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