HomeMy WebLinkAbout09497ORDINANCE NO. 9497
AN ORDINANCE APPROVING AND AUTHORIZING THE
MAYOR TO EXECUTE A REIMBURSEMENT AGREEMENT
BETWEEN THE CITY OF PUEBLO, A COLORADO
MUNICIPAL CORPORATION AND THE PUEBLO URBAN
RENEWAL AUTHORITY, A BODY CORPORATE AND
POLITIC OF THE STATE OF COLORADO RELATING TO
THE EVRAZ URBAN RENEWAL PROJECT AND
TRANSFERRING ONE HUNDRED FIFTY THOUSAND
DOLLARS ($150,000.00) FROM THE 1992-2021 SALES
AND USE TAX CAPITAL IMPROVEMENT PROJECTS
FUND AND GRANTING A VARIANCE FROM THE
CRITERIA AND STANDARDS ESTABLISHED BY SECTION
14-4-85.3 OF THE PUEBLO MUNICIPAL CODE
BE IT ORDAINED BY THE CITY COUNCIL OF PUEBLO, that:
SECTION 1.
The City Council finds and determines that the expenditure of $150,000 to
reimburse the Pueblo Urban Renewal Authority, a body corporate and politic of the State
of Colorado (“PURA”) for reasonable and customary out-of-pocket expenses incurred by
PURA in bringing the Evraz URA Project to fruition, as described in the attached
agreement, is for a public purpose and in furtherance of a municipal function and will
create employment opportunities justifying the expenditure of public funds.
SECTION 2.
The City Council further finds that the reimbursement payments to PURA
seemingly fail to meet the criteria and standards established by Section 14-4-85 of the
Pueblo Municipal Code (PMC). However, the City Council further finds and concludes
that PMC Sec. 14-4-85.3(c) of the Criteria Ordinance provides that the City Council “may
grant a variance” from the requirements of the Criteria Ordinance “if the City Council
determines in its sole discretion” that the requested payments will create employment
opportunities justifying the expenditure of public funds.
SECTION 3.
The City Council further finds and concludes that good cause exists to grant a
variance from the criteria and standards established by Section 14-4-85 of the Pueblo
Municipal Code because the failure to provide PURA with cash flow relief jeopardizes the
completion of the Evraz Urban Renewal Project and the retention of one thousand or
more Evraz employees in the Pueblo workforce at pre-benefit salaries averaging between
$60,000 to $65,000, which far exceeds the average salary in Pueblo County.
SECTION 4.
The Reimbursement Agreement, dated July 8, 2019, between the City of Pueblo,
a Colorado municipal corporation (“City”) and PURA, relating to the Evraz Urban
Renewal project, attached hereto, having been approved as to form by the City Attorney
is hereby approved.
SECTION 5.
The Mayor is hereby authorized and directed to execute said Reimbursement
Agreement for and on behalf of the City and the City Clerk is directed to affix the seal of
the City thereto and attest same.
SECTION 6.
Funds in the aggregate amount of $150,000 are hereby authorized to be
transferred, expended and made available out of the 1992- 2021 Sales and Use Tax
Capital Improvement Projects Fund for the sole purpose of reimbursing PURA for
reasonable and customary out-of-pocket expenses incurred by PURA in bringing the
Evraz URA Project to fruition and in the manner described in the attached agreement.
The funds hereby authorized to be transferred and expended shall be released, dispersed
and paid by the City’s Director of Finance as specified in the attached agreement.
SECTION 7.
The officers and staff of the City are authorized and directed to perform any and
all acts consistent with this Ordinance and the attached Reimbursement Agreement, to
implement the policies and procedures described therein.
SECTION 8.
This Ordinance shall become effective on the date of final action by the Mayor and
City Council.
Action by City Council:
Introduced and initial adoption of Ordinance by City Council on June 24, 2019 .
Final adoption of Ordinance by City Council on July 8, 2019 .
President of City Council
Action by the Mayor:
☒
Approved on July 11, 2019 .
□
Disapproved on based on the following objections:
_
Mayor
Action by City Council After Disapproval by the Mayor:
□
Council did not act to override the Mayor's veto.
□
Ordinance re-adopted on a vote of , on
□
Council action on _______ failed to override the Mayor’s veto.
