HomeMy WebLinkAbout13436RESOLUTION NO. 13436
A RESOLUTION APPROVING A LEASE PURCHASE
AGREEMENT AND A PROJECT FUND AGREEMENT BETWEEN
THE CITY OF PUEBLO, A MUNICIPAL CORPORATION AND
BRANCH BANKING AND TRUST COMPANY, AUTHORIZING
EXECUTION THEREOF BY THE PRESIDENT OF THE CITY
COUNCIL AND AUTHORIZING THE EXECUTION AND
DELIVERY OF ALL OTHER DOCUMENTS REQUIRED
THEREWITH NECESSARY FOR THE LEASE AND PURCHASE
OF POLICE DEPARTMENT VEHICLES AND RELATED
EQUPIMENT IN THE AMOUNT OF $1,123,837
BE IT RESOLVED BY THE CITY COUNCIL OF PUEBLO, that:
WHEREAS, the City of Pueblo, a municipal corporation (hereinafter “City”) is a Colorado
home rule City duly organized and existing under and by virtue of Article XX of the Colorado
Constitution and is authorized thereby to purchase and lease personal property for its municipal
purposes for the benefit of the City and its inhabitants and to enter into contracts with respect
thereto; and
WHEREAS, the City desires to lease and purchase certain police vehicles which constitute
personal property necessary for the performance of the Police Department’s duties; and
WHEREAS, in order to acquire said vehicles, the City proposes to enter into a Lease
Purchase Agreement and a Project Fund Agreement with Branch Banking and Trust Company
(“BB&T”); and
WHEREAS, City Council, as the governing body of the City, deems it for the benefit of the
City and for the efficient and effective administration thereof to enter into the Lease Purchase
Agreement and Project Fund Agreement for the leasing and purchase of the police vehicles
described therein and on the terms and conditions therein provided; and
WHEREAS, the funds made available under the Lease will be applied to the acquisition
of the police vehicles in accordance with the terms of such Lease Purchase Agreement and
Project Funds Agreement.
NOW, THEREFORE, BE IT FURTHER RESOLVED BY THE CITY COUNCIL OF
PUEBLO, that
SECTION 1.
The Lease Purchase Agreement and the Project Fund Agreement, attached hereto,
having been approved as to form by the City Attorney are hereby approved. The President of
City Council is hereby authorized and directed to execute the Lease Purchase Agreement and
the Project Fund Agreement and the City Clerk is authorized and directed to attest same and affix
the seal of the City thereto.
SECTION 2.
The City Manager and the officers, Directors and employees of the City are directed and
authorized to take all action necessary to give effect to and complete the lease and purchase
transaction which is hereby approved.
SECTION 3.
The Lease Purchase Agreement and the Project Fund Agreement are expressly made
subject to sufficient appropriations being made therefore in each fiscal year after 2016. Nothing
contained in this Resolution or the Lease Purchase Agreement or the Project Fund Agreement,
no any other instrument, shall be construed with respect to the City as incurring a pecuniary
liability or charge upon the general credit of the City or against its taxing power, nor shall the
breach of said agreements approved by this Resolution impose any pecuniary liability upon the
City except to the extent that the City is required to make the rental payments for fiscal year 2016.
Nothing in this Resolution is intended, nor shall it be construed, to create any multiple-fiscal year
direct or indirect debt or financial obligation whatsoever of the City.
SECTION 4.
The City Manager and Director of Finance of the City are each hereby designated to act
as authorized representatives of the City for purposes of the Lease Purchase Agreement and the
Project Fund Agreement until such time as the City Council shall designate any other or different
authorized representatives for purposes of said agreements.
SECTION 5.
This Resolution shall become effective immediately upon final passage.
INTRODUCED May 9, 2016
BY: Chris Nicoll
City Clerk’s Office Item # Q-1
Background Paper for Proposed
Resolution
COUNCIL MEETING DATE: May 9, 2016
TO: President Stephen G. Nawrocki and Members of City Council
CC: Sam Azad, City Manager
VIA: Gina Dutcher, City Clerk
FROM: Roni Kimbrel, Finance Director
Dr. Luis Velez, Chief of Police
SUBJECT: A RESOLUTION APPROVING A LEASE PURCHASE AGREEMENT AND A
PROJECT FUND AGREEMENT BETWEEN THE CITY OF PUEBLO, A
MUNICIPAL CORPORATION AND BRANCH BANKING AND TRUST COMPANY,
AUTHORIZING EXECUTION THEREOF BY THE PRESIDENT OF THE CITY
COUNCIL AND AUTHORIZING THE EXECUTION AND DELIVERY OF ALL
OTHER DOCUMENTS REQUIRED THEREWITH NECESSARY FOR THE
LEASE AND PURCHASE OF POLICE DEPARTMENT VEHICLES AND
RELATED EQUPIMENT IN THE AMOUNT OF $1,123,837
SUMMARY:
This Resolution allows the Police Department to lease/purchase twenty-two 2017 Police
Interceptor SUV’s and related equipment.
PREVIOUS COUNCIL ACTION:
Not applicable.
BACKGROUND:
Branch Banking and Trust Company’s (“BB&T”) proposal for the lease/purchase of new police
vehicles was selected by the City’s Committee of Awards as being the proposal most
advantageous to the City.
FINANCIAL IMPLICATIONS:
Under the lease, BB&T has agreed to finance the lease/purchase of twenty-two 2017 Police
Interceptor SUV’s at the rate of 1.45% over five years. Lease payments reflecting reductions in
principal and interest are to begin in 2017. During the five years lease period, the vehicles may
be purchased any time with no penalty. At the end of the lease term, the vehicles become the
unencumbered property of the City.
In order to comply with Art. X, Sec. 20 of the Colorado Constitution (TABOR), the lease is not a
multi-year fiscal obligation. The City retains the option of discontinuing lease payments at the end
of any fiscal year without incurring any penalty.
BOARD/COMMISSION RECOMMENDATION:
Not applicable.
STAKEHOLDER PROCESS:
Not applicable.
ALTERNATIVES:
City Council could deny this Resolution.
RECOMMENDATION:
Approve the Resolution.
Attachments: Lease/Purchase Agreement, Project Fund Agreement
LEASE PURCHASEAGREEMENT
THIS LEASE PURCHASE AGREEMENT (this "Agreement") is dated as of May 9,
2016, and is between the CITY OF PUEBLO, COLORADO a Colorado municipal corporation
(the "City"), and BRANCH BANKING AND TRUST COMPANY ("BB&T").
RECITALS:
The City has the power to lease such personal property as it may deem appropriate for
carrying out its governmental and proprietary functions, and to acquire such property pursuant to
lease purchase agreements. This Agreement provides for BB&T to make available to the City the
sum of $1,123,837.00 to enable the City to acquire the Equipment (as defined below) by lease, and
provides for securing the City's obligations under this Agreement by creating certain security
interests in favor of BB&T.
NOW THEREFORE, for and in consideration of the mutual promises in this Agreement,
and other good and valuable consideration, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS; INTERPRETATION
Unless the context clearly requires otherwise, capitalized terms used in this Agreement and
not otherwise defined shall have the following meanings:
"Additional Payments" means any of BB&T's reasonable and customary fees and expenses
related to the transactions contemplated by this Agreement, any of BB&T's expenses (including
attorneys' fees) in prosecuting or defending any action or proceeding in connection with this
Agreement, any required license or permit fees, state and local sales and use or ownership taxes or
property taxes which BB&T is required to pay as a result of this Agreement, inspection and re-
inspection fees, and any other amounts payable by the City (or paid by BB&T on the City's behalf)
as a result of its covenants under this Agreement (together with interest that may accrue on any of
the above if the City shall fail to pay the same, as set forth in this Agreement).
"Amount Advanced" has the meaning assigned in Section 2.02.
"Base Payments" means the rental payments payable by the City pursuant to Section 3.01.
"Bond Counsel Opinion" means a written opinion (in form and substance acceptable to
BB&T) of an attorney or firm of attorneys acceptable to BB&T.
"Budget Officer" means the City officer from time to time charged with preparing the
City's draft budget as initially submitted to the Governing Board for its consideration.
"Business Day" means any day on which banks in the State are not by law authorized or
required to remain closed.
"Closing Date" means the date on which this Agreement is first executed and delivered by
the parties.
"Code" means the Internal Revenue Code of 1986, as amended, including regulations,
rulings and revenue procedures promulgated thereunder or under the Internal Revenue Code of
1954, as amended, as applicable to the City's obligations under this Agreement and all proposed
(including temporary) regulations which, if adopted in the form proposed, would apply to such
obligations. Reference to any specific Code provision shall be deemed to include any successor
provisions thereto.
"City"means City of Pueblo,Colorado.
"City Representative"means the City's Finance Director or such other person or persons at
the time designated, by a written certificate furnished to BB&T and signed on the City's behalf by
the presiding officer of the City's Governing Board, to act on the City's behalf for any purpose (or
any specified purpose) under this Agreement.
"Equipment" has the meaning assigned in Section 2.04, and is generally expected to
include the personal property described in Exhibit A.
"Event of Default" means one or more events of default as defined in Section 6.01.
"Event of Nonappropriation" means any failure by the Governing Board to adopt, by the
first day of any Fiscal Year, a budget for the City that includes an appropriation for Required
Payments as contemplated by Section 3.05.
"Fiscal Year" means the City's fiscal year beginning January 1, or such other fiscal year as
the City may later lawfully establish.
"Governing Board" means the City's governing board as from time to time constituted.
"Net Proceeds," when used with respect to any amounts derived from claims made on
account of insurance coverages required under this Agreement,any condemnation award arising out
of the condemnation of all or any portion of the Equipment, or any amounts received in lieu or in
settlement of any of the foregoing, means the amount remaining after deducting from the gross
proceeds thereof all expenses (including attorneys' fees and costs) incurred in the collection of such
proceeds, and after reimbursement to the City or BB&T for amounts previously expended to
remedy the event giving rise to such payment or proceeds.
"Payment Dates"means the dates indicated in Exhibit B.
"Prime Rate" means the interest rate so denominated and set by Branch Banking & Trust
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Company of North Carolina (whether or not such Bank, or any affiliate thereof, is at any time the
counterparty to this Agreement) as its "Prime Rate,"as in effect from time to time.
"Project Costs" means all costs of the design, planning, acquiring and installing the
Equipment as determined in accordance with generally accepted accounting principles and that
will not adversely affect the exclusion from gross income for federal income tax purposes of the
designated interest component of Base Payments payable by the City under this Agreement,
including (a) sums required to reimburse the City or its agents for advances for any such costs,
(b) interest during the period of the acquisition and installation of the Equipment and for up to
six months thereafter, and (c) all costs related to the financing of the Equipment through this
Agreement and all related transactions.
"Required Payments"means Base Payments and Additional Payments.
"State"means the State of Colorado.
"UCC"means the Uniform Commercial Code or any successor law as in effect from time
to time in the State, currently Title 4 of the Colorado Revised Statutes.
All references in this Agreement to designated "Sections" and other subdivisions are to
the designated sections and other subdivisions of this Agreement. The words "hereof' and
"hereunder" and other words of similar import refer to this Agreement as a whole and not to any
particular Section or other subdivision unless the context indicates otherwise. Words importing
the singular number shall include the plural number and vice versa.
