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HomeMy WebLinkAbout10313RESOLUTION NO. 10313 A RESOLUTION APPROVING AMENDMENT NO. 2 TO THE COOPERATION AGREEMENT DATED AUGUST 25, 1986 BETWEEN CITY OF PUEBLO AND URBAN RENEWAL AUTHORITY OF PUEBLO, COLORADO WHEREAS, the City of Pueblo ( "City ") and the Urban Renewal Authority of Pueblo, Colorado ( "Authority ") entered into a Cooperation Agreement dated August 25, 1986, as amended by Amendment No. 1 dated October 15, 1996 (collectively, the "Cooperation Agreement "); and WHEREAS, the City and Authority desire to amend the Cooperation Agreement. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF PUEBLO, that: .q Fr.TInN 1 Amendment No. 2 dated as of January 24, 2005, between the City and the Authority, a copy of which is attached hereto, having been approved as to form by the City Attorney, is hereby approved. .qFrTInN 9 Pursuant to the provisions of Section 5 of Amendment No. 2, $100,000.00 of the Vendor Fee on deposit in the Account is hereby approved as a temporary cash -flow operating expense reserve for fiscal year 2005. .qFrTInN The President of the City Council is authorized to execute and deliver Amendment No. 2 in the name of the City and the City Clerk is directed to affix the seal of the City thereto and attest same. INTRODUCED January 24. 2005 BY Dr. Bill Sova Councilperson APPROVED: zz'�'y PREMIENT C/_CITY C IL ATTESTED BY: CITY CLERK o � o D o Background Paper for Proposed RESOLUTION )Q0. 4 10 3 13 AGENDA ITEM # 1 (C DATE: January 24, 2005 DEPARTMENT: Law Department TITLE A RESOLUTION APPROVING AMENDMENT NO. 2 TO THE COOPERATION AGREEMENT DATED AUGUST 25, 1986 BETWEEN CITY OF PUEBLO AND URBAN RENEWAL AUTHORITY OF PUEBLO, COLORADO ISSUE Should the City Council amend the Cooperation Agreement between the City and the Urban Renewal Authority of Pueblo, Colorado ( "Authority ") by approving Amendment No. 2 thereto? RECOMMENDATION Approve Amendment No. 2. BACKGROUND Authority intends ,to refund its Bonds which will according to the Authority result in net proceeds of approximately $508,000 in vendor fees and $300,000 in tax increment funds (TIF). Authority estimates that it has in addition approximately $704,652 in vendor fees and $672,153 in TIF not required to be applied to payment of the Bonds. Unless the qualified electors of the City authorize the City Council to use the vendor fees for other purposes, the approximately $1,213,652 in vendor fees will be held by the Authority in an interest bearing accountto pay extraordinary maintenance and replacement expenses and, if necessary, temporary operating expenses of the Convention Center as determined and authorized by City Council by resolution and the balance held to pay the refunding bonds. The approximate $972,153 in TIF shall be paid to City in satisfaction of Authority's obligation to reimburse the City for the value of land previously transferred to the Authority. The City will contribute such amount to the Authority for the purpose of constructing the HARP parking structure containing approximately 217 parking spaces, 92 of which shall be and remain open to the public for parking purposes. Subject to requirements of applicable law and conditions of federal funding agreements, City will transfer to the Authority title to the land for the HARP parking structure, which is the parking area in HARP west of City Hall. No agreement with respect to the use of the HARP parking structure shall be entered into without the consent of the City Council. City and Pueblo County entered into an intergovernmental agreement dated February 26, 2001 whereby the County agreed, subject to conditions set forth in the agreement, to contribute $300,000 toward the construction of a parking structure. When received from the County, the $300,000 will be used to construct the HARP parking structure. The City, subject to City Council appropriating funds therefor and the execution of a definitive agreement, will advance an amount not to exceed $700,000 for the construction of the HARP parking structure. The Authority will repay the $700,000 advance plus interest equal to earnings on City's investments. Authority will use its reasonably best efforts to secure the funding for the balance of the HARP parking structure. The HARP parking structure will be constructed on or before January 1, 2007 which date may be extended by mutual agreement. Based on the foregoing, it is anticipated that approximately $1,972,153 will be available to finance the construction of the HARP parking structure. All