President of City Council
ATTEST
City Clerk
City Clerk’s Office Item # R-7
Background Paper for Proposed
Ordinance
COUNCIL MEETING DATE: June 24, 2019
TO: President Dennis E. Flores and Members of City Council
VIA: Brenda Armijo, City Clerk
FROM: Mayor Nicholas A. Gradisar
SUBJECT: AN ORDINANCE APPROVING AND AUTHORIZING THE MAYOR TO EXECUTE
A REIMBURSEMENT AGREEMENT BETWEEN THE CITY OF PUEBLO, A
COLORADO MUNICIPAL CORPORATION AND THE PUEBLO URBAN
RENEWAL AUTHORITY, A BODY CORPORATE AND POLITIC OF THE STATE
OF COLORADO RELATING TO THE EVRAZ URBAN RENEWAL PROJECT AND
TRANSFERRING ONE HUNDRED FIFTY THOUSAND DOLLARS ($150,000.00)
FROM THE 1992-2021 SALES AND USE TAX CAPITAL IMPROVEMENT
PROJECTS FUND AND GRANTING A VARIANCE FROM THE CRITERIA AND
STANDARDS ESTABLISHED BY SECTION 14-4-85.3 OF THE PUEBLO
MUNICIPAL CODE
SUMMARY:
The attached Ordinance approves a reimbursement agreement between the City of Pueblo and
the Pueblo Urban Renewal Authority (“PURA”) to help pay for PURA’s out-of-pocket expenses in
connection with the Evraz urban renewal project; authorizes the transfer of up to $150,000 from
the City’s so-called “Half-Cent Economic Development Fund” for that purpose and grants a
variance from PMC Sec. 14-4-85.3(b) of the Criteria Ordinance.
PREVIOUS COUNCIL ACTION:
On November 12, 2018, by Ordinance No. 9361, the City Council approved the urban renewal
plan for the Evraz project area.
BACKGROUND:
Since the creation of the Evraz urban renewal area, PURA has incurred and will incur in the future
substantial out-of-pocket expenses, including payments made to third party financial and legal
experts, in connection with implementing the Evraz urban renewal plan and taking the actions
which are necessary for the issuance of revenue bonds.
FINANCIAL IMPLICATIONS:
Under the attached reimbursement agreement, the City agrees to reimburse PURA, up to
$150,000 for all reasonable and customary out-of-pocket expenses incurred by PURA in bringing
the Evraz URA Project to fruition. PURA has agreed to repay the City all funds received pursuant
to the reimbursement agreement, within thirty (30) days following the closing of the revenue bond
issuance.
PMC Sec. 14-4-85.3(b) of the Criteria Ordinance places limitations on expenditures from the City’s
so-called “Half-Cent Economic Development Fund.” However, PMC Sec. 14-4-85.3(c) of the
Criteria Ordinance provides that the City Council “may grant a variance” from the requirements of
the Criteria Ordinance “if the City Council determines in its sole discretion” that the requested
payments will create employment opportunities justifying the expenditure of public funds.
City staff is recommending that City Council grant a variance from the Criteria Ordinance because
the reimbursement payments to PURA are necessary for the completion of the Evraz URA Plan
and the retention of one thousand Evraz employees in the Pueblo workforce at pre-benefit
salaries averaging more than $60,000 to $65,000. Salaries paid by Evraz far exceed the average
salaries in Pueblo County.
BOARD/COMMISSION RECOMMENDATION:
Not applicable to this Ordinance.
STAKEHOLDER PROCESS:
Not applicable to this Ordinance.
ALTERNATIVES:
If this Ordinance is not approved PURA may encounter cash flow difficulties in implementing the
Evraz URA Plan and the Evraz employee retention plan may be at risk.
RECOMMENDATION:
The Pueblo Economic Development Corporation recommends approval of this Ordinance.
Attachments:
Proposed Ordinance, proposed reimbursement agreement
REIMBURSEMENT AGREEMENT
(EVRAZ Urban Renewal Project)
1.0 PARTIES. This Agreement (the "Agreement") is made and entered into as of July 8,
2019, by and between the City of Pueblo, a Colorado municipal corporation (the "City") and the
Pueblo Urban Renewal Authority, a body corporate and politic of the State of Colorado (the
"Authority") (the City and the Authority are referred to collectively as the "Parties" or
individually as a"Party").
2.0 RECITALS. The Recitals to this Agreement are incorporated herein and made a part
hereof by this reference as though fully set forth in the body of this Agreement. Capitalized
phrases, terms, and words are defined in Section 4.0.
2.1 The Urban Renewal Plan. In accordance with the provisions of Part 1 of Article
25 of Title 31 of the Colorado Revised Statutes (the "Act"), the City Council of the City
approved and the Authority is carrying out the Urban Renewal Plan for the Evraz Urban
Renewal Project Area(the"Plan").
2.2 Purpose. The purpose of this Agreement is to assist the Authority in the
redevelopment of the Project Area prior to the issuance of revenue bonds by the Authority.
3.0 AGREEMENT. in consideration of the premises and the mutual obligations of the
Parties and other good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, each covenants and agrees with the other as follows.
4.0 DEFINITIONS. In this Agreement, unless a different meaning clearly appears from the
context:
"Act"means the Colorado Urban Renewal Law cited in Section 2.1.
"Agreement" means this Agreement, as it may be amended or supplemented in writing.
