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HomeMy WebLinkAbout081 - 05/15/2001 - AUTHORIZING THE ISSUANCE OF ECONOMIC DEVELOPMENT REVENUE BONDS FOR THE RESIDENCE AT OAKRIDGE PROJECT ORDINANCE NO. 81, 2001 AN ORDINANCE AUTHORIZING THE ISSUANCE AND SALE OF THE CITY OF FORT COLLINS, COLORADO VARIABLE RATE ECONOMIC DEVELOPMENT REVENUE BONDS (THE RESIDENCE AT OAKRIDGE PROJECT) SERIES 2001A IN AN AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED $3,555,000 AND THE CITY OF FORT COLLINS, COLORADO TAXABLE VARIABLE RATE ECONOMIC DEVELOPMENT REVENUE BONDS (THE RESIDENCE AT OAKRIDGE PROJECT) SERIES 2001B IN AN AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED $300,000 TO FINANCE ACQUISITION,CONSTRUCTION AND EQUIPPING OF A HEALTH CARE FACILITY FOR THE RESIDENCE AT OAKRIDGE, LLC; RATIFYING CERTAIN ACTION HERETOFORE TAKEN;ACKNOWLEDGING THE USE OF AN OFFICIAL STATEMENT AND DELEGATING THE AUTHORITY FOR THE EXECUTION AND DELIVERY BY THE CITY OF A CERTAIN TRUST INDENTURE, LOAN AGREEMENT, REGULATORY AGREEMENT AND DECLARATION OF RESTRICTIVE COVENANTS, BOND PURCHASE AGREEMENT, SUCH BONDS AND CLOSING DOCUMENTS IN CONNECTION THEREWITH; MAKING DETERMINATIONS AS TO THE SUFFICIENCY OF REVENUES AND AS TO OTHER MATTERS RELATED TO THE PROJECT; AND REPEALING ACTION HERETOFORE TAKEN IN CONFLICT HEREWITH. BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT COLLINS, COLORADO, as follows: Section 1. That the City Council of the City of Fort Collins, Colorado (the "Council" and the "City," respectively) hereby finds and determines that: (a) The City is authorized by the County and Municipality Development Revenue Bond Act, constituting Sections 29-3-101 through 29-3-123, inclusive, Colorado Revised Statutes (the "Act"),to finance one or more projects,including any land,building or other improvement,and all real and personal properties, whether or not in existence, which shall be suitable for health care facilities to the end that more adequate heath care facilities may be provided, which promote the public health, welfare, safety, convenience and prosperity. (b) The Residence at Oakridge, LLC, a Florida limited liability company (the "Company")has presented to the City a proposal whereby the City would finance pursuant to the Act an assisted living facility(the'Project")providing certain health care services that would also qualify under Section 142(d) of the Internal Revenue Code of 1986, as amended, as a multifamily rental -2- housing project due to the Company's set aside of forty percent(40%) of the units in the Project for tenants whose adjusted gross income (anticipated total annual income) does not exceed 60 percent (60%) of the area median gross income. (c) The Act authorizes the City(i)to issue its revenue bonds for the purpose of defraying the cost of financing or refinancing any project and all incidental expenses incurred in connection with the issuance of such bonds, (ii) to enter into financing agreements with others for the purpose of providing revenues to pay the bonds authorized to be issued under the Act and upon such terms and conditions as the Council of the City may deem advisable, and (iii) to secure the payment of the principal of, premium, if any, and interest on such bonds as provided in the Act. (d) The Project will be located within the City, will be owned by the Company and will consist of an assisted living facility and land upon which such facility will be located. (e) On February 15, 2000, the Council of the City adopted Resolution 2000-32 expressing its willingness to issue bonds to finance the Project and amended that Resolution in its adoption of Resolution 2001-19 on February 6, 2001, extending the deadline for issuance of the bonds. (f) The Council hereby determines that the acquisition of the Project and the financing of the costs of the Project are in the best interest of the inhabitants of the City and will accomplish the purposes and objects of the Act by providing more adequate health care facilities which promote the public health, welfare, safety, convenience and prosperity. (g) The Council has determined that it is advisable and in the best interests of the City to issue its Variable Rate Economic Development Revenue Bonds (The Residence at Oakridge Project)Series 2001 A in an aggregate principal amount not to exceed$3,555,000(the"Series 2001 A Bonds") and