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HomeMy WebLinkAbout216 - 12/01/1998 - AUTHORIZING THE ISSUANCE OF $7.9 MILLION OF BONDS FOR THE COUNTRY RANCH PROJECT ORDINANCE NO. 2161998 AN ORDINANCE RELATING TO THE ISSUANCE OF MULTIFAMILY HOUSING REVENUE BONDS UNDER THE PROVISIONS OF THE COLORADO COUNTY AND MUNICIPALITY DEVELOPMENT REVENUE BOND ACT; PROVIDING FOR THE ISSUANCE AND SALE OF CITY OF FORT COLLINS, COLORADO, MULTIFAMILY HOUSING REVENUE BONDS, SERIES 1998 (COUNTRY RANCH II LIMITED PARTNERSHIP PROJECT) IN THE PRINCIPAL AMOUNT OF $6,509,000 FOR THE PURPOSE OF LOANING FUNDS TO COUNTRY RANCH II LIMITED PARTNERSHIP, AN OHIO LIMITED PARTNERSHIP, TO FINANCE IMPROVEMENTS RELATING TO ACQUIRING, IMPROVING, CONSTRUCTING, INSTALLING AND EQUIPPING OF AFFORDABLE MULTIFAMILY HOUSING UNITS IN FORT COLLINS, COLORADO; APPROVING AND AUTHORIZING THE EXECUTION AND DELIVERY OF A TRUST INDENTURE FROM THE CITY TO CHASE BANK OF TEXAS,NATIONAL ASSOCIATION,AS TRUSTEE;APPROVING AND AUTHORIZING THE EXECUTION AND ASSIGNMENT OF A LOAN AGREEMENT AND NOTE BETWEEN COUNTRY RANCH II LIMITED PARTNERSHIP AND THE CITY; AND AUTHORIZING THE PREPARATION AND EXECUTION OF CERTAIN RELATED DOCUMENTS AND INSTRUMENTS. WHEREAS,the City of Fort Collins, Colorado(the "City"), is authorized by Part 1 of Article 3 of Title 29, Colorado Revised Statutes, as amended(the "Act"), to issue revenue bonds for the purpose of financing projects to the end that business enterprises will bring affordable housing to the City of Fort Collins, to enter into financing agreements with others for the purpose of providing revenues to pay such bonds, and further to secure the payment of such bonds;and WHEREAS, pursuant to Resolution 96-89 duly adopted on August 6, 1996 (the "Inducement Resolution"), the City will take all necessary and advisable steps to issue such bonds in accordance with the provisions of the Act for the purpose of financing certain affordable multifamily residential housing units (the "Affordable Housing") to be owned by Country Ranch II Limited Partnership, an Ohio limited partnership(the 'Borrower")and to be located within the City of Fort Collins;and WHEREAS,the following documents (collectively, the"Basic Bond Documents")have been submitted to the Council of the City (the "Council') and filed in the office of the City Clerk of the City (the "Clerk") and are there available for public inspection: (a) a Trust Indenture, to be dated as of December 1, 1998 (the "Indenture"), from the City to Chase Bank of Texas, National Association, as trustee (the "Trustee"), including the form of the bonds to be issued by the City(the"Bonds"); (b) a Loan Agreement (the "Loan Agreement"), to be dated as of December 1, 1998, between the City and Borrower; (c) a Letter of Credit in the approximate amount of $6,653,447 issued by Chase Bank of Texas,National Association (the "Bank"), to be dated as of the date of its delivery, and to be executed by the Bank; (d) a Bond Purchase Agreement to be dated as of the date of its delivery(the'Bond Purchase Agreement") among Newman and Associates, Inc., as underwriter (the "Underwriter"), the City, and the Borrower; (e) a Remarketing Agreement to be dated as of December 1, 1998 (the "Remarketing Agreement') among Newman and Associates, Inc. as remarketing agent (the "Remarketing Agent"), the Trustee and Dynex Capital, Inc.(the"Funding Facility Issuer"); (f) a Multifamily Note and Addendum thereto to be dated December 1, 1998, between Borrower and the City; (g) an Intercreditor Agreement to be dated December 1, 1998,among the City,the Borrower, the Trustee and the Funding Facility Issuer; (h) a Land Use Restriction Agreement to be dated December 1, 1998, among the City, the Trustee,Dynex Commercial, Inc.