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HomeMy WebLinkAbout06543"SUBSTITUTED COPY" ORDINANCE NO. 6543 AN ORDINANCE CONCERNING THE REFUNDING OF CERTIFICATES OF PARTICIPATION ISSUED IN 1992 TO FINANCE A PUBLIC WORKS AND TRANSPORTATION COMPLEX; AUTHORIZING AND APPROVING THE ISSUANCE OF CERTAIN CERTIFICATES OF PARTICIPATION; AND AUTHORIZING AND APPROVING A PUBLIC WORKS LEASE PURCHASE AGREEMENT, A MORTGAGE AND INDENTURE OF TRUST AND OTHER RELATED DOCUMENTS AND ACTIONS 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 Council of the City (the "City Council ") in 1992 determined that the City was in need of a new and enlarged public works and transportation facility (the "Public Works Complex ") - and WHEREAS, the City entered into a Lease Purchase Agreement dated as of July 1, 1992 (the 1992 Lease Purchase Agreement ") with the City of Pueblo, Colorado Municipal Building Corporation (the "Corporation "), providing for the construction, improvement and equipping of a Public Works Complex and the leasing of the Public Works Complex by the Corporation to the City; and WHEREAS, the Corporation assigned its rights in the 1992 Lease Purchase Agreement to The Pueblo Bank and Trust Company (predecessor trustee to The Bank of Cherry Creek, N.A.) (the "Trustee ") pursuant to a Mortgage and Indenture of Trust dated as of July 1, 1992 (the "1992 Indenture "); and WHEREAS, Certificates of Participation dated July 1, 1992 (the "1992 Certificates ") evidencing interests in the 1992 Lease Purchase Agreement were issued pursuant to the 1992 Indenture; and WHEREAS, the 1992 Certificates may be called for redemption on June 15, 2000, and refunded through the issuance of new Certificates of Participation at a lower net effective interest rate than the 1992 Certificates, so that the City's lease payments for the Public Works Complex may be lowered; and WHEREAS, the City and the Corporation have agreed to refund the 1992 Certificates to effect such savings; and WHEREAS, the City Council continues to believe, and hereby determines that it is in the best interests of the City and its residents, that the Public Works Complex be leased, with the present intention to acquire the Public Works Complex, from the Corporation; and WHEREAS, for the purpose of refunding the 1992 Certificates and lowering the rental charges for the lease of the Public Works Complex, the City Council has determined, and hereby determines, that it is in the best interests of the City and its residents that the City and the Corporation enter into that certain annually renewable Public Works Lease Purchase Agreement, dated as of June 1, 2000 (the "Lease "), presented to this meeting of the City Council, to provide for the leasing by the City from the Corporation of the Public Works Complex (the Public Works Complex and the land on which it is located are hereinafter collectively referred to as the "Project "); and WHEREAS, there has also been presented to this meeting of the City Council a certain Mortgage and Indenture of Trust, dated as of June 1, 2000 (the "Indenture "), to be entered into between the Corporation and The Bank of Cherry Creek, N.A., as trustee (the "Trustee" ); and WHEREAS, Certificates of Participation (the "Certificates ") will be sold in a private placement pursuant to the Indenture and the Lease and pursuant to an investor's letter addressed to the Corporation and the City; and WHEREAS, pursuant to certain provisions of the Lease and the Indenture, the Corporation will deposit in escrow with the Trustee a deed and bill of sale for the Project from the Corporation to the City (collectively, the "escrowed deed "); BE IT ORDAINED BY THE CITY COUNCIL OF PUEBLO: Section 1. 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 leasing of the Project from the Corporation to the City are hereby ratified, approved and confirmed. The City Council hereby specifically ratifies, approves and confirms the employment of James Capital Advisors, Inc., as financial advisor, and its activities on behalf of the City arranging the financing, including contacting prospective purchasers of the Certificates. Section 2. The City Council hereby finds and determines, pursuant to the provisions of the Charter, that leasing the Project from the Corporation under the terms and provisions set forth in the Lease is necessary, convenient and in furtherance of the governmental purposes of the City and is in the best interests of the City, and the City Council hereby authorizes such leasing of the Project under the terms and provisions of the Lease. Section 3. The Lease, in substantially the form presented to this meeting of the City Council and with substantially the same content, is in all respects approved, authorized and confirmed, and the President or Vice President of the City Council is authorized and directed to affix her or his signature to the Lease in substantially the form 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 President or Vice President of the City Council 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 form and content of the Lease presented to this meeting. Section 4. The City Council hereby approves the execution and delivery by the Corporation and the Trustee of the Indenture, in substantially the form and with substantially the same content as presented to this meeting of the City Council, but with such changes, modifications, additions or deletions therein as the President or Vice President of the City Council and the City Attorney shall deem necessary, desirable or appropriate, the City Attorney's release of his opinion in connection with the sale and delivery of the Certificates to constitute conclusive evidence of such approval. Section 5. The City Council hereby acknowledges and consents to the assignment by the Corporation to the Trustee, pursuant to the Indenture, of all rights, title and interest of the Corporation in, to and under the Lease (with certain exceptions as provided in the Lease and the Indenture), and the delegation by the Corporation to the Trustee, pursuant to the Indenture, of all duties of the Corporation under the Lease. Section 6. The City Council hereby authorizes and consents to the issuance and sale of the Certificates pursuant to the Indenture. The City Council hereby authorizes and approves the form, terms and provisions of the Certificates contained in the Indenture, in substantially the form and with substantially the same content as that presented to this meeting of the City