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HomeMy WebLinkAbout10881RESOLUTION NO. 10881 A RESOLUTION APPROVING AN AGREEMENT BETWEEN THE CITY OF PUEBLO AND ATLAS PACIFIC ENGINEERING COMPANY RELATING TO A JOB CREATING CAPITAL IMPROVEMENT PROJECT, AUTHORIZING THE PRESIDENT OF THE CITY COUNCIL TO EXECUTE SAME AND AUTHORIZING THE TRANSFER OF $110,000.00 FROM THE 1992 -2011 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 Atlas Pacific Engineering Company will expand its business operations at the Pueblo Memorial Airport Industrial Park and employ an additional twenty -two (22) full -time employees having an average hourly salary of sixteen dollars ($16.00) excluding benefits during a seven -year period starting January 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: The City Council finds and determines that the job creating capital improvement project with Atlas Pacific Engineering 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. The Agreement dated as of December 11, 2006 between the City of Pueblo and Atlas Pacific Engineering 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 Restated Agreement and attest same. SECTION 3 Funds in an amount of $110,000.00 are hereby authorized to be transferred, expended and made available to Atlas Pacific Engineering Company out of the 1992 -2011 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 Atlas Pacific Engineering Company after receipt by the City Clerk of the documents required to be filed pursuant to paragraph 2(b) of the Agreement and (ii) by the Director of Finance of written requests for payment required by paragraph 2(c) 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. BY Randy Thurston Councilperson APPROVED: President of City Council ATTESTED BY: CITY CLERK INTRODUCED December 11, 2006 12C C) # )Oyol/ D � D Background Paper for Proposed RESOLUTION AGENDA ITEM # d DATE: December 11, 2006 DEPARTMENT: Law Department TITLE A RESOLUTION APPROVING AN AGREEMENT BETWEEN THE CITY OF PUEBLO AND ATLAS PACIFIC ENGINEERING COMPANY RELATING TOAJOB CREATING CAPITAL IMPROVEMENT PROJECT, AUTHORIZING THE PRESIDENT OF THE CITY COUNCIL TO EXECUTE SAME AND AUTHORIZING THE TRANSFER OF $110,000.00 FROM THE 1992 -2011 SALES AND USE TAX CAPITAL IMPROVEMENT PROJECT FUND THEREFOR ISSUE Should the City Council approve the job creating capital improvement project with Atlas Pacific Engineering Company? RECOMMENDATION PEDCO recommends that City Council approve the Project. BACKGROUND Atlas Pacific Engineering Company ( "Atlas Pacific ") expanded its business operations at the Pueblo Memorial Airport and through PEDCO has applied for $110,000 for reimbursement for equipment acquired in the Brown International transaction which was completed in September 2006. Atlas Pacific has committed to employ 22 full -time employees having an average hourly salary of $16.00 per hour excluding benefits in addition to its 163 full -time employees on December 31, 2005. City funds will be used to reimburse Atlas Pacific for equipment it acquired in the Brown International transaction and Atlas Pacific has agreed to give to City a perfected security interest in equipment with an original value of $223,477 to secure its performance of its employment commitment. If Atlas Pacific defaults in its employment commitment, it will repay the City based on the number of employees less than committed. FINANCIAL IMPACT See Background. AGREEMENT THIS AGREEMENT entered into as of December 11, 2006 between Pueblo, a municipal corporation (the "City ") and Atlas Pacific Engineering Company, a Delaware corporation (the "Company "). WHEREAS, Company has expressed a willingness to expand 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 January 1, 2008. "Equipment" means the Fadal VMC8030HT, Model 907 -1, Serial No. 9509789, Vertical Mill with an original value of $223,477.00 acquired by Company in the Brown International transaction and physically moved to the Facility. "Facility" means the building wherein Company conducts its business operations within the Pueblo Memorial Airport Industrial Park, having the following street address: 1 Atlas Way, Pueblo, Colorado, 81001. "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. "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 total number of business days in such Quarter. 2. City will advance to or for the benefit of Company funds in the amount of $110,000.00 (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 as reimbursement to Company for the acquisition of the Equipment by Company. (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) certified copy of the resolution of the governing board of Company approving this Agreement and authorizing its officers to execute and deliver this Agreement and related documents in the name of Company, and (iii) executed Security Agreement described in paragraph 5 hereof. The date of the last to occur of the filings required under (i), (ii) and (iii) of this paragraph 2(b) shall be referred to herein as "Closing." If Closing does not occur on or before March 1, 2007, 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 $110,000.00 of City Funds for the acquisition of Equipment, Company shall file (i) with the City Clerk the documents required by (b) above, and (ii) with City's Director of Finance written request for payment certified to be true and correct by an officer of Company that the amount included in the request for payment is for reimbursement for the acquisition of the Equipment having an original value of $223,477.00 and that the Equipment has been delivered to and installed in the Facility. 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 on and after the Employment Commitment Date employ in addition to the number of full -time employees employed by Company on December 31, 2005 not less than twenty-two (22) additional Full -Time Employees at the Facility having an average hourly salary of sixteen dollars ($16.00) excluding benefits (the "Employment Commitment "). For purposes of this Agreement, Company's number of full -time employees on December 31, 2005 was 163. 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 "Company's Repayment Obligation "), as follows: -2- (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 -two (22) Full - Time Employees having an average hourly salary of sixteen dollars ($16.00) (excluding benefits) employed at the Facility by Company multiplied by $178.57 ( "Company's Quarterly Payments "). For example, if for the Second Quarter of the second year after the Employment Commitment Date such Quarterly Employees is twenty (20), the amount payable by Company to City on or before the fifteenth (15`') date of the next calendar month would be (22 -20) x $178.57 = $357.14. (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 after date hereof and for one month after the Repayment Period 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 of ten (10) percent per annum ( "Default Rate ") 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 hourly 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 for the number of Full -Time employees and their average hourly salary or 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 or Repayment Obligation, 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 Default Rate and for such purpose the entire balance of Company's Repayment Obligation shall be an amount equal to 22 times $178.57 multiplied by the remaining Quarters of the Repayment Period plus the amount of Company's unpaid Quarterly Payments, if any. 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 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 -3- interest in the Equipment. Before City Funds will be advanced to or for the benefit of Company, 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 ajury 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 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 -4- 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, Atlas Pacific Engineering Company, 1 Atlas Way, Pueblo, Colorado, 81001, Attention: Erik Teranchi, 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 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 -5- 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. 17. 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] PUEBJ4), A MUNICIPAL CORPORATION Attest: By City erk Presi ent of the City Council [SEAL] Attest: By Name: Title: ATLAS PACCI�FIC ENGINEERING COMPANY Name: f Dros,P r�G Title: V P 4- (FV M