its Taxable Variable Rate Economic Development Revenue Bonds (The Residence at Oakridge Project) Series 2001B in an aggregate principal amount not to exceed $300,000 (the "Series 2001B Bonds")(together,the Series 2001 A Bonds and the Series 2001B Bonds are referred to herein as the "Bonds"), to sell and deliver the Bonds to U.S. Bancorp Piper Jaffray Inc., the Underwriter of the Bonds (the "Underwriter") by negotiated sale,which will better serve the public interest, to provide financing to the Company for the Project pursuant to the terms of a Loan Agreement as further described below. -3- (h) U.S.Bank National Association,a national banking association(the'Bank"), will issue an irrevocable direct-pay Letter of Credit in favor of the Trustee, for the account of the Company, obligating the Bank to pay to U.S. Bank Trust National Association as trustee (the "Trustee") during the periods described therein, upon request and in accordance with the terms thereof,the amounts described therein for the purpose of making certain payments on or with respect to the Bonds(other than Bonds pledged to the Bank,which Bonds shall not be entitled to any benefit of the Letter of Credit). (i) There have been presented to the Council (i) the proposed form of Loan Agreement dated as of May 1, 2001 (the "Loan Agreement'), between the City and the Company, (ii) the proposed form of Trust Indenture with respect to the Bonds, dated as of May 1, 2001 (the "Indenture"),between the City and the Trustee,(iii)the proposed form of Regulatory Agreement and Declaration of Restrictive Covenants dated as of May 1,2001 (the'Regulatory Agreement")among the City,the Trustee and the Company,(iv)the proposed form of Letter of Credit to be issued by the Bank for the benefit of the Trustee, (v) the proposed form of the Bond Purchase Agreement with respect to the Bonds (the 'Bond Purchase Agreement') among the City, the Company and the Underwriter and (vi) the proposed form of Official Statement prepared in connection with the offering of the Bonds. 0) The Council is authorized by the Supplemental Public Securities Act,Article 57 of Title 11 of Colorado Revised Statutes, as amended (the 'Public Securities Act'), to delegate to any of its members, chief executive officer, or chief financial officer the authority to sign a contract for the purchase of securities or to accept a binding bid for securities and, in addition, may delegate the following determinations to such member or officer without any requirement that the issuing authority approve such determinations: (a)the rate of interest on securities;(b)the conditions on which and the prices at which the applicable securities may be redeemed before maturity; (c)the existence and amount of any capitalized interest or reserve funds;(d)the price at which the securities will be sold;(e)the principal amount and denominations of the securities;(f)the amount of principal maturing in any particular year; and (g) the dates on which principal and interest shall be paid. -4- (k) The Council hereby determines that it is in the City's best interest to delegate to its City Manager (the "City Manager") certain of the specific powers enumerated in the Public Securities Act as more specifically provided in this ordinance. Section 2. That all action(not inconsistent with the provisions of this ordinance) heretofore taken by the Council and the officers of the City directed toward the financing of the Project and the issuance and sale of the Bonds therefor be,and the same is hereby,ratified,approved and confirmed. Section 3. That the City shall finance the Project,subject to the terms of the Loan Agreement,the Indenture and the Regulatory Agreement,by the issue,sale and delivery of the Bonds to obtain funds to fund the loan to the Company in order to provide financing to the Company for the Project. Section 4. That to defray the cost of financing the acquisition,construction and equipping of the Project,there is hereby authorized and created a series of revenue bonds designated "City of Fort Collins, Colorado, Variable Rate Economic Development Revenue Bonds (The Residence at Oakridge Project) Series 2001A" in an aggregate principal amount not to exceed $3,555,000 and a series of revenue bonds designated "City of Fort Collins, Colorado, Taxable Variable Rate Economic Development Revenue Bonds (The Residence at Oakridge Project)Series 2001B" in an aggregate principal amount not to exceed$300,000,issuable as fully registered bonds without coupons in denominations of$100,000 or any integral multiple of$5,000 in excess thereof, each dated as of the date of issuance of the Bonds,bearing interest at such Variable Rates(as defined in the Indenture) as are determined by U.S. Bancorp Piper Jaffray Inc., as remarketing agent (the "Remarketing Agent") until such time, if any, as the interest rate on the Bonds is converted to a Fixed Rate (as defined in the Indenture). Interest on the Bonds shall be payable on each Interest Payment Date (as defined in the Indenture) and shall not exceed a maximum net effective interest rate of 10%per annum with respect to the Series 2001A Bonds and a maximum net effective interest rate of 14% per annum with respect to the Series 2001B Bonds, which interest rates are hereby determined to be the maximum net effective interest rates for each series of the Bonds. The Series 2001A Bonds and the Series 2001B Bonds shall mature as determined by the City Manager, -5- provided the maturity of the Series 2001A Bonds shall not be later than December 1, 2032 and the maturity of the Series 2001B Bonds shall not be later than December 1, 2010. The Bonds shall be payable,shall be subject to redemption prior to maturity,and shall be in substantially the forms as set forth in the Indenture. Pursuant to the Bond Purchase Agreement, the Bonds shall be purchased by the Underwriter at a purchase price equal to the par amount of the Bonds less an underwriting fee of not to exceed 2.25% of the principal amount of the Bonds. The purchase price for the Bonds shall be approved by the City Manager and shall be evidenced by the terms of the Bond Purchase Agreement as executed by the City Manager . The maturities of the Bonds and the principal amount of each series shall be approved by the City Manager and shall be evidenced by the terms of the Indenture and the Bond Purchase Agreement as executed by the Mayor,City Manager,the City Clerk and the City's Financial Officer, as appropriate. Section 5. That the following determinations and findings are hereby made in accordance with Sections 29-3-113, 29-3-114 and 29-3-120 of the Act. (a) Assuming a maximum net effective interest rate of 10% per annum for the Series 2001A Bonds and a maximum net effective interest rate of 14% per annum for the Series 2001B Bonds, the maximum amount necessary in each year to pay the principal of and the interest on the Bonds are as follows: Date Taxable Taxable Taxable Taxable DiN Tax-Exempt Tax-Exempt Tax-Exempt Tax-Exempt Total Annual P+1 6/1101 - 14.00% _ _ _ 10.00% - 12/1/01 - 14.00% 21,000 21, - 10.00% 177,750 177,75 198,750 6/1/02 - 14,00% 21,000 21, - 10.00% 177,750 177,75 12/1/02 - 14.00% 21,000 21, - 10.00% 177,750 177,75 397,500 6/1/03 - 14.00% 21,000 21, - 10.00% 177,750 177,75 1211/03 - 14.00% 21,000 21, - 10.00% 177,750 177,75 397,500 6/1/04 - 14.00% 21,000 21, - 10.00% 177,750 177,75 12/1/04 - 14.00% 21,000 21, - 10.00% 177,750 177,75 397,500 6/1/05 - 14.00% 21,000 21, - 10.00% 177,750 177,75 12/1/05 - 14.00% 21,000 21,OOC 10,00% 177,750 177,75 397,500 6/1/06 - 14.00% 21,000 21, - 10.00% 177,750 177,75 12/1/06 - 14.00% 21,000 21,OOC 10.00% 177,750 177,75 397,500 6/l/07 - 14.00% 21,000 21, - 10.00% 177,750 177,75 12/I/07 - 14.00% 21,000 21,OOC 10,00% 177,750 177,75 397,500 6/1/08 - 14.00% 21,000 21,00C 10,00% 177,750 177,7.5 12/1/08 - 14.00% 21,000 21, - 10.00% 177,750 177,75 397,500 6/1/09 - 14.00% 21,000 21, - 10.00% 177,750 177,75 12/l/09 - 14.00% 21,000 21,00C 10.00% 177,750 177,75 397,500 6/1/10 - 14,00% 21,000 21,OOC 10,00% 177,750 177,75 12/1/10 300,000 14.00% 21,000 321,00C 10,00% 177,750 177,75 697,500 6/1/11 - 10.00% 177,750 177,75 12/1/11 - 10.00% 177,750 177,75 355,500 6/1/12 - 10.00% 177,750 177,75 12/1/12 - 10,00% 177,750 177,75 355,500 -6- Date Taxable Taxable Taxable Taxable D/S Tax-Exempt Tax-Exempt Tax-Exempt Tax-Exempt Total Annual P+l PrIneinal Cannon Interest D/S 6/1/13 - 10.00% 177,750 177,75 12/I/13 - 10.00% 177,750 177,75 355,500 6/l/14 - 10.00% 177,750 177,75 12/1/14 - 10,00% 177,750 177,75 355,500 6/1115 - 10.00% 177,750 177,75 12/1/15 - 10.00% 177,750 177,75 355,500 6/1/16 - 10.00% 177,750 177,75 12/1116 - 10.00% 177,750 177,75 355,500 6/I/17 - 10.00% 177,750 177,75 