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HomeMy WebLinkAbout11640RESOLUTION NO. 11640 A RESOLUTION APPROVING THE FIRST AMENDMENT TO THE MARCH 23, 2009 AGREEMENT BETWEEN PUEBLO, A MUNICIPAL CORPORATION, AND THE WATER COMPANY, LLC RELATING TO A JOB CREATING CAPITAL IMPROVEMENT PROJECT, AUTHORIZING THE PRESIDENT OF THE CITY COUNCIL TO EXECUTE SAME, AND TRANSFERRING $1,380,000.00 FROM THE 1992 -2011 SALES AND USE TAX CAPITAL IMPROVEMENT PROJECTS FUND FOR THE PURPOSE OF FACILITIES REMODELING BE IT RESOLVED BY THE CITY COUNCIL OF PUEBLO, that: SECTION 1. The City Council finds and determines that the expenditure of $1,380,000 .00 for the job creating capital improvement project with The Water Company, LLC described in the attached First Amendment, meets and complies with the criteria and standards established by Ordinance No. 6381 and will create employment opportunities justifying the expenditure of public funds. SECTION 2. The First Amendment dated as of July 13, 2009 to the March 23, 2009 Agreement between the City of Pueblo and The Water Company, LLC relating to a job creating capital improvement project, copies of which are attached hereto, having been approved as to form by the City Attorney, are hereby approved. The President of the City Council is authorized to execute and deliver the First Amendment in the name of the City. The City Clerk is directed to affix the seal of the City thereto and attest same. SECTION 3. Funds in an amount of $1,380,000.00 are hereby authorized to be transferred, expended and made available to The Water Company, LLC 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 March 23, 2009 Agreement and the First Amendment. The funds hereby authorized to be transferred and expended shall be held by the City and released, disbursed and paid by the Director of Finance to or for the benefit of The Water Company, LLC after receipt of written requests for payment required by paragraph 1(b) of the First Amendment. 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 13, 2009 M. Barbara Vidmar COUNCILPERSON s a PPP O'_ PRESIDE NT-of CARY Council D D O ED A e Background Paper for Proposed RESOLUTION AGENDA ITEM # 2 DATE: July 13, 2009 DEPARTMENT: Law Department TITLE A RESOLUTION APPROVING THE FIRST AMENDMENT TO THE MARCH 23, 2009 AGREEMENT BETWEEN PUEBLO, A MUNICIPAL CORPORATION, AND THE WATER COMPANY, LLC RELATING TO A JOB CREATING CAPITAL IMPROVEMENT PROJECT, AUTHORIZING THE PRESIDENT OF THE CITY COUNCIL TO EXECUTE SAME, AND TRANSFERRING $1,380,000.00 FROM THE 1992 -2011 SALES AND USE TAX CAPITAL IMPROVEMENT PROJECTS FUND FOR THE PURPOSE OF FACILITIES REMODELING ISSUE Should City Council approve the First Amendment to the March 23, 2009 Agreement between the City and The Water Company, LLC? RECOMMENDATION Approve the First Amendment. BACKGROUND The City and The Water Company, LLC ( "Company ") entered into a job creating capital improvement project Agreement dated as of March 23, 2009 ( "Agreement "). The Agreement and Resolution No. 11566 approving the Agreement authorized $1,420,000 to be transferred and made available to Company out of the 1992 -2011 Sales and Use Tax Capital Improvement Projects Fund ( "Fund ") as an employment incentive for 140 full -time employees whose annual compensation shall average $65,000, for remodeling the 50,000 square foot shell building located on Lot 2, Pueblo Memorial Airport Industrial Park Subdivision ( "Facilities "). Pursuant to the Agreement, Company executed and delivered to City its $1,380,000 Promissory Note payable without interest to the City in 60 monthly installments ( "Promissory Note "). The proceeds of the Promissory Note were intended to be used as additional money for remodeling the Facilities and repaid to the City ( "Promissory Note Funds "). Neither Resolution No. 11566 nor the Agreement provided that the Promissory Note Funds were to be made available by City to Company for such remodeling purposes. In order to modify the Agreement to conform with the intent of the parties, the First Amendment needs to be approved and executed by the City and Company. The First Amendment authorized the Promissory Note Funds to be made available to Company for purposes of remodeling the Facilities. As a result, City will make available for Facilities remodeling $2,800,000, $1,420,000 as the employment incentive and $1,380,000 as a loan to be repaid by the Company. The payment of the Promissory Note Funds and Company's performance of its employment commitment will be secured by a first deed of trust lien on the Facilities. The Promissory Note Funds will be disbursed to and for the benefit of the Company for Facilities remodeling before the $1,420,000 employment incentive funds. FINANCIAL IMPACT See Background. 