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HomeMy WebLinkAbout12889 RESOLUTION NO. 12889 A RESOLUTION ENCUMBERING $14.4 MILLION OF FUNDS IN THE 1992-2016 SALES AND USE TAX CAPITAL IMPROVEMENT PROJECTS FUND FOR THE REGIONAL TOURISM PROJECT. WHEREAS, the Colorado Economic Development Commission approved the application of the City for a Regional Tourism Project described as the Pueblo Professional Bull Riders University and the Heritage of Heroes Project (the “Project”) pursuant to the Colorado Regional Tourism Act, C.R.S. 24-46-301 et seq. (“RTA”); and WHEREAS, the Project will increase out-of-state tourism to the Pueblo area and would allow the development of unique projects not otherwise financially feasible except for the use of new state sales tax revenue; and WHEREAS, local funds are necessary in order to insure that the RTA Grant funds are available to the City for the Project; and WHEREAS, because of the economic development potential of the RTA Project, it is proper for City Council to spend funds from the 1992-2016 Sales and Use Tax Capital Improvement Projects Fund (“Half Cent Sales Tax Fund”) in appropriate circumstances; and WHEREAS, on February 25, 2013, the City, the Pueblo Urban Renewal Authority (“PURA”) and the Historic Arkansas Riverwalk of Pueblo (“HARP”) Authority entered into a Cooperation Agreement regarding the administration of the RTA Grant; and WHEREAS, the criteria ordinance for the expenditure of Half Cent Sales Tax Funds (Section 14-4-85 et seq. of the Municipal Code) requires that said funds be spent in connection with a job creating capital improvement project. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF PUEBLO, that: SECTION 1. Subject to the conditions set forth in Section 2 of this Resolution, $14.4 million of funds in the Half Cent Sales Tax Fund are hereby encumbered and pledged for subsequent use for the RTA Project. Upon full satisfaction of the conditions set forth in Section 2 of this Resolution, the City shall transfer up to $14.4 million from the City’s Half Cent Sales Tax Fund to PURA for Phase 1 of the RTA Project, with the requirement that said funds be repaid in full by PURA to the City within ten years of the date of transfer, at no interest. SECTION 2. The Half Cent Sales Tax Funds encumbered and pledged by this Resolution shall not be released to PURA for the RTA Project, unless: a. Concurrently with the release of the $14.4 million in Half Cent Sales Tax Funds to PURA, the City enters into an appropriate seven-year employment agreement with a new major employer, yet to be determined, who will create a significant number of new primary jobs within the RTA Project area. The City, in its sole judgment, shall make the final determination whether the number of jobs and annual compensation are sufficient to justify this release of funds. b. Contemporaneously with the release of the $14.4 million in Half Cent Sales Tax Funds to PURA for the RTA Project, the City, PURA and the HARP Authority sign an Amendment to the February 25, 2013 Cooperation Agreement which provides that the $14.4 million shall be repaid in full to the City by PURA within ten years from the date of transfer, at no interest, and further provides, for the creation of an RTA Project Oversight Commission, appointed by the City Council, which will oversee the administration of the RTA Grant. SECTION 3. The expenditure of Half Cent Sales Tax Funds is for a public purpose and a municipal function and will promote the welfare of the residents of the City. SECTION 4. The officers and staff of the City are directed and authorized to perform any and all acts consistent with the intent of this Resolution to effectuate the transactions described herein. SECTION 5. This Resolution shall become effective immediately upon passage and approval. SECTION 6. It is the intent of the City Council in adopting this Resolution that the Agreements specified in Section 2 of this Resolution be entered into within one hundred twenty (120) days of the date of this Resolution. In the event that one or both of the contracts listed in Section 2 of this Resolution are not executed on or before May 27, 2014, the encumbrance of the $14.4 million in Half Cent Sales Tax Funds shall terminate and said funds shall revert to the Half Cent Sales Tax Fund, unless City Council votes to extend the term of this resolution. INTRODUCED: January 27, 2014 BY: Steve Nawrocki Councilperson Background Paper for Proposed RESOLUTION DATE: January 27, 2014 AGENDA ITEM # Q-2 DEPARTMENT: Law Department Daniel C. Kogovsek, City Attorney TITLE A RESOLUTION ENCUMBERING $14.4 MILLION OF FUNDS IN THE 1992-2016 SALES AND USE TAX CAPITAL IMPROVEMENT PROJECTS FUND FOR THE REGIONAL TOURISM PROJECT ISSUE Should City Council encumber $14.4 of Half Cent Sales Tax Funds for the Regional Tourism Project? RECOMMENDATION Approve the Resolution. BACKGROUND Because of the economic development potential of the RTA Project, it is proper for City Council to spend funds from the Half Cent Sales Tax Fund in appropriate circumstances. The Criteria Ordinance for the expenditure of Half Cent Sales Tax Funds requires that said funds be spent in connection with a job creating capital improvement project. This Resolution encumbers and pledges $14.4 million in Half Cent Sales Tax Funds to PURA for the RTA Project. These funds will not be released to PURA, unless: A. Concurrently with the release of the $14.4 million in Half Cent Sales Tax Funds to PURA, the City enters into an appropriate employment agreement with a new major employer, yet to be determined, with a seven-year employment commitment for a significant number of new primary jobs within the RTA Project area. The City, in its sole judgment, shall make the final determination whether the number of jobs and annual compensation are sufficient to justify this release of funds. B. Concurrently with the release of the $14.4 million in Half Cent Sales Tax Funds to PURA for the RTA Project, the City, PURA and the HARP Authority sign an Amendment to the February 25, 2013 Cooperation Agreement which provides that the $14.4 million shall be repaid to the City by PURA within ten years from the date of transfer, at no interest, and further provides, for the creation of an RTA Project Oversight Commission, appointed by the City Council, which will oversee the administration of the RTA Grant. If the employment agreement and the amendment to the Cooperation Agreement are not executed within one hundred twenty (120) days (by May 27, 2014) the encumbrance shall terminate and the $14.4 million in encumbered funds shall revert to the Half Cent Sales Tax Fund, unless City Council votes to extend the term of this resolution. FINANCIAL IMPACT Up to $14.4 million of Half Cent Sales Tax Funds will be encumbered and subsequently spent for the RTA Project.