but the County's $300,000 of the $1,972,153 will be contributed and made available by the City. All future TIF revenues will be held by the Authority to be spent for lawful purposes and included in its annual budget with respect to TIF revenues, subject to prior approval by resolution of the City Council. All future vendor fees will be used to pay the debt services on the refunding bonds and to pay the net operating and maintenance expenses of the Convention Center as set forth in the Authority's annual budget for the Convention Center, subject to approval by City Council by resolution. FINANCIAL IMPACT See Background. -2- AMENDMENT NO.2 THIS AMENDMENT NO. 2, is made and entered into as of January 24, 2005, by and between the CITY OF PUEBLO, a Colorado municipal corporation (the City) and the URBAN RENEWAL AUTHORITY OF PUEBLO, COLORADO, a body corporate and politic of the State of Colorado (the Authority). RECITALS A. On March 22, 2004, pursuant to Ordinance No. 7113, as modified on August 23, 2004, by Ordinance No. 7186, the City Council of the City approved the urban renewal plan for the Pueblo Expanded Urban Renewal Project (the Expanded Plan), which Expanded Plan is being carried out by the Authority in cooperation with the City and in furtherance of the objectives of the Colorado Urban Renewal Law. The Expanded Plan is an amendment to and an expansion of the Amended Phase One Urban Renewal Project for Downtown Pueblo (the Phase One Project). B. The City and the Authority entered into a Cooperation Agreement dated August 25, 1986, as amended by Amendment No. 1 dated October 15, 1996 (collectively, the Cooperation Agreement) for the purpose of financing and providing certain public improvements for the Phase One Project. C. The Authority has issued its $7,275,000 Revenue Refunding Bonds (the Phase One Urban Renewal Project) Series 1994A and $2,225,000 subordinate Revenue Refunding Bonds (Phase One Urban Renewal Project) Series 1994B Bonds (collectively, the Bonds), which Bonds will be refunded and the net proceeds of such refunding shall be combined with other funds made available to the Authority pursuant to this Amendment No. 2. D. To carry out the Expanded Plan, the parties desire to further amend the Cooperation Agreement in accordance with this Amendment No. 2. NOW, THEREFORE, in consideration of the foregoing and the mutual covenants contained herein, the City and the Authority agree as follows: 1. The Authority will refund the Bonds, which will result in net proceeds of approximately $808,000 (the Refunding Proceeds). The Refunding Proceeds consist of the following: (a) Approximately $508,000 of the Refunding Proceeds is derived from Pledged City Sales Tax Revenues (Vendor Fees) as described in the indentures governing the Bonds (the Indentures). The Authority will expend the Refunded Vendor Fees in accordance with Section 5 hereof. (b) Approximately $300,000 of the Refunding Proceeds is derived from Pledged Property Tax Revenues and Pledged Authority Sales Tax Revenues (TIF Revenues) as described in the Indentures. The Authority will expend the TIF Revenues in accordance with Section 7 hereof. 2. Pursuant to the Indentures, the Authority has received and is holding approximately $704,652 in Vendor Fees not required to be applied to payment of the Bonds and approximately $672,153 in TIF Revenues not required to be applied to payment of the Bonds. The Authority shall expend the Vendor Fees in accordance with Section 5 hereof The Authority shall hold and expend the TIF Revenues in accordance with Section 7 hereof. 3. Pursuant to an Intergovernmental Agreement between the City and Pueblo County (the County) dated February 26, 2001, the County agreed to contribute $300,000 (the County Parking Funds) toward construction of a parking structure in the area covered by the Expanded Plan. The Authority and the City will request that the County deliver the County Parking Funds to the Authority for use in accordance with Section 7 hereof. 4. Pursuant to the refunding and refinancing of the Bonds, the Authority will renew the pledge of the Pledged Authority Sales Tax Revenues to pay debt service on the refinanced Bonds. To the extent not required to pay such debt service, the indenture governing the refunding Bonds shall release the Pledged Authority Sales Tax Revenues to the Authority each month, which released revenues will be held and expended by the Authority in accordance with Section 7 hereof. 