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HomeMy WebLinkAbout9415-03 Approving and Authorizing the Execution of a lease for the construction and equipping of a new Fire Stationand the RenovationORDINANCE No. Passed by the Common Council of the City of South Bend, Indiana April 28, Attest: Attest: ~C 20 03 Presented by me to the Mayor of the City of Sozrtlt Bend, Indiana April 29, 03 20 City Clerk President of Common Council Ciry Clerk Approved and signed by me April 29, 20 03 Mayrn f 't ORDINANCE NO. ~ ~ ~ S - D 3 AN ORDINANCE OF THE CITY OF SOUTH BEND, INDIANA, COMMON COUNCIL APPROVING AND AUTHORIZING THE EXECUTION OF A LEASE FOR THE CONSTRUCTION AND EQUIPPING OF A NEW FIRE STATION AND THE RENOVATION AND EXPANSION OF A POLICE STATION, PLEDGING COUNTY OPTION INCOME TAX REVENUES TO THE PAYMENT OF RENTALS THEREFOR AND REGARDING CERTAIN RELATED MATTERS STATEMENT OF PURPOSE AND INTENT: The City of South Bend, Indiana (the "City"), has previously investigated the necessity for the construction and equipping of a new central fire station to be located on Michigan Street approximately one hundred fifty (150) feet from the intersection of Broadway and Michigan Streets (the "Fire Station Project") and the renovation and expansion of the police station located at 701 W. Sample (the "Police Station Project" and, with the Fire Station Project, the "Projects"). The City has also previously investigated alternative methods for paying for the Projects. There has been filed with the Common Council of the City (the "Common Council") a petition certified by the St. Joseph County Auditor, which petition has been signed by at least fifty (50) owners of real property subject to taxation by the City and addressed to the Common Council, requesting that the Common Council enter into a lease whereby the Projects will be completed with the assistance of anot-for-profit building corporation and leased to the City pursuant to the provisions of Indiana Code 36-1-10, as amended. The City of South Bend Building Corporation (the "Building Corporation") has been organized as an Indiana not-for-profit corporation for the purpose of constructing and leasing public improvements, including the Projects, to the City. A form of lease between the Building Corporation and the City (the "Lease") has been prepared and submitted to the Common Council for its consideration. The Lease, as presented to the Common Council, provides for the lease of the Projects for a term not to exceed twenty-two (22) years (the "Term"). The Term under the proposed Lease would begin with respect to the Fire Station Project and the Police Station Project on the date that each respective project is available for use by the City. The lease rentals payable under the Lease (the "Rentals") by the City with respect to the Projects shall not exceed $1,192,780 per year for the Fire Station Project and $ 1,400,220 per year for the Police Station Project and shall be payable semiannually on each June 30 and December 30, beginning with respect to the Fire Station Project on the later of (i) the date that the Fire Station Project is completed; or (ii) December 30, 2004 and with respect to the Police Station Project or the later of (i) the date the Police Station Project is acquired by the City; or (ii) December 30, 2003. Lease rentals payable under the Lease by the City for the Project shall be payable on such dates solely from the county option income tax revenues (the "COIT Revenues") distributed to the City pursuant to I.C. 6-3.5-6 (the "Act"). As a result, the Project does not constitute a "controlled project" as such term is defined by IC 6-1.1-20-1.1 because such Rentals shall be payable from funds other than property taxes that are exempt from the levy limitations of IC 6-1.1-18.5. The Rentals shall rank on a parity with lease rentals payable pursuant to that certain lease entered into by and between the City and the Building Corporation dated March 1, 2001, pertaining to the Public Works Service Center Project (the "Outstanding Lease Obligation"), the revenues from which are security for the payment of the City of South Bend Building Corporation County Option Income Tax Lease Rental Revenue Bonds of 2001 (the "Prior Bonds"). NOW, THEREFORE, BE IT ORDAINED BY THE COMMON COUNCIL OF THE CITY OF SOUTH BEND, INDIANA, AS FOLLOWS: 1. The petition of taxpayers of the !City filed with the Common Council at this meeting is hereby approved. 2. The Common Council hereby determines that a need exists for the completion of the Project and the funds needed therefor exceed the funds presently available to the City. 3. Having held a public hearing regarding the Lease for which notice was provided in accordance with Indiana Code 5-1-3, the Common Council hereby approves the Lease in the form presented to this meeting. The Lease with the Building Corporation as lessor provides for a fair and reasonable rental, and further, the execution of the proposed lease is necessary and wise. The Mayor and Clerk of the City are hereby authorized to execute and attest, respectively, the Lease in the form presented to this meeting with such changes as may be necessary or appropriate on the advice of counsel with such execution and attestation to evidence approval of such changes; provided, however, that any such changes may not (i) increase the term of the Lease or increase the rentals payable by the City under the Lease with respect to the Project or (ii) alter the scope and nature of the Project described in the Lease. 