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HomeMy WebLinkAbout08336SUBSTITUTED COPY 4/21/2011 ORDINANCE NO. 8336 AN ORDINANCE PLEDGING A PORTION OF THE SALES AND USE TAXES COLLECTED BY THE CITY PURSUANT TO SECTION 14-4-17 OF CHAPTER 4, TITLE XIV OF THE PUEBLO MUNICIPAL CODE TOWARD PAYMENT OF THE PRINCIPAL OF, PREMIUM, IF ANY, AND INTEREST ON REVENUE BONDS OF THE URBAN RENEWAL AUTHORITY OF PUEBLO, COLORADO, ISSUED FOR THE PURPOSES OF REFUNDING CERTAIN BONDS AND FOR REMODELING AND RESTORING THE HISTORIC MEMORIAL HALL, AND FOR THE PAYMENT OF THE NET OPERATION AND MAINTENANCE EXPENSES OF THE PUEBLO CONVENTION CENTER AND FOR THE PAYMENT OF MAINTENANCE EXPENSES FOR HISTORIC MEMORIAL HALL, WHICH ARE SITUATED WITHIN THE BOUNDARIES OF THE URBAN RENEWAL AUTHORITY OF PUEBLO, COLORADO; PLACING RESTRICTIONS ON THE USE OF THE PROCEEDS OF SUCH BONDS; AND PROVIDING OTHER MATTERS RELATING THERETO. WHEREAS, the City of Pueblo, Colorado (the “City”), by Resolution No. 1133, adopted on March 9, 1959, created the Urban Renewal Authority of Pueblo, Colorado (the “Authority”), for the purpose of alleviating and correcting the blighted condition of certain areas of the City, in particular an area of downtown Pueblo; and WHEREAS, the Authority adopted an Urban Renewal Plan for the Phase One Urban Renewal Project for Downtown Pueblo (the “Phase One Urban Renewal Project”) in 1986, which was approved by the City in Resolution No. 5868, adopted on August 25, 1986; and WHEREAS, the Authority modified and amended the Phase One Urban Renewal Project and adopted the Urban Renewal Plan for the Amended Phase One Urban Renewal Project for downtown Pueblo in 1988, which was approved by the City in Resolution No. 6148 adopted on February 22, 1988; and WHEREAS, the Authority modified the Amended Phase One Urban Renewal Project in 1991, which modification was approved by the City in Resolution No. 6796 adopted on July 22, 1991; and WHEREAS, in order to finance certain public improvements (namely, the Pueblo Convention Center complex) in connection with the Phase One Project, the Authority issued $9,950,000aggregate principal amount of its Tax Increment Revenue Bonds (Phase One Urban Renewal Project) Series 1986A, the proceeds of which remained in an escrow until the issuance by the Authority of $7,275,000 aggregate principal amount of its Revenue Refunding Bonds (Phase One Urban Renewal Project), Series 1994A and $2,225,000 aggregate principal amount of its Subordinate Revenue Refunding Bonds (Phase One Urban Renewal Project), Series 1994B (together, the “Series 1994 Bonds”); and WHEREAS, in an election held on November 2, 1993, the voters of the City authorized the pledge of 3.30% of the sales and use tax revenues of the City (the “Pledged City Sales Taxes”) toward the payment of (1) the principal of, premium, if any, and interest on revenue bonds of the Authority, and (2) the operation and maintenance expenses of a civic center and hotel complex within the boundaries of the Authority; and WHEREAS, the City therefore adopted Ordinance No. 5853 on second reading on January 10, 1994, pledging the Pledged City Sales Taxes toward the payment of the Series 1994 Bonds and any revenue bonds issued by the Authority to refund the Series 1994 Bonds, and for paying the operation and maintenance expenses of the Pueblo Convention Center complex; and WHEREAS, in order to refund the Series 1994 Bonds at a lower interest rate, the Authority issued $7,310,000 aggregate principal amount of its Refunding Revenue Bonds (Phase One Urban Renewal Project), Series 2005, currently outstanding in the aggregate principal amount of $5,245,000 (the “Series 2005 Bonds”) in 2005; and WHEREAS, over the past several years it has become apparent that the historic Memorial Hall is in need of remodeling and restoration and that the best source of funds to support the remodeling and restoration would be the Pledged City Sales Taxes; and WHEREAS, the City