"Authority" means the Pueblo Urban Renewal Authority, a body corporate and politic of
the State of Colorado and its lawful successors and assigns.
"Bonds" shall have the same meaning as the definition in §31-25-103 (3) C.R.S.
"City"means the City of Pueblo, a municipal corporation of the State of Colorado.
"Party" or"Parties" means the Authority or the City or collectively both parties.
"Plan"means the urban renewal plan described in Section 2.1.
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"Pledged TIF Revenue" means the property tax increment revenue allocated to the
Authority by the Act and the Plan to pay the costs of the Urban Renewal Project described in the
Plan.
"Project Area" means the area included within the boundaries of the Plan.
"Project Costs" means the cost of all activities and undertakings required to administer
and carry out the Urban Renewal Project.
"Urban Renewal Project" means all of the activities and undertakings described in the
Act, including, without limitation, § 31-25-103 (10), required to carry out redevelopment of the
Project Area.
5.0 OBLIGATIONS OF THE CITY.
5.1 Until the issuance of the revenue bonds described below, City agrees to
reimburse the Authority, up to $150,000.00, for all reasonable and customary out-of-pocket
expenses (including, without limitation, payments made to third party financial and legal experts
retained by the Authority) incurred by the Authority in preparing and implementing the Plan and
taking the procedural actions necessary for issuance of the revenue bonds.
5.2 Authority shall file with City's Director of Finance written requests for
reimbursement certified to be true and correct by an officer of the Authority. Amounts included
in each request for payment shall have not been included in any prior request for reimbursement.
Reimbursement requests shall include adequate documentation of actual payments of out-of-
pocket expenses in connection with the Evraz Urban Renewal Project.
6.0 OBLIGATIONS OF THE AUTHORITY.
6.1 Issuance of Bonds. The Authority shall make commercially reasonable efforts to
issue Bonds for sale to third-party investors in an amount sufficient to carry out redevelopment
of the Project Area provided the City continues to fund all reasonable and customary out-of-
pocket expenses (including, without limitation, payments made to third party financial and legal
experts retained by the Authority) incurred by the Authority in preparing and implementing the
Plan and taking the procedural actions necessary for issuance of the revenue bonds.
6.2 Repayment of the City. The Authority shall directly or indirectly through the
bond document repay the City all funds received by the Authority pursuant to this Agreement
within thirty (30) days of closing of the Bond issuance.
6.3 Interest Accruals. No interest shall accrue on funds paid to the Authority by the
City pursuant to this Agreement provided that the Authority has not defaulted in its performance
hereunder. In the event of such default, the Authority agrees to pay interest on such funds at the
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rate of eight percent (8%) per annum, compounded annually, from the date of default until the
date of repayment.
7.0 FAILURE OF THE EVRAZ URBAN RENEWAL PROJECT.
7.1 Notice of Termination. If the Redevelopment and Reimbursement Agreement
between the Authority and New CF&I, a Delaware corporation, is terminated, this Agreement
will terminate and become null and void within 30 days after receipt of such notice of
termination unless the Parties have otherwise agreed in writing.
7.2 Effect of Termination. If this Agreement is terminated pursuant to Section 7.1,
each Party shall pay its own costs and expenses related to this Agreement, and this Agreement
shall be null and void and of no effect; and no action, claim or demand (including the
reimbursement by the Authority of funds paid by the City under this Agreement) may be based
on any term or provision of this Agreement. In addition, the Parties agree to execute a mutual
release or other instruments reasonably required to effectuate and give notice of such
termination.
8.0 BOOKS AND RECORDS.
8.1 Books and Accounts; Financial Statement. The Authority will keep, or cause to
be kept, proper and current books and accounts in which complete and accurate entries shall be
made of amounts expert fees for which reimbursement is requested from the City and such other
calculations, allocations and payments required by this Agreement. All documentation for costs
and expenses are to be retained for seven(7) years.
8.2 Inspection of Records. All books, records and reports in the possession of the
Authority relating to the reimbursement of expert fees, including the books and records described
in Section 8.1, shall at all reasonable times be open to inspection (at City's expense) by such
accountants or other agents as the City may from time to time designate.
9.0 DEFAULT. Time is of the essence hereof. If any payment or any other material
condition, obligation, or duty is not timely made, tendered, or performed by any Party, then,
subject to notice and the opportunity to cure as set forth below, any non-defaulting Party may
seek any remedy available at law or in equity, including damages, and costs as may be proper,
including reasonable attorney fees.
10.0 NOTICE OF DEFAULT AND CURE PERIOD. In the event of an alleged default by a
Party, prior to the non-defaulting Party's ability to move forward with remedies pursuant to
Section 9.0 above, the non-defaulting Party must deliver written notice to the defaulting Party of
such default, and the defaulting Party shall have thirty (30) days after receipt of the notice to cure
such default.