4. The Clerk of the City shall cause to be published a notice of execution of the Lease according to law following such execution. 5. All actions taken to publish the notice of the public hearing regarding the Lease are hereby approved and ratified. 6. The Common Council hereby approves of the use of the Building Corporation for purposes of financing and leasing the Project to the City. The Common Council hereby further approves of the sale and issuance by the Building Corporation of its lease rental revenue bonds in one or more series in an aggregate principal amount not to exceed $26,000,000 (the "Bonds"). The Rentals and the Bonds payable therefrom shall be made on a parity with the Outstanding Lease Obligation and none of the provisions of this Ordinance shall be construed to affect the rights of the holders of the Prior Bonds. The Mayor of the City (the "Mayor") is authorized to hire Crowe Chizek and Company LLP to perform any and all computations necessary to confirm the preliminary evidence and findings demonstrating compliance with the conditions set forth in Ordinance No. 9203-01 adopted by the Common Council on March 12, 2001 (the "Prior Ordinance") for the making of the pledge contained herein on a parity with the Outstanding Lease Obligation. The City shall not complete the execution of the Lease without first receiving a certificate from Crowe Chizek in form and substance satisfactory to the Mayor SBIMANI 148291v1 _ 2 _ and to the effect that the City and the Building Corporation are in complete compliance with the conditions of the Prior Ordinance for the making of the pledge contained herein on a parity with the outstanding Prior Bonds. 7. The Rentals payable under the Lease are payable solely from the COIT Revenues distributed to the City pursuant to the Act and set aside as hereinafter provided. The foregoing pledge shall continue irrevocably during the period in which the Bonds remain outstanding. The provisions hereof shall be construed to create a trust in the COIT Revenues described herein and the provisions hereof are made in accordance with Indiana Code 5-1-14-4. This Ordinance shall not be repealed or amended in any manner which would serve to adversely affect the pledge of the COIT revenues made herein by the Common Council on behalf of the City. The Mayor, Controller, and the Clerk are hereby authorized to execute such documents as may be necessary in connection with the issuance of the Bonds to evidence the Pledge. Neither the full faith and credit nor the taxing power of the City shall be pledged to the payment of the Rentals. 8. The COIT Revenues distributed to the City pursuant to the Act shall be used and applied by the City only as provided in this Ordinance and in strict accordance with the provisions of the Act. All of such COIT Revenues shall be segregated and kept in special accounts separate and apart from all other funds of the City and shall be used and applied in payment of rentals for leases, including without limitation the Lease, and the principal of and interest on bonds which by their respective terms are payable from such revenues and to maintain a reasonable reserve, in accordance with this Ordinance. The COIT Revenue Fund is hereby created and is hereby designated and constituted as the fund for the payment of such amounts. Said Fund shall be continued until all such amounts have been paid pursuant to such leases or bonds. In addition, there is hereby created and established (i) a COIT Obligations Fund and a COIT Reserve Fund (which two funds the City hereby covenants and agrees to cause to be kept and maintained so long as needed for the purposes set forth herein), and (ii) an COIT Excess Fund. All of the COIT Revenues distributed to the City pursuant to the Act shall be set aside in said funds in the following order of priority and to the extent indicated below: (1) COIT Obligations Fund (2) COIT Reserve Fund; and (3) COIT Excess Fund (a) COIT Obligations Fund. As soon as possible upon receipt by the City of its COIT Revenue distribution (each, a "Distribution"), but in any event not later than the fifteenth (15`h) day following such distribution, there shall be set aside from the COIT Revenue Fund and paid into the COIT Obligations Fund a sufficient amount for the payment of all amounts due on any lease or bonds which by their respective terms are payable from such fund and, with respect to bonds which may be payable from such fund, the necessary fiscal agency charges for paying the principal of and interest on such bonds. If the City receives monthly Distributions, the monthly payments into the COIT Obligations Fund shall be in an amount equal to at least one-sixth (1/6) of the amount payable during the then next succeeding six (6) calendar months of (i) rentals, including without limitation the Rentals, payable from COIT Revenues under any lease, including without limitation, the Lease and (ii) principal of and interest on bonds payable by their terms from COIT Revenues. If the City receives distributions ssi~rr> >asz9~~~ _ 3 _ semiannually, the semiannual payments into the