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HomeMy WebLinkAboutordinance.council.028-05ORDINANCE NO. ~(SERIES OF 2005) A ORDINANCE RATIFYING THE ORGANIZATION OF A NONPROFIT CORPORATION KNOWN AS BURLINGAME HOUSING, INC.; APPROVING THE ISSUANCE BY SUCH CORPORATION OF ITS MULTIFAMILY HOUSING MORTGAGE REVENUE REFUNDING BONDS, SERIES 2005; AGREEING TO ACCEPT TITLE TO THE BURLINGAME HOUSING PROJECT UPON THE REPAYMENT OF SUCH BONDS; RATIFYING THE EXISTING MECHANISM FOR THE CITY TO CONSIDER FUNDING EXCESS OPERATING EXPENDITURES FOR SUCH HOUSING PROJECT; RATIFYING THE EXISTING MECHANISM FOR THE CITY TO CONSIDER REPLENISHING THE DEBT SERVICE RESERVE FUND ESTABLISHED TO SECURE SUCH BONDS; RATIFYING THE THE BURLINGAME HOUSING PROJECT DEVELOPMENT AND OPERATING AGREEMENT AND APPROVING AN AMENDMENT THERETO, SUBJECT TO THE FINANCE DIRECTOR'S PRIOR REVIEW AND APPROVAL THEREOF; DELEGATING THE AUTHORITY TO THE CITY'S FINANCE DIRECTOR TO EXECUTE CERTAIN DOCUMENTS; RATIFYING ACTION PREVIOUSLY TAKEN AND APPERTAINING THERETO; AND DECLARING AN EMERGENCY. WHEREAS, the City of Aspen (the "City"), in the County of Pitkin and State of Colorado, is a legally and regularly created, established, organized and existing home rule city and municipal corporation under the provisions of Article XX of the Constitution of the State of Colorado and the home rule charter of the City (the "Charter"); and WHEREAS, under the Charter, the City possesses all powers which are necessary, requisite or proper for the government and administration of its local and municipal matters, all powers which are granted to home rule municipalities by the Colorado Constitution, and all rights and powers that now or hereafter may be granted to municipalities by the laws of the State of Colorado; and WHEREAS, on November 22, 1999, the City and the Music Associates of Aspen, Inc., a Colorado nonprofit corporation ("Music Associates"), entered into the Burlingame Housing Project Development and Operating Agreement (the "Operating Agreement"), with Burlingame Housing, Inc., a Colorado nonprofit corporation (the "Corporation"), providing for the development and operation of one hundred dwelling units, together with accessory support uses including a laundry facility, property manager's office and apartment and general storage (collectively, the "Project"), located within the City; and WHEREAS, the Corporation is authorized to borrow money and issue bonds and other obligations, and to secure such obligations by mortgage or pledge of all or any part of its property interests and income; and 02-203497.1 WHEREAS, on December 21, 1999, in order to provide the ftmds needed to finance the costs of the Project, the Corporation issued its $8,515,000 Multifamily Housing Project Revenue Bonds, Series 1999A (the "Series 1999A Bonds") and, on a basis subordinate thereto, its Multifamily Housing Project Revenue Bonds, Series 1999B (the "Series 1999B Bonds"), which were issued to the City, and its Multifamily Housing Project Revenue Bonds, Series 1999C, which were issued to the Music Associates (the "Series 1999C Bonds" and, together with the Series 1999B Bonds, the "Subordinate Bonds"); and WHEREAS, the Series 1999A Bonds maturing on and after November 1, 2010 are subject to redemption prior to maturity, at the option of the Corporation, on November 1, 2009 and on any date thereafter, at a redemption price of 101% (expressed as a percentage of the principal amount so redeemed) plus accrued interest to the date of such redemption; WHEREAS, the Board of Directors of the Corporation has determined that it is in the best interests of the Corporation to issue the Burlingame Housing, Inc. (A Colorado nonprofit corporation created by the City of Aspen, Colorado) Multifamily Housing Project Revenue Refunding Bonds, Series 2005 (the "Series 2005 Refunding Bonds"), for the purpose of advance refunding all of the outstanding Series 1999A Bonds at a lower interest rate and paying the costs of issuance of the Series 2005 Refunding Bonds; and WHEREAS, the City Council recognizes that the savings the Corporation expects to realize from the issuance of the Series 2005 Refunding Bonds are anticipated to be greater if the Series 2005 Refunding Bonds can be issued in a timely fashion; therefore, the City Council has determined and hereby determines that there is an urgency and need for issuing the Series 2005 Refunding Bonds in a timely manner in order to obtain the greatest savings to the Corporation, thus preserving public property, health, peace and safety; and WHEREAS, the Series 2005 Refunding Bonds will be issued pursuant to the terms and provisions ora Amended and Restated Mortgage and Indenture of Trust, dated as of May 1, 2005 (the "Indenture"), between the Corporation and American National Bank, as trustee (the "Trustee"), which Indenture amends and restates in its entirety the Mortgage and Indenture of Trust, dated as of December 1, 1999, between the Corporation and Norwest Bank Colorado, National Association, as trustee thereunder (the "Original Indenture"); and WHEREAS, the Subordinate Bonds were issued pursuant to the Original Indenture and, upon issuance of the Series 2005 Refunding Bonds and execution and delivery