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HomeMy WebLinkAbout10913* City Clerk's Office Item # R1 Background Paper for Proposed Ordinance COUNCIL MEETING DATE: March 10, 2025 TO: President Mark Aliff and Members of City Council CC: Mayor Heather Graham VIA: Marisa Stoller, City Clerk FROM: Carla Sikes, City Attorney SUBJECT: AN ORDINANCE AUTHORIZING A SITE LEASE AND LEASE PURCHASE AGREEMENT BETWEEN THE CITY, AND BOKF, NA (SOLELY IN ITS CAPACITY AS TRUSTEE) TO FINANCE THE ACQUISITION, IMPROVEMENT AND EQUIPPING OF FACILITIES TO BE USED AS MUNICIPAL ADMINISTRATIVE AND OTHER SPACE; APPROVING A CERTIFICATE OF PARTICIPATION, SERIES 2025 IN CONNECTION THEREWITH IN A PRINCIPAL AMOUNT NOT TO EXCEED $9,100,000; AUTHORIZING THE MAYOR TO EXECUTE ALL DOCUMENTS AND OFFICIALS OF THE CITY TO TAKE ALL ACTION NECESSARY TO CARRY OUT THE TRANSACTIONS CONTEMPLATED HEREBY; AND RELATED MATTERS SUMMARY: Attached for consideration is an Ordinance approving a lease purchase agreement between the City and BOKF, NA to finance the acquisition, improvement and equipping of facilities to be used as municipal administrative and other space, and approving a certificate of participation, series 2025 in the principal amount not to exceed $9,100,000 to effectuate such purchase agreement. PREVIOUS COUNCIL ACTION: None. BACKGROUND: Currently, many City departments lack sufficient office space to efficiently conduct daily operations. As a result, numerous City employees are required to share already cramped office space or work from home. Approval of this Ordinance will allow the City to purchase an existing property sufficiently large to consolidate many City departments into one centralized building with easy public access. Cost to construct a similar building would cost the City an estimated amount in excess of $32M. The departments planned to be moved into the new building include Planning and Zoning, Housing, Human Resources, Civil Service, Finance, Sales Tax, and Law. The purchase of the Property will put most City departments within a two-s Office and City Clerk will remain in City Hall. In September 2024, the City purchased a building at 640 Dittmer Avenue to house several City departments. Since that time, the City discovered mold in the current Parks and Recreation offices and has had to relocate Parks and Recreation staff to the Dittmer building. The Dittmer building is not large enough to accommodate Parks and Recreation and the other departments needing additional office space. The purchase of this Property will allow the City to sell or repurpose those stand-alone buildings currently used by the City departments slated to move into the Property. In 2023, the Property appraised at approximately $8M. Currently, it was offered to the City at $7M. Some interior finish will be required to accommodate the needs of the City. The City has included an additional $3M into the financing in anticipation of these needs. If approved by City Council, the purchase of the Property will close on or before May 1, 2025. FINANCIAL IMPLICATIONS: The Series 2025 Certificate shall be issued in a principal amount not to exceed $9,100,000 and shall mature not later than December 1, 2045. It shall bear interest at a net effective interest rate not exceeding 6.50% and may be subject to redemption at redemption prices which may include redemption premiums not exceeding 3% of their principal amount, all as may be approved by Final Terms Certificate. All payments under the Series 2025 Certificate will be subject to annual appropriation by City Council. BOARD/COMMISSION RECOMMENDATION: Not applicable to this Ordinance. STAKEHOLDER PROCESS: Not applicable to this Ordinance. ALTERNATIVES: City Council could decide not to adopt the attached Ordinance. RECOMMENDATION: None. ATTACHMENTS: None ORDINANCE NO. 10913 AN ORDINANCE AUTHORIZING A SITE LEASE AND LEASE PURCHASE AGREEMENT BETWEEN THE CITY, AND BOKF, NA (SOLELY IN ITS CAPACITY AS TRUSTEE) TO FINANCE THE ACQUISITION, IMPROVEMENT AND EQUIPPING OF FACILITIES TO BE USED AS MUNICIPAL ADMINISTRATIVE AND OTHER SPACE; APPROVING A CERTIFICATE OF PARTICIPATION, SERIES 2025 IN CONNECTION THEREWITH IN A PRINCIPAL AMOUNT NOT TO EXCEED $9,100,000; AUTHORIZING THE MAYOR TO EXECUTE ALL DOCUMENTS AND OFFICIALS OF THE CITY TO TAKE ALL ACTION NECESSARY TO CARRY OUT THE TRANSACTIONS CONTEMPLATED HEREBY; AND RELATED MATTERS provide lands and facilities for governmental purposes; and WHEREAS, to provide for the capital asset needs of the City, the City Council of the City y and its citizens that the City undertake lease-purchase financing for the acquisition, improvement and equipping of facilities to be used for municipal administrative and other offices d WHEREAS, the City Council wishes to fund the Project from the proceeds of a lease- WHEREAS, the City