COIT Obligations Fund shall be in an amount equal to at least the total amount payable during the then next succeeding six (6) calendar months of (i) rentals, including without limitation the Rentals, payable from COIT Revenues under any lease, including without limitation, the Lease and (ii) principal of and interest on bonds payable by their terms from COIT Revenues. In the even that the City receives only an annual distribution of COIT Revenues, the annual payment into the COIT Obligations Fund shall be in an amount equal to at least the total amount payable during the then next succeeding twelve (12) months of (i) rentals, including without limitation the Rentals, payable from COIT Revenues under any lease, including without limitation, the Lease and (ii) principal of and interest on bonds payable by their terms from COIT Revenues. Such payments shall continue as provided herein until such time as the COIT Obligations Fund shall contain an amount sufficient to pay all of the obligations of the City then outstanding which by their terms are payable from such fund. (b) COIT Reserve Fund. To the extent that there are bonds outstanding issued by the .City which by their terms require that the City maintain a reserve therefor, an amount from each Distribution shall next be set apart and paid into the COIT Reserve Fund, if needed, and used to make deposits into the COIT Obligations Fund in the event of any deficiency at any time in such fund with respect to such bonds so that the sum in the COIT Reserve Fund shall equal the least of (i) the maximum annual debt service on the Bonds, (ii) one and one-quarter (1-1/4) times the average annual debt service on the Bonds, or (iii) ten percent (10%) of the proceeds of the Bonds, within the meaning of Section 148(d) of the Internal Revenue Code of 1986, as amended (the "Debt Service Reserve Requirement"), and thereafter no deposit shall be made into the COIT Reserve Fund so long as there shall be on deposit therein an amount equal to the Debt Service Reserve Requirement. (c) COIT Excess Fund. Any remaining COIT Revenues distributed to the City pursuant to the Act shall be deemed excess funds and shall be deposited in the COIT Excess Fund for appropriation and use as permitted by law. In the event of any deficiency at any time in the (i) COIT Obligations Fund for the purposes of paying the rentals on leases or interest on or principal of bonds, which by their terms are payable from COIT Revenues or the (ii) COIT Reserve Fund for purposes of maintaining in said fund the Debt Service Reserve Requirement with respect to bonds which contain such a requirement, funds may be withdrawn from the COIT Excess Fund for deposit into said COIT Obligations Fund or COIT Reserve Fund in the amount of such deficiency. All moneys in said funds shall be segregated and kept separate and apart from all other funds of the City and shall be deposited in lawful depositories of the City and continuously held and secured or invested as provided by law. Interest earned in each such fund shall be credited to such fund except that the amount of interest earned on the COIT Reserve Fund when added to the amount on deposit in the COIT Reserve Fund shall not exceed the Debt Service Reserve Requirement, and any such excess shall be deposited into the COIT Excess Fund. 9. The City reserves the right to enter into additional leases or authorize and issue bonds, payable out of its COIT Revenues, ranking on a parity with the rentals payable under the Lease, for the purpose of financing the cost of additional projects (the "Parity Obligations"). The authorization and issuance of Parity Obligations shall be subject to the following conditions precedent: ss~Mnty~ iaaz9i~t _ 4 _ (a) Rental payments under all leases and the principal of and interest on all bonds which are, respectively, in accordance with their terms, payable from COIT Revenues shall have been paid in accordance with their terms. (b) All required deposits into the COIT Obligations Fund and the COIT Reserve Fund shall have been made in accordance with the provisions of this Ordinance. (c) Either: (1) the COIT Revenues distributed to the City pursuant to the Act in the fiscal year immediately preceding the entering into or issuance of any such Parity Obligations shall be not less than one hundred thirty-five percent (135%) of the maximum annual interest and principal requirements of all the then outstanding obligations, including without limitation the Lease, payable from amounts that the City receives from COIT Revenues and the additional Parity Obligations; or (2) the COIT Revenues distributed to the City pursuant to the Act for the first full fiscal year immediately succeeding the issuance of any such Parity Obligations shall be projected by a certified public accountant to be at least equal to one hundred thirty-five percent (135%) of the total of the maximum annual rentals or interest and principal requirements of all the then outstanding obligations including without limitation the Lease, payable from amounts that the City receives from COIT Revenues and the Parity Obligations proposed to be issued. For purposes of this subsection, the records of the City shall be analyzed and all showings prepared by a certified public accountant or independent financial adviser employed by the City for that purpose. (d) Lease rentals on any leases and the principal of and interest on any bonds which constitute Parity Obligations shall be payable semiannually on the fifteenth days of 3anuary and 3uly in the years such amounts are payable. Except as otherwise provided in this Section 9, so long as the City is obligated to make lease rental payments under the Lease, no Parity Obligations pledging any portion of the COIT Revenues distributed to the City pursuant to the Act shall be authorized, executed or issued by the City except such as shall be made subordinate and junior in all respects to the rentals payable under the Lease, unless the City exercises its option to purchase the Project under the Lease coincidentally with the delivery of such Parity Obligations. 