5. Unless the qualified electors of the City authorize the City Council to use the Vendor Fee for other purposes, the Vendor Fees held by the Authority at December 31, 2004, as identified in Section 2 above shall be deposited and retained by the Authority, in trust nevertheless, in an interest bearing account (Account) for the following purposes: extraordinary maintenance and replacement expenses of the Convention Center. Prior to December 31, 2005 and prior to each December 31 thereafter, the City Council after consultation with the Authority, shall by resolution determine the amount of funds on deposit that shall be reasonable and prudent to retain in the Account for extraordinary maintenance and replacement expenses of the Convention Center. Any excess in the Account over the amount determined to be reasonable and prudent for extraordinary maintenance and replacement expenses shall be held in trust in another interest bearing account for retirement of the refunding bonds or, if necessary on a temporary basis, the operating expenses of the Convention Center, subject to approval by City Council by resolution. After retirement of the refunding Bonds, any funds held in either of the accounts identified above shall be returned to the City for any lawful use; provided, that, any amount of such funds returned to the City that are used for any lawful purpose by the City other than to reimburse retailers for their costs incurred in collecting and remitting sales and use tax revenues to the City shall be deemed to reduce any obligation to reimburse the City for the balance, if any, of the Parking Structure Advance made by the City to the Authority under Section 7(a) hereof. No expenditure of the funds on deposit in the Account shall be made by the Authority until after such expenditure has been approved by the City Council by resolution. If the qualified electors of the City authorize the City Council to use the Vendor Fee for other purposes, funds on deposit in the account shall be first used to reimburse the City for the N balance, if any, of the Parking Structure Advance made by the City to the Authority under Section 7(a) hereof. 6. In accordance with applicable law, the Authority will use its reasonable best efforts to enter into one or more redevelopment agreements in the area covered by the Expanded Plan, which agreement or agreements will seek private participation in the HARP Parking Structure in a manner that will benefit both and facilitate redevelopment of the area included in the Expanded Plan and to provide parking for users of the Convention Center, the Historic Arkansas Riverwalk of Pueblo, City Hall/Memorial Hall, and private development in the downtown area. No agreement with respect to the use of the HARP Parking Structure shall be entered into without the prior consent and approval of City Council, which consent and approval shall not be unreasonably withheld, conditioned or delayed. 7. The approximately $300,000 of TIF Revenues returned to the Authority pursuant to Section 1(b) and approximately $672,153 of TIF Revenues described in Section 2 shall be paid to the City by the Authority in satisfaction of the obligation of the Authority to reimburse the City under Section 1, subsections (e) and (f) of Amendment No. 1 to the Cooperation Agreement. Pursuant to the authorization contained in Section 31 -25 -112, C.R.S., upon receipt of the foregoing amounts, the City will contribute such amounts to the Authority for deposit, along with the County Parking Funds, and the advanced or borrowed funds described in Sections 7(a) and 7(b), below, in an account (the HARP Parking Account) for the purpose of constructing a parking structure (the HARP Parking Structure) in accordance the terms and conditions of this Amendment No. 2. The HARP Parking Account shall be applied, if lawful (as determined by bond counsel to the Authority), to construction of the HARP Parking Structure. The HARP Parking Structure will contain approximately 217 parking spaces and will be located on the existing parking facility located south of City Hall and north of lots 3 and 4 Historic Arkansas Riverwalk Project, Filing One. Construction of the HARP Parking Structure is dependent upon the County Parking Funds the amounts deposited in the HARP Parking Account pursuant to this Amendment No. 2 construct, or cause the construction of, the HARP Parking Structure on or before January 1, 2007, which date may be extended by mutual agreement. (a) In addition to the other funds to be deposited in the HARP Parking Account and subject to City Council appropriating funds therefor and