENEWAL
AUTHORITY, a public body corporate and
politic of the State of Colorado.
By:
Executive Director
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Exhibit A
Urban Renewal Authority
North College Market Place phase 2
Loan from General Fund to URA
Loan Amount 3,000,000.00 Start Date 1-Au -11
Interest Rate 4.010% * Matures 31-Dec-29
Years 18 5/12
Year of Loan Date Payment Interest Principal Balance
0 1-Aug-11 3,000,000.00
0.42 31-Dec-11 50,125.00 50,125.00 - 3,000,000.00
1.42 31-Dec-12 237,172.64 120,300.00 116,872.64 2,883,127.36
2.42 31-Dec-13 237,172.64 115,613.41 121,559.23 2,761,568.13
3.42 31-Dec-14 237,172.64 110,738.88 126,433.76 2,635,134.37
4.42 31-Dec-15 237,172.64 105,668.89 131,503.75 2,503,630.62
5.42 31-Dec-16 237,172.64 100,395.59 136,777.05 2,366,853.57
6.42 31-Dec-17 237,172.64 94,910.83 142,261.81 2,224,591.76
7.42 31-Dec-18 237,172.64 89,206.13 147,966.51 2,076,625.25
8.42 31-Dec-19 237,172.64 83,272.67 153,899.97 1,922,725.28
9.42 31-Dec-20 237,172.64 77,101.28 160,071.36 1,762,653.92
10.42 31-Dec-21 237,172.64 70,682.42 166,490.22 1',596,163.70
11.42 31-Dec-22 237,172.64 64,006.16 173,166.48 1,422,997.22
12.42 31-Dec-23 237,172.64 57,062.19 180,110.45 1,242,886.77
13.42 31-Dec-24 237,172.64 49,839.76 187,332.88 1,055,553.89
14.42 31-Dec-25 237,172.64 42,327.71 194,844.93 860,708.96
15.42 31-Dec-26 237,172.64 34,514.43 202,658.21 658,050.75
16.42 31-Dec-27 237,172.64 26,387.84 210,784.80 447,265.95
17.42 31-Dec-28 237,172.64 17,935.36 219,237.28 228,028.67
18.42 31-Dec-29 237,172.62 9,143.95 228,028.67 -
4,319,232.50 1,319,232.50 3,000,000.00
* Dates and rates are preliminary. Specifics will be set after the loan is authorized.
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PROMISSORY NOTE
$3,000,000 12011
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 Million Dollars ($3,000,000). This Promissory Note is
issued pursuant to the Loan Agreement dated as of . 2011, 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 % 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 December 31, 2029. 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,
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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.
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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
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