(the"Servicer"),and the Borrower; (i) an Agreement of Environmental Indemnification to be dated December 1, 1998, to be executed by the Borrower; 0) a Mortgage, Assignment of Rents and Security Agreement to be dated December 1, 1998, to be executed by the Borrower for the benefit of the Funding Facility Issuer, the Servicer and the City; (k) a Servicing Agreement to be dated December 1, 1998 between the Trustee and the Servicer; (1) a Funding Facility (Standby Commitment)to be dated as of the date of its delivery to be executed by the Funding Facility Issuer;and (m) a Replacement Reserve Agreement to be dated as of December 1, 1998, among the City, the Borrower,the Funding Facility Issuer and Dynex Commercial,Inc. WHEREAS, the Council desires to issue at this time the City of Fort Collins, Colorado Multifamily Housing Revenue Bonds, Series 1998 (Country Ranch II Limited Partnership Project) in the principal amount of $6,509,000(the 'Bonds");and WHEREAS, it is necessary to authorize the issuance of the Bonds by ordinance and to approve the form and authorize the execution of the aforementioned documents thereby. NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT COLLINS, COLORADO,THAT: ARTICLE 1. DEFINITIONS,LEGAL AUTHORIZATION, ELECTION,APPROVALS AND FINDINGS 1.1 Definitions The terms used herein, unless the context hereof shall require otherwise, shall have the same meanings when used herein as assigned to them in the Indenture unless the context or use thereof indicates another or different meaning or intent. 1.2 Legal Authorization The City is a political subdivision of the State of Colorado and, in the opinion of Bond Counsel, is authorized under the Act to finance the Project herein referred to, and to issue and sell the Bonds for the purpose, in the manner and upon the terms and conditions set forth in the Act and in this Ordinance. 2 1.3 Findings The Council, based on the representations of the Borrower,has heretofore determined and found, and does hereby determine and find,as follows: a) In authorizing the Project the City's purpose is, and in its judgment the effect thereof will be, the promotion and development of more adequate residential housing facilities for low- and middle- income families and persons in the City by inducing the Borrower to acquire and construct the Project; b) The amount estimated to be necessary to finance the Project Costs, including the costs and estimated costs permitted by the Act, will require the issuance of the Bonds in the principal amount of $6,509,000 as hereinafter provided; c) It is desirable, feasible and consistent with the objects and purposes of the Act to issue the Bonds,for the purpose of financing the construction of the Project; d) The Bonds and the interest accruing thereon shall never constitute the debt or indebtedness of the Issuer within the meaning of any provision or limitation of the Constitution or Statutes of the State of Colorado or the home rule charter of the Issuer, and the Bonds and the interest thereon do not create any multiple-fiscal year direct or indirect debt or other financial obligation and shall not constitute nor give rise to a pecuniary liability of the Issuer or a charge against its general credit or taxing powers; e) Pursuant to Sections 113 and 114 of the Act the City hereby determines: (i)the total amount necessary in each year to pay the principal of and interest on the Bonds is as follows: Maximum Interest Principal Total Principal and Year Payable at 9.0% Payable Interest Payable 1998 $0.00 $0.00 $0.00 1999 $584,182.75 $0.00 $584,182.75 2000 $585,810.00 $0.00 $585,810.00 2001 $585,810.00 $0.00 $585,810.00 2002 $583,965.00 $45,000.00 $628,965.00 2003 $579,780.00 $49,000.00 $628,780.00 2004 $575,220.00 $53,000.00 $628,220.00 2005 $570,240.00 $58,000.00 $628,240.00 2006 $564,780.00 $64,000.00 $628,780.00 2007 $558,810.00 $70,000.00 $628,810.00 2008 $552,270.00 $76,000.00 $628,270.00 2009 $545,145.00 $84,000.00 $629,145.00 2010 $537,315.00 $91,000.00 $628,315.00 2011 $528,765.00 $100,000.00 $628,765.00 2012 $519,412.50 $109,000.00 $628,412.50 2013 $509,190.00 $119,000.00 $628,190.00 2014 $498,007.50 $130,000.00 $628,007.50 2015 $485,775.00 $143,000.00 $628,775.00 2016 $472,395.00 $156,000.00 $628,395.00 2017 $457,755.00 $171,000.00 $628,755.00 3 2018 $441,742.50 $187,000.00 $628,742.50 2019 $424,230.00 $204,000.00 $628,230.00 2020 $405,090.00 $223,000.00 $628,090.00 2021 $384,120.00 $244,000.00 $628,120.00 2022 $361,200.00 $267,000.00 $628,200.00 2023 $336,142.50 $293,000.00 $629,142.50 2024 $308,707.50 $320,000.00 $628,707.50 2025 $278,737.50 $350,000.00 $628,737.50 2026 $245,932.50 $383,000.00 $628,932.50 2027 $210,030.00 $419,000.00 $629,030.00 2028 $170,790.00 $457,000.00 $627,790.00 2029 $127,852.50 $500,000.00 $627,852.50 2030 $80,910.00 $548,000.00 $628,910.00 2031 $29,542.50 $596,000.00 $625,542.50 TOTALS $14,099,655.25 $6,509,000.00 $20,608,655.25 and (ii)since the Loan Agreement provides that the Borrower shall maintain the Project and carry all proper insurance with respect thereto, no determination of the estimated cost of maintaining the Project need be made;and f) Pursuant to Section 120 of the Act, the City hereby determines that the revenues of the Borrower will be sufficient to, and that the Loan Agreement provides that the Borrower shall, pay all taxes which may be due and owing with respect to the Project. 1.4 Authorization and Ratification of Project The City hereby authorizes the Borrower to provide for the acquisition, construction and installation of the Project by such means as shall be available to the Borrower and in the manner determined by the Borrower. 1.5 Election by Issuer The City hereby elects, with respect to the Bonds, to be within the limitation imposed by the provisions of Section 144(a)(4)(A)of the Internal Revenue Code of 1986, as amended (the "Code")and the Clerk of the Issuer is hereby directed to keep this election in such person's official records of the proceedings of Council, and any and all acts heretofore taken pertaining to such election and relating to such requirements are hereby ratified and confirmed. 1.6 Approval Pursuant to Section 147(f)of the Code For purposes of complying with Section 147(f)of the Code,this Council has heretofore conducted a public hearing with respect to the Project and the use of proceeds of the Bonds, notice of which hearing was published at least 14 days prior thereto for purposes of approving the issuance of the Bonds in the maximum aggregate principal amount of$6,509,000 and the use of the proceeds to finance the costs of the Project. 4 ARTICLE 2. BONDS 2.1 Issuance and Sale of Bonds; Interest Rates The Issuer shall issue its Multifamily Housing Revenue Bonds, Series 1998 (Country Ranch II Limited Partnership Project)to be dated the date of issuance in a principal amount not to exceed$6,509,000, for the purpose, in the form and upon the terms set forth in the Bonds and the Indenture. The Bonds shall be subject to redemption as set forth in the Indenture. The Bonds shall be sold to the Underwriter pursuant to the terms of the Bond Purchase Agreement. The Bonds shall be numbered consecutively from "R-l" upward, shall initially be issued in denominations of $100,000 or any integral multiple of $1,000 greater than $100,000, all as more particularly provided in the Indenture, and shall be dated as of the date of issuance. Interest on the Bonds shall be payable monthly, all as more particularly provided in the Indenture. Each Bond shall bear interest until the principal sum thereof has been paid; provided, however, that if Bonds have been called for redemption and funds are available for the payment on the redemption date thereof in full accordance with the terms of this Ordinance and the Indenture,the Bonds shall then cease to bear interest. The Bonds shall mature on the 1st day of December in the principal amount and year, and shall bear interest at the per annum rate shown in the following schedule: Maturity Date Principal Interest (December 1) Amounts Rate 2031 $6,509,000 (as provided in the Indenture) The maximum net effective interest rate authorized for the Bonds is nine percent (9%) per annum. The initial net effective interest rate on the Bonds shall be as provided in the Indenture but not in excess of such maximum. The City hereby authorizes the distribution of a Preliminary Official Statement and an Official Statement pertaining to the Bonds, in substantially the form submitted to the City, but with such changes as the Director of Finance may approve;provided,however,that the City does not warrant or represent that any information contained in the Official Statement other than information relating to the City under the captions "THE ISSUER" and "ABSENCE OF LITIGATION" is