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HomeMy WebLinkAboutOrdinance-1993-0928 INTRODUCED BY COUNCILMEMBER DAVIS ORDINANCE NO. 928 Council Bill 13 ----- A ORDINANCE AUTHORIZING THE ISSUANCE AND SALE OF THE CITY OF WHEAT RIDGE, COLORADO, INDUSTRIAL DEVELOPMENT REVENUE BONDS, SERIES 1993 (ADOLPH COORS COMPANY PROJECT), IN THE AGGREGATE PRINCIPAL AMOUNT OF NOT TO EXCEED $5,000,000 TO FINANCE A PROJECT; RATIFYING CERTAIN ACTION HERETOFORE TAKEN; AUTHORIZING THE EXECUTION AND DELIVERY BY THE CITY OF A FINANCING AGREEMENT, TRUST INDENTURE, BOND PURCHASE AGREEMENT, SUCH BONDS AND CLOSING DOCUMENTS IN CONNECTION THEREWITH; MAKING DETERMINATIONS AS TO THE SUFFICIENCY OF REVENUES AND AS TO OTHER MATIERS RELATED TO THE PROJECT; AND REPEALING ACTION HERETOFORE TAKEN IN CONFLICT HEREWITH. WHEREAS, the City of Wheat Ridge, Colorado (the "City") is a legally and regularly created, established, organized and existing political subdivision under the laws of the State of Colorado; and WHEREAS, the City is authorized by the County and Municipality Development Revenue Bond Act, constituting Sections 29-3-101 through 29-3-123, inclusive, Colorado Revised Statutes (the "Act"), to finance one or more projects for disposing of solid waste; and WHEREAS, the Act authorizes the City (i) to issue its development revenue bonds for the purpose of defraying the cost of financing any project and all incidental expenses incurred in connection with the issuance of such bonds, (ii) to enter into financing agreements with others for the purpose of providing revenues to pay the bonds authorized to be issued under the Act and upon such terms and conditions as the Board of City Commissioners of the City may deem advisable, and (iii) to secure the payment of the principal of, premium, if any, and interest on such bonds as provided in the Act; and WHEREAS, the City caused to be published at least fourteen days before the date of adoption hereof, a notice of public hearing with respect to the issuance of the Bonds, inviting all interested persons to attend such hearing on the date hereof; and WHEREAS, such public hearing was held immediately prior to the final adoption of this ordinance; and WHEREAS, the bonds authorized herein shall be sold in order to provide financing to Adolph Coors Company, a Colorado corporation (the "Company"), for acquiring, constructing and equipping a glass container recycling plant and all related and subordinate facilities (the "Project") located within the City; and WHEREAS, the City has determined that it is advisable and in the best interests of the City to issue, sell and deliver its Industrial Development Revenue Bonds, Series 1993 (Adolph Coors Company Project) in the aggregate principal amount of not to exceed $5,000,000 (the "Bonds"), to First Commerce Capital, division of Morgan, Keegan & Company, Inc. (the "Underwriter") to provide moneys to provide financing to the Company for the Project; and WHEREAS, the City Council has been advised by the law firm of Sherman & Howard, which is acting as bond counsel in connection with the Bonds, that the issuance of the Bonds is permitted under the Colorado Constitution since pursuant to the Act and the decision of the Colorado Supreme Court in Allardice v. Adams County the issuance of the Bonds imposes no pecuniary obligation on the City; and WHEREAS, in order to provide such financing, the City will make a loan from the proceeds of the Bonds to the Company pursuant to a Financing Agreement dated as of May 15, 1993 (the "Financing Agreement"), between the City and the Owner, and the Owner will acquire, operate and maintain the Project in accordance with the requirements of the Act; and WHEREAS, the Bonds will be secured by (i) a pledge of the Financing Agreement, (ii) a pledge of the revenues and receipts derived by the City pursuant to the Financing Agreement, and (iii) a direct-pay Letter of Credit to be issued by Wachovia Bank of Georgia, National Association (the "Bank") to The First National Bank of Chicago, as Trustee (the ''Trustee''); and WHEREAS, there have been presented to the City Council of the City (i) the proposed form of Financing Agreement, (ii) the proposed form of Trust Indenture dated as of May 15, 1993 (the "Indenture"), between the City and the Trustee, (iii) the proposed form of Bond Purchase Agreement (the "Bond Purchase Agreement"), between the City and the Underwriter, and (iv) the proposed form of Preliminary Official Statement (the "Preliminary Official Statement"), to be distributed by the Underwriter to prospective purchasers of the Bonds. NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF WHEAT RIDGE: Section 1. All action (not inconsistent with the provisions of this ordinance) heretofore taken by the City Council and the officers of the City directed toward the financing of the Project, and the issuance and sale of the Bonds therefor is hereby ratified, approved and confirmed. Section 2. The City shall finance the Project subject to the terms