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HomeMy WebLinkAbout10780RESOLUTION NO. 10780 A RESOLUTION APPROVING AN AGREEMENT BETWEEN THE CITY OF PUEBLO AND L. B. FOSTER COMPANY RELATING TO A JOB CREATING CAPITAL IMPROVEMENT PROJECT, AUTHORIZING THE PRESIDENT OF THE CITY COUNCIL TO EXECUTE SAME AND AUTHORIZING THE TRANSFER OF $216,000.00 FROM THE 1992 -2006 SALES AND USE TAX CAPITAL IMPROVEMENT PROJECT FUND THEREFOR WHEREAS, Pueblo Economic Development Corporation ( "PEDCO ") has presented to City Council a proposed job creating capital improvement project whereby L. B. Foster Company will locate its new business facility within the Pueblo Municipal Airport Industrial Park City of Pueblo and employ 28 full -time employees having an average salary of $46,000.00 per year including benefits during a seven year period starting April 1, 2008 ( "Project "); and WHEREAS, the Project and financial details thereof, were negotiated and approved by PEDCO, and WHEREAS, PEDCO has recommended to the City Council that the City Council approve the Project, Agreement and financial details relating thereto, and WHEREAS, based upon PEDCO's recommendation and representations made to the City by representatives of PEDCO with respect to the Project, City Council is willing to approve the Project, NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF PUEBLO. that: SECTION 1 The City Council finds and determines that the job creating capital improvement project with L. B. Foster Company described herein and in the attached Agreement meets and complies with the criteria and standards established by Ordinance No. 6381 ( "Ordinance ") and will create employment opportunities justifying the expenditure of public funds. SECTION 2 The Agreement dated as of July 2006 between the City of Pueblo and L. B. Foster Company, a copy of which is attached hereto, having been approved as to form by the City Attorney, is hereby approved. The President of the City Council is authorized to execute and deliver the Agreement and all related required documents in the name of the City and the City Clerk is directed to affix the seal of the City to the Agreement and attest same. SECTION 3 Funds in an amount of $216,000.00 are hereby authorized to be transferred, expended and made available to L. B. Foster Company out of the 1992 -2006 Sales and Use Tax Capital Improvement Projects Fund for the sole purpose of the job creating capital improvement project and in the manner described in the attached Agreement. The funds hereby authorized to be transferred and expended shall be released and paid by the Director of Finance to or for the benefit of L. B. Foster Company after receipt by the City Clerk of the documents required to be filed pursuant to paragraph 2(b) of the Agreement. SECTION 4 The officers of the City are directed and authorized to perform any and all acts consistent with the intent of this Resolution and attached Agreement to effectuate the transactions described therein. SECTION 5 This Resolution shall become effective upon final approval and passage. INTRODUCED: July 10, 2006 BY: Barbara Vidmar COUNCILPERSON APPROVED: President of City Council ATTESTED BY: CITY CLERK FID ED Background Paper for Proposed RESOLUTION 6 J,0_(J- # /0 7FO AGENDA ITEM # 1,5 DATE: July 10, 2006 DEPARTMENT: Law Department TITLE A RESOLUTION APPROVING AN AGREEMENT BETWEEN THE CITY OF PUEBLO AND L. B. FOSTER COMPANY RELATING TO A JOB CREATING CAPITAL IMPROVEMENT PROJECT, AUTHORIZING THE PRESIDENT OF THE CITY COUNCIL TO EXECUTE SAME AND AUTHORIZING THE TRANSFER OF $216,000.00 FROM THE 1992 -2006 SALES AND USE TAX CAPITAL IMPROVEMENT PROJECT FUND THEREFOR ISSUE Should City Council approve the job creating capital improvement project with L. B. Foster Company? RECOMMENDATION PEDCO recommends that the City Council approve the project. BACKGROUND L. B. Foster Company ( "Company ") is establishing a new business facility at the Pueblo Memorial Airport Industrial Park and has committed to employ 28 full -time employees having an average salary of $46,000 including benefits during a seven year period starting April 1, 2008. City will make available to Company $216,000 out of the one -half cent sales tax revenue in reimbursement for equipment purchased for the new facility. If Company defaults in its commitment to employ the 28 employees, Company will repay City funds based upon the number of employees actually employed less than the 28 additional employees and secure its payment and performance by a first security interest in the equipment. FINANCIAL IMPACT See Background. AGREEMENT THIS AGREEMENT entered into as of July 10, 2006 between Pueblo, a municipal corporation (the "City ") and L. B. Foster Company, a Pennsylvania corporation (the "Company "). WHEREAS, Company has expressed a willingness to locate its business within the Pueblo Memorial Airport Industrial Park, and in furtherance thereof has through the Pueblo Economic Development Corporation ( "PEDCO ") made application for funds with the City, and WHEREAS, PEDCO has recommended to the City Council that the City Council approve the application, and WHEREAS, the City, based upon PEDCO's recommendation, has approved such application and will make funds available to Company subject to and upon the terms and conditions of this Agreement. NOW, THEREFORE, in consideration of the foregoing and mutual covenants contained herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, City and Company agree as follows: 1. The