intends to issue a Request for Proposals ( from potential investors specifying terms and other details in order to identify a suitable financial WHEREAS, the City is or will be the owner in fee simple of certain real property and WHEREAS, in order to finance the costs of the Project, the Council desires to demise to BOKF, NA, solely in its the City, as lessor, and the Trustee, as lessee, a leasehold interest in the Site Leased Property -sum payment of not more than $9,100,000 and lease the Leased Property, with improvements constructed thereon, back from the Trustee pursuant to that certain Lease Purchase Agreement dated as of the date of the Si between the Trustee, as lessor, and the City, as lessee; and WHEREAS, for the purpose of providing funds for the completion of the Project, a single in an aggregate amount not to exceed $9,100,000 will be sold and executed and delivered to the Bank pursuant to an Trustee; and WHEREAS, there have been filed for public inspection with the City Clerk in connection herewith the proposed forms of the Site Lease, the Lease, and the Indenture (collectively, the ; NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF PUEBLO, that: SECTION 1. Ratification of Actions. All action heretofore taken, not inconsistent with the provisions implementation of the Project, including the preparation of the forms of the Site Lease, the Lease and the Indenture as well as other related documents, are hereby ratified, approved and confirmed. SECTION 2. Findings; Authorizations. The City Council hereby finds and determines, pursuant to the laws of the State of Colorado, that the Project is necessary, convenient, and in furtherance of the governmental purposes of the City and in the best interests of the City and its citizens; and the City Council hereby authorizes the Project. SECTION 3. Approval and Execution of Documents; City Representatives. The Site Lease, the Lease and the Indenture, in substantially the forms filed in the office of the City Clerk before the final adoption of this Ordinance, are in all respects approved, authorized and confirmed, and the Mayor of the City or his designee are hereby authorized and directed to execute and deliver, and the City Clerk of the City is hereby authorized and directed to affix the seal of the City to, and attest, the Site Lease and the Lease, in substantially the forms approved by the City Attorney and filed with the City Clerk, with such changes as are not inconsistent with the intent of this Ordinance and are approved by bond counsel or the City Attorney. The City Council hereby designates the Mayor and the City Finance Director (and any persons authorized by law to act on their behalf in documents. Before the execution of the Site Lease, the Lease, or any other instrument contemplated by this Ordinance, or the issuance of the Series 2025 Certificate, the identity of the Bank, the final Base Rentals due under the Site Lease and Lease, and the principal amount, interest rates and other terms of the Series 2025 Certificate, not inconsistent herewith, shall be later than the date that is one year from the effective date of this Ordinance. Among the other terms to be addressed in the Final Terms Certificate, the City Finance Director is hereby appropriate combination of real and personal property, taking the amount of Project costs being financed into account, that shall constitute the Leased Property, from among the schedule of City- owned properties attached hereto as Exhibit A. SECTION 4 The Series 2025 Certificate. The City Council hereby acknowledges and consents to the sale, execution and delivery of the Series 2025 Certificate to the Bank by the Trustee pursuant to the Indenture. The City Council hereby acknowledges and approves the form, terms and provisions of the Series 2025 Certificate contained in the Indenture, in substantially the form approved by the City Attorney and filed with the City Clerk prior to the final adoption of this Ordinance. The Series 2025 Certificate shall be issued in a principal amount not to exceed $9,100,000, shall mature not later than December 1, 2045, shall bear interest at a net effective interest rate not exceeding 6.50%, and may be made subject to redemption at redemption prices which may include redemption premiums not exceeding 3% of their principal amount, all as may be approved by Final Terms Certificate. The proceeds of the Series 2025 Certificate shall be used to accomplish the Project in the manner required under the Site Lease, the Lease and the Indenture. SECTION 5. Additional Documents. The City Clerk is hereby authorized and directed to attest all signatures and acts of any official of the City in connection with the matters authorized by this Ordinance. The Mayor, his designee, and the City Representatives 