10. The provisions hereof shall be construed to create a trust in the COIT revenues and this Ordinance shall not be repealed or amended in any manner which would serve to adversely affect the pledge made herein by the Common Council on behalf of the City. 11. This Ordinance shall be in full force and effect from and after its passage by the Common Council and approval by the Mayor. 1 st READING ~~~-D3 PUBLIC HEARING ~-Z$'-Q3 3 rd READING c~~~.,~3 NOT APPRO.VI:D REFERRED PASSED ~~ L~ ~ COMMON COUNCIL OF THE CITY OF SO TH BEND, INDIANA By: Me ber of the Common Coun it SBIMANI 148291v1 _ 5 _ TO THE COMMON COUNCIL OF THE CITY OF SOUTH BEND: Your Committee of the Whole, to whom was referred: BILL NO. 29-03 A BILL OF THE CITY OF SOUTH BEND, INDIANA, COMMON COUNCIL APPROVING AND AUTHORIZING THE EXECUTION OF A LEASE FOR THE CONSTRUCTION AND EQUIPPING OF A NEW FIRE STATION AND THE RENOVATION AND EXPANSION OF A POLICE STATION, PLEDGING COUNTY OPTION INCOME TAX REVENUES TO THE PAYMENT OF RENTALS THEREFOR AND REGARDING CERTAIN RELATED MATTERS Respectfully report that they have examined the matter and that in their opinion, this bill is being recommended to the full Council with a favorable recommendation. Karl King Chairman CAUNTY-CTCY BUILDING SOUTH BEND, INDIANA 46601-1830 CITY OF SOU'T'H BEND STEPHEN J. LUECKE, MAYOR PHONE 574/ 235-9216 Fax 574/235-9928 TDD 574/ 235-5567 DEPARTMENT OF ADMINISTRATION AND .FINANCE FREDERICK B. ~1.LETT, III April 10, 2003 _ CO~O~ i RR os 03-31 +Z9-03 Ms. Karen L. White, President South Bend Common Council 4th Floor, County-City Building South Bend, IN 46601 Re: Ordinance for the City's New Fire Station and the Renovation and Expansion of a Police Station and a Resolution Authorizing the Publication ofNotice ofPublic Hearing for Related Matters Dear President White: I attach for the consideration and approval of the South Bend Common Council the ordinance that would approve and authorize the execution of a lease for the construction and equipping of a new fire station and the renovation and expansion of a police station, pledging County Option Income Tax revenues to the payment of rentals for these structures. Also, a resolution setting a public hearing and authorizing the publication of a notice of public hearing and regarding certain related matters is attached. The project includes the construction of a new South Bend Fire Department Headquarters and Central Fire Station and the addition and renovation to the existing South Bend Police Department Headquarters and Training Facility. Over the past eighteen months, a team composed of police and fire department personnel as well as other city departments and the firm of DLZ has concentrated on both: the necessary facilities to support their services to the residents of the City of South Bend; and the technical development of the construction drawings and the associated specifications, bidding requirements and general conditions of the contract. The bid documents have been offered. It is anticipated that a Notice of Intent to Award will be announced in late May 2003. The project will be constructed concurrently and will begin in June 2003. The Fire Department is anticipated to be substantially complete in Apri12004, while the new addition of the Police Department will be substantially complete in May 2004, with the entire facility substantially complete by Winter 2004/2005. CATHERINE A. HussnRD-BREAD LIZ Roa~E THOMAS SKARBEK SusaN W.~LIacE RosERrAu.EN DIRECTOR DIRECTOR DIRECTOR MANAGER DIRECTOR HUMAN RESOURCES CTTYFINANCE BUDGETING SL FINANCW. REPORTING BENEFITS INFORMATION TECHNOLOGY Karen L. White, President April 10, 2003 Page Two After reviewing various methods to finance the project, we have selected a lease structure through the City of South Bend Building Corporation. The lease rentals payable under the Lease by the City shall be payable solely from the County Option Income Tax revenues (COIT). There has been filed with the Common Council of the City a petition certified by the St. Joseph County auditor signed by at least fifty (50) owners of real property subject to taxation by the City. Please call me if you have any questions regarding the same. We plan to make a presentation on this request on Apri128, 2003, if that meets with your approval. Thank you for your favorable consideration of this ordinance. Sincerely, ~~~ ~ ~~~ ~ ^~-~- Frederick B. Ollett, III City Controller Attachments _ a ^q~9v~.~Jan~,~'n~'i:1 ~7. gib,°?~>'~ C-Y! y 1iLo"'.: 7s~i~n~.'~i'. Su~3^..Jy ~a~.