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11.0 RIGHTS AND REMEDIES CUMULATIVE. The rights and remedies of the Parties to
the Agreement are cumulative, and the exercise by either Party of any one or more of such
remedies shall not preclude the exercise by it, at the same or different times, of any other such
remedies for any other default or breach by any other Party.
12.0 TITLE OF SECTIONS. Any titles of the several parts and sections of the Agreement are
inserted for convenience of reference only and shall be disregarded in construing or interpreting
any of its provisions.
13.0 NO THIRD-PARTY BENEFICIARIES. No third-party beneficiary rights are created in
favor of any person not a Party to the Agreement.
14.0 VENUE AND APPLICABLE LAW. Any action arising out of the Agreement shall be
brought in the Pueblo County District Court and the laws of the State of Colorado shall govern
the interpretation and enforcement of the Agreement. To the maximum extent permitted by law,
each Party hereto waives its right to a trial by jury.
15.0 NONLIABILITY OF AUTHORITY AND CITY OFFICIALS, AGENTS AND
EMPLOYEES. Neither the Mayor of the City nor any City Council member, board member,
Authority Commissioner, official, employee, consultant, attorney or agent of the Authority or the
City shall be personally liable for any amount of damages under this Agreement or in the event
of any default or breach by the City or the Authority under this Agreement.
16.0 AUTHORITY AND CITY NOT PARTNERS. Notwithstanding any language in this
Agreement or any other agreement, representation, or warranty to the contrary, neither the
Authority nor the City shall be deemed or constituted a partner or joint venturer of one another or
any contractor or subcontractor performing work carrying out the Urban Renewal Plan for the
Evraz Urban Renewal Project Area and neither the Authority nor the City shall be responsible
for any debt or liability of one another,their agents or contractors.
17.0 INTEGRATED CONTRACT. It is intended by the Parties that this Agreement is an
integrated contract and that invalidation of any of its provisions by judgment or court order shall
in no way affect any of the other provisions, which shall remain in full force and effect unless the
Parties otherwise agree to an amendment in writing.
18.0 COUNTERPARTS. This Agreement may be executed in counterparts, each of which
shall constitute one and the same instrument.
19.0 NOTICES. A notice, demand, or other communication under this Agreement by any
Party to the other shall be in writing and sufficiently given if delivered in person or if it is
delivered by overnight courier service with guaranteed next-day delivery or by certified mail,
return receipt requested, postage prepaid, and
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In the case of the City. Mayor, 1 City Hall Place, 2nd Floor, Pueblo, CO 81003 with a
copy to City Attorney, 1 City Hall Place, 3rd Floor, Pueblo, CO 81003
In the case of the Authority, Pueblo Urban Renewal Authority, 115 East Riverwalk, Suite
410, Pueblo, CO 81003, with a copy to Paul C. Benedetti, 2730 Iliff Street, Boulder, CO 80305.
or at such other address with respect to any such Party as that Party may, from time to time,
designate in writing and forward to the other as provided in this Section.
20.0 GOOD FAITH OF PARTIES. In performance of this Agreement or in considering any
requested extension of time or in the giving of any approval, the Parties agree that each will act
in good faith and will not act unreasonably, arbitrarily, capriciously or unreasonably withhold
any approval required by this Agreement.
21.0 FURTHER ASSURANCES. Each Party agrees to execute such documents and take such
action as shall be reasonably requested by the other Party to confirm, clarify or effectuate the
provisions of this Agreement.
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22.0 AMENDMENTS. This Agreement shall not be amended except by written instrument.
Each amendment, which shall be in writing and signed and delivered by the Parties, shall be
effective to amend the provisions hereof.
23.0 JOINTLY DRAFTED. The Parties acknowledge that this Agreement is the result of
negotiations between the Parties and further agree that this Agreement shall not be construed or
interpreted against either Party on the basis of which Party prepared this Agreement or the
preceding drafts.
24.0 AUTHORITY. The persons executing this Agreement on behalf of the Parties covenant
and warrant that each is fully authorized to execute this Agreement on behalf of such Party.
25.0 NO WAIVER OF IMMUNITY. Nothing contained in this Agreement constitutes a
waiver of sovereign immunity or governmental immunity by the Authority under applicable state
law.
IN WITNESS WHEREOF, the Authority and the City have caused the Agreement to be
duly executed as of the day first above written.
THE PUEBLO URBAN RENEWAL
AUTHORITY
ATTEST:
J C�� G Its
Donald J. Banner, C it
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Ral liams Asst. Treasurer
CITY OF PUEBLO, A MUNICIPAL
CORPORATION
ATTEST: #716et
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Nicholas A. Gradisar
1 - , Mayor
L' A 4-4.Al -t_
Brenda Armijo I
City Clerk
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