and the Authority therefore presented to the electorate of the City Question 2B at the election held on November 2, 2010, and the voters approved said question; and WHEREAS, Question 2B authorizes the issuance of revenue bonds by the Authority in the amount of up to $10,000,000 for the purpose of financing the remodeling, restoring and maintaining of the historic Memorial Hall (the “Memorial Hall Project”) and Question 2B further authorizes the City Council to pledge 3.30% of the sales and use tax revenues of the City to pay (1) the principal of, premium, if any, and interest on those revenue bonds of the Authority, as well as the Series 2005 Bonds and any bonds issued to refund the Series 2005 Bonds, (2) the net operation and maintenance expenses of the Pueblo Convention Center; and (3) the costs of maintaining the historic Memorial Hall; and WHEREAS, the Memorial Hall Project will be of great benefit to the residents of the City, and the City desires that the Memorial Hall Project be financed with the proceeds of revenue bonds issued by the Authority; and WHEREAS, the City Council, after consultation with the Authority’s Board of Commissioners, has determined that it is in the best interests of the inhabitants of the City to pledge such moneys toward the payment of two series of revenue bonds to be issued by the Authority (together, the “Series 2011 Bonds”), the proceeds of which would be used to refund the outstanding Series 2005 Bonds and to finance the Memorial Hall Project. NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF PUEBLO: SECTION 1. All actions consistent with the provisions of this Ordinance heretofore taken by any of the officials of the City or the City Council members directed toward the refunding of the Series 2005 Bonds and the remodeling and restoration of the historic Memorial Hall shall be, and the same hereby are, ratified, approved and confirmed. SECTION 2. Pursuant to Section 14-4-17 of Chapter 4, Title XIV of the Pueblo Municipal Code, as amended, the City Council hereby pledges irrevocably (in accordance with the terms of this Ordinance) all of the moneys in the Collection Fee Fund (as defined in Section 14-4-17) from time to time for the purposes of (a) paying the principal of, premium, if any, and interest on the Series 2011 Bonds and any revenue bonds issued by the Authority to refund the Series 2011 Bonds (together, the “Bonds”), (b) paying the net operation and maintenance expenses of the Pueblo Convention Center, and (c) maintaining the historic Memorial Hall. This pledge shall be irrevocable so long as the Series 2011 Bonds are outstanding, although excess moneys not necessary under the pledge may be returned to the City pursuant to the provisions of a cooperation agreement or similar document to be entered into by the City and the Authority. SECTION 3. (a) The Indenture and all other documents for the Series 2011 Bonds shall be subject to prior approval by Resolution of the City Council of the City. (b) In addition, all contracts for the construction of all or any part of the Memorial Hall Project which is funded in whole or in part by the proceeds of the Series 2011 Bonds shall be procured through competitive bidding procedures which allow competent and qualified local contractors and subcontractors a reasonable opportunity to participate in such competitive bidding. SECTION 4. The City Council of the City and the Board of Commissioners of the Authority have heretofore entered into an agreement concerning the planning of the Memorial Hall Project, including its design and the specifications for its construction contracts, and shall mutually agree regarding (a) the management of and the annual budget for the Pueblo Convention Center, and (b) the maintenance of the historic Memorial Hall. SECTION 5. All bylaws, orders, resolutions and ordinances or parts of bylaws, orders, resolutions and ordinances, in conflict with this Ordinance, are hereby