of the Indenture, the Subordinate Bonds will be governed by the provisions of the Indenture; and WHEREAS, the repayment terms of the Subordinate Bonds will not be altered by the provisions of the Indenture and the City has determined and hereby determines that the provisions of the Indenture, as amended and restated, will not have an adverse effect on the City and its residents and provides certain benefits thereto; and WHEREAS, 92 of the 100 units in the Project are leased to the Music Associates during the months of June, July and August of each year pursuant to the terms and provisions of a Master Lease Agreement, between the Corporation and the Music Associates; and 02-203497.1 2 WHEREAS, the Project is leased to "qualified employees" (as defined by the Aspen/Pitkin County Housing Authority) for the remainder of each year; and WHEREAS, the interest on the Series 2005 Refunding Bonds is intended to be exempt from the gross income of the registered owners thereof for federal income tax purposes pursuant to the Internal Revenue Code of 1986, as amended (the "Code"); and WHEREAS, in order for the interest on the Series 2005 Refunding Bonds to be exempt from the gross income of the registered owners thereof for federal income tax purposes, the Corporation and the Series 2005 Refunding Bonds must meet certain conditions set for in the Code and the regulations and rulings promulgated thereunder; and WHEREAS, the Articles of Incorporation for the Corporation provide that four of the five directors of the Corporation are to be appointed by the City Council of the City; and WHEREAS, the Code and the regulations and the rulings promulgated thereunder require that the City approve the formation of the Corporation and the issuance of the Series 2005 Refunding Bonds thereby and agree to accept title to the Project, including any additions to the Project, upon the retirement of the Series 2005 Refunding Bonds; and WHEREAS, pursuant to the City's Resolution No. 107 (Series of 1999) (the "1999 Resolution"), the City approved the formation of the Corporation and the issuance of the Series 1999 Bonds; WHEREAS, the City desires to ratify its approval of the formation of the Corporation pursuant the adoption of this Ordinance; and WHEREAS, there is presently a shortage of employee housing within the City and the City Council believes that it is in the best interest of the City to support the development and operation of employee housing within the City; and WHEREAS, the Series 2005 Refunding Bonds are secured by certain moneys contained in a debt service Reserve Fund established pursuant to the Indenture; and WHEREAS, in order to assure the continued use of the Project as employee housing, the City may desire to appropriate moneys to replenish draws upon the debt service Reserve Fund; and WHEREAS, the City desires to approve the issuance by the Corporation of the Series 2005 Refunding Bonds. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ASPEN, COLORADO: Section 1. Definitions. Capitalized terms used and not otherwise defined in this Ordinance shall have the meanings set forth in the Indenture. 02-203497.1 3 Section 2. Ratification. All action heretofore taken (not inconsistent with the provisions of this Ordinance) by the Council and officers of the City relating to the organization of the Corporation and the development and operation of the Project is hereby ratified, approved and confirmed. Section 3. Ratification of the Organization of the Corporation. The organization of the Corporation is hereby ratified, approved and confirmed. Section 4. Approval of the Issuance of the Series 2005 Refunding Bonds. The issuance of the Series 2005 Refunding Bonds by the Corporation for the purpose of advance refunding all of the outstanding Series 1999A Bonds is hereby approved. Section 5. Ratification of the Operating Agreement; Approval of Amendment Thereto. The Operating Agreement is hereby ratified, approved and confirmed and, subject to the prior review and approval of the City's Director of Finance (the "Finance Director"), amendment to the Operating Agreement which is necessary or desirable in order to effectuate the issuance of the Series 2005 Refunding Bonds is hereby approved. The Mayor is hereby authorized to execute such amendment to the Operating Agreement and her signature on such amendment shall constitute the City's approval thereof. Section 6. Agreement to Accept Title to the Project The City hereby agrees to accept title to the Project upon the repayment of the Series 2005 Refunding Bonds. Section 7. Approval of Miscellaneous Documents. The Mayor, the City Clerk or, in the absence thereof, the Deputy City Clerk, and all other officers of the City are hereby authorized and directed to execute all of the documents and certificates necessary or desirable to effectuate the issuance of the Series 2005 Refunding Bonds and the transactions contemplated hereby and pursuant to the Official Statement. Execution by such parties thereto shall constitute the City Council's approval of such documents and certificates in the form so executed. Section 8. Ratification of Agreement to Consider Funding Operating Expenditures for the Project The City Council of the