following terms as used in this Agreement shall have the following meaning unless the context clearly indicates otherwise: "Employment Commitment Date" means April 1, 2008. "Equipment" means the business personal property described in Schedule A attached hereto to be kept, maintained and used by Company after date of this Agreement in the Facility. Company represents and warrants (i) Company has good marketable title to the Equipment free and clear of liens and encumbrances, (ii) the Equipment has been installed in the Facility and is in good working condition, and (iii) the Equipment has a fair market value not less than the "Estimated Value" shown on the attached Schedule A. "Facility" means the building located on the Property wherein Company will conduct its business operations. "Full -Time Employee" means a person who actually performs work at the Facility for not less than thirty -two (32) hours per week whether employed by Company or by an outside entity acting as an agency to provide Full -Time Employees for Company. The term "Full -Time Employee" does not include independent contractors nor employees of independent contractors except employees of an independent contractor acting as an agency to provide Full -Time Employees for Company to perform work at the Facility. "Property" means 381 Lockheed Street, Pueblo, Colorado, 81001. "Quarter" means three consecutive calendar months commencing January 1, April 1, July 1 and October 1 of each calendar year. "Quarterly Employees" means the sum of the aggregate number of Full -Time Employees on each business day of a Quarter, divided by the sum of the business days in such Quarter. 2. City will advance to or for the benefit of Company funds in the amount of $216,000.00 (the "City Funds "), subject to and contingent upon the following conditions and covenants which Company agrees to perform and comply with: (a) City Funds will be advanced by City solely for the acquisition of Equipment by Company at fair market value from a reputable vendor in an arms- length transaction. Acquisition of equipment from any person or entity related to or a subsidiary of Company is not an arms - length transaction. (b) Company shall file in the office of the City Clerk copies of the following: (i) Company's certificate or other evidence of authority to transact business in the State of Colorado issued by the Colorado Secretary of State, (ii) certificate of Company's secretary confirming that Company and its officers are duly authorized to execute, deliver and perform this Agreement and/or authorizing its officers to execute and deliver this Agreement and related documents in the name of Company, and (iii) evidence reasonably satisfactory to City that Company will commence business operations at the Facility. The date of the last to occur of the filings required under (i), (ii) and (iii) of this paragraph 2(c) shall be referred to herein as "Closing." If Closing does not occur on or before August 1, 2006, or such later date as Company and City shall mutually agree, City, at its sole option, may terminate this Agreement and City and Company shall thereafter be released and discharged from all obligations hereunder. (c) As a condition precedent to the disbursement of the $216,000.00 of City Funds for the acquisition of Equipment, Company shall (i) file all documents required by (b) above with the City Clerk and (ii) execute and deliver to City the Security Agreement described in paragraph 5 hereof. 3. Company acknowledges and agrees that the primary purpose of City in entering into this Agreement and the sole benefit to the City for making City Funds available to Company hereunder is the creation of jobs. Therefore, Company represents, covenants, and agrees that it will after date of this Agreement continuously conduct its business operations and employ Full - Time Employees at the Facility as follows: (i) during the period from date hereof to the Employment Commitment Date, Company shall use its best efforts in good faith to employ as many Full -Time Employees as reasonably justified by its business operations, and (ii) on and after the Employment Commitment Date, Company shall employ not less than twenty -eight (28) Full -Time Employees at the Facility having an average salary of over $46,000.00 per year including benefits (collectively the "Employment Commitment "). 4. Notwithstanding anything contained in this Agreement to the contrary, if Company shall for any reason default in its Employment Commitment set forth in paragraph 3, Company shall repay to City a pro -rata share of the City Funds advanced by City under paragraph 2 hereof based upon the number of Full -Time Employees employed by Company at the Facility (the "Repayment Obligation "), as follows: (a) During the seven (7) year period starting on the Employment Commitment Date and ending eighty -four (84) months thereafter (the "Repayment Period ") Company shall pay to City an amount each Quarter equal to the Quarterly Employees less than twenty -eight (28) Full -Time Employees having an average salary of over $46,000.00 per year excluding benefits employed at the Facility by Company multiplied by $275.50 (the "Company's Quarterly Payments "). For example, if for the second Quarter of the third year after the Employment Commitment Date such Quarterly Employees is 20, the amount payable by Company to City on or before the fifteenth (15th) day of the next calendar month would be (28 - 20) x $275.50 = $2,204.00. (b) Company's