9 1 FIRST AMENDMENT THIS FIRST AMENDMENT entered into as of July 13, 2009 between Pueblo, a,municipal corporation (the "City' ") and The water Company, LLC, a Delaware limited liability company�(the "Company "), (herein collectively, the "Parties "), WITNESSETH: WHEREAS, City and Company entered into as Agreement dated March 23, 2009 relating to a job creating capital improvement project (the "Agreement "), and WHE REAS, a dispute has arisen between the language ofthe Agreement and the intent of the Parties; and WHEREAS, in order to resolve such dispute, the Parties desire to amend the Agreement. NOW, THEREFORE, in consideration of the foregoing and mutual covenants contained herein City and Company agree as follows: 1. Promissory Note If Company is not in default, under the Agreement, this First Amendment, or Company's $1,380,000.00 Promissory Note described in Paragraph 2(c)(i) of the Agreement and attached to the Agreement as Exhibit "B" (" Promissory Note "), City will advance to or for the benefit of Company `holds in the amount of $1,380,000.00 ( "Promissory Note Funds ") subject to and contingent upon the following conditions and covenants which Company agrees to perform and comply with: (a) The Promissory Note Funds will be used by Company solely for remodeling the Facility described in Paragraph 1 of the Agreement. (b) As a condition precedent to the disbursement of the Promissory Note Funds to Company for remodeling the Facility, Company shall file with the City's Director of Finance written request for payment of the Promissory Note Funds certified to be true and correct by an officer of Company that the amounts included in the request for payment have not been included in any prior request for payment and me. for the actual cost of remodeling the Facility, identifying the services, work or materials for which payment is sought, including certificates of the contractor andlor architect that such services, work or materials have been completed and installed, in the Facility. All Promissory Note Funds, if any, received by Company shall be deposited in a s account held in trust by Company far the sole and only purpose of paying for remodeling the Facility. (c) Promissory Note Funds shall be disbursed and paid by City prior to the disbursement or payment of any City Funds described in Paragraph 3 of the Agreement. (d) Promissory Note Funds are in addition to City Funds to be advanced to or for the benefit of the Company for remode the Facility. 2. Promissory Note. Funds City has authorized. the Promissory Note Funds to be transferred, expended and made available to Company out of City's 1992 -2011 Sales and Use Tax Capital Improvement Projects Fund for remodeling the Facility. City will hold the Promissory Note Funds solely for such purpose to be disbursed in accordance with the provisions of Paragraph 1 above. 3. Mechanics' Lien (a) Before any construction or remodeling work for the Facility is commenced under and in accordance with any contract between the Company and a contractor for such work, Company shall file for record in the office of the Pueblo County Clerk and Recorder. the contract or a memorandum thereof containing the information required. by §38 -22- 101(3), C.R.S. ( "Contract Information ") and deliver a copy of the recorded Contract Information to City's Director of Finance. (b) Before the first disbursement by Company of any funds or payment to any contractor for construction or remodeling work on the Facility, Company shall file for record in the office of the Pueblo County Clerk and Recorder a disburser notice containing the information required by §38 -22- 126(2), C.R.S. including designating the City of Pueblo, Director of Finance as "disburser" ( "Disburser Notice "), - and deliver a copy of the recorded Disburser Notice to the City's Director of Finance. (c) The filing of the Contract Information and . Disburser Notice and delivering recorded copies thereof to the City's Director of Finance are conditions precedent to any disbursement or payment of Promissory Note Funds and/or City Funds for construction or remodeling work. For purposes hereof, "construction or remodeling work" does not include architect or engineering servi ces. (d) If, pursuant to §§38 -22- 102(4) to (7) or 38 -22 -126, C.R.S., City becomes obligated to pay to or withhold money for the benefit of a lien claimant, the arnount 'so paid or withheld shall . be deducted from the balance of the Promissory Note Funds or City Funds then held by the Cityand, as between City and Company, City shall be credited with payment thereof against the Promissory Note Funds or City Funds, whichever the case may be. (e) Company shall not permit laborers% mechanics% materiaimens', contractors' or subcontractors' liens � arising from any architect, engineering, labor, construction or remodeling services or w or other claims or demands to be enforced against Lot 2 as defined in Paragraph 1 of the Agreement. 4. Qperational Date Paragraph 3(b) of the Agreement is amended to read as follows: (b) Company shall cause the Facility to be remodeled in an expeditious manner. The Facility shall be remodeled and fully operational by December 1, 2009, unless circumstances beyond Company's control delay such operational date but in no event later than March 1, 2010. y 5. Default If Company defaults in any provision of this First Amendment, such default shall be and be deemed to be a default under the Agreement. 6. Inco_pr oration All the terms and provisions of the Agreement are incorporated herein as if set out herein in full. The Agreement as modified by this First Amendment shall remain in full force and effect inuring to the benefit of and binding on the Parties. Executed at Pueblo, Colorado, the day and year first above written. [SEAL] PUEBLO, A MUNICIPAL CORPORATION ATTEST: By City k President of the City Council � ATTEST: Victoria F. Hauser Chief Financial Officer President/CEO