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
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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:
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(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
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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
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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
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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
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