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HomeMy WebLinkAbout11910RESOLUTION NO. 11910 A RESOLUTION APPROVING AMENDMENT NO. 1 TO THE DECEMBER 28, 2009 PRE-ANNEXATION AGREEMENT BETWEEN THE CITY OF PUEBLO, A MUNICIPAL CORPORATION, BLACK HILLS/COLORADO ELECTRIC UTILITY COMPANY, LP, AND BLACK HILLS ELECTRIC GENERATION, LLC AND AUTHORIZING THE PRESIDENT OF THE CITY COUNCIL TO EXECUTE SAME WHEREAS, the City of Pueblo ("City") has heretofore entered into a Pre- Annexation Agreement ("Pre-Annexation Agreement") with Black Hills/Colorado Electric Utility Company, LP ("Utility") and Black Hills Electric Generation, LLC ("Generation") dated December 28, 2009; and WHEREAS, Generation has assigned its rights under the Pre-Annexation Agreement to Black Hills Colorado IPP, LLC ("IPP") with conditional consent thereto by City; and WHEREAS, it is necessary and desirable that the Pre-Annexation Agreement be amended to extend certain deadlines for actions. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF PUEBLO, that: SECTION 1. Amendment No. 1 to the Agreement, dated June 14, 2010 effective June 1, 2010, between the City of Pueblo, a Municipal Corporation and Utility and IPP ("Amendment No. 1"), a copy of which is attached hereto, having been approved as to form by the City Attorney, is hereby approved. SECTION 2. The President of the City Council is hereby authorized and directed to execute Amendment No. 1 in the name of and on behalf of Pueblo, a Municipal Corporation and the City Clerk shall affix the seal of the City thereto and attest same. INTRODUCED: June 14, 2010 BY: Judy Weaver /COUNCILPERSON Background Paper for Proposed RESOLUTION DATE: # M-11 June 14, 2010 AGENDA ITEM DEPARTMENT: Law Department Thomas J. Florczak, City Attorney TITLE A RESOLUTION APPROVING AMENDMENT NO. 1 TO THE DECEMBER 28, 2009 PRE-ANNEXATION AGREEMENT BETWEEN THE CITY OF PUEBLO, A MUNICIPAL CORPORATION, BLACK HILLS/COLORADO ELECTRIC UTILITY COMPANY, LP, AND BLACK HILLS ELECTRIC GENERATION, LLC AND AUTHORIZING THE PRESIDENT OF THE CITY COUNCIL TO EXECUTE SAME ISSUE Should City Council approve an amendment to the Pre-Annexation Agreement with the Black Hills companies in order to extend the deadline to complete the annexation of the proposed power plant site to June 14, 2010? RECOMMENDATION Approval. BACKGROUND On December 28, 2009, the City entered into a Pre-Annexation Agreement with Black ills providing a process for development of the proposed Black Hills power plant site. The Pre-Annexation Agreement included economic incentives to Black Hills to construct the plant within the City, a prepayment to the City of $7.5 million in lieu of actual sales and use tax for materials used in construction of the plant ($4.6 million of which has been paid) and an expeditious period for accomplishing annexation. Due to an inability of the City and Black Hills to reach complete agreement over the terms of annexation, the parties need to extend the June 1, 2010 deadline contained in the Pre-Annexation Agreement to June 15, 2010. FINANCIAL IMPACT The approval of the amendment is necessary to avoid the City having to repay $4.6 million of the payment in lieu of sales and use tax made by Black Hills in 2009. AMENDMENT NO. 1 TO PRE - ANNEXATION AGREEMENT THIS AMENDMENT NO. 1 to Pre - Annexation Agreement ( "Amendment No. 1") is made and entered into this 14th day of June, 2010 effective June 1, 2010, between the City of Pueblo, a Municipal Corporation (the "City ") and Black Hills /Colorado Electric Utility Company, LP, a Delaware limited partnership ( "Utility ") and Black Hills Colorado IPP, LLC, a South Dakota limited liability company ( "IPP ") (collectively, Utility and IPP may be referred to herein as "Black Hills "). WHEREAS, City, Utility and Black Hills Electric Generation, LLC, a South Dakota limited liability company ( "Generation ") heretofore entered into a Pre - Annexation Agreement dated December 28, 2009 (the "Pre- Annexation Agreement "); and WHEREAS, Generation has assigned its rights under the Pre - Annexation Agreement to IPP, to which assignment the City has given its conditional consent in reliance upon the Guaranty made by Generation dated May 10, 2010; and WHEREAS, due to extended negotiations concerning the terms of Annexation Agreement contemplated by the Pre - Annexation Agreement, it is necessary and desirable that the Pre - Annexation Agreement be amended to extend the period within which an ordinance approving an Annexation Agreement and annexing certain property is to be adopted. NOW, THEREFORE, in consideration of the foregoing and the mutual terms and conditions set forth herein, the parties agree as follows: 1. Section 5 of the Pre - Annexation Agreement is amended to read as follows: 5. Refund. If the City Council of the City does not adopt an ordinance approving the Annexation Agreement and annexing the Property to the City on or before June 15, 2010, or such later date as the Parties may mutually agree, City will refund the Partial Payment to the Petitioners in full, without interest, on or before July 15, 2010 or thirty (30) days after such later date established by the Parties for adoption of the ordinance approving the Annexation Agreement ( "Refund "). The City will take all lawful action reasonably required and necessary to effect such Refund. If the City fails to take any lawful action reasonably required and necessary to effect such Refund, Petitioners may pursue a remedy for specific performance, injunction or declaratory judgment to effect such Refund, but not for recovery of damages of any type or nature, with each party to pay its own costs and attorney fees. 2. Except as expressly modified by this Amendment No. 1, the Pre - Annexation Agreement shall remain in full force and effect. Except as expressly modified, any obligations remaining to be performed under the original pre- Annexation Agreement by either party, are not waived or excused in any manner, but shall be fully performed in accordance with the terms and conditions of the Pre - Annexation Agreement as it existed prior to this Amendment No. 1. 974639.1 IN WITNESS WHEREOF, Black Hills and City have executed this Amendment No. 1 to the Pre - Annexation Agreement as of the date first above written. ATTEST: PUEBLO, a Municipal Corporation 1 Bytt � City rk President of the City Council APPROVED AS TO FORM: BLACK HILLS COLORADO IPP, LLC '77-1 City Attorn � Title: U,�P yes cl,rt >< Rs, 0e/, ,0 BLACK HILLS /COLORADO ELECTRIC UTILITY COMPANY, LP By Title: U, c C / t C, , /, / f �, �/ D,t . ' 2