Council; provided, that the principal amount of the Certificates shall not exceed $2,200,000 and the interest rate of the Certificates as a whole upon issuance shall not exceed 6.50 %. The City Clerk and the President of the City Council are hereby authorized and directed to affix their facsimile signatures and the City seal, or a facsimile thereof, to authenticate the Certificates, as provided in the Lease and the Indenture. Section 7. The City Council hereby approves the execution of the escrowed deed by the Corporation and the delivery of the escrowed deed to the Trustee. Section 8. The City Council hereby authorizes and approves the refunding by the Corporation of the 1992 Certificates issued pursuant to the 1992 Indenture, and the execution and delivery of any and all documents necessary or desirable to accomplish such refunding. Section 9. Tax Covenants. (a) The City covenants that it shall not use or permit the use of any proceeds of the Certificates or any other funds of the City from whatever source derived, directly or indirectly, to acquire any securities or obligations, and shall not take or permit to be taken any other action or actions, which would cause any of the Certificates to be an "arbitrage bond" within the meaning of Section 148 of the Code, or would otherwise cause the interest on the Certificates to be includible in gross income for federal income tax purposes. The City covenants that it shall at all times do and perform all acts and things permitted by law and which are necessary in order to assure that interest paid by the City on the Certificates shall, for purposes of federal income taxation, not be includible in gross income under the Internal Revenue Code or any other valid provision of law. (b) In particular, but without limitation, the City further represents, warrants and covenants to comply with the following restrictions of the Internal Revenue Code, unless it receives an opinion of nationally recognized bond counsel stating that such compliance is not necessary: (i) Gross proceeds of the Certificates shall not be used in a manner which will cause the Certificates to be considered "private activity bonds" within the meaning of the Code. (ii) The Certificates are not and shall not become directly or indirectly 'federally guaranteed." (iii) The City shall timely file Internal Revenue Form 8038 -G, which shall contain the information required to be filed pursuant to subsection 149(e) of the Code. (iv) The City shall comply with the Investment Instructions delivered to it on the date of issue of the Certificates with respect to the application and investment of the proceeds. Section 10. 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 authorized and approved by this ordinance. The President or Vice President of the City Council and other 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 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. The appropriate officers of the City Council or the City are authorized to execute on behalf of the City agreements concerning the deposit and investment of funds in connection with the transactions contemplated by this ordinance. Section 11. NO PROVISION OF THIS ORDINANCE, THE LEASE, THE INDENTURE OR THE CERTIFICATES SHALL BE CONSTRUED AS CREATING OR CONSTITUTING A GENERAL OBLIGATION OR OTHER INDEBTEDNESS OF THE CITY OR A MANDATORY PAYMENT OBLIGATION OF THE CITY IN ANY FISCAL YEAR BEYOND A FISCAL YEAR FOR WHICH THE CITY HAS APPROPRIATED AMOUNTS TO MAKE PAYMENTS UNDER THE LEASE. THE CITY SHALL HAVE NO OBLIGATION TO MAKE ANY PAYMENT WITH RESPECT TO THE CERTIFICATES EXCEPT IN CONNECTION WITH THE PAYMENT OF THE BASE RENTALS AND ADDITIONAL RENTALS (EACH AS DEFINED IN THE LEASE) TO THE EXTENT AND FOR THE YEAR FOR WHICH FUNDS HAVE BEEN APPROPRIATED AND CERTAIN OTHER PAYMENTS UNDER THE LEASE, WHICH PAYMENTS MAY BE TERMINATED BY THE CITY IN ACCORDANCE WITH THE PROVISIONS OF THE LEASE. Section 12. The City Council hereby determines and declares that the Base Rentals (as set forth in the Lease) represent the fair value of the use of the Project; and that the Purchase Option Price (as defined in the Lease) represents the fair purchase price of the Project. The City Council hereby determines and declares that the Base Rentals do not exceed a reasonable amount so as to place the City under an economic or practical compulsion to renew the Lease or to exercise its option to purchase the Project pursuant to the Lease. In making such determinations, the City Council has given consideration to the uses and purposes for which the Project will be employed by the City, the benefit to the citizens and residents of the City by reason of the use of the Project pursuant to the terms and provisions of the Lease, the option of the City to purchase the Project, and the expected eventual vesting of title to the Project in the City. The City Council hereby determines and declares that the leasing of the Project pursuant to the Lease will result in facilities of comparable quality and meeting the same requirements and standards as would be necessary if the construction, acquisition, improvement and equipping of the Project were performed by the City. The City Council hereby determines and declares that the period during which the City has an option to purchase the Project (i.e., the maximum term of the Lease, including all Renewal Terms) does not exceed the useful life of the Project. Section 13. The City, including any entities acting on behalf of or subordinate to the City, does not anticipate issuing more than $10,000,000 of tax - exempt obligations during calendar year 2000, which is the calendar year in which the Certificates are issued. No proceeds of the Certificates will be used in a manner which would cause the Certificates to be private activity bonds. Accordingly, the City hereby designates the Certificates as "qualified tax - exempt obligations" pursuant to Section 265(b)(3)(13)(i) of the Code. Section 14. If any section, paragraph, clause or provision of this Ordinance (other than provisions as to the payment of Base Rentals by the City during the Lease Term and provisions for the conveyance of the Project to the City under the conditions provided in the Lease) 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 15. 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. INTRODUCED April 24, 2000 By Robert Schilling Councilperson AP VED. President of the City Council Attest: City Crk APPROVED AS TO FORM BY CITY ATTORNEY: City Attor4y. = =.: