The URL can be used to link to this page

Home My WebLink About12603RESOLUTION NO. 12603 A RESOLUTION APPROVING THE AMENDMENT TO THE AGREEMENT BETWEEN PUEBLO, A MUNICIPAL CORPORATION AND ROCLA CONCRETE TIE, INC. RELATING TO A JOB CREATING CAPITAL IMPROVEMENT PROJECT, AND AUTHORIZING THE PRESIDENT OF CITY COUNCIL TO EXECUTE SAID AMENDMENT AND TRANSFERRING $362,261 FROM THE 1992–2016 SALES AND USE TAX CAPITAL IMPROVEMENT PROJECTS FUND THEREFOR BE IT RESOLVED BY THE CITY COUNCIL OF PUEBLO, that: SECTION 1. The City Council finds and determines that the expenditure of $362,261 for the job creating capital improvement project with Rocla Concrete Tie, Inc. described in the attached Amendment to the Agreement, meets and complies with the criteria and standards established by Section 14-4-85 of the Pueblo Municipal Code and will create employment opportunities justifying the expenditure of public funds. SECTION 2. The Amendment to the Agreement dated February 25, 2013 between Pueblo, a Municipal Corporation and Rocla Concrete Tie, Inc., a Texas corporation, relating to a job creating capital improvement project, a copy of which is attached hereto ("Amendment"), having been approved as to form by the City Attorney, is hereby approved. The President of the City Council is authorized to execute and deliver the Amendment in the name of the City and the City Clerk is directed to affix the seal of the City thereto and attest same. SECTION 3. Funds in the aggregate amount of $362,261 are hereby authorized to be transferred, expended and made available out of the 1992 – 2016 Sales and Use Tax Capital Improvement Projects Fund for the sole purpose of the job creating capital improvement project authorized herein and in the manner described in the 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 in the following manner: the sum of $362,261 shall be paid to Rocla Concrete Tie, Inc. 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 Amendment which are necessary or desirable to effectuate the transactions described therein. SECTION 5. This Resolution shall become effective upon passage and approval. INTRODUCED: February 25, 2013 BY: Chris Nicoll Background Paper for Proposed RESOLUTION DATE: FEBRUARY 25, 2013AGENDA ITEM # Q-2 DEPARTMENT: LAW DEPARTMENT DANIEL C. KOGOVSEK, CITY ATTORNEY TITLE A RESOLUTION APPROVING AN AMENDMENT TO THE EMPLOYMENT AGREEMENT BETWEEN PUEBLO, A MUNICIPAL CORPORATION, AND ROCLA CONCRETE TIE, INC. RELATING TO A JOB CREATING CAPITAL IMPROVEMENT PROJECT, AUTHORIZING THE PRESIDENT OF THE CITY COUNCIL TO EXECUTE SAID AMENDMENT AND TRANSFERRING $362,621 FROM THE 1992-2016 SALES AND USE TAX CAPITAL IMPROVEMENT PROJECTS FUND THEREFOR ISSUE Should City Council approve an amendment to the April 9, 2012 agreement (“Original Employment Agreement”) with Rocla Concrete Tie, Inc. (“Company”) which extends the term of the Company’s employment commitment by two (2) years from seven (7) to nine (9) years and authorizes the expenditure of an additional $362,621 from the 1992-2016 Sales and Use Tax Capital Improvement Projects Fund (“Half Cent Tax Fund”)? BACKGROUND On April 9, 2012, the City of Pueblo entered into the Original Employment Agreement with the Company which authorized the expenditure of $2,300,000 of Half Cent Tax Funds as an employment incentive to the Company which committed to employ at least one hundred (100) full-time employees whose annual compensation would average at least $26,000. All but $100,000 of the transferred funds were used to construct railroad lead track and switches which are currently available to the Company and other companies on a non-exclusive basis. The track which was constructed is approximately 4,000 feet longer than was necessary for the Company in order to open the area for further industrial development. After the execution of the Original Employment Agreement, the Company incurred unforeseen costs in the amount of $362,621 to construct the lead track and switches. This Resolution approves an amendment to the Original Employment Agreement