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HomeMy WebLinkAbout06793SUBSTITUTED COPY 3 -25 -02 ORDINANCE NO. 6793 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; 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 SUBSTITUTED COPY 3 -25 -02 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 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. SUBSTITUTED COPY 3 -25 -02 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 and passed on first reading on February 25, 2002. Introduced, Passed and adopted on second and final reading on March 25, 2002. By Al Gurule Councilperson Attest: Clerk Approved: President of the City Council IlIOUI I� Background Paper for Proposed ORDINANCE AGENDA ITEM # 3(0 DATE: FEBRUARY 25, 2002 DEPARTMENT: HOUSING AND CITIZEN SERVICES / TONY BERUMEN 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 By approving this Ordinance and its attached exhibits (Delegation Agreement and Funds Exchange Agreement) the City will delegate to CHFA the authority to make available additional mortgage revenue bonds by recycling any prepayments or early redemptions of the outstanding 1978 Sr. A, Single Family Mortgage Revenue Bonds. On February 1, 2002, the Bond trustee called for prior redemption of $285,000 in currently outstanding bonds due to principal prepayments. RECOMMENDATION Approve the Ordinance thus authorizing CHFA to issue recycle revenue bonds or other refunding obligations. BACKGROUND On June 11, 2001, Council approved Ordinance #6692 entering into a similar agreement with CHFA. In August 1, 2001 CHFA recycled $230,000 in maturing bond principal, which made possible additional loans in the City and County of Pueblo. In the past CHFA required the yearly adoption of an ordinance and the execution of the accompanying documents. In order to simplify the process, CHFA has gone to a perpetual agreement with rights of rescission by the delegating entity. The changes were made in between first and final hearings and therefore the new documents have been substituted prior to the final hearing. FINANCIAL IMPACT There is no cost to the City to complete this transaction, other than staff time in the preparation of documents for Council's approval. By adopting this ordinance the City will ensure the availability of $285,000 in new mortgage revenue bond monies for the citizens of Pueblo. FEDERAL TAX EXEMPTION CERTIFICATE PUEBLO COUNTY, COLORADO The undersigned representative of the City of Pueblo, Colorado (the "Local Government ") hereby certifies on behalf of the Local Government as to the following facts, estimates and circumstances: Section 1. The Colorado Housing and Finance Authority (the "Authority ") is delivering, simultaneously with the delivery of this certificate, certain of its Single Family Program Bonds (the "Bonds "). Section 2. The undersigned is one of the officials of the Local Government delegated responsibility for the issuance of bonds on behalf of the Local Government. Section 3. In the Delegation Agreement between the Local Government and the Authority dated as of January 15, 2002 (the "Delegation Agreement"), the Local Government delegated to the Authority its powers under the County and M unicipality Development Revenue B and Act to issue bonds to finance properties to the end that more adequate residential housing facilities for low- and middle - income families and persons may be provided on behalf of the Local Government The Delegation Agreement recognized, however, that the Local Government would be the "issuer" for federal income tax law purposes of such portion of the Bonds being issued for such purpose (the "Local Government portion of the Bonds "), and the Local Government agreed in the Delegation Agreement to take certain further action in connection therewith, including executing this Federal Tax Exemption Certificate. Section4. The purpose of this certificate is to certify reasonable expectations as of this date regarding the amount and use of the gross proceeds of the Local Government portion of the Bonds in the principal amount of $415,000 (the "Expectations ") of the LocalGovernment pursuant to the Internal Revenue Code of 1986, as amended and to the regulations promulgated thereunder (the "Regulations "), as specifically required by Regulation § 1.148- 2(b)(2). Section 5. Based solely upon and in reliance on the representations of the Authority as to the Authority's Expectations which are contained in the Federal Tax Exemption Certificate of the Authority (the "Authority Certificate ") dated as ofthis date, the Local Government hereby certifies that with respect to the Local Government portion of the Bonds the Local Governments Expectations are the same as the Authority's Expectations. Section 6. The Local Government knows of no reason to question the Expectations contained in the Authority's Certificate. Dated this April 25, 2002 CITY OF BLO, COLORADO B Title: PrPsi giant of the City Council SUBSTITUTED COPY 3 -25 -02 EXHIBIT A Single Family Mortgage Revenue Bonds Issued by the Issuer $20,000,000 City of Pueblo, Colorado Single Family Mortgage Revenue Bonds, 1978 Series A Dated August 1, 1978 SUBSTITUTED COPY 3 -25 -02 DELEGATION AGREEMENT This Delegation Agreement is made and entered as of January 15, 2002 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) The Project Act and Part 2 of Article 1 of Title 29, Colorado Revised Statutes, provide, in effect, that any county or municipality may by resolution or ordinance delegate to any other county, municipal authority or political subdivision its 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. SUBSTITUTED COPY 3 -25 -02 2. Delegation by the Local Government Pursuant to the Project Act and Part 2 of Article 1 of Title 29, Colorado Revised Statutes: (a) The Local Government hereby delegates to the Authority the authority of the Local Government with respect to the refunding of the Bonds as specified herein. 