ARTICLE II
LEASE; ADVANCE; SECURITY
2.01. Lease. BB&T hereby leases to the City,and the City hereby leases from BB&T,the
Equipment, for a term beginning on the Closing Date and ending upon final payment of all
Required Payments, unless this Agreement is earlier terminated. The City shall be entitled to
possession of all property constituting any portion of the Equipment and may retain possession of
all property constituting any portion of the Equipment so long as no Event of Default is continuing
under this Agreement and no Event of Nonappropriation has occurred.
2.02. Advance. BB&T advances $1,123,837.00 (the "Amount Advanced") to the City on
the Closing Date, and the City hereby accepts the Amount Advanced from BB&T. BB&T is
advancing the Amount Advanced directly to the City for the acquisition of the Equipment for lease
to the City. The Amount Advanced and all investment earnings thereon shall be used only for
Project Costs.
2.03. Title to the Equipment. During the term of this Agreement,title to the Equipment
and any and all substitutions, repairs, replacements or modifications will be vested in the City;
provided that in the event this Agreement is terminated by reason of the occurrence of an event
described in Sections 6.01 or 6.04,title to the Equipment will immediately be transferred to BB&T
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or its assigns. Neither BB&T nor its assigns shall have any right or interest in the Equipment or
any additions, repairs, replacements or modifications thereto except as expressly set forth in this
Agreement.
2.04. UCC Security Agreement.
(a) This Agreement is intended as and constitutes a security agreement pursuant to the
UCC with respect to the Amount Advanced and all property acquired by the City with funds
advanced by BB&T pursuant to this Agreement, all personal property obtained in substitution or
replacement therefore and all personal property obtained in substitution or replacement for any
portion of the Equipment, and all proceeds of the foregoing (collectively, the "Equipment"). The
City hereby grants to BB&T a security interest in the Equipment and in the Amount Advanced to
secure the Required Payments.
(b) The City shall allow BB&T to deliver and file, or cause to be filed, in such place or
places as may be required by law, financing statements (including any continuation statements
required by the UCC or determined by BB&T) in such form as BB&T may reasonably require to
perfect and continue the security interest in the Equipment and in the Amount Advanced.
2.05. City's Limited Obligation.
(a) No provision of this Agreement shall be construed or interpreted as creating a pledge
of the City's faith and credit within the meaning of any constitutional debt limitation. No provision
of this Agreement shall be construed or interpreted as an improper delegation of governmental
powers or as a donation or a lending of the City's credit within the meaning of the State constitution.
No provision of this Agreement shall be construed to pledge or to create a lien on any class or
source of the City's moneys (other than the funds held under this Agreement), nor shall any
provision of this Agreement restrict the future issuance of any of the City's bonds or obligations
payable from any class or source of the City's moneys (except to the extent this Agreement restricts
the incurrence of additional obligations secured by the Equipment).
(b) Nothing in this Section is intended to impair or prohibit repossession of the
Equipment by BB&T if the Required Payments are not paid when due or otherwise upon the
occurrence of an Event of Default under this Agreement.
2.06. City's Continuing Obligations. The City shall remain liable for full performance
of all its covenants under this Agreement (subject to the limitations described in Section 2.05),
including payment of all Required Payments, notwithstanding the occurrence of any event or
circumstances whatsoever, including any of the following:
(a) BB&T's waiver of any right granted or remedy available to it;
(b) The forbearance or extension of time for payment or performance of any obligation
under this Agreement, whether granted to the City, a subsequent owner of the Equipment or any
other person;
(c) The release of all or part of the Equipment or the release of any party who assumes
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all or any part of such performance;
(d) Any act or omission by BB&T (but this section provision does not relieve BB&T
of any of its obligations under this Agreement);
(e) The sale of all or any part of the Equipment;or
(f) Another party's assumption of the City's obligations under this Agreement.
ARTICLE III
CITY'S PAYMENT OBLIGATION AND RELATED MATTTERS
3.01. Rental; Purchase Option.
(a) As rental for the Equipment,the City shall make Base Payments to BB&T in lawful
money of the United States at the times and in the amounts set forth in Exhibit B, except as
otherwise provided in this Agreement. As indicated in Exhibit B, the Base Payments reflect the
repayment of the Amount Advanced and include designated interest components.
(b) Upon payment of all the Base Payments and all Additional Payments, the City may,
at its option, purchase all of BB&T's interest in the Equipment, on an as-is, where-is basis, upon
notice and payment to BB&T of the sum of Ten Dollars. This option to purchase the Equipment is
personal to the City and is not assignable.
3.02. Additional Payments. The City shall pay all Additional Payments on a timely basis
directly to the person or entity to which such Additional Payments are owed in lawful money of the
United States.
3.03. Prepayment.At its option on any scheduled Payment Date,the City may prepay the
outstanding principal component of the Amount Advanced (in whole but not in part), and thereby
obtain ownership of all the Equipment free of this lease, by paying (a) all Additional Payments then
due and payable, (b) all interest accrued and unpaid to the prepayment date, and (c) 101% of the
outstanding principal component of the Amount Advanced.
3.04. Late Payments. If the City fails to pay any Base Payment when due, the City shall
pay additional interest on the principal component of the late Base Payment at an annual rate equal
to the Prime Rate from the original due date.
3.05. Appropriations.
(a) The Budget Officer shall include in the initial proposal for each of the City's annual
budgets the amount of all Base Payments and estimated Additional Payments coming due during
the Fiscal Year to which such budget applies. Notwithstanding that the Budget Officer includes
such an appropriation for Required Payments in a proposed budget, the Governing Board may
determine not to include such an appropriation in the City's final budget for such Fiscal Year.
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(b) The Budget Officer shall deliver to BB&T, within 15 days after the beginning of
each Fiscal Year, a certificate stating whether an amount equal to the Base Payments and estimated
Additional Payments coming due during the next Fiscal Year has been appropriated by the City in
such budget for such purposes.
(c) The actions required of the City and its officers pursuant to this Section shall be
deemed to be and shall be construed to be in fulfillment of ministerial duties,and it shall be the duty
of each and every City official to take such action and do such things as are required by law in the
performance of the official duty of such officials to enable the City to carry out and perform the
actions required pursuant to this Section and the remainder of this Agreement to be carried out and
performed by the City.
(d) The City reasonably believes that it can obtain funds sufficient to pay all Required
Payments when due.
3.06. No Abatement. There shall be no abatement or reduction of the Required Payments
for any reason, including, but not limited to, any defense, recoupment, setoff, counterclaim, or any
claim(real or imaginary)arising out of or related to the Equipment,except as expressly provided in
this Agreement. The City assumes and shall bear the entire risk of loss and damage to the
Equipment from any cause whatsoever. The Base Payments shall be made in all events unless the
City's obligation to make Base Payments is terminated as otherwise provided in this Agreement.
3.07. Interest Rate and Payment Adjustment. (a) "Rate Adjustment Event" means any
action by the Internal Revenue Service (including the delivery of a deficiency notice) or any other
federal court or administrative body determining (i) that the interest component of Base Payments,
or any portion thereof, is includable in any counterparty's gross income for federal income tax
purposes or (ii) that the City's obligations under this Agreement are not "qualified tax-exempt
obligations" within the meaning of Code Section 265 (a"265 Event"), in any case as a result of any
misrepresentation by the City or as a result of any action the City takes or fails to take.
(b) Upon any Rate Adjustment Event, (i) the unpaid principal portion of the Amount
Advanced shall continue to be payable on dates and in amounts as set forth in Exhibit B, but(ii)the
interest components of the Base Payments shall be recalculated, at an interest rate equal to an
annualized interest rate equal to the Prime Rate plus 2% (200 basis points), to the date
(retroactively, if need be) determined pursuant to the Rate Adjustment Event to be the date interest
became includable in any counterparty's gross income for federal income tax purposes (in the case
of a 265 Event,retroactively to the Closing Date).
(c) The City shall pay interest at such adjusted rate (subject to credit for interest
previously paid) to each affected counterparty, notwithstanding the fact that any particular
counterparty may not be a counterparty to this Agreement on the date of a Rate Adjustment Event.
The City shall additionally pay to all affected counterparties any interest, penalties or other charges
assessed against or payable by such counterparty and attributable to a Rate Adjustment Event
notwithstanding the prior repayment of the entire Amount Advanced or any transfer to another
counterparty.
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ARTICLE IV
CITY'S COVENANTS,REPRESENTATIONS AND WARRANTIES
4.01. Indemnification. To the extent permitted by law, the City shall indemnify, protect
and save BB&T and its officers and directors harmless from all liability,obligations,losses, claims,
damages, actions, suits, proceedings, costs and expenses, including attorneys' fees, arising out of,
connected with, or resulting directly or indirectly from the Equipment or the transactions
contemplated by this Agreement,including without limitation the possession,condition or use of the
Equipment. The indemnification arising under this Section shall survive the Agreement's
termination.
4.02. Covenant as to Tax Exemption.
(a) The City shall not take or permit, or omit to take or cause to be taken, any action that
would cause its obligations under this Agreement to be "arbitrage bonds" or"private activity bonds"
within the meaning of the Code, or otherwise adversely affect the exclusion from gross income for
federal income tax purposes of the designated interest component of Base Payments to which such
components would otherwise be entitled. If the City should take or permit, or omit to take or cause
to be taken, any such action, the City shall take or cause to be taken all lawful actions within its
power necessary to rescind or correct such actions or omissions promptly upon having knowledge
thereof
(b) In particular, the City covenants that it shall not permit the Amount Advanced, plus
the investment earnings thereon(the "Proceeds"),to be used in any manner that would result in 5%
or more of the Base Payments being directly or indirectly secured by an interest in property, or
derived from payments in respect of property or borrowed money, being in either case used in a
trade or business carried on by any person other than a governmental unit, as provided in Code
Section 141(b), or result in 5% or more of the Proceeds being used directly or indirectly to make or
finance loans to any persons other than a governmental unit, as provided in Code Section 141(c);
provided, however,that if the City receives a Bond Counsel Opinion that compliance with any such
covenant is not required to prevent the interest components of Base Payments from being includable
in the counterparty's gross income for federal income tax purposes under existing law, the City need
not comply with such covenant.
(c) Unless the City qualifies for one or more exceptions to the arbitrage rebate
requirement with respect to this fmancing,the City shall provide for the rebate to the United States
of(i) at least 90% of the required rebate amount(A) on or before 60 days after the date that is five
years from the Closing Date, and (B) at least once during each five years thereafter while the
Obligations remain outstanding,and(ii)the entire required rebate amount on or before 60 days after
the date of final payment of the Obligations. Payments shall be made in the manner prescribed by
the Internal Revenue Service. The City shall cause the required rebate amount to be recomputed as
of each fifth anniversary of the Closing Date, and again as of the date of final payment of the
Obligations. The City shall provide BB&T with a copy of the results of such computation within 20
days after the end of each computation period or final payment of the Obligations. Each
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computation shall be prepared or approved, at the City's expense, by a person with experience in
matters of accounting for federal income tax purposes, a bona fide arbitrage rebate calculating and
reporting service, or nationally-recognized bond counsel, in any case reasonably acceptable to
BB&T. The City shall engage such rebate consultant to perform the necessary calculations not less
than 60 days prior to the date of the required payment.
(d) The City acknowledges that its personnel must be familiar with the arbitrage
rebate rules, because the tax-exempt status of the interest on the Obligations depends upon
continuing compliance with such rules. The City therefore covenants to take all reasonable
action to assure that City personnel responsible for the investment of and accounting for
financing proceeds comply with such rules.
