HomeMy WebLinkAbout08660ORDINANCE NO. 8660
AN ORDINANCE APPROVING A COOPERATION
AGREEMENT BETWEEN THE CITY OF PUEBLO AND THE
PUEBLO URBAN RENEWAL AUTHORITY RELATING TO
THE FUNDING PLAN FOR THE PROPOSED DILLON DRIVE /
INTERSTATE-25 INTERCHANGE AND AUTHORIZING THE
PRESIDENT OF THE CITY COUNCIL TO EXECUTE SAME
BE IT ORDAINED BY THE CITY COUNCIL OF PUEBLO, that:
SECTION 1.
The Cooperation Agreement dated October 28, 2013 between the City of
Pueblo and the Pueblo Urban Renewal Authority relating to the relating to the funding
plan for the proposed Dillon Drive / Interstate-25 interchange within the North Pueblo
Urban Renewal Project, a copy of which is attached hereto, 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 Cooperation Agreement in the name of the City
and the City Clerk is directed to affix the seal of the City thereto and attest same.
SECTION 2.
The officers and staff of the City are directed and authorized to perform any and
all acts consistent with the intent of this Ordinance and the attached Cooperation
Agreement to effectuate the transactions described therein.
SECTION 3.
This Ordinance shall become effective immediately upon final passage and
approval.
INTRODUCED: October 28, 2013
BY: Ami Nawrocki
PASSED AND APPROVED: November 11, 2013
Background Paper for Proposed
ORDINANCE
DATE: October 28, 2013 AGENDA ITEM # R-10
DEPARTMENT: Law Department
Daniel C. Kogovsek, City Attorney
TITLE
AN ORDINANCE APPROVING A COOPERATION AGREEMENT BETWEEN THE
CITY OF PUEBLO AND THE PUEBLO URBAN RENEWAL AUTHORITY RELATING
TO THE FUNDING PLAN FOR THE PROPOSED DILLON DRIVE / INTERSTATE-25
INTERCHANGE AND AUTHORIZING THE PRESIDENT OF THE CITY COUNCIL TO
EXECUTE SAME
ISSUE
Should City Council approve the Cooperation Agreement?
RECOMMENDATION
Approve the Cooperation Agreement.
BACKGROUND
On August 26, 2013, the City Council approved a revision to the funding plan for the
proposed Dillon Drive / Interstate 25 Interchange. The Cooperation Agreement provides
that all incremental property tax revenue less the Pueblo Urban Renewal Authority’s
(“Authority”) administration expenses (capped at $55,000 annually) will be pledged for
the construction of the Dillon/I-25 interchange and flyover. The Authority will issue Tax
Increment Financing (“TIF”) bonds in the amount of $4.0 million. Initially, any debt
service deficiency on the TIF bonds will be paid by the City with Funding Advancement
for Surface Transportation and Economic Recovery (“FASTER”) funds. As new
development occurs within the North Urban Renewal Area, the Authority agrees to
reimburse the City’s payments with interest at five percent (5%) using TIF revenues.
FINANCIAL IMPACT
FASTER funds currently estimated at $225,000 per year will be used to pay any debt
service deficiency on the TIF bonds until the increase in TIF revenues will permit
reimbursement to the City by the Authority.
AMENDED AND RESTATED COOPERATION AGREEMENT
North Pueblo Urban Renewal Project
THIS COOPERATION AGREEMENT (the Agreement), is made and entered into as of October 28, 2013,
by and between the CITY OF PUEBLO, a Colorado municipal corporation (the City) and the PUEBLO URBAN
RENEWAL AUTHORITY, a body corporate and politic of the State of Colorado (the Authority). The City and the
Authority are sometimes referred to herein collectively as the Parties and individually as a Party.
RECITALS
A. On November 13, 2006, pursuant to Ordinance No. 7533, the City Council of the City approved
the North Pueblo Urban Renewal Plan (the "Plan ").
B. The priority of the Plan and its principal urban renewal project is the construction of the Dillon
Drive Extension, which will consist of the Dillon/Eden split diamond interchange and flyover or such other
configuration and facilities as may be approved by the Colorado Department of Transportation ( "CDOT "), to be
located within the Plan Area, to allow increased traffic and access to properties within the Plan Area via Interstate
25 (the "Interchange Project "). The Interchange Project is being carried out under contract with CDOT in
cooperation between the City and the Authority in furtherance of the Colorado Urban Renewal Law (the "Act ") and
the Plan. The Plan provides for financing the activities and undertakings of the Authority in connection with
carrying out the Project by means of property tax allocation or tax increment financing ( "Property Tax TIF ") in
accordance with Section 31 -25- 107(9) of the Act.
C. The Parties entered into a Cooperation Agreement dated as of April 14, 2008, regarding the
Interchange Project. The Parties agree that this Amended and Restated Cooperation Agreement shall replace the
April 14, 2008 Cooperation Agreement in its entirety as set forth herein.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants contained herein, the
Parties agree as follows:
Section 1. Cooperation Regarding the Interchange Project. The Parties shall cooperate to take any
and all reasonable steps necessary to finance, design, construct, modify, acquire property for, and obtain all permits
and approvals required for the Interchange Project, including, without limitation, compliance with the procedures
established by the Colorado Department of Transportation in Procedural Directive 1601.1 and other applicable
requirements, in accordance with the preferred alternative for the Interchange Project (the "Interchange Project
Work ") so that construction can begin during the 2013 -14 winter season.
a. The City has entered into a contract with the Colorado Department of Transportation relating to the
design and construction of the Interchange Project (the "CDOT Contract "). Project work will be performed in
conformance with the CDOT Contract.
b. The City has obtained funding from a combination of federal and CDOT sources for the design and
construction of Interchange Project in an amount that provides approximately $10.9 million remaining for
construction, which construction is estimated to cost approximately $14.5 million leaving a shortfall of
approximately $3.6 million. The Parties agree to provide funding for such shortfall and for the other costs related to
the Interchange Project and for carrying out the Plan as set forth in this Agreement.
Section 2. Funding Plan for Interchange Project Shortfall
a. Funding of the Interchange Project shortfall will require the issuance of Tax Increment Financing
( "TIF ") Bonds and the establishment of a Bond Fund, pursuant to a Bond Indenture. The Authority agrees to issue
TIF Bonds in a principal amount not to exceed $4.0 million. The additional $400,000 indebtedness in excess of the
$3.6 million required to complete the Interchange Project shall be used to pay issuance costs and debt service
reserve requirements of the TIF Bonds for the Interchange Project and shall not be used by the Authority for any
other purpose. The Bond Indenture will require the Authority to deposit all of the Property Tax TIF revenue in a
Special Fund in the Bond Fund as described in Section 4 of this Agreement. If the revenue in the Bond Fund is not
sufficient to meet applicable debt service requirements under the Indenture, the Authority shall submit a certificate
to the City indicating the sum necessary to meet such debt service requirements ( "Debt Service Deficiency
Payment ") together with a request for appropriation of such funds by the City Council. The City Council may make,
but shall not be required to make, the appropriation, so requested, to pay the Debt Service Deficiency Payment.
b. The City Council, in its discretion, may direct the City Manager to include in the budget proposals
submitted to the City Council, in each year while the obligation to maintain the Bond Fund is in effect, an amount of
funds available under the Funding Advancement for Surface Transportation and Economic Recovery ( "FASTER ")
allocation to the City, as a line item in its annual budget, a sum necessary to pay the Debt Service Deficiency
Payment. The decision as to whether to appropriate such amounts shall be at the sole discretion of the City Council.
