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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. 1 "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 2 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. 3 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 4 • 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. • 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 5 ael.L.o.wk, Ral liams Asst. Treasurer CITY OF PUEBLO, A MUNICIPAL CORPORATION ATTEST: #716et ait/idarve.04„ Nicholas A. Gradisar 1 - , Mayor L' A 4-4.Al -t_ Brenda Armijo I City Clerk 6