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HomeMy WebLinkAbout06692ORDINANCE NO. 6692 AN ORDINANCE CONCERNING THE REFINANCING OF SINGLE FAMILY MORTGAGE REVENUE BONDS; DELEGATING TO THE COLORADO HOUSING AND FINANCE AUTHORITY THE POWERS TO ISSUE REFUNDING REVENUE BONDS OR OTHER REFUNDING OBLIGATIONS IN ORDER TO EFFECT SUCH REFINANCING, AND AUTHORIZING THE EXECUTION AND DELIVERY OF A DELEGATION AGREEMENT AND FUNDS EXCHANGE AGREEMENTS IN CONNECTION THEREWITH; DIRECTING THE TRUSTEE FOR SUCH BONDS TO EXECUTE AND DELIVER SUCH FUNDS EXCHANGE AGREEMENTS; PROVIDING OTHER DETAILS IN CONNECTION THEREWITH; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, the City of Pueblo, Colorado (the "Issuer ") previously has issued the single family mortgage revenue bonds identified on Exhibit A hereto (the "Bonds ") pursuant to the County and Municipality Development Revenue Bond Act, constituting Article 3 of Title 29, Colorado Revised Statutes (the "Project Act "), in order to finance, refinance, acquire, own, lease, improve and dispose of properties to the end that more adequate residential housing facilities for low- and middle - income families and persons may be provided, which promote the public health, welfare, safety, convenience and prosperity; and WHEREAS, Section 18 of Article XIV of the Colorado Constitution and Part 2 of Article 1 of Title 29, Colorado Revised Statutes, authorize the Local Government to delegate to another political subdivision of the State of Colorado the Local Government's authority under the Project Act to refinance projects originally financed under the Project Act; and WHEREAS, the Issuer desires to delegate to the Colorado Housing and Finance Authority (the "Authority "), its powers under the Project Act to issue refunding revenue bonds or other refunding obligations to be used to pay at maturity and /or redeem prior to maturity the principal of the Bonds as the same becomes due and payable from time to time during the calendar year 2001; and WHEREAS, the Authority desires to accept such delegation; and WHEREAS, it is necessary to evidence such delegation and the acceptance of such delegation by the execution and delivery of a Delegation Agreement between the Authority and the Issuer, substantially in the form attached hereto as Exhibit B (the "Delegation Agreement "); and WHEREAS, in order to increase the availability of adequate affordable housing for low- and moderate - income persons and families within the jurisdiction of the Issuer and elsewhere in the State of Colorado, it is necessary in connection with each refunding of any of the Bonds during the calendar year 2001 to authorize the exchange of certain funds held by the trustee for such Bonds for certain funds of the Authority (including funds held by the trustee for such refunding obligations of the Authority), each of which exchanges is to be evidenced by a Funds Exchange Agreement substantially in the form attached hereto as Exhibit C (the "Funds Exchange Agreement ") either between the trustee for such Bonds and the Authority or among the trustee for such Bonds, the Authority and the trustee for such refunding obligations of the Authority. NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF PUEBLO, COLORADO THAT: Section 1. In order to ensure the refinancing of a portion of the Bonds by the Authority from time to time, it is deemed necessary and advisable that the Delegation Agreement be approved, executed and delivered by and on behalf of the Issuer, and that the form of the Funds Exchange Agreement be approved for completion, execution and delivery in connection with each refunding of any Bonds. Section 2. The form, terms and provisions of the Delegation Agreement hereby are approved and the officers of the Issuer hereby are authorized and directed to execute and deliver the Delegation Agreement, with such changes therein as are approved by the officers of the Issuer executing the Delegation Agreement. The execution of the Delegation Agreement shall be conclusive evidence of the approval by the Issuer of such document in accordance with the terms hereof. Section 3. The form, terms and provisions of the Funds Exchange Agreement hereby are approved and the officers of the Issuer hereby are authorized and directed to execute and deliver a Funds Exchange Agreement in connection with each refunding of any Bonds, with such changes therein as are approved by the officers of the Issuer executing such Funds Exchange Agreement. The execution of any Funds Exchange Agreement shall be conclusive evidence of the approval by the Issuer of such document in accordance with the terms hereof. Section 4. Each trustee for each series of the Bonds is hereby authorized and directed to execute and deliver a Funds Exchange Agreement in connection with each refunding of any Bonds for which it acts as trustee, to release such information to the Authority and the trustee for the refunding obligations and to take such other steps or actions as may be necessary, useful or convenient to effect the aforesaid exchange of funds in accordance with such Funds Exchange Agreement and this Ordinance. Section 5. The officers of the Issuer shall take such other steps or actions necessary or reasonably required to carry out the terms and intent of this Ordinance, the