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
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Bytt �
City rk President of the City Council
APPROVED AS TO FORM: BLACK HILLS COLORADO IPP, LLC
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City Attorn �
Title: U,�P yes cl,rt >< Rs, 0e/, ,0
BLACK HILLS /COLORADO ELECTRIC
UTILITY COMPANY, LP
By
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