12/1/17 - 10.00% 177,750 177,75 355,500 6/1118 - 10.00% 177,750 177,75 12/1/18 - 10.00% 177,750 177,75 355,500 6/1119 - 10.00% 177,750 177,75 12/1/19 - 10.00% 177,750 177,75 355,500 6/1120 - 10.00% 177,7.50 177,75 12/1120 - 10.00% 177,750 177,75 355,500 6/1/21 - 10.00% 177,750 177,75 12/1121 - 10.00% 177,750 177,75 355,500 6/122 - 10.00% 177,750 177,75 12/1/22 - 10.00% 177,750 177,75 355,500 611123 - 10.00% 177,750 177,75 12/1123 - 10.00% 177,750 177,75 355,500 6/1/24 - 10.00% 177,750 177,75 12/1/24 - 10.00% 177,750 177,75 355,500 6/1125 - 10.00% 177,750 177,75 121125 - 10.00% 177,750 177,75 355,500 6/126 - 10.00% 177,750 177,75 121126 - 10.00% 177,750 177,75 355,500 6/127 - 10.00% 177,750 177,75 12/127 - 10.00% 177,750 177,75 355,500 6/1/28 - 10.00% 177,750 177,75 12/128 - 10.00% 177,750 177,75 355,500 6/129 - 10.00% 177,750 177,75 121129 - 10.00% 177,750 177,7.5 355,500 6/1130 - 10.00% 177,750 177,75 1211/30 - 10.00% 177,750 177,75 355,500 6/1131 - 10.00% 177,750 177,75 12/1/31 - 10.00% 177,750 177,75 355,500 6/1/32 - 10.00% 177,750 177,75 12/1132 3,555,000 10.00% 177,750 3,732 75 3,910,500 TOTAL 300,000 399,000 699, 3,555,000 11,198,250 14,753,25 15,452,250 (b) Pursuant to the terms of the Loan Agreement no reserve funds have been established for the retirement of the Bonds or the maintenance of the Project; such reserve funds as have been required by the Bank are to be held pursuant to the terms of the Bank's Reimbursement Agreement dated as of May 1, 2001 between the Bank and the Company, and by such additional agreements as are required by the Bank, and shall be replenished in the manner set forth in therein. (c) The terms under which the Project is to be financed provide that the Company shall maintain the Project in good repair and carry all proper insurance with respect thereto. -7- (d) The revenues payable under the financing documents with respect to the Bonds and the Project are sufficient to pay,in addition to all other requirements of such financing documents and this ordinance, all sums referred to in paragraph (a) and (b) of this Section. (e) Since the Project is owned by the Company, which is a private legal entity,pursuant to Section 29-3-120 of the Act the financing documents with respect to the Project require the Company to pay all taxes due,with respect to the Project,to the State of Colorado,to the City, and to the school district and all other political subdivisions and public bodies corporate wherein the Project is located, authorized to levy taxes. Section 6. That the forms, terms and provisions of the Loan Agreement, the Indenture, the Regulatory Agreement and the Bond Purchase Agreement are hereby approved and the City shall enter into the Loan Agreement,the Indenture,the Regulatory Agreement and the Bond Purchase Agreement substantially in the forms of such documents presented to the Council at this meeting with such changes are necessary to reflect the determinations made by the City Manager hereunder; and the Mayor of the City is hereby authorized and directed to execute and deliver the Loan Agreement,the Indenture,the Regulatory Agreement and the Bond Purchase Agreement,the City Clerk is hereby authorized and directed to affix the City seal to and to attest the Loan Agreement,the Indenture,the Regulatory Agreement and the Bond Purchase Agreement,the City's Financial Officer is hereby authorized and directed to countersign the Loan Agreement, the Indenture, the Regulatory Agreement and the Bond Purchase Agreement and the City Manager is hereby authorized and directed to countersign the Bond Purchase Agreement. Section 7. That the City acknowledges the use by the Underwriter of an Official Statement in connection with the offer and sale of the Bonds. The City makes no representation or warranty as to, and has no responsibility for, the accuracy or completeness of the information contained in the Official Statement other than as expressly provided therein. Section 8. That the City acknowledges the appointment of U.S. Bancorp Piper Jaffray Inc. as the Remarketing Agent under the Indenture. Section 9. That the form,terms and provisions of the Bonds,substantially in the form contained in the Indenture,are hereby approved;and the Mayor of the City is hereby authorized and directed to execute the Bonds and the City Clerk is hereby authorized and directed to affix