Quarterly Payments, if any, shall be paid to the City without notice, demand, deduction or setoff on or before the fifteenth (15th) day of the month after the end of each Quarter during the Repayment Period and for one month thereafter at the office of the Director of Finance of City, 1 City Hall Place, Pueblo, Colorado, 81003, or such other person or location as the City may designate. All past due Company's Quarterly Payments shall bear interest at the rate often (10) percent per annum until paid. (c) Within fifteen (15) days after the end of each Quarter after the Employment Commitment Date and for one calendar month after the Repayment Period, Company will submit to City's Director of Finance Company's statements showing the Quarterly Employees and their average salary for the preceding Quarter and the basis upon which Quarterly Employees and Company's Quarterly Payment, if any, were computed certified by an officer of the Company to be true and correct. For purposes of verifying Company's employment, City shall have access to Company's records relating to Company's employees employed at the Facility. Except in the event of any action filed by City to enforce this Agreement, City shall treat Company's records as confidential and shall not disclose (except pursuant to a subpoena or court order) such information to any party other than those City employees who have a need to know such information. (d) Notwithstanding anything contained in this Paragraph 4 to the contrary, if Company defaults in its Employment Commitment, and such default is not cured within sixty (60) days after written notice specifying the default is given by City to Company, then in such event, City may declare the entire balance of Company's Repayment Obligation due and owing together with interest thereon from the date of default at the rate of ten (10) percent per annum, and for such purpose, the entire balance of Company's Repayment Obligation shall be an amount equal to 28 times $275.50 multiplied by the remaining Quarters of the Repayment Period plus the amount of Company's unpaid Quarterly Payments, if any, but in no event more than the amount of City Funds advanced by City under paragraph 2 hereof and interest as herein provided. Company's Repayment Obligation is absolute and unconditional and shall not be abated, reduced, diminished, modified, withheld or otherwise offset for any cause or reason 3 whatsoever. 5. All City Funds advanced to Company by City under this Agreement shall be deemed to be a debt of Company payable to City until Company performs and discharges its obligations hereunder including its Employment Commitment contained in Paragraph 3 and its Repayment Obligation contained in Paragraph 4. Company's obligations under this Agreement including its Employment Commitment and Repayment Obligation shall be secured by a perfected first security interest in the Equipment. Contemporaneously with the execution of this Agreement, Company shall execute and deliver to City Company's Security Agreement, Financing Statement and other documents required to perfect a first security interest in the Equipment all in form and content approved by City's Attorney (the "Security Agreement "). 6. (a) Prior to instituting any proceeding to enforce Company's Repayment Obligation under Paragraph 4, City shall notify Company in writing of its intention to institute such proceedings. Company may request relief from its Repayment Obligation by delivering to City within twenty (20) days after date of City's notice, Company's written request for relief specifying the grounds upon which such relief is sought together with documents supporting said grounds. Within ninety (90) days after receipt of Company's request, City will schedule a meeting with the City Council at which Company may appear. City will notify Company of the time and place of the meeting. Failure of Company to timely deliver its complete written request for relief or to appear at the scheduled meeting with the City Council shall entitle City to immediately institute proceedings to enforce Company's Repayment Obligation. (b) City Council may or may not, in its sole and absolute discretion, relieve Company, in whole or in part, from Company's Repayment Obligation. Any action taken by the City Council relating to a request for relief shall be final and binding on Company, and not subject to judicial review. Any such action by City Council is, and shall constitute, a legislative measure. Nothing contained in this paragraph 6 shall grant or be construed to grant to Company any right or claim to relief from its Repayment Obligation or hearing with respect thereto. (c) No delay by the City in scheduling a meeting, or failure by City to exercise its right to enforce this Agreement, including Company's Repayment Obligation, and no partial or single exercise of that right, shall constitute a waiver of that right. 7. In the event of any litigation arising under this Agreement, the court shall award to the prevailing party its costs and reasonable attorney fees. Venue for any such litigation shall be Pueblo County, Colorado. All such litigation shall be filed in the District Court, County of Pueblo, State of Colorado and each party submits to the jurisdiction of such District Court. To the extent allowed by law, each party waives its right to a jury trial. 