which authorizes the transfer of $362,621 of Half Cent Tax Funds to the Company in exchange for an extension of the term of the Company’s employment commitment by two (2) years from seven (7) to nine (9) years. The employment commitment date begins on April 1, 2014 and will end on March 31, 2023. RECOMMENDATION PEDCO recommends that City Council approve the amendment to the Original Employment Agreement. FINANCIAL IMPACT Payment of $362,621 in Half Cent Tax Funds to Rocla Concrete Tie, Inc. ' - AMENDMENT TO EMPLOYMENT AGREEMENT THIS AMENDMENT TO EMPLOYMENT AGREEMENT ( "Amendment ") is entered into as of this 25th day of February, 2013 between Pueblo, a municipal corporation (the "City ") and Rocla Concrete Tie, Inc., a Texas corporation (the "Company "). The City and the Company are each sometimes referred to herein as a "Party" or collectively as the "Parties." RECITALS A. The Parties agreed upon the terms and conditions of that certain Agreement which was approved by City Council of the City by Resolution adopted on April 9, 2012 (the "Original Employment Agreement "). Capitalized terms not defined herein shall have the same meaning set forth in the Original Employment Agreement. B. After the execution of the Original Employment Agreement, the Company incurred unforeseen costs in the amount of Three Hundred Sixty Two Thousand Six Hundred Twenty One Dollars (U.S. $362,621) to construct the railroad lead track and switches which are currently available to the Company and other companies on a non - exclusive basis. C. The Parties now wish to modify the total economic incentives provided by City for the benefit of the Company, to extend the length of the Company's employment commitment to the City and to make such additional minor changes to the Original Employment Agreement as are set forth below. AGREEMENT In accordance with the foregoing recitals, which are incorporated herein by this reference, and in consideration of the mutual covenants contained herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, City and Company agree as follows: 1. Section 4 of the Original Employment Agreement is hereby deleted and replaced with the following: 4. City and Company stipulate and agree that the total economic incentives provided by City for the benefit of Company under this Agreement is $1,762,621, computed as follows: City Funds for that portion of Railroad Lead Track serving the Site on a non - exclusive basis - $1,662,621, and Lime Road improvements — $100,000 (the "Total Economic Incentives "). 1 2. Section 6(a) of the Original Employment Agreement is hereby deleted and replaced with the following: 6. Notwithstanding anything contained in this Agreement to the contrary, if Company shall fail to meet the Employment Commitment, Company shall pay to City compensating amounts calculated as follows: (a) During the nine (9) year period starting on the Employment Commitment Date and ending one hundred eight (108) months thereafter (the "Commitment Period ") Company shall pay to City a compensating amount for each Quarter in the Commitment Period calculated by subtracting the number of Quarterly Employees from the commitment of one hundred (100) Full -Time Employees and then multiplying the result by $489.62. For example, if for the second Quarter of the third year after the Employment Commitment Date the number of Quarterly Employees is 90 the amount payable by Company to City on or before the fifteenth (15th) day of the next calendar month would be (100 - 90) x $489.62 = $4,896.20. 3. Except as specifically modified by this Amendment to Employment Agreement, the Original Employment Agreement shall not be amended or modified hereby. As modified by this Amendment, the Original Employment Agreement shall continue in full force and effect. [SEAL] , : Pueblo, atb,,,rporation Attest: : 011. - - City Jerk -rest. ent of the City Council [ S_EA L ] ; ROCLA CONCRETE TIE,INC., a Texas - : I. oration Attest. d .i�` Thk4L By Name: C% / � _ ^ Peter Urquhart Title: Fir'1( 4-,CI S ACL�t 'iDut1 j President 2