The obligation of the City to pay the Debt Service Deficiency Payment, if any, shall not constitute the creation of
indebtedness or authorize borrowing of money by the City within the meaning of any constitutional, home -rule
charter, or statutory limitation or provision. The obligation of the City shall be from year to year only and shall not
constitute a mandatory obligation of the City in any fiscal year beyond the present fiscal year. This Agreement shall
not directly or indirectly obligate the City to make any payments beyond those appropriated for any fiscal year in
which this Agreement shall be in effect.
c. The terms and conditions of all documents related to the issuance of the Bonds and use of the
proceeds thereof shall be subject to the prior written approval of the City through its City Manager.
d. The TIF Bonds shall be issued by the Authority as soon as reasonably possible so that construction
of the Interchange Project can commence within the time period set forth in Section 1 of this Agreement. The TIF
Bonds shall be repaid on a priority basis from Property Tax TIF revenue produced and allocated to the Authority
pursuant to the Act. The TIF Bonds shall have a first lien on the Property Tax TIF revenue until paid in full.
Section 3. Reimbursement of Costs. The Parties will cooperate to establish a procedure for
documenting, certifying, and presenting for payment the actual reasonable costs incurred by the City for the
Interchange Project Work. The Authority shall have the right to review and approve all requests for payment which
approval shall not be unreasonably delayed, withheld or conditioned. The Authority shall promptly pay all approved
invoices from the revenue in the Special Fund described in Section 4 of this Agreement.
Section 4. Special Fund. In accordance with Section 31- 25- 107(9)(a)(II) of the Act, the Authority
shall establish a special fund (the "Special Fund ") and deposit therein all Property Tax TIF revenue from the Plan
area upon receipt thereof from the Treasurer of Pueblo County, except for the Authority Administrative Fee
described in Section 5 of this Agreement.
Section 5. Authority Administrative Fee. The Authority shall be paid an annual administrative fee
of up to fifteen percent (15%) of the gross proceeds of the Property Tax TIF revenue received from the Treasurer of
Pueblo County each year (the "Authority Administrative Fee "), for general administration of the Plan and other
statutory duties as well as the fiduciary and reporting requirements associated with issuance and payment of the TIF
Bonds. The annual administrative fee paid to the Authority shall not exceed Fifty -Five Thousand Dollars
($55,000.00).
Section 6. Financing Plan; Reimbursement of City. The Authority agrees to repay the City as
follows:
a. Reimbursement of the Matching Funds of $1,069,800 paid by the City as required for receipt of
partial funding for the Interchange Project from a Federal Highway Administration (HFWA) SAFTEA -LU grant.
b. Reimbursement of Debt Service Deficiency Payments made by the City with appropriated FASTER
funds.
c. All payments by the Authority to the City shall be made using Property Tax TIF revenue available
in the Special Fund after (a) payment of the Authority Administrative Fee described in Section 5, and (b) payment of
the Bond annual debt service, including replenishment of any reserve funds in a manner provided in any agreement
governing issuance and payment of the TIF Bonds.
d. The Authority shall make reasonable effort to make payments to the City in accordance with this
Agreement, subject to market conditions and growth in Property Tax TIF revenue. All payments to the City shall be
subordinate and junior in all respects to payment of the TIF Bonds. The Authority agrees that it shall not refinance
or refund the TIF Bonds without the express, written consent of the City.
e. The Authority agrees to pay interest on each year's Debt Service Deficiency Payment (with
appropriated FASTER funds) by the City at the rate of five percent (5 %) per annum simple interest calculated from
the date that the City transfers each such installment of FASTER funds to the Authority. Such payments shall be
made in a manner that is compatible with payment of the Bonds.
f. The Authority shall not enter into any agreement or transaction that impairs, subordinates or delays
the rights of the City to receive the payments specified in this Agreement.
g. The Authority will keep, or cause to be kept, proper and current books and accounts in which
complete and accurate entries shall be made of the amount of Property Tax TIF revenue received by the Authority,
and the amounts deposited into and paid out from the Special Fund. All books, records and reports in the possession
of the Authority relating to the foregoing shall at all reasonable times be open to inspection by such accountants or
other agents as the City may from time to time designate. The Authority agrees to prepare and provide the City with
commercially reasonable financial and performance reports upon request by the City.