4.03. Validity of Organization and Acts. The City is validly organized and existing
under State law, has full power to enter into this Agreement and has duly authorized and has
obtained all required approvals and all other necessary acts required prior to the execution and
delivery of this Agreement. This Agreement is a valid,legal and binding obligation of the City.
4.04. Maintenance of Existence. The City shall maintain its existence, shall continue to
be a local governmental unit of the State, validly organized and existing under State law, and shall
not consolidate with or merge into another local governmental unit of the State, or permit one or
more other local governmental units of the State to consolidate with or merge into it, unless the local
governmental unit thereby resulting assumes the City's obligations under this Agreement.
4.05. Acquisition of Permits and Approvals. All permits, consents, approvals or
authorizations of all governmental entities and regulatory bodies, and all filings and notices required
on the City's part to have been obtained or completed as of today in connection with the
authorization, execution and delivery of this Agreement, the consummation of the transactions
contemplated by this Agreement and the acquisition and installation of the Equipment have been
obtained and are in full force and effect, and there is no reason why any future required permits,
consents,approvals,authorizations or orders cannot be obtained as needed.
4.06. No Breach of Law or Contract. Neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated by this Agreement, nor the
fulfillment of or compliance with the terms and conditions of this Agreement, (a) to the best of the
City's knowledge, constitutes a violation of any provision of law governing the City or(b)results in
a breach of the terms, conditions or provisions of any contract, agreement or instrument or order,
rule or regulation to which the City is a party or by which the City is bound.
4.07. No Litigation. There is no litigation or any governmental administrative proceeding
to which the City (or any official thereof in an official capacity) is a party that is pending or, to the
best of the City's knowledge after reasonable investigation, threatened with respect to (a)the City's
organization or existence, (b) its authority to execute and deliver this Agreement or to comply with
the terms of this Agreement, (c) the validity or enforceability of this Agreement or the transactions
contemplated by this Agreement,(d)the title to office of any Governing Board member or any other
City officer, (e) any authority or proceedings relating to the City's execution or delivery of this
Agreement,or(f)the undertaking of the transactions contemplated by this Agreement.
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4.08. No Current Default or Violation. (a) The City is not in violation of any existing
law, rule or regulation applicable to it, (b) the City is not in default under any contract, other
agreement, order,judgment, decree or other instrument or restriction of any kind to which the City
is a party or by which it is bound or to which any of its assets are subject,including this Agreement,
and (c) no event or condition has happened or existed, or is happening or existing, under the
provisions of any such instrument, including this Agreement, which constitutes or which, with
notice or lapse of time,or both,would constitute an event of default hereunder or thereunder.
4.09. No Misrepresentation. No representation, covenant or warranty by the City in this
Agreement is false or misleading in any material respect.
4.10. Environmental Warranties and Indemnification.
(a) The City warrants and represents to BB&T that, to the best of the City's
knowledge after thorough investigation, the Equipment is not now and has not ever been used to
generate, manufacture, refine, transport,treat,store,handle, dispose,transfer, produce or process
Hazardous Materials.
(b) The City covenants that the Equipment shall be kept free of Hazardous Materials
and shall not be used to generate, manufacture, refine, transport, treat, store, handle, dispose,
transfer, produce or process Hazardous Materials, except in connection with the normal
maintenance and operation of the Equipment, and the City shall not cause or permit, as a result
of any intentional or unintentional act or omission on the part of the City or any lessee, the
release of Hazardous Materials onto the Equipment or suffer the presence of Hazardous
Materials on the Equipment, except in connection with the normal maintenance and operation of
the Equipment.
(c) The City shall comply with, and ensure compliance by all users and lessees with,
all applicable federal, State and local laws, ordinances, rules and regulations with respect to
Hazardous Materials and shall keep the Equipment free and clear of any liens imposed pursuant
to such laws, ordinances, rules and regulations. If the City receives any notices from any
governmental agency or any lessee with regard to Hazardous Materials on, from or affecting the
Equipment, the City shall immediately notify BB&T. The City shall conduct and complete all
investigations, studies, sampling and testing and all remedial, removal and other actions
necessary to clean up and remove all Hazardous Materials on, from or affecting the Equipment in
accordance with all applicable federal, State and local laws, ordinances, rules, regulations and
policies and to BB&T's satisfaction.
(d) "Hazardous Materials" means any explosives, radioactive materials, hazardous
materials, hazardous wastes, hazardous or toxic substances, or related materials, asbestos or any
materials containing asbestos, or any other substance or material as defined by any federal, State
or local environmental law, ordinance, rule or regulation including, without limitation, the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended
(42 U.S.C. sections 9601 et seq.), the Hazardous Materials Transportation Act, as amended (49
U.S.C. sections 1801 et seg.), the Resource Conservation and Recovery Act, as amended (42
U.S.C. sections 9601 et seq.), and the regulations adopted and publications promulgated pursuant
thereto.
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(e) To the extent permitted by law, the City shall indemnify and hold BB&T harmless
from and against (i) any and all damages, penalties, fines, claims, liens, suits, liabilities, costs
(including clean-up costs), judgments and expenses (including attorneys', consultants' or experts'
fees and expenses) of every kind and nature suffered by or asserted against BB&T as a direct or
indirect result of any warranty or representation made by the City in subsections (a) through (c)
above being false or untrue in any material respect,or(ii)any requirement under any law,regulation
or ordinance, local, State or federal, which requires the elimination or removal of any hazardous
materials,substances,wastes or other environmentally regulated substances by BB&T or the City or
any transferee or assignee BB&T or the City.
(f) The City's obligations under this Section shall continue in full force and effect
notwithstanding full payment of the Required Payments.
4.11. Further Instruments. Upon BB&T's request, the City shall execute, acknowledge
and deliver such further instruments reasonably necessary or desired by BB&T to carry out more
effectively the purposes of this Agreement or any other document related to the transactions
contemplated by this Agreement,and to subject to the liens and security interests hereof and thereof
all or any part of the Equipment intended to be given or conveyed hereunder or thereunder, whether
now given or conveyed or acquired and conveyed subsequent to the date of this Agreement.
4.12. BB&T's Advances for Performance of City's Obligations. If the City fails to
perform any of its obligations under this Agreement,BB&T is hereby authorized,but not obligated,
to perform such obligation or cause it to be performed. All expenditures incurred by BB&T
(including any advancement of funds for payment of taxes, insurance premiums or other costs of
maintaining the Equipment, and any associated legal or other expenses), together with interest
thereon at the Prime Rate, shall be secured as Additional Payments under this Agreement. The City
promises to pay all such amounts to BB&T immediately upon demand.
4.13. Equipment Will Be Used and Useful. The acquisition and installation of the
Equipment is necessary and expedient for the City, and will perform essential functions of the City
appropriate for units of local government. The City has an immediate need for,and expects to make
immediate use of, all of the Equipment, and does not expect such need or use to diminish in any
material respect during the term of the Agreement. The Equipment will not be used in any private
business or put to any private business use.
4.14. Financial Information.
(a) The City shall send to BB&T a copy of the City's audited financial statements for each
Fiscal Year within 30 days of the City's acceptance of such statements,but in any event within 270
days of the completion of such Fiscal Year.
(b) The City shall furnish BB&T, at such reasonable times as BB&T shall request, all
other financial information (including, without limitation, the City's annual budget as submitted or
approved) as BB&T may reasonably request. The City shall permit BB&T or its agents and
representatives to inspect the City's books and records and make extracts therefrom.
10
4.15. Taxes and Other Governmental Charges. The City shall pay, as Additional
Payments,the full amount of all taxes, assessments and other governmental charges lawfully made
by any governmental body during the term of this Agreement. With respect to special assessments
or other governmental charges which may be lawfully paid in installments over a period of years,
the City shall be obligated to provide for Additional Payments only for such installments as are
required to be paid during the Agreement term. The City shall not allow any liens for taxes,
assessments or governmental charges with respect to the Equipment or any portion thereof to
become delinquent (including, without limitation, any taxes levied upon the Equipment or any
portion thereof which,if not paid,will become a charge on any interest in the Equipment,including
BB&T's interest,or the rentals and revenues derived therefrom or hereunder).
4.16. City's Insurance.
(a) The City shall, at its own expense, acquire, carry and maintain broad-form extended
coverage property damage insurance with respect to all Equipment in an amount equal to the actual
cash value of the Equipment. Such property damage insurance shall include BB&T as loss payee.
The City shall provide evidence of such coverage to BB&T promptly upon installation of the
Equipment. Any Net Proceeds of the insurance required by this subsection (a) shall be payable as
provided in Section 5.14.
(b) The City shall, at its own expense, acquire, carry and maintain comprehensive
general tort liability insurance(and auto liability insurance, if applicable)in an amount not less than
$600,000 for personal injury or death and$600,000 for property damage.
(c) The City shall also maintain workers' compensation insurance issued by a
responsible carrier authorized under State law to insure the City against liability for compensation
under applicable State law as in effect from time to time.
(d) All insurance shall be maintained with generally recognized responsible insurers and
may carry reasonable deductible or risk-retention amounts. All such policies shall be deposited with
BB&T, provided that in lieu of such policies there may be deposited with BB&T a certificate or
certificates of the respective insurers attesting the fact that the insurance required by this Section is
in full effect. Prior to the expiration of any such policy, the City shall furnish BB&T evidence
satisfactory to BB&T that the policy has been renewed or replaced or is no longer required by this
Agreement.
(e) No City agent or employee shall have the power to adjust or settle any property
damage loss greater than $50,000 with respect to the Equipment, whether or not covered by
insurance,without BB&T's prior written consent.
(f) BB&T shall not be responsible for the sufficiency or adequacy of any required
insurance and shall be fully protected in accepting payment on account of such insurance or any
adjustment,compromise or settlement of any loss agreed to by BB&T.
(g) The City shall deliver to BB&T annually by June 30 of each year a certificate stating
11
that the risk coverages required by this Agreement are in effect, and stating the carriers, policy
numbers,coverage limits and deductible or risk-retention amounts for all such coverages.
ARTICLE V
THE EQUIPMENT
5.01. Acquisition and Installation. The City shall comply with all provisions of law
applicable to the acquisition of the Equipment, accept all portions of the Equipment when
properly delivered, provide for the proper installation thereof and thereafter promptly place each
such portion in service.
5.02. Changes in Location. The City shall promptly inform BB&T if any component
of the Equipment shall be moved from the location designated for such Equipment at the time of
its acquisition.
5.03. Acquisition and Installation within Funds Available. The City represents that,
based upon its examination of the plans and specifications for the Equipment, estimated installation
costs and the Equipment's anticipated configuration, the Equipment can be acquired and installed
for a total price within the total amount of funds to be available therefore from the Amount
Advanced, income anticipated to be derived from the investment thereof and other funds previously
identified and designated for such purposes. If the total amount available for such purposes from
the Amount Advanced shall be insufficient to pay the entire cost of acquiring and installing the
Equipment,the City promises to pay any such excess costs, with no resulting reduction or offset in
the amounts otherwise payable by the City under this Agreement.
