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HomeMy WebLinkAbout09967ORDINANCE NO. 9967 AN EMERGENCY ORDINANCE AUTHORIZING AND APPROVING THE AMENDMENT OF CERTAIN TERMS OF THE CITY’S OUTSTANDING SERIES 2014 AND SERIES 2016 CERTIFICATES OF PARTICIPATION THROUGH THE EXECUTION AND DELIVERY OF AMENDMENTS TO THE RELATED LEASE PURCHASE AGREEMENTS, SUPPLEMENTAL INDENTURES AND OTHER NECESSARY DOCUMENTS IN ORDER TO REDUCE THE INTEREST RATES ON SUCH OBLIGATIONS AND PRESCRIBING OTHER DETAILS IN CONNECTION THEREWITH WHEREAS, the City of Pueblo, Colorado (the “City”), is authorized, pursuant to the Home Rule Charter of the City (the “Charter”) to enter into lease purchase agreements in order to provide lands and facilities for governmental purposes; and WHEREAS, the City has previously entered into a Lease Purchase Agreement dated as of November 12, 2014 (the “2014 Lease”), between the City, as lessee, and the City of Pueblo, Colorado Municipal Building Corporation (the “Corporation”), as lessor, for the purpose of providing funding to finance the replacement of approximately 8,725 high pressure sodium streetlight fixtures with approximately 8,725 light emitting diode streetlight fixtures throughout the City (the “2014 Project”); and WHEREAS, pursuant to a Trust Indenture dated as of November 12, 2014 (the “2014 Indenture”), between the Corporation and Wells Fargo Bank, National Association, in its capacity as trustee thereunder (the "2014 Trustee"), and a Continuing Covenant Agreement dated as of November 12, 2014 (the “2014 Agreement”), by and among the City, the Corporation and the 2014 Trustee, the City caused the execution and delivery of the Certificate of Participation, Series 2014, in the original aggregate principal amount of $4,200,000 (the “Series 2014 Certificates”), evidencing interests in the right to receive revenues under the 2014 Lease, which Series 2014 Certificates are currently outstanding in the aggregate principal amount of $1,794,753.36 and bear interest at a rate of 2.54% per annum; and WHEREAS, the City has previously entered into a Lease Purchase Agreement dated as of December 9, 2016 (the “2016 Lease”), between the City, as lessee, and the Corporation, as lessor, for the purpose of providing funding to advance refunding certain then-outstanding obligations of the City at a savings (the “2016 Project”); and WHEREAS, pursuant to a Trust Indenture dated as of December 9, 2016 (the “2016 Indenture”), between the Corporation and Wells Fargo Bank, National Association, in its capacity as trustee thereunder (the "2016 Trustee"), and a Continuing Covenant Agreement dated as of December 9, 2016 (the “2016 Agreement”), by and among the City, the Corporation and the 2016 Trustee, the City caused the execution and delivery of the Certificate of Participation, Series 2016, in the original aggregate principal amount of $16,380,000 (the “Series 2016 Certificates”), evidencing interests in the right to receive revenues under the 2016 Lease, which Series 2016 Certificates are currently outstanding in the aggregate principal amount of $7,271,949.51 and bear interest at a rate of 2.16% per annum; and WHEREAS, Wells Fargo Bank, National Association (the “Owner”) as the initial purchaser and the sole owner of the Series 2014 Certificates and the Series 2016 Certificates, has proposed interest rate amendments that would reduce the interest rate on the Series 2014 Certificates from 2.54% to 1.25% and would reduce the interest rate on the Serie 2016 Certificates from 2.16% to 0.90%, with such amendments resulting in a reissuance of both the Series 2014 Certificates and the Series 2016 Certificates under the Internal Revenue Code of 1986, as amended; and WHEREAS, the City Council of the City of Pueblo, Colorado (the “City Council”) has determined that it is in the best interests of the City and its inhabitants to provide for the amendment of the terms of the outstanding Series 2014 Certificates and Series 2016 Certificates to effect a reduction in their respective interest rates by (a) executing and delivering the First Amendment to the 2014 Lease (the “2014 Lease Amendment”) and the First Amendment to the 2016 Lease (the “2016 Lease Amendment” and, collectively with the 2014 Lease Amendment, the “Lease Amendments”), and (b) approving the execution and delivery of the First Supplemental 2014 Indenture (the “2014 Supplemental Indenture”) and the First Supplemental 2016 Indenture (the “2016 Supplemental Indenture” and, collectively with the 2014 2014 Supplemental Indenture, the “Supplemental Indentures”), each in substantially the form presented to the City and made available to the City Council prior to this meeting; and WHEREAS, the City Council has been presented with or had made available to it substantially final forms of the Lease Amendments and the