Section 7. Maintenance of Bridge and Landscaping. The Parties intend, and shall cooperate to
require, that the owners and developers of a development project known as Pueblo Crossings Phase 11 shall be
responsible for maintenance of the bridge and landscaping improvements included in the interchange improvements
by means of a metropolitan district or public improvement fee.
Section 8. Delays. Any delays in or failure of performance by any Party of its obligations under this
Agreement shall be excused if such delays or failure are a result of acts of God, fires, floods, strikes, labor disputes,
accidents, regulations or order of civil or military authorities, shortages of labor or materials, or other causes, similar
or dissimilar, which are beyond the control of such Party.
Section 9. Default. Time is of the essence, subject to Section 8 above. If any payment or any other
material condition, obligation, or duty is not timely made, tendered, or performed by either Party, then either Party
may exercise any and all rights available at law or in equity, including damages, but such damages shall be limited
to the actual amount that such Party is entitled to receive or retain under this Agreement. No special or punitive
damages shall be payable hereunder.
Section 10. Obligations Subject to Charter and Constitution. The covenants, duties and actions
required of the parties under this Agreement shall be subject to and performed in accordance with the provisions and
procedures required and permitted by the City Charter, the Act, any other applicable provision of law and the
Colorado Constitution.
Section 11. Captions. The captions of the Sections are set forth only for the convenience and
reference of the Parties and are not intended in any way to define, limit, or describe the scope or intent of this
Agreement.
Section 12. Additional Documents or Action. The Parties agree to execute any additional documents
or take any additional action that is necessary to carry out this Agreement.
Section 13. Integration and Amendment. This Agreement represents the entire agreement between
the Parties with respect to the subject matter and there are no oral or collateral agreements or understandings with
respect to the subject matter. This Agreement may be amended only by an instrument in writing signed by the
Parties.
Section 14. Waiver of Breach. A waiver by any Party to this Agreement of the breach of any term or
provision of this Agreement shall not operate or be construed as a waiver of any subsequent breach by either Party.
Section 15. Governing Law. This Agreement shall be governed by the laws of the State of Colorado.
Section 16. Execution in Counterparts. This Agreement may be executed in several counterparts,
each of which shall be deemed an original and all of which shall constitute but one and the same instrument.
Section 17. Third -party Beneficiaries. This Agreement is intended to describe the rights and
responsibilities only as to the Parties hereto. This Agreement is not intended and shall not be deemed to confer any
rights on any person or entity not named as a Party hereto.
Section 18. Minor Changes. The Parties executing this Agreement are authorized to make non -
substantive corrections to this Agreement and attached exhibits, if any, as the Parties mutually consider necessary.
Section 20. Good Faith of Parties. In the performance of this Agreement or in considering any
requested approval, acceptance, or extension of time, the Parties agree that each will act in good faith and will not
act unreasonably, arbitrarily, capriciously, or unreasonably withhold, condition, or delay any approval, acceptance,
or extension of time required or requested pursuant to this Agreement.
Section 21. Parties Not Partners. Notwithstanding any language in this Agreement or any other
agreement, representation, or warranty to the contrary, the Parties shall not be deemed to be partners or joint
venturers, and neither Party shall be responsible for any debt or liability of the other Party or any other party.
IN WITNESS WHEREOF, this Agreement is executed by the Parties hereto in their respective names as of
the date first above written.
PUEBLO URBAN RENEWAL AUTHORITY
ATTEST: r -- G ` By - ! / , /
Secretary Chairman of the Board of Commissioners
PUEBLO, A MUNICIPAL CORPORATION
ATTEST: __ �.� By:
Ili City Clerk President oft e ity Council