5.04. Disclaimer of Warranties. The City agrees that BB&T has not designed the
Equipment, that BB&T has not supplied any plans or specifications with respect thereto and that
BB&T(a) is not a manufacturer of,nor a dealer in,any of the component parts of the Equipment or
similar Equipment, (b) has not made any recommendation, given any advice nor taken any other
action with respect to (i) the choice of any supplier, vendor or designer of, or any other contractor
with respect to, the Equipment or any component part thereof or any property or rights relating
thereto, or(ii) any action taken or to be taken with respect to the Equipment or any component part
thereof or any property or rights relating thereto at any stage of the acquisition, installation and
equipping thereof, (c) has not at any time had physical possession of the Equipment or any
component part thereof or made any inspection thereof or of any property or rights relating thereto,
and (d) has not made any warranty or other representation, express or implied, that the Equipment
or any component part thereof or any property or rights relating thereto (i) will not result in or cause
injury or damage to persons or property, (ii) has been or will be properly designed, or will
accomplish the results which the City intends therefor, or(iii)is safe in any manner or respect.
BB&T MAKES NO EXPRESS OR IMPLIED WARRANTY OR REPRESENTATION
OF ANY KIND WHATSOEVER WITH RESPECT TO THE EQUIPMENT OR ANY
COMPONENT PART THEREOF, INCLUDING BUT NOT LIMITED TO ANY WARRANTY
OR REPRESENTATION WITH RESPECT TO THE MERCHANTABILITY OR THE FITNESS
OR SUITABILITY THEREOF FOR ANY PURPOSE, and further including the design or
12
condition thereof; the safety, quality or capacity thereof; compliance thereof with the requirements
of any law, rule, specification or contract pertaining thereto; any latent defect; the Equipment's
ability to perform any function; that the Amount Advanced will be sufficient to pay all costs of the
acquisition and installation of the Equipment; or any other characteristic of the Equipment; it being
agreed that the City is to bear all risks relating to the Equipment, the installation thereof and the
transactions contemplated by this Agreement, and the City hereby waives the benefits of any and all
implied warranties and representations of BB&T.
Provided the City is in compliance with the terms and conditions of this Agreement,
BB&T shall assign to the City any and all manufacturer's warranties with respect to the Equipment.
The provisions of this Section shall survive the Agreement's termination.
5.05. Right of Entry and Inspection. BB&T and its representatives and agents shall
have the right to enter upon the City's property and inspect the Equipment from time to time during
installation and after the completion of installation, and the City shall cause any vendor, contractor
or sub-contractor to cooperate with BB&T and its representatives and agents during such
inspections.
No right of inspection or approval granted in this Section shall be deemed to impose upon
BB&T any duty or obligation whatsoever to undertake any inspection or to make any approval. No
inspection made or approval given by BB&T shall be deemed to impose upon BB&T any duty or
obligation whatsoever to identify or correct any defects in the Equipment or to notify any person
with respect thereto, and no liability shall be imposed upon BB&T, and no warranties (either
express or implied) are made by BB&T as to the quality or fitness of any improvement, any such
inspection and approval being made solely for BB&T's benefit.
5.06. Compliance with Requirements.
(a) The City shall cause the Equipment to be installed in a careful manner and in
compliance with all applicable legal requirements.
(b) The City shall observe and comply promptly with all current and future
requirements relating to the Equipment's use or condition imposed by(i)any judicial, governmental
or regulatory body having jurisdiction over the Equipment or any portion thereof or (ii) any
insurance company writing a policy covering the Equipment or any portion thereof, whether or not
any such requirement shall necessitate structural changes or improvements or interfere with the use
or enjoyment of the Equipment.
(c) The City shall obtain and maintain in effect all licenses and permits required for the
Equipment's operation.
(d) The City shall in no event use the Equipment or any part thereof,nor allow the same
to be used, for any unlawful purpose, or suffer any act to be done or any condition to exist with
respect to the Equipment or any part thereof, nor any article to be brought thereon, which may be
dangerous, unless safeguarded as required by law, or which may, in law, constitute a nuisance,
public or private, or which may make void or voidable any insurance then in force with respect
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thereto.
5.07. Use and Operation. The City shall use and operate the Equipment and related
property as set forth in Exhibit A hereto, and for no other purpose unless required by law. The City
shall be solely responsible for the Equipment's operation, and shall not contract with any other
person or entity for the Equipment's operation.
5.08. Maintenance and Repairs; Additions.
(a) The City shall keep the Equipment in good order and repair (reasonable wear and
tear excepted) and in good operating condition, shall not commit or permit any waste or any other
thing to occur whereby the value or usefulness of the Equipment might be impaired, and shall make
from time to time all necessary or appropriate repairs,replacements and renewals.
(b) The City may, also at its own expense, make from time to time any additions,
modifications or improvements to the Equipment that it may deem desirable for its governmental or
proprietary purposes and that do not materially impair the effective use, nor materially decrease the
value or substantially alter the intended use, of the Equipment. The City shall do, or cause to be
done, all such things as may be required by law in order fully to protect the security of and all
BB&T's rights under this Agreement.
(c) Any and all additions to or replacements of the Equipment and all parts thereof shall
constitute accessions to the Equipment and shall be subject to all the terms and conditions of this
Agreement and included in the "Equipment" for the purposes of this Agreement.
(d) Notwithstanding the provisions of subsection (c) above, however, the City may,
from time to time in its sole discretion and at its own expense, install machinery, equipment and
other tangible property in or on the Equipment. All such property shall remain the City's sole
property in which BB&T shall have no interest; provided, however, that any such property which
becomes permanently affixed to the Equipment shall be subject to the lien and security interest
arising under this Agreement if BB&T shall reasonably determine that the Equipment would be
damaged or impaired by the removal of such machinery,equipment or other tangible property.
5.09. Security. The City shall take all reasonable steps necessary to safeguard the
Equipment against theft. The security afforded the Equipment shall at all times be equal to or better
than the security afforded the City's personal property that is not subject to this Agreement.
5.10. Utilities. The City shall pay all charges for utility services furnished to or used on or
in connection with the Equipment.
5.11. Risk of Loss. The City shall bear all risk of loss to and condemnation of the
Equipment.
5.12. Condemnation.
(a) The City shall immediately notify BB&T if any governmental authority shall
14
institute, or shall notify the City of any intent to institute,any action or proceeding for the taking of,
or damages to, all or any part of the Equipment or any interest therein under the power of eminent
domain, or if there shall be any damage to the Equipment due to governmental action, but not
resulting in a taking of any portion of the Equipment. The City shall file and prosecute its claims
for any such awards or payments in good faith and with due diligence and cause the same to be
collected and paid over to BB&T, and to the extent permitted by law hereby irrevocably authorizes
and empowers BB&T, in the City's name or otherwise, to collect and receipt for any such award or
payment and to file and prosecute such claims. If the City receives any Net Proceeds arising from
any such action,the City shall apply such Net Proceeds as provided in Section 5.14.
(b) If any of the real or personal property acquired or improved by the City (in whole
or in part) using any portion of the Amount Advanced consists of or is located on any real
property acquired by the City through the exercise of the power of eminent domain, or through
the threat of the exercise of the power of eminent domain, then during the term of this
Agreement the City may not transfer any interest in such real property to any entity other than a
local governmental unit without BB&T's prior express written consent.
5.13. No Encumbrance,Mortgage or Pledge of Equipment.
(a) The City shall not directly or indirectly create, incur, assume or suffer to exist any
mortgage, pledge, lien (including mechanics' and materialmen's liens), charge, encumbrance or
other claim in the nature of a lien on or with respect to the Equipment. The City shall promptly, at
its own expense,take such action as may be duly necessary to discharge any such mortgage,pledge,
lien, charge, encumbrance or claim not excepted above which it shall have created, incurred or
suffered to exist.
(b) The City shall reimburse BB&T for any expense incurred by BB&T to discharge or
remove any such mortgage, pledge, lien, security interest, encumbrance or claim, with interest
thereon at the Prime Rate.
5.14. Damage and Destruction; Use of Net Proceeds.
(a) The City shall promptly notify BB&T if(i) the Equipment or any portion thereof is
stolen or is destroyed or damaged by fire or other casualty,(ii)a material defect in the installation of
the Equipment shall become apparent, or (iii) title to or the use of all or any portion of the
Equipment shall be lost by reason of a defect in title. Each notice shall describe generally the nature
and extent of such damage,destruction or taking.
(b) If the Net Proceeds arising from any single event,or any single substantially related
sequence of events, is not more than $50,000, the City shall retain such Net Proceeds and apply the
same to the prompt completion,repair or restoration of the Equipment, and shall promptly thereafter
report to BB&T regarding the use of such Net Proceeds.
(c) If the Net Proceeds arising from any single event,or any single substantially related
sequence of events,is more than$50,000,then the City shall cause such Net Proceeds to be paid to
an escrow agent (which shall be a bank, trust company or similar entity exercising fiduciary
responsibilities)designated by BB&T for deposit in a special escrow fund to be held by such escrow
15
agent. The City shall thereafter provide for the application of all Net Proceeds to the prompt
completion, repair or restoration of the Equipment, as the case may be. The escrow agent shall
disburse Net Proceeds for the payment of such costs upon receipt of requisitions in form and
substance acceptable to BB&T and such escrow agent. If the Net Proceeds shall be insufficient to
pay in full the cost of completion, repair or restoration, the City shall either (i) complete the work
and pay any cost in excess of the Net Proceeds, or (ii) not carry out such completion, repair or
restoration, and instead apply the Net Proceeds, together with other available funds as may be
necessary,to the prepayment of all outstanding Required Payments pursuant to Section 3.03.
(d) Any repair, restoration,modification,improvement or replacement paid for in whole
or in part out of Net Proceeds shall be the BB&T's property and shall be part of the Equipment.
ARTICLE VI
DEFAULTS AND REMEDIES; TERMINATION
6.01. Events of Default. An"Event of Default" is any of the following:
(a) The City's failing to make any Base Payment when due.
(b) The City's breaching or failing to perform or observe any term, condition or
covenant of this Agreement on its part to be observed or performed, other than as provided in
subsection (a) above, including payment of any Additional Payment, for a period of 15 days after
written notice specifying such failure and requesting that it be remedied shall have been given to the
City by BB&T, unless BB&T shall agree in writing to an extension of such time prior to its
expiration.
(c) The institution of proceedings under any bankruptcy, insolvency, reorganization or
similar law by or against the City as a debtor, or the appointment of a receiver, custodian or similar
officer for the City or any of its property, and the failure of such proceedings or appointments to be
vacated or fully stayed within 30 days after the institution or occurrence thereof.
(d) Any warranty, representation or statement made by the City in this Agreement is
found to be incorrect or misleading in any material respect on the Closing Date (or, if later, on the
date made).
(e) Any lien, charge or encumbrance affecting the validity of the Agreement, is found
to exist, or proceedings are instituted against the City to enforce any lien, charge or encumbrance
against the Equipment and such lien,charge or encumbrance would be prior to this Agreement.
(f) The City's failing to pay when due any principal of or interest on any of its general
obligation debt.
6.02. Remedies on Default. Except for an Event of Nonappropriation, upon the
continuation of any Event of Default, BB&T may, without any further demand or notice, exercise
any one or more of the following remedies:
(a) Declare the unpaid principal components of the Base Payments immediately due and
16
payable;
(b) Proceed by appropriate court action to enforce the City's performance of the
applicable covenants of this Agreement or to recover for the breach thereof;and
(c) Avail itself of all available remedies under this Agreement, including repossession
as provided in Section 6.03,and recovery of attorneys'fees and other expenses.