of the Financing Agreement and the Indenture by the issuance, sale and delivery of the Bonds. -2- Section 3. To defray the cost of such financing, there is hereby authorized and created an issue of development revenue bonds designated as the "City of Wheat Ridge, Colorado, Industrial Development Revenue Bonds, Series 1993 (Adolph Coors Company Project)," in the aggregate principal amount of not to exceed $5,000,000, issuable as fully registered bonds in the Authorized Denomination (as defined in the Indenture) or any integral multiple thereof, dated as provided in the Indenture and maturing on December 1, 2013. The final aggregate principal amount of the Bonds shall be as specified in the Bond Purchase Agreement. The Bonds shall bear interest at such rates as are determined by the Remarketing Agent (as defined in the Indenture) in accordance with the terms of the Indenture and shall be payable, shall be subject to redemption prior to maturity and shall be in substantially the forms as provided in the Indenture. Pursuant to the Bond Purchase Agreement, the Bonds shall be sold to the Underwriter at a purchase price equal to 100% of the aggregate principal amount of the Bonds and the Underwriter will be paid a fee equal to 1 % of the aggregate principal amount of the Bonds. The maximum net effective interest rate on the Bonds is 12% per annum, which rate is hereby determined to be the maximum net effective interest rate on the Bonds. Section 4. The following determinations and findings are hereby made in accordance with Sections 29-3-113, 29-3-114 and 29-3-120 of the Act. (a) Assuming no optional redemptions of the Bonds, the maximum amount necessary in each year to pay the principal of and the interest on the Bonds is as follows: (i) for the rest of 1993, the debt service at the maximum rate would be $250,000; (ii) in all future years, the debt service at the maximum rate would be $600,000, except in the final year, 2013 (when all principal would be paid) the debt service would be $5,600,000. The maximum interest rate of 12% per annum has been established to provide maximum flexibility and to prevent a default should interest rates unexpectedly rise dramatically for short periods of time. It is not expected that the maximum amount of interest will need to be paid on the Bonds. Current annual interest rates are in the range of 3% per annum. At that rate, for example, the annual debt service for 1994 would be $150,000, rather than $250,000 as described above. (b) The terms under which the Project is to be financed provide that the Company shall maintain the Project and carry all proper insurance with respect thereto. (c) The revenues payable under the financing documents with respect to the Bonds and the Project are sufficient to pay, in addition to all other requirements of -3- such financing documents and this ordinance, all sums referred to in paragraphs (a) and (b) of this Section. (d) The revenues payable under the financing documents with respect to the Bonds and the Project are sufficient to pay, in addition to all other requirements of such financing documents and this ordinance, all taxes payable pursuant to Section 29-3-120 of the Act. Section 5. The forms, terms and provisions of the Financing Agreement, the Indenture and the Bond Purchase Agreement hereby are approved and the City shall enter into the Financing Agreement, the Indenture and the Bond Purchase Agreement in the forms of such documents presented to the City Council at this meeting; provided, however, that City Attorney is hereby delegated the authority to approve reasonable changes in such documents after the date of this ordinance. The Mayor of the City Council of the City is hereby authorized and directed to execute and deliver the Financing Agreement, the Indenture and the Bond Purchase Agreement and the City Clerk is hereby authorized and directed to affix the City seal to and to attest the Financing Agreement, the Indenture and the Bond Purchase Agreement, such signatures to be conclusive evidence of the City's approval of the final terms of such documents. Section 6. The City acknowledges the proposed use by the Underwriter of the Preliminary Official Statement in connection with the offering of the Bonds to the public. The City acknowledges the use by the Underwriter in connection with the sale of the Bonds of a final official statement (the "Official Statement") to be prepared by the Underwriter and to be substantially in the form of the Preliminary Official Statement but containing such amendments as may be deemed appropriate by the Underwriter. The City makes no representation or warranty as to, and has no responsibility for, the accuracy or completeness of the information contained in the Preliminary Official Statement or the Official Statement except that specifically relating to it under the caption "INTRODUCTION - The Issuer," ''THE City" and the first paragraph under the caption "ABSENCE OF LIDGATION:' Section 7. The forms, terms and provisions