Delegation Agreement and each Funds Exchange Agreement. Section 6. If any section, paragraph, clause or provisions 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. All action not inconsistent with the provisions of this Ordinance heretofore taken by the governing body and the officers of the Issuer directed toward the authorization of the Delegation Agreement and any Funds Exchange Agreement hereby are ratified, approved and confirmed. Section 8. This Ordinance shall be effective upon final passage. Introduced May 29 2001 By Corinne Koehler Councilperson Attest: .Y1rr -Lr � t i L..L_t City Crk of the City Council PASSED AND APPROVED June 11, 2001 a Background Paper for Proposed ORDINANCE AGENDA ITEM # DATE: MAY 29, 2001 1 - 7 - 7,5 DEPARTMENT: HOUSING AND COMMUNITY DEVELOPMENT TITLE AN ORDINANCE CONCERNING THE REFINANCING OF SINGLE FAMILY MORTGAGE REVENUE BONDS; DELEGATING TO THE COLORADO HOUSING AND FINANCE AUTHORITY THE POWERS TO ISSUE REFUNDING REVENUE BONDS OR OTHER REFUNDING OBLIGATIONS IN ORDER TO EFFECT SUCH REFINANCING, AND AUTHORIZING THE EXECUTION AND DELIVERY OF A DELEGATION AGREEMENT AND FUNDS EXCHANGE AGREEMENTS IN CONNECTION THEREWITH; DIRECTING THE TRUSTEE FOR SUCH BONDS TO EXECUTE AND DELIVER SUCH FUNDS EXCHANGE AGREEMENTS; PROVIDING OTHER DETAILS IN CONNECTION THEREWITH; AND PROVIDING AND EFFECTIVE DATE. ISSUE This Ordinance will delegate to CHFA the powers to issue refunding revenue bonds or other refunding obligations to be used to pay at maturity and /or redeem prior to maturity the principal of the Bonds as the same becomes due and payable from time to time. RECOMMENDATION Approve the Ordinance, thus authorizing CHFA to issue funding revenue bonds or other refunding obligations. BACKGROUND Allowing CHFA to refund/recycle the 1978 Series A, Single Family Mortgage Revenue Bonds preserves the bond capacity represented by the outstanding bonds. Presently, as the mortgage loans pay down, the 1978 bonds are redeemed and the bond capacity is lost forever. By allowing CHFA to refund these bond prepayments redemptions, this bond capacity can be preserved and CHFA can make additional loans in the City and County. The bond - recycling program will take very little effort on the part of the City. CHFA and Newman & Associates, Inc., will handle all aspects of the recycling program commencing with the next bond redemption on August 1, 2001. In order to implement the program, the Council must approve this Ordinance and enter into a Delegation Agreement, which authorizes CHFA and the Trustee (Wells Fargo Bank West, N.A.) to proceed with the periodic refundings. This ordinance only authorizes CHFA's ref endings of the City's bonds for the calendar year 2001. An ordinance will have to be adopted early in every year (to pick up the February bond payments) that the City wishes to participate in the refunding/recycling process. FINANCIAL IMPACT By refunding /recycling the private activity mortgage revenue bonds the amount of available bond financing is preserved from the original bond cap allocation. Upon entering into this Agreement, CHFA through a line of credit refunds the Trustee, at which point the bond cap transfers to CHFA, allowing them to issue new single - family mortgage bonds. In essence, there is an increase of the original allocation ($20 Million). The amount of the increase will depend on the amounts of any principal payments made or bond calls. Cumulative redemptions starting in 2/99 — 2/01 were $1.375 million. Q DELEGATION AGREEMENT ` This Delegation Agreement is made and entered as of June 11, 2001 between the City of Pueblo, Colorado (the "Local Government "), a political subdivision duly organized and existing under the Constitution and laws of the State of Colorado (the "State ") and the Colorado Housing and Finance Authority (the "Authority"), a body corporate and a political subdivision of the State. 1. Preliminary Statement Among the matters of mutual inducement which have resulted in the execution of this Delegation Agreement are the following: (a) The Local Government and the Authority are authorized by the County and Municipality Development Revenue Bond Act, constituting Article 3 of Title 29, Colorado Revised Statutes (the "Project Act ") and by the Colorado Housing and Finance Authority Act, constituting Title 29, Article 4, Part 7, Colorado Revised Statutes (the "Authority Act "), respectively, to finance properties to the end that more adequate residential housing facilities for low- and middle- income families and persons may be provided, to issue bonds evidencing such financing and to refinance any outstanding bonds issued for such purpose. (b) Pursuant to the Project Act, the Local Government previously has issued the bonds identified on Exhibit A hereto (the "Bonds ") for such purposes. (c) Section 18 of Article XIV of the Colorado Constitution and Part 2 of Article 1 of Title 29, Colorado Revised Statutes, authorize the Local Government to delegate to the Authority the Local Government's authority under the Project Act to refinance projects originally financed under the Project Act. (d) The Local Government desires to delegate to the Authority its powers under the Project Act to issue refunding revenue bonds or other refunding obligations to be used to pay at maturity and/or redeem prior to maturity the principal of the Bonds as the same becomes due and payable from time to time. (e) The Authority desires to accept such delegation. (f) Neither the execution and delivery of this Delegation Agreement, the consummation of the transactions contemplated hereby, nor the fulfillment of or compliance with the terms and conditions of this Delegation Agreement conflicts with or results in a breach of any of the terms, conditions or provisions of any legal restriction or any agreement or instrument to which the Local Government or the Authority is now a party or by which the Local Government or the Authority is bound, or constitutes a default under any of the foregoing. 