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 rely upon the corresponding Federal Tax Exemption Certificates of the Authority. 3. Acceptance of Delegation by the Authority Pursuant to the Authority Act: (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. Income and Purchase Price Limits. In consideration of the Local Government's delegation to the Authority as described above, the Authority hereby agrees that (a) it will use its best efforts to have moneys continually available in an amount equal to the aggregate principal amount of the refunded Bonds for the purchase of mortgage loans on residences located within the Local Government for a period of not less than two years after the date of such refunding, and (b) with respect such mortgage loans, the Local Government may designate income and purchase price limits different from the income and purchase price limits otherwise imposed by the Authority under its Qualified Single- Family Mortgage Program, subject to the maximum incomes and maximum purchase prices permitted by the Internal Revenue Code of 1986, as amended. 5. Indemnification To the extent permitted by law, the Authority agrees to hold harmless and indemnify the Local Government from any and all damages incurred by the Local Government as a result of the Authority's actions or omissions with respect to this Delegation Agreement including, but not limited to, the Authority's failure to comply with applicable tax code requirements under this Delegation Agreement and Federal Tax Exemption Certificate(s) with SUBSTITUTED COPY 3 -25 -02 respect to the refunding obligations issued hereunder including, but not limited to, damages resulting from failure of the Authority to perform its Arbitrage/Rebate responsibilities. 6. No Impairment of Rights Notwithstanding anything in this Delegation Agreement to the contrary, nothing in this Delegation Agreement shall impair the Local Government's rights and obligations under the documents authorizing the Bonds. Nothing in this Delegation Agreement shall prohibit or impair the Local Government's ability to refund or otherwise restructure the Bonds. 7. 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 PUEBLO, COLORADO By: - Title: President of City council (SEAL) Attest: By: Title: i Clerk SUBSTITUTED COPY 3 -25 -02 (SEAL) Attest: COLORADO HOUSING AND FINANCE AUTHORITY By: 4 & 4 -4-- Executive Director SUBSTITUTED COPY 3 -25 -02 EXHIBIT A List of Single Family Mortgage Revenue Bonds Issued by the Local Government City of Pueblo, Colorado Single Family Mortgage Revenue Bonds, 1978 Series A Dated August 1, 1978 EXHIBIT "C" COLORADO HOUSING AND FINANCE AUTHORITY and WELLS FARGO BANK WEST, NATIONAL ASSOCIATION as the Trustee FUNDS EXCHANGE AGREEMENT Dated as of January 15, 2002 FUNDS EXCHANGE AGREEMENT THIS FUNDS EXCHANGE AGREEMENT (this "Agreement ") is made and entered into as of January 15, 2002 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, NATIONAL ASSOCIATION (the "Trustee "), a national banking association duly organized and existing under the laws of the United States, 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 borrow 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 ") of the Prior Bonds shown on Exhibit A attached hereto (the "Refunded Bonds ") on the date (the "Refunding Date ") shown on Exhibit A attached hereto; and the Local Government has directed the 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, the Authority shall pay the Refunding Amount from the proceeds of such borrowing or other available moneys to the Trustee. The 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. (b) On or before the Refunding Date, simultaneously with the deposit(s) described in paragraph (a) above, the 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. - --- ==Section-2- - Fees-- and_Expenses __T ie Authorit sh all not receiv any fees or expenses for carrying out its responsibilities under this Agreement, and the 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 of payment in full of the Refunded Bonds. 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 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. 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 Attest: Executive Director Assistant Secretary Attest: By: _ Title: WELLS FARGO BANK WEST, NATIONAL as the Trustee By:_ Title: 4 EXHIBIT A Details of Prior Bonds City of Pueblo, Colorado Single Family Mortgage Revenue Bonds, 1978 Series A Dated August 1, 1978 Refunding Amount Refunding Date $285,000 February 1, 2002 5