6.03. Execution on Personal Property. Upon the continuation of any Event of Default
and in addition to all other remedies granted in this Agreement, BB&T shall have all the rights and
remedies of an owner of personal property under the UCC and may proceed to recover and
repossess the Equipment.
6.04. Consequences of Nonappropriation. Upon an Event of Nonappropriation, the
City shall have no further obligation to pay Base Payments beyond the end of the Fiscal Year for
which amounts have been appropriated for Base Payments. This Agreement shall terminate on the
last day of the Fiscal Year for which amounts have been appropriated for Base Payments without
any penalty to the City whatsoever. The City agrees to peaceably surrender possession the
Equipment to BB&T or its assignees on the first day of the Fiscal Year to which the Event of
Nonappropriation applies,packed for shipment in accordance with manufacturer specifications and
freight prepaid and insured to any location in the continental United States or Canada designated by
BB&T.
In addition, upon the occurrence of any Event of Nonappropriation, BB&T may, without
any further demand or notice, take action with respect to the City and the Equipment as
contemplated in Section 6.05. An Event of Nonappropriation and resulting termination of this
Agreement shall not relieve the City of liability for any defaults under this Agreement occurring
prior to the Event of Nonappropriation, or of liability under those provisions of this Agreement
which are stated to survive termination.
6.05. Possession of Equipment. Upon the continuation of an Event of Default or the
occurrence of an Event of Nonappropriation, the City shall immediately lose the right to possess,
use and enjoy the Equipment(but may remain in possession of the Equipment as a lessee at will of
BB&T), and thereupon the City (a) shall pay monthly in advance to BB&T a fair and reasonable
rental value for the use and possession of the Equipment(in an amount BB&T shall determine in its
reasonable judgment), and (b) upon BB&T's demand, shall deliver possession of the Equipment to
BB&T or, at BB&Ts direction,to any purchaser of the Equipment after surrender of the Equipment
to BB&T.
In addition, upon the continuation of any Event of Default or the occurrence of an Event of
Nonappropriation,BB&T,to the extent permitted by law,is hereby authorized to (i)take possession
of the Equipment, with or without legal action, (ii) lease the Equipment, (iii) collect all rents and
profits therefrom, with or without taking possession of the Equipment, and (iv) after deducting all
costs of collection and administration expenses, apply the net rents and profits first to the payment
of necessary maintenance and insurance costs,and then to the City's account and in reduction of the
City's corresponding Required Payments in such fashion as BB&T shall reasonably deem
appropriate. BB&T shall be liable to account only for rents and profits it actually receives.
17
6.06. No Remedy Exclusive; Delay Not Waiver. All remedies under this Agreement are
cumulative and may be exercised concurrently or separately. The exercise of any one remedy shall
not be deemed an election of such remedy or preclude the exercise of any other remedy. If any
Event of Default shall occur and thereafter be waived by BB&T, such waiver shall be limited to the
particular breach so waived and shall not be deemed a waiver of any other breach under this
Agreement.
6.07. Payment of Costs and Attorney's Fees. If BB&T employs an attorney to assist in
the enforcement or collection of Required Payments, or if BB&T voluntarily or otherwise shall
become a party to any suit or legal proceeding(including a proceeding conducted under any state or
federal bankruptcy or insolvency statute)to protect the Equipment,to protect BB&T's rights under
this Agreement, to enforce collection of the Required Payments or to enforce compliance by the
City with any of the provisions of this Agreement,the City agrees to pay reasonable attorneys' fees
and all of the costs that may reasonably be incurred (whether or not any suit or proceeding is
commenced), and such fees and costs (together with interest at the Prime Rate) shall be secured as
Required Payments.
ARTICLE VII
MISCELLANEOUS
7.01. Notices.
(a)Any communication required or permitted by this Agreement must be in writing.
(b) Any communication under this Agreement shall be sufficiently given and deemed
given when delivered by hand or five days after being mailed by first-class mail, postage prepaid,
addressed as follows:
(i) If to the City, to City of Pueblo, 1 City Hall Place, Pueblo, CO 81003,
Attention: Finance Director; with a copy to:
City Attorney, 1 City Hall Place,3rd Floor,Pueblo,CO 81003
(ii) If to BB&T, to BB&T Governmental Finance, 5130 Parkway Plaza
Boulevard, Building 9, Charlotte, North Carolina 28217, Attention: Account
Administration/Municipal.
(c) Any addressee may designate additional or different addresses for communications
by notice given under this Section to each of the others.
7.02. No Assignments by City. The City shall not sell or assign any interest in this
Agreement.
7.03. Assignments by BB&T. BB&T may,at any time and from time to time,assign
all or any part of its interest in the Equipment or this Agreement, including, without limitation,
18
BB&T's rights to receive Required Payments. Any assignment made by BB&T or any subsequent
assignee shall not purport to convey any greater interest or rights than those held by BB&T pursuant
to this Agreement.
The City agrees that this Agreement may become part of a pool of obligations at BB&T's or
its assignee's option. BB&T or its assignees may assign or reassign all or any part of this
Agreement, including the assignment or reassignment of any partial interest through the use of
certificates evidencing participation interests in this Agreement. Notwithstanding the foregoing, no
assignment or reassignment of BB&T's interest in the Equipment or this Agreement shall be
effective unless and until the City shall receive a duplicate original counterpart of the document by
which such assignment or reassignment is made disclosing the name and address of each such
assignee.
The City further agrees that BB&T's interest in this Agreement may be assigned in whole
or in part upon terms which provide in effect that the assignor or assignee will act as a collection
and paying agent for any holders of certificates of participation in this Agreement,provided the City
receives a copy of such agency contract and such collection and paying agent covenants and agrees
to maintain for the full remaining term of this Agreement a written record of each assignment and
reassignment of such certificates of participation.
The City agrees to execute any document reasonably required in connection with any
assignment. Any assignor must provide notice of any assignment to the City, and the City shall
keep a complete and accurate record of all assignments as required by the Code. After the giving of
any such notice, the City shall thereafter make all payments in accordance with the notice to the
assignee named therein and shall,if so requested,acknowledge such assignment in writing, but such
acknowledgment shall in no way be deemed necessary to make the assignment effective.
7.04. Amendments. No term or provision of this Agreement may be amended, modified
or waived without the prior written consent of the City and BB&T.
7.05. Governing Law. The City and BB&T intend that State law shall govern this
Agreement.
7.06. Liability of Officers and Agents. No officer, agent or employee of the City shall
be subject to any personal liability or accountability by reason of the execution of this Agreement or
any other documents related to the transactions contemplated by this Agreement. Such officers or
agents shall be deemed to execute such documents in their official capacities only, and not in their
individual capacities. This Section shall not relieve an officer, agent or employee of the City from
the performance of any official duty provided by law.
7.07. Severability. If any provision of this Agreement shall be determined to be
unenforceable,that shall not affect any other provision of this Agreement.
7.08. Non-Business Days. If the date for making any payment or the last day for
performance of any act or the exercising of any right shall not be a Business Day, such payment
shall be made or act performed or right exercised on or before the next preceding Business Day.
19
7.09. Entire Agreement. This Agreement constitutes the City's entire agreement with
respect to the general subject matter covered by this Agreement.
7.10. Binding Effect. Subject to the specific provisions of this Agreement, and in
particular Section 7.03, this Agreement shall be binding upon and inure to the benefit of and be
enforceable by the parties and their respective successors and assigns.
20
IN WITNESS WHEREOF, the parties have duly signed, sealed and delivered this
Agreement by duly authorized officers, all as of the date first above written.
(SEAL)
[ SEAL] CITY OF PUEBLO, a Colorado municipal
corporation
11111 -1111004
Attest: By
City rk President of the City Council
BRANCH BANKING AND
TRUST COMPANY
BY: .
Printed Name: WTLLrA,H g PA SrtvA
Title: 13AM rN&QFfxCER.
[Lease Agreement between City of Pueblo, Colorado, and Branch Banking and Trust Company]
21
EXHIBIT A --PROJECT AND EQUIPMENT DESCRIPTION
22
EXHIBIT A
Equipment Cost Schedule: As of 4/12/16
Project 16-021
Item Vendor Costs
Twenty-two(22) 2017 Police Interceptor Sili-Terhar Motors, Inc. $682,198.00
SUVs
Emergency Lighting and Wiring for SUVs Wireless Advanced Communications $206,630.16
In-Car Dash Video Camera System Watch Guard Video $148,590.00
Video Camera Server Storage System CDWG $ 61,821.70
Video Camera SQL Server Storage License Insight $ 4,678.32
AVL Antennas Antenna Plus $ 2,550.00
Stop Sticks Stop Stick LTD $ 13,454.00
Striping/Decals for SUVs Deluxe Design/Rio Rancho, NM $ 3.915.00
Project Total $1,123,837.18
Request for Proposal: 16-021 Page 8
EXHIBIT B --PAYMENT SCHEDULE
Payment Schedule to Lease Purchase Agreement dated as of May 9, 2016 (the "Lease
Agreement"), between Pueblo,Colorado,and Branch Banking and Trust Company
Contract Number: 1106000161—00001
The payments required to repay the advance made pursuant to the Lease Agreement call
for an amortization period of approximately 15 years. Payments are QJU U a_f in
in A4ff�0S in the amount of$ 3 (48.Y. A portion of each payment is paid as and represents
payment of interest at an annual inte est rate of
Payments are due beginning on x/31!t 7 , , and Qft6tuall thereafter with a final
payment of all outstanding principal and accrued and unpaid interest d on 1/3 , 201/,
all as set forth in the attached amortization schedule.
23
May 9,2016 9:16 am Prepared by BB&T Governmental Finance (Finance 7.005 Pueblo(City),CO:ISSUER01-1P01)Page 1
Bond Debt Service
City of Pueblo,CO Customer No.9906000269 NAICS:921140
Installment Purchase(Police Vehicles)Contract No.00001
Dated Date 5/13/2016
Delivery Date 5/13/2016
Period Annual Debt Total Bond
Ending Principal Coupon Interest Debt Service Service Bond Balance Value
5/13/2016 1,123,637.00 1,123,837.00
1/31/2017 222,009.87 1.450% 11,678.54 233,688.41 901,827.13 901,827.13
12/31/2017 233,688.41 901,827.13 901,827.13
1/31/2018 220,611.92 1.450% 13,076.49 233,688.41 681,215.21 681,215.21
12/31/2018 233,688.41 681,215.21 681,215.21
1/31/2019 223,810.79 1.450% 9,877.62 233,688.41 457,404.41 457,404.41
12/31/2019 233,688.41 457,404.41 457,404.41
1/31/2020 227,056.05 1.450% 6,632.36 233,688.41 230,348.36 230,348.36
12/31/2020 233,688.41 230,348.36 230,348.36
1/31/2021 230,348.36 1.450% 3,340.05 233,688.41
12/31/2021 233,688.41
1,123,837.00 44,605.07 1,168,442.07 1,168,442.07
PROJECT FUND AGREEMENT
THIS PROJECT FUND AGREEMENT is dated as of May 9, 2016, and is by and
between CITY OF PUEBLO, COLORADO, a Colorado municipal corporation (the "City"), and
BRANCH BANKING AND TRUST COMPANY("BB&T").