2. Delegation by the Local Government (a) The Local Government hereby delegates to the Authority all authority of the Local Government with respect to the refunding of the Bonds. The Local Government hereby acknowledges that the Authority may effect the refunding of the Bonds using any method which the Authority deems, in its discretion, to be most effective to accomplish such refunding. The Local Government acknowledges that, for federal income tax purposes, it will be the "issuer" of such refunding obligations, and authorizes the Authority to act as its agent and representative in effecting the refunding and to take all necessary or desirable action towards accomplishing that purpose, including without limitation completing, executing and filing any IRS Form 8038s required. (b) The Local Government agrees that it will take such further action and adopt such further proceedings as may be required to implement the terms of this Delegation Agreement. Such further action will include, but is not necessarily limited to, the execution of Federal Tax Exemption Certificates in connection with the issuance of the tax - exempt refunding revenue bonds described in paragraph (a) above. In executing such Certificates, the Local Government will be entitled to review and exclusively rely upon the corresponding Federal Tax Exemption Certificates of the Authority. 3. Acceptance of Delegation by the Authority (a) The Authority hereby accepts the delegation granted to it by the Local Government, subject to the terms and conditions herein contained. (b) The Authority agrees that it will take such further action and adopt such further proceedings as may be required to implement the terms of this Delegation Agreement. 4. Mortgage Loan Set - Aside In consideration of the Local Government's delegation to the Authority as described above, the Authority hereby agrees that in connection with the next series of its single family mortgage revenue bonds issued after the refunding of any Bonds, an amount equal to the aggregate principal amount of such Bonds shall be made available solely for the purchase of mortgage loans on residences located within the Local Government. Such amount reserved for such purpose shall be made available for thirty days beginning on the day that amounts are made available for the purchase of mortgage loans on residences located anywhere within the State (including the Local Government). The Local Government agrees and acknowledges that any such reserved amount that is not used for such purpose within such period will be made available for the purchase of mortgage loans on residences located anywhere within the State (including the Local Government) after the end of such period. Additionally, however, if any such reserved amount is not used for such purpose within such period, an amount equal to the unused reserved amount shall be reserved in connection with subsequent series of the Authority's single family mortgage revenue bonds until the full reserved amount shall have been used to purchase mortgage loans on residences located within the Local Government. -2- 5. General Provisions (a) This Delegation Agreement is hereby declared irrevocable during the terms of any agreements to be entered into by the Authority for the purpose of providing for the refunding of the Bonds, and this Delegation Agreement shall terminate upon the termination of all of such agreements. (b) This Delegation Agreement shall not constitute the debt or indebtedness of the Authority or the Local Government within the meaning of the Constitution or laws of the State, nor give rise to a pecuniary liability or a charge against the general credit or taxing powers of the Authority or the Local Government. IN WITNESS WHEREOF, the parties hereto have entered into this Delegation Agreement as of the day and year first above written. CITY OF PUEBLOI COLORADO V. IM-esident of the Council (SEAL) Attest: Title: Ci t Clerk (;Orr. cEav�, COLORADO HOUSING AND FINANCE • AUTHORITY Al -A"A pR �•' .By: (SEAL) � Executive Director 6 Attest: gip, -3- EXHIBIT A List of Single Family Mortgage Revenue Bonds Issued by the Local Government $20,000,000 City of Pueblo, Colorado Single Family Mortgage Revenue Bonds 1978 Series A Dated August 1, 1978 COLORADO HOUSING AND FINANCE AUTHORITY and Wells Fargo Bank West, N.A. as the Local Government Trustee FUNDS EXCHANGE AGREEMENT Dated as of June 11, 2001 FUNDS EXCHANGE AGREEMENT THIS FUNDS EXCHANGE AGREEMENT (this "Agreement ") is made and entered into as of June 11, 2001 by and between the COLORADO HOUSING AND FINANCE AUTHORITY (the "Authority "), a body corporate