Supplemental Indentures; NOW THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF PUEBLO: SECTION 1. Ratification of Prior Actions. All action heretofore taken (not inconsistent with the provisions of this Ordinance) by the City Council or the officers or employees of the City, directed toward the reissuance of the Series 2014 Certificates and the Series 2016 Certificates, respectively, are hereby ratified, approved and confirmed. SECTION 2. Authorization of Reissuance; Approval Lease Amendments. The City Council hereby authorizes and approves the reissuance of the Series 2014 Certificates and the Series 2016 Certificates, respectively, and all necessary actions relating to the same. The Lease Amendments, in substantially the forms presented to the City and made available to the City Council prior to this meeting and with substantially the same content, are in all respects approved, authorized and confirmed, and the Mayor is authorized and directed to affix his signature to the Lease Amendments in substantially the forms and with substantially the same content as presented to this meeting of the City Council, for and on behalf of the City, but with such changes, modifications, additions or deletions therein as the Mayor and the City Attorney shall deem necessary, desirable or appropriate, the execution thereof to constitute conclusive evidence of their approval of any and all changes, modifications, additions or deletions therein from the forms and content of the Lease Amendments presented to the City and made available to the City Council prior to this meeting. SECTION 3. Consent and Approval of Supplemental Indentures. The City Council hereby approves and acknowledges the Supplemental Indentures in substantially the forms presented to the City and made available to the City Council prior to this meeting of the City Council and with substantially the same content. SECTION 4. Other Actions in Furtherance of this Ordinance. The City Clerk is hereby authorized and directed to attest all signatures and acts of any official of the City Council or the City in connection with the matters authorized by this Ordinance, and to place the seal of the City on the Lease Amendments and any other necessary documents authorized and approved by this Ordinance. The Mayor and any officials of the City Council or the City are hereby authorized to execute and deliver for and on behalf of the City any and all additional agreements, certificates, documents and other papers and to perform all other acts that they may deem necessary or appropriate in order to implement and carry out the transactions and other matters authorized and contemplated by this Ordinance. SECTION 5. Home Rule Powers Invoked. In authorizing and approving the actions herein set forth, it is the intent of the City Council of the City to exercise the home rule powers of the City granted pursuant to the Colorado Constitution and the Charter, and the City Council of the City hereby finds, determines and declares that the matters herein referred to are matters of local or municipal concern and are appropriate for the exercise of the home rule powers of the City. SECTION 6. Severability. If any section, paragraph, clause or provision of this Ordinance shall for any reason be held to be invalid or unenforceable, the invalidity or unenforceability of such section, paragraph, clause or provision shall not affect any of the remaining provisions of this Ordinance. SECTION 7. Repealer. All bylaws, orders and ordinances, or parts thereof, inconsistent with this Ordinance or with any of the documents hereby approved, are hereby repealed only to the extent of such inconsistency. This repealer shall not be construed as reviving any bylaw, order or ordinance, or part thereof. SECTION 8. Savings Clause. The City Council has been advised that in order for the City to secure the savings available from the reduction in the rates of the Series 2014 Certificates and Series 2016 Certificates, respectively, and to avoid possible increases in interest rates generally due to market volatility, it is necessary to effect the reissuance of the Series 2014 Certificates and Series 2016 Certificates as soon as possible. Therefore, for said reason, the City Council declares that this Ordinance is necessary for the immediate preservation of public property, health, peace, or safety and an emergency exists. SECTION 9. Public Hearing. A public hearing on this Ordinance was held on July 12, 2021, at 7:00 p.m., in the City Council Chambers, One City Hall Place, Pueblo, Colorado. SECTION 10. Effective Date. This Ordinance shall take effect on July 12, 2021, upon final action and approval by City Council and the Mayor. Action by City Council: Introduced and initial adoption of Ordinance by City Council on July 12, 2021 Final adoption of