City hereby ratifies, approves and confirms the mechanism established pursuant to the 1999 Resolution providing for the City Council's consideration of appropriation of amounts to pay operating losses for the Project, if any. The City Council of the City hereby instructs the Finance Director (or any other City officer at any time charged with the responsibility of budget proposals for the City), if requested by the Corporation, to submit a request to the City Council for an appropriation of moneys of the City in the amount, if any, requested by the Corporation pursuant to the terms of the Operating Agreement, for the purpose of funding Project operating losses, if any. The decision to appropriate any such moneys will, however, be in the sole discretion of the City Council. Section 9. Ratification Agreement to Consider Replenishment of Debt Service Reserve Fund for the Series 2005 Refunding Bonds The City Council of the City hereby ratifies, approves and confirms the mechanism established pursuant to the 1999 Resolution providing for the City Council's consideration of appropriation of amounts to replenish drawings on the Reserve Fund (defined below), if any. The City Council of the City hereby instructs the Finance Director (or any other City officer at any time charged with the responsibility of budget 02-203497.I 4 proposals for the City), if requested by the Corporation, to submit a request to the City Council for an appropriation of moneys of the City in the amount, if any, requested by the Corporation, for the purpose of providing funds to replenish any drawings on the Debt Service Reserve Fund (the "Reserve Fund") established under the Indenture, pursuant to the terms of the Operating Agreement. The decision to appropriate such amounts will, however, be in the sole discretion of the City Council. Section 10. No Obligation of City to Appropriate. No provision of this Ordinance (including, without limitation, Sections 8 and 9 hereof), the Operating Agreement, as amended, or any other documents or instruments relating to the Series 2005 Refunding Bonds, shall be construed or interpreted (a) to directly or indirectly obligate the City to make any payment in any fiscal year in excess of amounts appropriated for such fiscal year, if any; (b) as creating a debt or multiple fiscal year direct or indirect debt or other financial obligation whatsoever of the City within the meaning of Article XI, Section 6 or Article X, Section 20 of the Colorado Constitution or any other constitutional or statutory limitation or provision; (c) as a delegation of governmental powers by the City; (d) as a loan or pledge of the credit or faith of the City or as creating any responsibility by the City for any debt or liability of any person, company or corporation within the meaning of Article XI, Section 1 of the Colorado Constitution; or (e) as a donation or grant by the City to, or in aid of, any person, company or corporation within the meaning of Article XI, Section 2 of the Colorado Constitution. Section 11. Severability Clause. 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. Section 12. Repealer Clause. All bylaws, orders or Ordinances, or parts thereof, inconsistent herewith are hereby repealed to the extent only of such inconsistency. This repealer shall not be construed to revive any bylaw, order or Ordinance, or part thereof, heretofore repealed. Section 13. Recordation. A true copy of this Ordinance, as adopted by the governing body of the City, shall be numbered and recorded in the records of the City. Section 14. Further Action. The officers of the City are authorized and directed to take all action necessary or appropriate to effectuate the provisions of this Ordinance. Section 15. Captions. The captions or headings in this Ordinance are for convenience only and in no way define, limit or describe the scope or intent of any provisions or sections of this Ordinance. Section 16. Applicable Provisions of Law. This Ordinance shall be govemed by and construed in accordance with the laws of the State of Colorado. Section 17. Declaration of Emergency and Effective Date of Ordinance. The City Council recognizes that the savings the Corporation expects to realize from the issuance of the Series 2005 Refunding Bonds are anticipated to be greater if the Series 2005 Refunding Bonds can be issued in a timely fashion; therefore, the City Council hereby determines that there is an 02-203497.1 5 urgency and need for issuing the Series 2005 Refunding Bonds in a timely manner in order to obtain the greatest savings to the Corporation, thus preserving public property, health, peace and safety. This Ordinance shall take effect upon final passage. [signatures appear on following page] 02-203497.1 6 INTRODUCED at a regularly scheduled meeting of the City Council of the City of Aspen, Colorado, on the 25th day of April, 2005, AND PASSED ON FIRST READiNG by a vote of _~' FOR and O AGAiNST. ~ITY CLERK/J FiNALLY PASSED at a regularly scheduled meeting of the City Council of the City of Afilpen, Colorad3b//on the 9th day of May, 2005 on second and final reading, by a vote of b/FOR and ~q~ AGAINST; and ordered published within ten days of such final passage. 02-203497.1 7