of the Bonds in the forms contained in the Indenture, hereby are approved, with such changes as may be approved by City Attorney who is hereby delegated authority to approve reasonable changes; and the Mayor of the City Council of the City is hereby authorized and directed to execute the Bonds and the City Clerk is hereby authorized and directed to affix the seal of the City to the Bonds and to attest the Bonds. The signatures of the Mayor and the City Clerk on the Bonds and the seal of the City on the Bonds shall be affIXed manually or by facsimile and shall conclusively demonstrate the City's approval of the final terms of the Bonds. Section 8. The Mayor of the City Council is hereby authorized and directed to execute and deliver to the Trustee the written order of the City for the authentication and delivery of the Bonds by the Trustee, in accordance with Section 3.01 of the Indenture. -4- Section 9. The First National Bank of Chicago, Chicago, Illinois, is hereby appointed as Trustee, paying agent and bond registrar under the Indenture. First Commerce Capital, division of Morgan, Keegan & Company, Inc., is hereby appointed as Remarketing Agent under the Indenture and The First National Bank of Chicago is hereby appointed Tender Agent under the Indenture. Section 10. The officers of the City shall take all action in conformity with the Act necessary or reasonably required to effectuate the issuance of the Bonds and shall take all action in conformity with the Act necessary or desirable to finance the cost of the Project and for carrying out, giving effect to and consummating the transactions contemplated by this ordinance and the Financing Agreement, the Indenture and the Bond Purchase Agreement, including, without limitation, the execution and delivery of any closing documents to be delivered in connection with the sale and delivery of the Bonds. Section 11. The cost of financing the Project, including incidental issuing expenses, will only be paid out of the proceeds of the Bonds or other moneys provided by the Company and none of the Bonds will be the general obligation of the City, nor shall any of the Bonds, including interest thereon, constitute the debt or indebtedness of the City within the meaning of the City Charter or the Constitution or statutes of the State of Colorado, nor shall anything contained in this ordinance or in the Bonds, the Financing Agreement, the Indenture, the Bond Purchase Agreement, or any other instrument give rise to a pecuniary liability of the City, any "multiple fiscal year direct or indirect debt or other financial obligation whatsoever", or a charge upon the general credit or taxing powers of the City, nor shall the breach of any agreement contained in this ordinance, the Bonds, or the Financing Agreement, the Indenture, or the Bond Purchase Agreement impose any pecuniary liability on the City or a charge upon the general credit or taxing powers of the City, the City having no power to payout of its general fund, or otherwise contribute any part of the costs of financing the Project, nor power to operate the Project as a business or in any manner, nor shall the City condemn any land or other property for the Project nor contribute any land or other property to the Project. Nothing contained in this ordinance or the Financing Agreement, the Indenture or the Bond Purchase Agreement shall give rise to any personal or pecuniary liability of any elected official, officer, director, employee, agent, or attorney of the City. Section 12. For purposes of Section 147(1) of the Internal Revenue Code of 1986, as amended (the "Code"), the City Council hereby approves the issuance of the Bonds. Section 13. After any of the Bonds are issued, this ordinance shall be and remain irrepealable until the Bonds and the interest thereon shall have been fully paid, cancelled and discharged. Section 14. 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. -5- Section 15. All bylaws, orders, resolutions and ordinances, or parts hereof, inconsistent herewith and with the documents hereby approved, are hereby repealed to the extent only of such inconsistency. This repealer shall not be construed as reviving any bylaw, order, resolution or ordinance, or part thereof. Section 16. final publication. This Ordinance shall take effect 15 days after INTRODUCED, READ, AND ADOPTED on first reading by a vote of 8 to 0 on this 24th day of May , 1993, ordered published in full in a newspaper of general circulation in the City of Wheat Ridge and Public Hearing and consideration on final passage set for Monday June 14 , 1993, at 7:30 o'clock p.m., in the Council Chambers, 7500 West 29th Avenue, Wheat Ridge, Colorado. READ, ADOPTED AND ORDERED PUBLISHED on second and final reading by a vote of 8 to 0, this Jlltday of June , 1993. Signed by the Mayor on this ~ day of June , 1993. APPROVED AS TO FORM BY CITY ATIORNEY 1st Publication: June 1, 1993 2nd Publication: June 22, 1993 Wheat Ridge Sentinal Effective Date: July 7, 1993 -6-