true and correct in all material respects or that such information does not contain any untrue or misleading statement of a material fact or omit to state any material fact necessary to be stated therein in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. ARTICLE 3. GENERAL COVENANTS 3.1 Payment of Principal and Interest The principal and interest are payable solely from and secured by revenues and proceeds derived from the Project and payable pursuant to the Basic Bond Documents; and nothing in the Bonds or in this Ordinance shall be considered as assigning, pledging or otherwise encumbering any funds or assets of the City. 5 3.2 Performance of and Authority for Covenants The City covenants that it will faithfully perform at all times any and all covenants, undertakings, stipulations and provisions contained in this Ordinance, the Indenture, the Loan Agreement, in the Bonds executed, authenticated and delivered hereunder and in all proceedings of the City Council pertaining thereto; that it is duly authorized under the Constitution and laws of the State of Colorado, including particularly and without limitation the Act,to issue the Bonds authorized hereby, pledge the revenues and assign the Loan Agreement and endorse the Multifamily Note and Addendum thereto in the manner and to the extent set forth in this Ordinance, the Indenture, the Bonds and the Loan Agreement; that all action on its part for the issuance of the Bonds and for the execution and delivery thereof has been duly and effectively taken; and that the Bonds are and will be a valid and enforceable obligation of the City according to the terms thereof. In making these representations, the City relies upon the opinion of Bond Counsel as to the truth of matters asserted and the efficacy of actions taken. 3.3 Nature of Security Notwithstanding anything contained in the Bond, the Indenture, the Loan Agreement, the Bond Purchase Agreement, the Letter of Credit or any other document referred to in this Ordinance, the Bonds shall never constitute the debt or indebtedness of the City within the meaning of any provision or limitation of the constitution or statutes of the State of Colorado or Charter of the City of Fort Collins, Colorado, the Bonds and the interest thereon do not create any multiple-fiscal year direct or indirect debt or other financial obligation, and the Bonds shall not constitute nor give rise to a pecuniary liability of the City or a charge against its general credit or taxing powers; and the City, its agents, officers and employees shall not be subject to any personal or pecuniary liability thereon. ARTICLE 4 MISCELLANEOUS 4.1 Facsimile Signatures Pursuant to the Uniform Facsimile Signature of Public Officials Act of the State of Colorado, Section 11-55-101 et seq., C.R.S., as amended, the Mayor, the City Clerk and the Finance Director of the City shall forthwith,but in any event prior to the time the Bonds are delivered to the purchasers thereof, file with the Colorado Secretary of State their manual signatures, certified by them under oath, using a suitable Facsimile Signature Certificate for such purpose. 4.2 CUSIP Numbers Pursuant to recommendations promulgated by the Committee on Uniform Security Identification Procedures and the requirements of Rule G-34 of the Municipal Securities Rulemaking Board, "CUSIP" identifica- tion numbers shall be imprinted on the Bonds, but such numbers shall not constitute a part of the contract evidenced by the Bonds, and no liability shall hereafter attach to the City or any of the officers or agents thereof because of or on account of said numbers. Any error or omission with respect to said numbers shall not constitute cause for refusal by any person to accept delivery of and pay for the Bonds nor shall it affect the validity of such Bonds. 