the execution of a definitive agreement therefore, the City will advance to the Authority an amount not to exceed $700,000 dollars (the Parking Structure Advance), the proceeds of which shall be used with the balance in the HARP Parking Account to construct the HARP Parking Structure. The interest payable by the Authority on the Parking Structure Advance shall be equal to the City's earnings on its invested funds. The term and other conditions applicable to the Parking Structure Advance shall be negotiated in good faith by the parties at the time such advance is required by the Authority to construct the HARP Parking Structure. (b) The Authority agrees to use its reasonable best efforts to secure all or the balance of any funding required to construct the HARP Parking Structure from any source legally available to the Authority. Kl All TIF Revenues, notwithstanding the source, except as otherwise provided herein, shall be deposited by the Authority in a separate TIF Revenue Account to be used by the Authority for uses authorized by law and included in the annual budget of the Authority approved by the City Council by resolution each year (the Approved Budget). No further approval of the City will be required unless the Authority desires to amend the Approved Budget or expend such funds in excess of the line items in the Approved Budget or for items not included in the Approved Budget; provided, however, the Authority may increase spending by (i) 10% in any line item in that portion of its budget devoted to expenditure of TIF Revenues without further approval of the City Council if there is no increase in the total expenditure of TIF Revenue in the Approved Budget and (ii) 10% in any line item in that portion of its budget devoted to expenditure of Vendor Fees for the Convention Center without further approval of the City Council if there is no increase in the total expenditure of Vendor Fees in the Approved Budget. Except as provided herein, any expenditure in excess of the line items in the Approved Budget or for items not included in the Approved Budget shall be subject to the prior approval by resolution of the City Council. 8. In consideration of receiving the payments described herein, constructing the HARP Parking Structure, and the covenants of the Authority to provide the parking set forth above, the City hereby releases the Authority from any obligation to return to the City any additional excess revenues under Section 1, subsections (e) and (f) of Amendment No. 1 to the Cooperation Agreement. 9. Subject to the requirements of applicable law and the conditions of any applicable federal funding agreements, upon request of the Authority, the City, if it is the fee simple title owner thereof, will transfer title to the real property on which the HARP Parking Structure is to be constructed to the Authority on terms and conditions mutually satisfactory to the parties. In consideration of such transfer and execution of this Amendment No. 2 by the City, not less than 92 parking spaces in the HARP Parking Structure shall be and remain open to the public for parking purposes. 10. Unless the qualified electors of the City authorize the City Council to use the Vendor Fees for other purposes, the Authority and City agree that all revenues derived or to be derived from Vendor Fees shall be used solely for the following purposes: (a) Paying the principal of, premium, if any, and interest on the Bonds and the refunding bonds; (b) Paying the net operating and maintenance expenses of the Convention Center, and appurtenant parking and landscaping within the Phase One Project Area. Net operating and maintenance expenses of the Convention Center means the total operating expenses less the total operating revenues of the Convention Center, both as generally identified in the attached 2005 Urban Renewal Authority of Pueblo, Colorado Proposed Convention Center and URA Operating Budget and such budgets submitted and similarly approved for subsequent years; and (c) Reimbursing retailers for their costs incurred in collecting and remitting the sales and use tax revenues to the City. 11. Except as modified by this Amendment No. 2, the Cooperation Agreement will remain in full force and effect inuring to the benefit of and binding upon the City and the Authority. IN WITNESS WHEREOF, the City and Authority have caused this Amendment No. 2 to be executed as of the date first above written. ATTEST: Secretary PUEBLO, A MUNICIPAL CORPORATION ATTEST: � By: C Clerk 5 THE URBAN RENEWAL AUTHORITY OF