the -8- seal of the City to the Bonds and to attest the Bonds and the City's Financial Officer is authorized to countersign such Bonds. The signatures of the Mayor, the City Clerk and the City's Financial Officer on the Bonds and the seal of the City on the Bonds shall be affixed manually or by facsimile. Section 10. That the Mayor is hereby authorized and directed to execute and deliver to the Trustee the written order of the City for the authentication and delivery of the Bonds by the Trustee, in accordance with the Indenture. Section 11. That U.S. Bank Trust National Association, is hereby appointed Trustee under the Indenture. Section 12. That the officers of the City shall take all action in conformity with the Act necessary or reasonably required to effectuate the issuance of the Bonds and shall take all action in conformity with the Act necessary or desirable to finance the Project and for carrying out, giving effect to and consummating the transactions contemplated by this ordinance and the Loan Agreement,the Indenture,the Regulatory Agreement and the Bond Purchase Agreement, including without limitation, the execution and delivery of any closing documents to be delivered in connection with the sale and delivery of the Bonds and any necessary depository agreement. Section 13. That the cost of financing the Project will only be paid out of the proceeds of the Bonds and other legally available funds of the Company, and the Bonds shall be special limited obligations of the City and none of the Bonds shall be the general obligation of the City nor shall any of the Bonds, including interest thereon, constitute the debt or indebtedness or multiple fiscal year financial obligation of the City within the meaning of the Constitution or statutes of the State of Colorado or of the home rule charter of any political subdivision thereof, including the City, nor shall anything contained in this ordinance or in the Bonds, the Loan Agreement, the Indenture,the Regulatory Agreement or the Bond Purchase Agreement,or any other instrument give rise to a pecuniary liability of the City or a charge upon the general credit or taxing powers of the City, nor shall the breach of any agreement contained in this ordinance, the Bonds, the Loan Agreement,the Indenture,the Regulatory Agreement or the Bond Purchase Agreement impose any pecuniary liability on the City or a charge upon the general credit or taxing powers of the City, the City having no power to pay out of its general fund, or otherwise contribute any part of the costs of financing the Project, nor power to operate the Project as a business or in any manner, nor shall the -9- City condemn any land or other property for the Project nor contribute any land or other property to the Project. Nothing contained in this ordinance or the Loan Agreement, the Indenture, the Regulatory Agreement or the Bond Purchase Agreement shall give rise to any personal or pecuniary liability of any council member, officer, employee or agent of the City. Section 14. That after any of the Bonds are issued, this ordinance shall be and remain irrepealable until the Bonds and the interest thereon shall have been fully paid,canceled and discharged. Section 15. That if any section, paragraph, clause or provision of this ordinance shall for any reason be held to be invalid or unenforceable,the invalidity or unenforceability of such section, paragraph, clause or provision shall not effect any of the remaining provisions of this ordinance. Section 16. That all bylaws, orders, resolutions and ordinances, or parts thereof, inconsistent herewith and with the documents hereby approved, are hereby repealed to the extent only of such inconsistency. This repealer shall not be construed as reviving any bylaw, order, resolution or ordinance, or part thereof. Section 17. That this ordinance,immediately on its final passage,shall be recorded in the City book of ordinances kept for that purpose, authenticated by the signatures of the Mayor and the City Clerk. INTRODUCED, READ, APPROVED ON FIRST READING, AND ORDERED PUBLISHED ONCE BY NUMBER AND TITLE ONLY this first day of May 2001. READ, FINALLY PASSED AS AMENDED ON SECOND READING AND ORDERED PUBLISHED ONCE BY NUMBER AND TITLE ONLY this fifteenth day of May 2001. CITY OF FO/�`COLLINS, CQLORADO IJ ", Mayor r (SEAL) .. Attest: City Clerk -10-