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 to implement and carry out the transactions and other matters authorized by this Ordinance. The Mayor, his designee, and the City Representatives are hereby authorized to cause the preparation and distribution of an Official Statement describing the Series 2025 Certificate, the Site Lease, the Lease, the City, the Leased Property, and other matters material to the offering of the Series 2025 Certificate. The appropriate officers of the City are also 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 6. No General Obligation or Other Indebtedness. The obligation of the City to make rental payments under the Lease is subject to annual appropriation by the City Council and constitutes an undertaking of the City to make current expenditures. No provision of this Ordinance, the Lease, the Indenture or the Series 2025 Certificate shall be construed as constituting or giving rise to a general obligation or other indebtedness or multiple fiscal year financial obligation of the City within the meaning of any home rule, statutory, or constitutional debt limitation nor a mandatory charge or requirement against the City in any ensuing fiscal year beyond the current fiscal year. The City shall have no obligation to make any payment with respect to the Series 2025 Certificate except in connection with the payment of the Base Rentals (as defined in the Lease) and certain other payments under the Lease, which payments are subject to termination and nonrenewal by the City in accordance with the provisions of the Lease. SECTION 7. Expression of Need; Reasonable Rentals. The City hereby declares its current need ental operations. It is hereby declared to be the present intention and expectation of the City Council that the Lease will be renewed annually until all of the Leased Property is acquired by the City pursuant to the Lease; but this declaration shall not be construed as contractually obligating or otherwise binding the City. The City Council hereby determines and declares that the Base Rentals due under the Lease, so long as they are within the limits provided in this Ordinance, will represent the fair value of the use of the Leased Property and the Purchase Option Price (as defined in the Lease) will interest in such Leased Property, the fair purchase price thereof. The City Council further hereby determines and declares that the Base Rentals due under the Lease will 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 Lease. In making such determinations, the City Council has considered the cost of acquiring and installing the Leased Property, the uses and purposes for which the City will employ the Leased Property, the benefit to the citizens of the City because of the acquisition and installation of the Leased Property and the use of the Leased Property pursuant to the terms and provisions of the eased Property, and the expected eventual vesting of title to the Leased Property in the City. The City Council hereby determines and declares that the acquisition and installation of the Leased Property and the leasing of the Leased Property pursuant to the Lease will result in facilities of comparable quality and meeting the same requirements and standards as would be necessary if the acquisition and installation of the Leased Property were performed by the City other than pursuant to the Lease. The City Council hereby determines and declares that the maximum duration of the portion of the Lease allocable to any item of Leased Property separately identified in the Lease will not exceed the weighted average useful life of such item of Leased Property. SECTION 8. Severability. If any section, paragraph, clause or provision of this Ordinance or the Lease (other than provisions as to the payment of Base Rentals by the City during the term of the Lease, provisions for the quiet enjoyment of the Leased Property by the City during the term of the Lease, and provisions for the transfer of the Leased Property 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 9. Repealer of Measures. All acts, orders, resolutions, ordinances, or parts thereof, in conflict with this Ordinance or with any of the documents hereby approved, are hereby repealed only to the extent of such conflict. This repealer shall not be construed as reviving any resolution, ordinance, or part thereof heretofore repealed. SECTION 10. Effective Date. 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 February 24, 2025. Final adoption of Ordinance by City Council on March 10, 2025. ____________________________ President of City Council Action by the Mayor: Approved on _______________. 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 _____________ ____________________________ President of City Council ATTEST ________________________________ City Clerk