4.3 Severability If any provision of this Ordinance, except Section 3.3 of Article III hereof, shall be held or deemed to be, or shall, in fact, be, inoperative or unenforceable as applied in any particular case in any jurisdictions or in all cases because it conflicts with any provisions of any constitution or statute or rule or public policy, or for any other reason, such circumstances shall not have the effect of rendering the provision in question inoperative or unenforceable in any other case or circumstance, or of rendering any other provision or provisions herein contained invalid, inoperative or unenforceable to any extent whatever. The invalidity of any one or more phrases, sentences, clauses or paragraphs in this Ordinance, except Section 3.3 of Article III hereof, shall not affect the remaining 6 portions of this Ordinance or any part hereof. In the event Section 3.3. of Article III hereof is held to be inoperative or unenforceable for any reason,no other provision or section of this Ordinance shall be given effect in any manner so as to impose any indebtedness or liability upon the City. 4.4 Authorization to Execute Basic Bond Documents The forms of the proposed Basic Bond Documents are hereby approved in substantially the form presented to the Council; and the Mayor and the City Clerk are authorized to endorse the Multifamily Note and Addendum thereto and execute those Basic Bond Documents to which the City is a party in the name of and on behalf of the City and such other documents as Bond Counsel considers appropriate in connection with the issuance of the Bonds, including an IRS Form 8038. The City Manager or the Assistant City Manager or the Director of Finance, in the absence of the City Manager, is authorized to execute the Bond Purchase Agreement on behalf of the City. The officials and officers of the City specified in the Indenture are authorized to execute and deliver the Bonds. In the event of the absence or disability of the Mayor or the City Clerk, such officers of the City as, in the opinion of the City Attorney, may act in their behalf, shall without further act or authorization of the Council do all things and execute all instruments and documents required to be done or executed by such absent or disabled officers. 4.5 Authority to Correct Errors,Etc. Counsel for the City is hereby authorized and directed to make or agree to any alterations, changes or additions in the instruments hereby approved as it deems necessary or proper to accomplish the purposes of this Ordinance; provided, however, no alteration, change or addition shall be made which shall alter the maximum net effective interest rate, denomination, date, maturity, registration privileges, manner of execution, places of payment or terms of prepayment of the Bonds or which shall increase the aggregate principal amount of the Bonds authorized by the City Council or in any way give rise to a pecuniary liability of the City or a charge against its general credit or taxing powers with respect to the Bonds. 4.6 Further Authority The Mayor and the City Clerk and other proper City officials, and each of them, are hereby authorized to execute and deliver for and on behalf of the City any and all additional certificates, documents and other papers and to perform all other acts they may deem necessary or appropriate in order to implement and carry out the matters herein authorized. 4.7 Repealer All ordinances or parts thereof in conflict with this ordinance are hereby repealed. 4.8 Ordinance Irrepealable;Amendments After said Bonds are issued this Ordinance shall be and remain irrepealable until said Bonds and the interest thereon shall have been fully paid, satisfied and discharged. In the event this Ordinance is amended, modified or changed in any manner,written notice of same shall be given by the City to the Trustee. 4.9 Recording and Authentication This Ordinance, as adopted by the City Council, shall be numbered and recorded, and the adoption and publication by title shall be authenticated by the signatures of the Mayor and City Clerk and by the certificate of the publisher,respectively. 7 Introduced,considered favorably on first reading and ordered published by title this 17th day of November, 1998,and to be presented for final passage on the I st day of December, 1998. (SEAL) ATTEST: --- i j Wanda M. Krajicek,City lerl n ayor Passed and adopted on final reading on this Ist day of December, 1998. (SEAL) ATTEST: WandaM.Krajicek,City C1 k William P. Smith, Mayor Pro Tem 8