repealed. This repealer shall not be construed to revive any bylaw, order, resolution or ordinance, or part thereof, heretofore repealed. SECTION 6. If any section, paragraph, clause or provision of this Ordinance shall for any reason be held to be invalid or unenforceable, the invalidity or unenforceability of such section, paragraph, clause or provision shall not affect any remaining provisions of this Ordinance. INTRODUCED AND PRESENTED FOR A FIRST TIME ON APRIL 25, 2011, ORDERED PUBUSHED BY TITLE ONLY, PRESENTED A SECOND TIME AND FINALLY PASSED AND ADOPTED ON MAY 9, 2011 INTRODUCED APRIL 25, 2011 By Judy Weaver Councilperson APPROVED MAY 9, 2011 BY Presiden C ity ouncil [SEAL] ATTEST r , eputy City Clerk APPROVED AS TO FORM BY CITY ATTORNEY - City Attorn / Background Paper for Proposed ORDINANCE DATE: AGENDA ITEM # S-1 April 25, 2011 DEPARTMENT: Law Department Thomas J. Florczak, City Attorney TITLE AN ORDINANCE PLEDGING A PORTION OF THE SALES AND USE TAXES COLLECTED BY THE CITY PURSUANT TO SECTION 14-4-17, CHAPTER 4, TITLE XIV OF THE PUEBLO MUNICIPAL CODE TOWARD PAYMENT OF THE PRINCIPAL OF, PREMIUM, IF ANY, AND INTEREST ON REVENUE BONDS OF THE URBAN RENEWAL AUTHORITY OF PUEBLO, COLORADO, ISSUED FOR THE PURPOSES OF REFUNDING CERTAIN BONDS AND FOR REMODELING AND RESTORING THE HISTORIC MEMORIAL HALL, AND FOR THE PAYMENT OF THE NET OPERATION AND MAINTENANCE EXPENSES OF THE PUEBLO CONVENTION CENTER AND FOR THE PAYMENT OF MAINTENANCE EXPENSES FOR HISTORIC MEMORIAL HALL, WHICH ARE SITUATED WITHIN THE BOUNDARIES OF THE URBAN RENEWAL AUTHORITY OF PUEBLO, COLORADO; PLACING RESTRICTIONS ON THE USE OF THE PROCEEDS OF SUCH BONDS; AND PROVIDING OTHER MATTERS RELATING THERETO ISSUE Should City Council adopt an Ordinance pledging the so-called "Vendor's Fee" for the repayment of principal on bonds issued by the Urban Renewal Authority of Pueblo, Colorado ("Authority") to finance the remodeling and restoration of the historic Memorial Hall? RECOMMENDATION Approve the Ordinance. BACKGROUND Under Pueblo's tax code, traditionally the vendors who collected and remitted sales tax to the City from the buyers of goods and services were allowed to retain 3.3% of the sales tax collected (i.e.: 0.1155% of the sales price). The concept behind this was compensation to the vendors for the costs and efforts in collection, remission and accounting for the sales tax. In 1993, with the support of the major types of businesses that collect such taxes (e.g., car dealers) the People amended this provision to divert the Vendor's Fee to pay for operation and maintenance of a civic center and payment of principal and interest on bonds to finance a civic center, which allowed the construction of the Pueblo Convention Center. By 2010, the amount of the Vendors Fee had exceeded the amount required for debt service on the Convention Center bonds and its operating deficiency. A ballot question was therefore presented to the voters on November 2, 2010, and approved by them, which authorized the issuance of additional revenue bonds in an amount up to $10,000,000 by the Authority for the purpose of financing the remodeling and restoration of Memorial Hall, and further authorizing the pledge of the Vendor's Fee to repay the new bonds as well as the existing bonds for the Convention Center, the net operating and maintenance expenses of the Convention Center and the costs of maintaining Memorial Hall. The proposed Ordinance before Council effects that pledge of the Vendors Fee so that the Authority may issue bonds to both refund the existing Convention Center bonds and finance the remodeling and restoration of Memorial Hall. By issuing the new bonds in this manner, it is anticipated that the bond funds made available for construction work on Memorial Hall will be maximized. FINANCIAL IMPACT The Ordinance will not increase the sales tax rate but merely pledges the Vendor's Fee to be used to fund bonds for the renovation of Memorial Hall.