and political subdivision of the State of Colorado, and WELLS FARGO BANK WEST, N.A., (the "Local Government Trustee "), a national banking association duly organized and existing under the laws of the State of Colorado, and authorized under such laws to accept and execute trusts of the character herein set out. WITNESSETH: WHEREAS, the Colorado Housing and Finance Authority Act, being part 7 of article 4 of title 29, Colorado Revised Statutes (the "CHFA Act "), authorizes the Colorado Housing and Finance Authority (the "Authority ") to issue revenue bonds to finance "housing facilities" for "low- or moderate - income families" (all as defined in the CHFA Act) to the end that decent, safe and sanitary dwelling accommodations for such families may be provided; and WHEREAS, the County and Municipality Development Revenue Bond Act, being article 3 of title 29, Colorado Revised Statutes (the "IDB Act "), authorizes cities and counties in the State of Colorado to issue revenue bonds to finance properties suitable for residential facilities for low- and middle- income families or persons; and WHEREAS, pursuant to the IDB Act, The City of Pueblo, Colorado (the "Local Government ") has heretofore issued the bonds listed on Exhibit A attached hereto (the "Prior Bonds "); and WHEREAS, the Authority intends to borrow money for the purpose of providing funds to be used to pay at maturity and/or redeem prior to maturity the principal amount(s) (the "Refunding Amount(s)") of the Prior Bonds shown on Exhibit A attached hereto (the "Refunded Bonds ") on the date(s) (the "Refunding Date(s)") shown on Exhibit A attached hereto during the calendar year 2001; and WHEREAS, the Local Government has directed the Local Government Trustee to execute and deliver this Agreement. NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained, the parties hereto agree as follows: Section 1. Exchange of Proceeds (a) On or before the Refunding Date(s), the Authority shall pay the Refunding Amount(s) from the proceeds of such borrowing to the Local Government Trustee. The Local Government Trustee shall deposit such amount in the appropriate fund(s) or account(s) in connection with the Prior Bonds to be used solely to pay principal of the Refunded Bonds equal to the Refunding Amount(s). (b) On or before the Refunding Date(s), simultaneously with the deposit(s) described in paragraph (a) above, the Local Government Trustee shall pay to the Authority, in exchange therefor, amount(s) equal to the Refunding Amount(s) from amounts on deposit in the fund(s) or account(s) which otherwise would have been used to pay the principal of the Refunded Bonds on the Refunding Date(s). Section 2. Fees and Expenses The Authority shall not receive any fees or expenses for carrying out its responsibilities under this Agreement, and the Local Government Trustee shall not receive any fees or expenses for carrying out its responsibilities under this Agreement other than those fees and expenses which it is otherwise entitled to receive as provided pursuant to the trust indenture or indentures authorizing the Prior Bonds. Section 3. Amendments, Changes and Modifications This Agreement may not be amended, changed or modified except by an instrument in writing duly executed and delivered by the parties hereto. Section 4. Governing Law This Agreement shall be construed in accordance with the laws of the State of Colorado. Section 5. Counterparts This Agreement may be simultaneously executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. Section 6. Severability If any term, covenant, condition or provision of this Agreement, or the application thereof to any circumstance, shall, at any time or to any extent, be determined by a court of competent jurisdiction to be invalid or unenforceable, the remainder of this Agreement, or the application thereof to circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby and each term, covenant, condition and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law. Section 7. Term of Agreement This Agreement shall be in full force and effect from the date hereof to and including the date set forth in Section 1 hereof. Section 8. Captions Captions or headings in this Agreement are for convenience only and shall not influence the construction or interpretation of this Agreement. Section 9. Further Assurances and Corrective Instruments To the extent permitted by law, the Authority and the Local Government Trustee agree that they will, from time to time, execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered, such supplements hereto and such further instruments as may reasonably be required for carrying out the intention of or facilitating the performance of this Agreement. -2- IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed on their respective behalfs by their duly authorized officers as of the date first written above. COLORADO HOUSING AND FINANCE � AUTHORITY A T F�`. SEAL By: 00 n ;; o Executive Director Attest: p �-'Z O R ®O M . S WELLS FARGO BANK WEST, N.A. as the Local Government Trustee By: AIM 0)4'V Title: -3- EXHIBIT A Details of Prior Bonds $20,000,000.00 City of Pueblo, Colorado Single Family Mortgage Revenue Bonds 1978 Series A Dated August 1, 1978 Date Principal Amount [To be completed for each separate refunding] Be