RECITALS
The City is, simultaneously with the execution and delivery of this Project Fund Agreement,
executing and delivering a Lease Purchase Agreement dated as of May 9, 2016 (the "Lease Purchase
Agreement"), by and between the City and BB&T. The purpose of the Lease Purchase Agreement is
to provide for BB&T's advance of $1,123,837.00 to the City to finance the City's acquisition of
equipment, as defined in the Lease Purchase Agreement. In partial consideration for BB&T's
entering into the Lease Purchase Agreement, the City has agreed to provide for financing proceeds
to be deposited and disbursed pursuant to this Project Fund Agreement.
NOW, THEREFORE,the parties agree as follows:
SECTION 1. DEFINITIONS
In this Project Fund Agreement, the term "Project Costs" means all costs of the design,
planning, acquiring, installing of the Equipment as determined in accordance with generally
accepted accounting principles and that will not adversely affect the exclusion from gross income
for federal income tax purposes of the designated interest component of Installment Payments
payable by the City under the Lease Purchase Agreement, including (a) sums required to reimburse
the City or its agents for advances made for any such costs, (b) interest during the installation
process and for up to six months thereafter, and (c) all costs related to the financing of the
Equipment through the Lease Purchase Agreement and all related transactions.
In addition, any capitalized terms used in this Project Fund Agreement and not otherwise
defined shall have the meanings assigned thereto in the Lease Purchase Agreement.
SECTION 2. PROJECT FUND.
2.1. Project Fund. On the Closing Date, BB&T will deposit $1,123,837.00 into a special
account of the City at Branch Banking and Trust Company to be designated "2016-021 City of
Pueblo Project Fund" (the "Project Fund"). This account shall be held separate and apart from all
other funds of the City. The Project Fund is the City's property, but the City will withdraw amounts
on deposit in the Project Fund only as provided in the Project Fund Agreement and only for
application from time to time to the payment of Project Costs. Pending such application, such
amounts shall be subject to a lien and charge in favor of BB&T to secure the City's obligations
under the Lease Agreement.
2.2. Requisitions from Project Fund. The City may withdraw funds from the Project
Fund only after authorization from BB&T. BB&T will disburse funds from the Project Fund only to
the City and only upon its receipt of written requisitions from one of the designated City
Representatives named in the Certificate of Authorized Representatives contained herein and
substantially in the form of Exhibit A attached hereto.
2.3. Disposition of Project Fund Balance.
(a) Upon completion — Promptly after the acquisition and installation of the Equipment
has been completed, the City shall deliver to BB&T a certificate to such effect signed by a City
Representative.
(b) Upon default— Upon the occurrence of an Event of Default, BB&T may withdraw
any balance remaining in the Project Fund and apply such balance against outstanding Required
Payments.
(c) Upon event of nonappropriation — Upon an event of nonappropriation, BB&T may
withdraw any balance remaining in the Project Fund and apply such balance against outstanding
Required Payments.
(d) After delay or inactivity— If (i) more than two years have elapsed from the
Closing Date or(ii) at least six months has passed from BB&T's most recent receipt of a requisition
for Project Costs, then BB&T, upon 30 days' notice from BB&T to the City, may withdraw any
balance remaining in the Project Fund and apply such balance against outstanding Required
Payments.
(e) Application of Project Fund balance — BB&T will apply any amounts paid to it
pursuant to this section (i) first against all Additional Payments then due and payable, (ii) then to
interest accrued and unpaid to the prepayment date, and (iii) then to the prepayment, in inverse order
of maturity and without premium (notwithstanding any contrary provisions of Section 3.03 of the
Lease Purchase Agreement), of the outstanding principal components of Installment Payments. Such
prepayment, however, will not affect any other City payment obligation under the Lease Purchase
Agreement. BB&T will notify the City of any withdrawal from the Project Fund made under this
Section 2.3, and in the notice will describe its application of the funds withdrawn.
2.4. Investment. (a) The City and BB&T agree that money in the Project Fund will be
continuously invested and reinvested in a public funds money rate savings account.
(b) From and after the date that is three years from the Closing Date, the City will not
purchase or hold any investment which has a "yield," as determined under the Code, in excess of the
"yield" on the City's obligations under the Lease Purchase Agreement, unless the City has supplied
BB&T with a Bond Counsel Opinion to the effect that such investment will not adversely affect the
exclusion from gross income for federal income tax purposes to which the interest components of
Installment Payments would otherwise be entitled.
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(c) Investment obligations acquired with money in the Project Fund shall be deemed at
all times to be part of the Project Fund. The interest accruing thereon and any profit or loss realized
upon the disposition or maturity of any such investment shall be credited to or charged against the
Project Fund.
(d) All earnings on moneys in the Project Fund must be used for Project Costs.
SECTION 3. MISCELLANEOUS.
3.1. Notices. Any notice or other communication required or contemplated by this
Project Fund Agreement shall be deemed to be delivered if in writing, addressed as provided below
and if(a) actually received by such addressee, or (b) in the case of mailing, when indicated to have
been delivered by a signed receipt returned by the United States Postal Service after deposit in the
United States mails, postage and registry fees prepaid, and clearly directed to be transmitted as
registered or certified mail:
(i) If intended for the City, addressed to it at the following address: City of
Pueblo, Attention: Finance Director, 1 City Hall Place, 2nd Floor, Pueblo, CO 81003.
(ii) If intended for BB&T, addressed to it at the following address: BB&T
Governmental Finance, Attention: Account Administration/Municipal — Project Fund
Agreement Notice, 5130 Parkway Plaza Boulevard, Building 9, Charlotte, North Carolina
28217.
Any party may designate a different or alternate address for notices by notice given under this
Project Fund Agreement.
3.2. Survival of Covenants and Representations. All covenants, representations and
warranties made by the City in this Project Fund Agreement and in any certificates delivered
pursuant to this Project Fund Agreement shall survive the delivery of this Project Fund Agreement.
3.3. Choice of Law. The parties intend that COLORADO law shall govern this Project
Fund Agreement.
3.4. Amendments. This Project Fund Agreement may not be modified or amended
unless such amendment is in writing and signed by BB&T and the City.
3.5. No Third-Party Beneficiaries. There are no parties intended to be or which shall
be deemed to be third-party beneficiaries of this Project Fund Agreement.
3.6. Successors and Assigns. All of the covenants and conditions of this Project Fund
Agreement shall be binding upon and inure to the benefit of the parties to this Project Fund
Agreement and their respective successors and assigns.
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3.7. Severability. If any court of competent jurisdiction shall hold any provision of this
Project Fund Agreement invalid or unenforceable, such holding shall not invalidate or render
unenforceable any other provision of this Project Fund Agreement.
3.8. Counterparts. This Project Fund Agreement may be executed in any number of
counterparts, including separate counterparts, each executed counterpart constituting an original but
all together only one agreement.
3.9. Termination. Except as otherwise provided in this Project Fund Agreement, this
Project Fund Agreement shall cease and terminate upon payment of all funds (including investment
proceeds) from the Project Fund.
The remainder of this page has been left blank intentionally; signature page follows.
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CERTIFICATE DESIGNATING CITY REPRESENTATIVES
In accordance with the terms herein, the City designates the following persons as City
Representatives authorized to sign requisitions to withdraw funds from the Project Fund account:
Printed Name: Signature:
Roni Kimbrel
Sam Azad
The City may designate additional Representatives to sign requisitions upon written
notification to BB&T.
IN WITNESS WHEREOF, each of the parties has caused this Project Fund Agreement to
be signed and delivered by a duly authorized officer, all as of the date first above written.
[ SEAL]
CITY OF P Kiworas o munici.. corporation
Attest: B11111
City Clerk 'resi•ent of City Council
BRANCH BANKING AND
TRUST COMPANY
By. Vwfie,r,.0
Printed Name: lilka.TAAA v. LASrLVA
Title: 5/1Nn71/6 OFFXCLE
5
EXHIBIT A
[to be prepared on City's letterhead for submission]
PROJECT FUND REQUISITION
[Date]
E-MAIL REQUISITIONS TO: GFProjectfunds@bbandt.com
Ms. Trina Britt direct dial: 704-954-1873 fax: 704-954-1799
BB&T Governmental Finance
RE: Request for disbursement of funds from the Project Fund related to Contract No.
with City of Pueblo, dated May_, 2016.
Dear Ms. Britt,
Pursuant to the terms and conditions of the Project Fund Agreement dated as of May ,
2016, City of Pueblo (the "City"), requests the disbursement of funds from the Project Fund
established under the Project Fund Agreement for the following Project Costs:
This is requisition number from the Project Fund.
Disbursements will be to City of Pueblo
Amount: $
For vehicles and equipment for which a title is issued, attach the following to this
requisition
• Copies of vendor invoices;
• copies of the certificates of origin listing BB&T Governmental Finance, 5130
Parkway Plaza Blvd., Charlotte, NC 28217 as 1st lienholder OR a copy of the lien
recording application listing BB&T Governmental Finance, 5130 Parkway Plaza
Blvd., Charlotte, NC 28217 as 1st lienholder and a copy of the vehicle title
• Certificate of Insurance showing:
o automobile liability and property coverage with BB&T Governmental Finance
listed as loss payee and certificate holder;
o year, make model, VIN number;
o loan contract number
For equipment other than vehicles, attach the following to this requisition
• Copies of vendor invoices;
• Certificate of Insurance showing:
o general/tort liability insurance in an amount not less than $600,000 for
personal injury or death and $600,000 for property damage. (This applies only
to financed equipment other than vehicles).
6
o property coverage with BB&T Governmental Finance listed as loss payee and
certificate holder;
o make, model, serial number of each piece of equipment;
o loan contract number
Project Description:
Location of Equipment/Facilities:
To receive funds via wire transfer please include:
ABA Routing Number:
Account Number:
Physical address of City:
The City of Pueblo makes this requisition pursuant to the following representations:
1. The City has appropriated in its current fiscal year funds sufficient to pay the Installment
Payments and estimated Additional Payments due in the current fiscal year.
2. The purpose of this disbursement is for partial payment on the project provided for under the
Contract referenced above.
3. The requested disbursement has not been subject to any previous requisition.
4. No notice of any lien, right to lien or attachment upon, or claim affecting the right to receive
payment of, any of the moneys payable herein to any of the persons, firms or corporations
named herein has been received, or if any notice of any such lien, attachment or claim has
been received, such lien, attachment or claim has been released or discharged or will be
released or discharged upon payment of this requisition.
5. This requisition contains no items representing payment on account of any percentage
entitled to be retained on the date of this requisition.
6. No Event of Default is continuing under the Lease Agreement, and no event or condition is
existing which, with notice or lapse of time or both, would become an Event of Default.
7. The City authorizes BB&T to complete and file Uniform Commercial Code financing
statements with respect to the equipment that is the subject of this requisition.
8. The City has in place insurance on this portion of the Facilities that complies with the
insurance provisions of the above-referenced Contract.
Each amount requested for payment in this requisition either (a) represents reimbursement to
the City for a Project Cost expenditure previously made, or (b) will be used by the City promptly
upon the receipt of funds from BB&T to make the payments to third parties described in this
requisition.
Attached is evidence that the amounts shown in this requisition are properly payable at this
time, such as bills, receipts, invoices, architects' payment certifications or other appropriate
documents.
CITY OF PUEBLO, COLORADO
By:
Printed Name:
Title:
8
r ,
{
CLOSING CERTIFICATE
The undersigned officers of the City of Pueblo, Colorado (the "City"), hereby certify as
follows:
1. The City's governing board (the "Board") adopted the attached resolution (the
"Resolution"), authorizing and providing for a lease financing with Branch Banking and Trust
Company. The Resolution was duly adopted at a meeting duly called and held at which a quorum
was present and acting throughout. The Resolution has not been repealed, revoked, rescinded or
amended,but remains in full effect as of today.
2. The signatures set forth below are the true and genuine signatures of the persons
holding the indicated offices. The indicated persons have held such offices at all times since the
Resolution was adopted.
Printed Name Title Si at re
Ann 1\z p Chairman or City Manager Lk.sy
New; K:M b I Finance Officer
GON A 7)44-e. e r Clerk
3. The City has duly authorized, executed and delivered the Lease Agreement and the
Project Fund Agreement provided for by the Resolution. We have reviewed the City's
representations as set forth in such Agreements, and all of such representations are correct and
complete in all material respects as if made today. The City has appropriated at least
$ for Base Payments under the Lease Agreement coming due between today and the
end of the City's current fiscal year.
4. The seal impressed below is the City's official seal, and has been the City's official
seal since prior to the adoption of the Resolution.
WITNESS our signatures and the seal of City of Pueblo, Colorado, this 9 day of May,
2016.
(SEAL)
By: /\ jA :
l hbu � By:
Chairman or City Manager Finance Officer Clerk
t ti �t t
RESOLUTION NO. 13436
A RESOLUTION APPROVING A LEASE PURCHASE
AGREEMENT AND A PROJECT FUND AGREEMENT BETWEEN
THE CITY OF PUEBLO, A MUNICIPAL CORPORATION AND
BRANCH BANKING AND TRUST COMPANY, AUTHORIZING
EXECUTION THEREOF BY THE PRESIDENT OF THE CITY
COUNCIL AND AUTHORIZING THE EXECUTION AND
DELIVERY OF ALL OTHER DOCUMENTS REQUIRED
THEREWITH NECESSARY FOR THE LEASE AND PURCHASE
OF POLICE DEPARTMENT VEHICLES AND RELATED
EQUPIMENT IN THE AMOUNT OF $1,123,837
BE IT RESOLVED BY THE CITY COUNCIL OF PUEBLO, that:
WHEREAS, the City of Pueblo, a municipal corporation (hereinafter"City") is a Colorado
home rule City duly organized and existing under and by virtue of Article XX of the Colorado
Constitution and is authorized thereby to purchase and lease personal property for its municipal
purposes for the benefit of the City and its inhabitants and to enter into contracts with respect
thereto; and
WHEREAS, the City desires to lease and purchase certain police vehicles which constitute
personal property necessary for the performance of the Police Department's duties; and
WHEREAS, in order to acquire said vehicles, the City proposes to enter into a Lease
Purchase Agreement and a Project Fund Agreement with Branch Banking and Trust Company
("BB&T"); and
WHEREAS, City Council, as the governing body of the City, deems it for the benefit of the
City and for the efficient and effective administration thereof to enter into the Lease Purchase
Agreement and Project Fund Agreement for the leasing and purchase of the police vehicles
described therein and on the terms and conditions therein provided; and
WHEREAS, the funds made available under the Lease will be applied to the acquisition
of the police vehicles in accordance with the terms of such Lease Purchase Agreement and
Project Funds Agreement.
NOW, THEREFORE, BE IT FURTHER RESOLVED BY THE CITY COUNCIL OF
PUEBLO, that
SECTION 1.
The Lease Purchase Agreement and the Project Fund Agreement, attached hereto,
having been approved as to form by the City Attorney are hereby approved. The President of
City Council is hereby authorized and directed to execute the Lease Purchase Agreement and
the Project Fund Agreement and the City Clerk is authorized and directed to attest same and affix
the seal of the City thereto.
SECTION 2.
The City Manager and the officers, Directors and employees of the City are directed and
authorized to take all action necessary to give effect to and complete the lease and purchase
transaction which is hereby approved.
SECTION 3.
The Lease Purchase Agreement and the Project Fund Agreement are expressly made
subject to sufficient appropriations being made therefore in each fiscal year after 2016. Nothing
contained in this Resolution or the Lease Purchase Agreement or the Project Fund Agreement,
no any other instrument, shall be construed with respect to the City as incurring a pecuniary
liability or charge upon the general credit of the City or against its taxing power, nor shall the
breach of said agreements approved by this Resolution impose any pecuniary liability upon the
City except to the extent that the City is required to make the rental payments for fiscal year 2016.
Nothing in this Resolution is intended, nor shall it be construed, to create any multiple-fiscal year
direct or indirect debt or financial obligation whatsoever of the City.
SECTION 4.
The City Manager and Director of Finance of the City are each hereby designated to act
as authorized representatives of the City for purposes of the Lease Purchase Agreement and the
Project Fund Agreement until such time as the City Council shall designate any other or different
authorized representatives for purposes of said agreements.
SECTION 5.
This Resolution shall become effective immediately upon final passage.
INTRODUCED: May 9, 2016
BY:
O L PE_R.S�O+
APPROV "'—
PRESIDENT OF CITY COUNCIL
ATTESTED BY:
CITY CLERK
USE OF PROCEEDS CERTIFICATE
The undersigned Finance Officer of City of Pueblo, Colorado (the "City"), is among the
City officers charged with responsibility for the City's entering into a Lease Agreement dated as
of May 9 , 2016 (the "Agreement"), with Branch Banking and Trust Company("BB&T"). This
Certificate is delivered as part of the official record of the proceedings for the delivery of the
Agreement. I am executing and delivering this Certificate on behalf of the City to set forth in
good faith the City's reasonable expectations concerning the use and investment of financing
proceeds and other related matters, in order to assure that interest on the Obligations, as defined
below, will be excluded from gross income for federal income tax purposes. I understand that I
have an obligation to make the representations in this Certificate both correct and complete.
All capitalized terms used in this Certificate and not otherwise defined have the meanings
assigned to such terms under the Treasury Regulations applicable to tax-exempt bonds.
PURPOSE OF AGREEMENT
1. The City is executing and delivering the Agreement today to provide funds to
finance the acquisition (the "Project") of the equipment set forth in the Agreement (the
"Equipment"), and to pay certain financing costs. BB&T will advance funds to the City pursuant
to the Agreement for the Project. BB&T is entering into the Agreement for its own account with
no current intention of reselling its rights under the Agreement or any interest therein, except that
BB&T may make an assignment of payment rights to an affiliate, in whole, at par and without
recourse.
PROCEEDS; PAYMENT OBLIGATIONS
2. (a) BB&T will today pay directly to the City the full principal amount to be
advanced under the Agreement of $100,000.00 (the "Proceeds") by making a deposit into a
Project Fund created under an Project Fund Agreement between the City and BB&T.
(b) Under the Agreement, the City is obligated to pay Base Payments, as defined in
the Agreement, on the dates and in the amounts set forth in the Agreement(the City's obligations
to pay Base Payments are referred to in this Certificate as the "Obligations"), subject to
prepayment as provided in the Agreement.
(c) The Base Payments reflect the repayment of the Proceeds and include a
designated interest component corresponding to an annual interest rate as set forth in the
Agreement. The City does not expect to prepay any of the Obligations prior to the scheduled
payment dates.
USE OF PROCEEDS; REIMBURSEMENT
3. (a) All of the Proceeds and all investment earnings thereon will be used to pay
Project Costs, including costs incurred in connection with the execution and delivery of the
Agreement and interest on the Obligations during the Project period.
(b) All of such costs will be incurred and expenditures made subsequent to today,
except for reimbursement to the City for amounts (i) paid not more than 60 days prior to today,
(ii) representing engineering, design and similar preliminary expenses in an aggregate amount not
exceeding 20% of the principal amount of the Obligations, or (iii) otherwise in an amount not
exceeding 5%percent of the Proceeds.
(c) All expenditures to be reimbursed occurred not more than 18 months prior to
today. None of the Equipment was placed in service more than one year before today.
(d) All of the costs to be paid or reimbursed from Proceeds will be Capital
Expenditures, and none will be Working Capital Expenditures. No portion of the Gross Proceeds
will be used, directly or indirectly, to make or finance loans to two or more ultimate borrowers.
QUALIFICATION FOR TEMPORARY PERIOD
4. Work on the Project will proceed with due diligence, and the Equipment will be
placed in service beginning on or about '4/3 I /l b . Within 90 days of today (if it has not
already done so), the City will enter into substantial binding obligations to third parties to spend
Proceeds on Project Costs that are Capital Expenditures in an amount exceeding 5% of the
amount financed. The City estimates that all the Proceeds and all the investment earnings thereon
will be fully expended within 7 months from today.
INVESTMENT PROCEEDS
5. (a) Any earnings or net profit derived from the investment of the Proceeds
will be used to pay additional Project Costs or interest on the Obligations not later than the date
that is the later of(i) three years from today or (ii) twelve months from the date of the receipt of
such earnings.
(b) After the date that is three years from today, the City will not invest any of the
Gross Proceeds at a Yield in excess of the Yield on the Obligations.
(c) No investment will be acquired or disposed of at a cost or price that exceeds its
Fair Market Value as of the acquisition date, or which is less than its Fair Market Value as of the
disposition date. No portion will be invested in any investment as to which the economic return
is substantially guaranteed for more than three years.
(d) No portion of the Gross Proceeds will be used, directly or indirectly, to replace
funds that the City used (directly or indirectly) to acquire securities or obligations producing (or
expected to produce) a Yield higher than the Yield on the Obligations.
NO OVER-ISSUANCE OR EXCESSIVE MATURITY
6. (a) The sum of the Proceeds and the reasonably expected investment earnings
thereon does not exceed the amount reasonably expected to be required to pay Project Costs,
including interest on the Obligations during the Project period and financing costs.
(b) The term of the Obligations is not longer than reasonably necessary for the
governmental purposes thereof, and is not longer than the expected useful life of the Equipment.
(c) In connection with the issuance of the Obligations, the City has not utilized any
device (not described in this Certificate) which attempts to circumvent the restrictions of the
Code to exploit the difference between tax-exempt and taxable interest rates to obtain a material
financial advantage. The City has not attempted to increase improperly the burden on the market
for tax-exempt securities (for example, by selling its obligations in larger amounts or with longer
maturities, or selling them sooner,than would otherwise be necessary).
COMPLIANCE WITH REBATE REQUIREMENT
7. In the Agreement, the City has agreed to comply with provisions of the Code
which in some circumstances require the City to pay some of its investment earnings to the
United States, as provided in Code Section 148.
PRIVATE ACTIVITY TESTS
8. No payment on the Obligations is secured by property to be used in any private
business. None of the Proceeds are to be used for any such private business use. The City has no
leases, management contracts or other agreements with private entities or the federal government
for either (a) management or operation of the Equipment, or(b)the use of designated portions of
the Equipment.
QUALIFIED TAX-EXEMPT OBLIGATIONS
9. (a) None of the Obligations are "private activity bonds" within the meaning of
Code Section 141. The aggregate amount of tax-exempt obligations, including the Obligations,
issued and reasonably expected as of today to be issued in calendar year 2016 by (i) the City, (ii)
all entities on behalf of which the City issues tax-exempt obligations, (iii) all governmental units
that are "subordinate" to the City, within the meaning of Code Section 265(b)(3), and (iv) all
entities that issue tax-exempt obligations on behalf of the same such entities, does not exceed
$10,000,000. The City has no reason to believe that the City and such other entities will issue
tax-exempt obligations in 2016 in an aggregate amount that will exceed such $10,000,000 limit.