8. This Agreement expresses the entire understanding of the parties and supersedes and abrogates any and all prior dealings and commitments, whether oral or written, with respect to the subject matter of this Agreement and may not be amended or modified except in writing signed by City and Company. Any waiver of any provision of this Agreement must be in writing and signed by the party whose rights are being waived. No waiver of any breach of any provision hereof shall be or be deemed to be a waiver of any preceding or subsequent breach of E the same or any other provision of this Agreement. The failure of either party to enforce or seek enforcement of the terms of this Agreement following any breach shall not be construed as a waiver of such breach. 9. This Agreement shall be construed in accordance with and be governed by the laws of the State of Colorado without regard to conflict of law principles. 10. Any notices hereunder shall be sufficiently given if given in writing personally or mailed by first class, registered, or certified mail, postage prepaid, addressed: (a) if to City, City Manager, City of Pueblo, 1 City Hall Place, Pueblo, Colorado, 81003, with copy to Thomas E. Jagger, City Attorney, 503 N. Main Street, Suite 127, Pueblo, Colorado, 81003, or (b) if to the Company, President, L. B. Foster Company, 415 Holiday Drive, Pittsburgh, Pennsylvania, 15220, with copy to Company's General Counsel at the same address. or to such other person or address as either party shall specify in written notice given to the other party pursuant to the provisions of this paragraph 10. 11. Time is of the essence hereof. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and assigns, provided Company may not assign this Agreement or any interest herein without the express written consent of the City, which consent may be arbitrarily withheld, conditioned or delayed. Any assignment or attempted assignment of this Agreement by Company without such consent shall be null and void. 12. The persons signing this Agreement in the name of and on behalf of Company represent and warrant that they and Company have the requisite power and authority to enter into, execute, and deliver this Agreement, and that this Agreement is a valid legally binding obligation of Company enforceable against Company in accordance with its terms. 13. Company represents and warrants that no person, entity, or organization has been employed or retained or will receive or be paid, directly or indirectly, any commission, percentage, contingent fee or any other remuneration payment or receipt of which is contingent upon approval of this Agreement or City's advancement of City Funds to Company hereunder. For breach or violation of this warranty, City shall have the right to terminate this Agreement, or recover the full amount of such commission, percentage, contingent fee or other remuneration, and/or to seek such other remedies legally available to City, which remedies shall be cumulative. 14. In no event shall City, its officers, agents or employees be liable to Company for damages, including without limitation, compensatory, punitive, indirect, special or consequential damages, resulting from or arising out of or related to this Agreement or the performance or 5 breach thereof by City or the failure or delay of City in the performance of any covenant or provision under this Agreement on its part to be performed. In consideration of City entering into this Agreement, Company hereby waives and discharges City, its officers, agents and employees from all claims for any and all such damages. No breach, default, delay or failure of City under this Agreement shall be or be construed to be a waiver, discharge or release of Company's Repayment Obligation under paragraph 4 hereof with respect to the amount of City Funds actually advanced or paid by City to or for the benefit of Company pursuant to paragraph 2 hereof. 15. If any provision of this Agreement is declared by a court of competent jurisdiction to be invalid or unenforceable, such determination shall not affect the other provisions of this Agreement which shall remain in full force and effect. 16. Neither party shall be, or hold itself out as, agent of the other or as joint ventures under this Agreement. IT Each party acknowledges that this Agreement was fully negotiated by the parties and, therefore, no provision of this Agreement shall be interpreted against any party because such party or its legal representative drafted such provision. 18. The provisions of this Agreement are for the exclusive benefit of the parties hereto and their successors and permitted assigns, and no third party shall be a beneficiary, or have any rights by virtue of, this Agreement. 19. This Agreement may be executed in any number of counterparts, and each such counterpart shall be deemed for all purposes to be an original, and all such counterparts shall together constitute but one and the same original. Executed at Pueblo, Colorado, the day and year first above written. [SEAL] � By pueblo Municipal Corp Attest: �t City C rk President of the City Council [SEAL] 1 n.� I Attest: / "Y L. B. FOSTER COMPANY, a Penpsylvania corporation B ✓� Name: 1 C i J L /, J � Z Title: S - "' A ? Name: 0q%=0-. SCHEDULE A Equipment to be Financed by Agreement between L.B. Foster Company and the City of Pueblo Estimated Description Manufacturer Serial Number Value 80' Power Inbound Rail AEM Group LLC None $61,400.00 Rack with Metering System 90' Inbound & 40' Outbound United Mechanics None $85,000.00 Saw Conveyor Semi Automatic Carbide Saw (Used) Centro - Metalcut SN 112 -235 $88,120.00