Ordinance by City Council on July 12, 2021 . President of City Council Action by the Mayor: ☒ Approved on July 14, 2021 . □ 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 # S-1 Background Paper for Proposed Ordinance COUNCIL MEETING DATE: July 12, 2021 TO: President Lawrence W. Atencio and Members of City Council CC: Mayor Nicholas A. Gradisar VIA: Marisa Stoller, City Clerk FROM: Daniel C. Kogovsek, City Attorney SUBJECT: AN EMERGENCY ORDINANCE AUTHORIZING AND APPROVING THE AMENDMENT OF CERTAIN TERMS OF THE CITY’S OUTSTANDING SERIES 2014 AND SERIES 2016 CERTIFICATES OF PARTICIPATION THROUGH THE EXECUTION AND DELIVERY OF AMENDMENTS TO THE RELATED LEASE PURCHASE AGREEMENTS, SUPPLEMENTAL INDENTURES AND OTHER NECESSARY DOCUMENTS IN ORDER TO REDUCE THE INTEREST RATES ON SUCH OBLIGATIONS AND PRESCRIBING OTHER DETAILS IN CONNECTION THEREWITH SUMMARY: The attached Emergency Ordinance authorizes and approves the reissuance of the Series 2014 Certificates of Participation and the Series 2016 Certificates of Participation, respectively, and all necessary actions relating to the same. PREVIOUS COUNCIL ACTION: The City has previously entered into a Lease Purchase Agreement dated as of November 12, 2014 (the “2014 Lease”), between the City, as lessee, and the City of Pueblo, Colorado Municipal Building Corporation (the “Corporation”), as lessor, for the purpose of providing funding to finance the replacement of approximately 8,725 high pressure sodium streetlight fixtures with approximately 8,725 light emitting diode streetlight fixtures throughout the City (the “2014 Project”). Pursuant to a Trust Indenture dated as of November 12, 2014 (the “2014 Indenture”), between the Corporation and Wells Fargo Bank, National Association, in its capacity as trustee thereunder (the "2014 Trustee"), and a Continuing Covenant Agreement dated as of November 12, 2014 (the “2014 Agreement”), by and among the City, the Corporation and the 2014 Trustee, the City caused the execution and delivery of the Certificate of Participation, Series 2014, in the original aggregate principal amount of $4,200,000 (the “Series 2014 Certificates”), evidencing interests in the right to receive revenues under the 2014 Lease, which Series 2014 Certificates are currently outstanding in the aggregate principal amount of $1,794,753.36 and bear interest at a rate of 2.54% per annum. The City has previously entered into a Lease Purchase Agreement dated as of December 9, 2016 (the “2016 Lease”), between the City, as lessee, and the Corporation, as lessor, for the purpose of providing funding to advance refunding certain then-outstanding obligations of the City at a savings (the “2016 Project”). Pursuant to a Trust Indenture dated as of December 9, 2016 (the “2016 Indenture”), between the Corporation and Wells Fargo Bank, National Association, in its capacity as trustee thereunder (the "2016 Trustee"), and a Continuing Covenant Agreement dated as of December 9, 2016 (the “2016 Agreement”), by and among the City, the Corporation and the 2016 Trustee, the City caused the execution and delivery of the Certificate of Participation, Series 2016, in the original aggregate principal amount of $16,380,000,000 (the “Series 2016 Certificates”), evidencing interests in the right to receive revenues under the 2016 Lease, which Series 2016 Certificates are currently outstanding in the aggregate principal amount of $7,271,949.51 and bear interest at a rate of 2.16% per annum. BACKGROUND: Wells Fargo Bank, National Association (the “Owner”) as the initial purchaser and the sole owner of the Series 2014 Certificates and the Series 2016 Certificates, has proposed interest rate amendments that would reduce the interest rate on the Series 2014 Certificates from 2.54% to 1.25% and would reduce the interest rate on the Series 2016 Certificates from 2.16% to 0.90%, with such amendments resulting in a reissuance of both the Series 2014 Certificates and the Series 2016 Certificates under the Internal Revenue Code of 1986, as amended. FINANCIAL IMPLICATIONS: The reduction of the interest rate on the Series 2014 Certificates from 2.54% to 1.25% and the reduction of the interest rate on the Series 2016 Certificates from 2.16% to 0.90% will result in lower lease payments made by the City, as lessee to the City of Pueblo, Colorado Municipal Building Corporation, as lessor. BOARD/COMMISSION RECOMMENDATION: Not applicable to this Ordinance. STAKEHOLDER PROCESS: Not applicable to this Ordinance. ALTERNATIVES: City Council could decide not to approve the reissuance of the Series 2014 Certificates of Participation and the Series 2016 Certificates of Participation and keep the current Certificates of Participation in effect. RECOMMENDATION: The Mayor and City staff recommend approval of this Ordinance. Attachments: Proposed Ordinance