(b) In making the statements in subparagraph (a) above, I have taken into account (i)
all the City's departments and agencies and (ii) all political subdivisions or other entities (x)
which have the power to borrow money or enter into contracts and (y) of which the City is a
member or over which it has legal or practical control. For all of such entities, I have taken into
account all bonds, bond anticipation notes, installment or lease-purchase contracts and all other
obligations to pay money (excluding only current accounts payable and private activity bonds)
issued or to be issued or contracted by such entities in calendar year 2016. I have not included
those private activity bonds or those refunding obligations excluded from the annual $10,000,000
calculation by Code Section 265(b)(3).
INVESTED SINKING FUNDS
10. There are no funds (a) to be held under the Agreement or(b) which are pledged as
security for the Obligations (including by way of negative pledges), or which will be used to pay
the Obligations, or which could be reasonably be expected to be available to pay the Obligations
if the City were to encounter financial difficulty, other than the Project Fund referenced above.
The City will pay the Obligations from its general funds, with there being no obligation (or
expectation) on the part of the City or any other entity to segregate or identify any particular
funds or accounts for the payment of or security for the Obligations.
MISCELLANEOUS
11. (a) No substantial part of the Equipment will be sold, no arrangement has
been or will be entered into with respect to the Equipment that would be treated as a sale for
federal income tax purposes, and the City expects to use the Equipment for its currently-intended
purpose at least until the stated date for final payment of the Obligations, in all cases other than
such insubstantial portions as may be disposed of in the ordinary course of business due to
normal wear or obsolescence.
(b) There are no other tax-exempt bonds, notes or obligations of the City which have
been or are expected to be issued or contracted within 20 days before or after today.
(c) None of the Proceeds will be used to make any payment on any other City
obligation that was contracted in the exercise of the City's borrowing power.
(d) No portion of the Obligations is Federally Guaranteed.
REASONABLENESS; BINDING EFFECT
12. To the best of my knowledge and belief, the expectations set forth above are
reasonable and the statements set forth above are correct. The City's covenants made as
described in this Certificate are intended as binding covenants of the City.
WITNESS my signature this Atday of May, 2016.
By: C.)
Finance
Finance Officer
City of Pueblo, Colorado
city of
PU BLO
colorado
1 TELEPHONE: 719 -
CITY HALL PLACE,THIRD FLOOR ( )562 3899
PUEBLO,COLORADO 81003 DEPARTMENT OF LAW FAX NO.(719)544-1007
May 9,2016
City of Pueblo,Colorado
Branch Banking and Trust Company("BB&T")
Charlotte,North Carolina
$1,123,837 Lease Financing for City of Pueblo,Colorado
Ladies and Gentlemen:
I have represented the City of Pueblo, Colorado (the "City"), in connection with the City's
authorization,execution and delivery of the following:
(1) A Lease Agreement dated as of May 9, 2016 (the "Lease Agreement"), between the
City and BB&T;and
(2) A Project Fund Agreement dated as of May 9, 2016(the"Project Fund Agreement"),
between the City and BB&T.
In this connection, I have reviewed (a) the Constitution of the State of Colorado and other
applicable law; (b) certain proceedings taken by the City, including a resolution (the "Resolution")
duly adopted by the City, pertaining to the authorization of the above documents and related
transactions; (c) executed copies of the Lease Agreement and the Project Fund Agreement (the
"Agreements"); and(d) such other information and documents as I have deemed relevant in order to
render this opinion.
Based upon the foregoing, it is my opinion that:
1. The City is a Colorado public body duly existing pursuant to Colorado law.
2. The City has duly adopted the Resolution.
3. The City has duly authorized, executed and delivered each Agreement. Assuming
the due authorization, execution and delivery of an Agreement by every other party thereto, each
such Agreement constitutes a valid and binding agreement of the City enforceable in accordance
with its terms.The enforceability of the City's obligations with respect to the Agreements is subject
to the provisions of bankruptcy,insolvency,reorganization,moratorium and similar laws affecting
the enforcement of creditors'rights. The enforceability of such obligations is also subject to usual
equity principles,which may limit the specific enforcement of certain remedies.
4. No further approval, consent or withholding of objections is required from any
federal, state or local government authority with respect to the City's entering into the Lease
Agreement, the City's performing its obligations thereunder or the transactions contemplated
thereby. The City has complied with all required public-bidding procedures regarding the
Equipment (as defined in the Lease Agreement) and the transactions contemplated by the Lease
Agreement.
5. All of the Equipment described in the Lease Agreement as intended to be financed
by the City will be personal property when installed as expected, and no portion will be real
property or a"fixture"within the meaning of the Colorado Uniform Commercial Code.
6. To the best of my knowledge after reasonable investigation,neither(a)the adoption
of the Resolution, nor (b) the execution and delivery of the Agreements or the consummation of
the transactions contemplated thereby,nor(c) the fulfillment of or compliance with the terms and
conditions of the Agreements,breaches or violates any provision of any contract,lease,instrument
or other agreement or any judgment, order or decree of any court or other governmental authority
to which the City is a party or by which the City is bound. No event or condition has happened or
existed, or is happening or existing, under the provisions of any such instrument which, at this
time, constitutes a default or which,with notice or lapse of time or both,would constitute an event
of default under any such contract, lease, instrument or other agreement or any such judgment,
order or decree.
7. There is no litigation or any proceeding before any governmental agency pending
or,to the best of my knowledge after reasonable investigation,threatened against the City(or any
official thereof in an official capacity) with respect to (a)the City's organization or existence, (b)
the City's authority to execute and deliver the Agreements, to adopt the Resolution or to comply
with the terms thereof, (c) the transactions contemplated by the Agreements and the Resolution,
(d) the title to office of any City governing board member or any other City officer, or (e) any
authority or proceedings relating to the City's execution or delivery of any of the Agreements.
Very truly yours,
-76w�, 4 }! V, --
Daniel C. Kogovsek 7
City Attorney
Form 8030®G Information Return for Tax-Exempt Governmental Obligations
(Rev.September 2011) to-Under Internal Revenue Code section 149(e) OMB No.1545-0720
Department of the Treasury
110-See separate instructions.
Internal Revenue Service Caution:if the issue price is under$100,000,use Form 8038-GC.
Part I Reporting Authority If Amended Return,check here ► D
1 Issuer's name 2 Issuer's employer identification number(EIN)
City of Pueblo,a municipal corporation 84-6000615
3a Name of person(other than issuer)with whom the IRS may communicate about this return(see instructions) 3b Telephone number of other person shown on 3a
4 Number and street(or P.O.box if mail is not delivered to street address) Room/suite 5 Report number(For IRS Use Only)
#1 City Hall Place,Finance Office,2nd Floor 131717
6 City,town,or post office,state,and ZIP code 7 Date of issue
Pueblo,CO 81003
8 Name of issue 9 CUSIP number
10a Name and title of officer or other employee of the issuer whom the IRS may call for more information(see 10b Telephone number of officer or other
instructions) employee shown on 10a
Lara Keys,Assistant Director of Finance 719-553-2653
Part`.II Type of Issue (enter the issue price). See the instructions and attach schedule.
11 Education 11
12 Health and hospital 12
13 Transportation 13
14 Public safety 14
15 Environment(including sewage bonds) 15
16 Housing 16
17 Utilities 17
18 Other. Describe ► Twenty-two Police Interceptor SUVs and related equipment for each vehicle 18 1,123,837 00
19 If obligations are TANs or RANs,check only box 19a ► ❑
If obligations are BANs,check only box 19b ► ❑ `,; * ' ,,,- '"
20 If obligations are in the form of a lease or installment sale,check box ► 0 .-':, -:'", .'-'.:'''';!':2,(-:: :,,<',
a' . ,,ixJ :. 'i
Part IIIDescription of Obligations. Complete for the entire issue for which this form is being filed.
(a)Final maturity date (b)Issue price (c)Stated redemption (d)Weighted (e)Yield
price at maturity average maturity
21 1/31/2021 $ 1,123,837.00 $ NA years, 1.45 %
Part°IV' Uses of Proceeds of Bond Issue (including underwriters' discount)
22 Proceeds used for accrued interest 22
23 Issue price of entire issue(enter amount from line 21,column(b)) 23
24 Proceeds used for bond issuance costs(including underwriters'discount). . 24
25 Proceeds used for credit enhancement 25
26 Proceeds allocated to reasonably required reserve or replacement fund 26
27 Proceeds used to currently refund prior issues 27
28 Proceeds used to advance refund prior issues 28 ° .
29 Total (add lines 24 through 28) 29
30 Nonrefunding proceeds of the issue(subtract line 29 from line 23 and enter amount here) . . 30
Part;.V Description of Refunded Bonds. Complete this part only for refunding bonds.
31 Enter the remaining weighted average maturity of the bonds to be currently refunded . . . . ► years
32 Enter the remaining weighted average maturity of the bonds to be advance refunded . . . ► years
33 Enter the last date on which the refunded bonds will be called(MM/DD/YYYY) ►
34 Enter the date(s)the refunded bonds were issued►(MM/DD/YYYY)
For Paperwork Reduction Act Notice,see separate instructions. Cat.No.63773S Form 8038-G(Rev.9-2011)
Form 8038-G(Rev.9-2011) Page 2
Part VI Miscellaneous
35 Enter the amount of the state volume cap allocated to the issue under section 141(b)(5) . . . . 35
36a Enter the amount of gross proceeds invested or to be invested in a guaranteed investment contract ,A.'< ,<
(GIC)(see instructions) 36a.
b Enter the final maturity date of the GIC►
C Enter the name of the GIC provider► Eb"t'•
37 Pooled financings: Enter the amount of the proceeds of this issue that are to be used to make loans
to other governmental units 37
38a If this issue is a loan made from the proceeds of another tax-exempt issue, check box Is ❑and enter the following information:
b Enter the date of the master pool obligation►
c Enter the EIN of the issuer of the master pool obligation►
d Enter the name of the issuer of the master pool obligation►
39 If the issuer has designated the issue under section 265(b)(3)(B)(i)(III)(small issuer exception),check box . . . ► ❑
40 If the issuer has elected to pay a penalty in lieu of arbitrage rebate,check box ► ❑
41a If the issuer has identified a hedge,check here Is ❑ and enter the following information:
b Name of hedge provider Is
c Type of hedge Is
d Term of hedge►
42 If the issuer has superintegrated the hedge,check box ► ❑
43 If the issuer has established written procedures to ensure that all nonqualified bonds of this issue are remediated
according to the requirements under the Code and Regulations(see instructions), check box ► ❑
44 If the issuer has established written procedures to monitor the requirements of section 148,check box Is ❑
45a If some portion of the proceeds was used to reimburse expenditures,check here Is ❑ and enter the amount
of reimbursement ►
b Enter the date the official intent was adopted►
Under penalties of perjury,I declare that I have examined this return and accompanying schedules and statements,and to the best of my knowledge
Signature and belief,they are true,correct,and complete.I further declare that I consent to the IRS's disclosure of the issuer's return information,as necessary to
and processthis return,to the person that I have authorized above.
Consent f1p-y IICLA 04' . L, Roni Kimbrel,Director of Finance
Signature of issuer's authorized representative Date r Type or print name and title
Paid Printaype preparer's name Preparer's signature Date Check ❑ it PTIN
Preparer self-employed
Use Only Firm's name O. Firm's EIN ►
Firm's address ► Phone no.
Form 8038-6(Rev.9-2011)