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HomeMy WebLinkAboutApproving Lease for the Construction of a New fire Station & a New Safety Training CenterORDINANCE No. 10229.13 Passed by the Common Council of the City of South Bend, Indiana Attest: Attest: April 22, 2d3 JOHN VOORDE Presented by me to the Mayor of the City of South Bend, Indiana April 23, `13 City Clerk President of Common Council City Clerk JOHN VOORDE Approved and signed by me A P t2 i L Zh ao 13 ORDINANCE NO. DLL 0 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 A NEW FIRE SAFETY TRAINING CENTER 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 fire station to replace the existing Fire Station #5 located at 2221 Prairie Avenue in the City (the "Fire Station Project ") and the construction and equipping of a new fire safety training center located on a 5.5 acre site near Sample and High Streets in the City (the "Fire Safety Training Center 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 a not - 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 -one (21) years (the "Term "). The Term would begin on the date that the Projects are 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 $561,000 per year and shall be payable at the semiannual rate of $280,500 on each January 15 and July 15, beginning on the later of. (i) the date on which the Projects are completed; or (ii) July 15, 2014. Lease rentals payable under the Lease by the City for the Projects shall be payable on such dates from Emergency Medical Services Funds received by the City (the "EMS Funds ") and any other revenues made available for such purpose and to the extent that such EMS Funds and other revenues are insufficient, from a tax levy. The Rentals under the Lease have been structured such that the tax levy is expected to serve as a back -up only for purposes of marketing the Building Corporation's bonds at a lower rate of interest. 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 are reasonably expected to be paid from funds other than property taxes that are exempt from the levy limitations of IC 6 -1.1 -18.5. NOW, THEREFORE, BE IT ORDAINED BY THE COMMON COUNCIL OF THE CITY OF SOUTH BEND, INDIANA, AS FOLLOWS: Section I. The petition of taxpayers of the City filed with the Common Council at this meeting is hereby approved. Section II. The Common Council hereby determines that a need exists for the completion of the Projects and the funds needed therefor exceed the funds presently available to the City. Section III. Having held a public hearing regarding the Lease for which notice was provided in accordance with Indiana Code 5 -3 -1, 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 Projects or (ii) alter the scope and nature of the Projects described in the Lease. Section IV. The Clerk of the City shall cause to be published a notice of execution of the Lease according to law following such execution. Section V. All actions taken to publish the notice of the public hearing regarding the Lease are hereby approved and ratified. Section VI. The Common Council hereby approves of the use of the Building Corporation for purposes of financing and leasing the Projects to the City. The Common Council hereby further approves of the sale and issuance by the Building Corporation of its first mortgage bonds in one or more series in an aggregate principal amount not to exceed $6,215,000 (the 'Bonds ") to pay the costs of completing the Projects. Section VIII. The Common Council expects that the Rentals- payable under the Lease will be payable from the EMS Revenues and any other revenues that the Common Council may make available for such purpose. To the extent that such funds are not expected to be sufficient to pay such Rentals when due, the City covenants to levy a tax for such purpose. On the July 15 immediately following the date of issuance of the Bonds by the Building Corporation, and on each July 15 thereafter (the "Determination Date "), the Controller of the City (the "Controller ") will determine if the EMS Funds and any other revenues that the Common Council may make available for such purpose are sufficient on such Determination Date to pay the Rentals payable under the Lease in the twelve (12) month period beginning on July 1 in the next following year and each twelve (12) month period beginning on each July 1 thereafter (the "Pledge Period "). If such revenues are expected to be sufficient, an amount of such revenues necessary to pay the Rentals during the Pledge Period will be set aside in a separate account for such purpose. If such revenues are insufficient for such purpose, the -2- DMS_US 51840778v2 Common Council hereby covenants to levy a tax for collection during such Pledge Period upon all of the taxable property of the City in a total amount, together with any available revenues described above, which will be sufficient to pay the Rentals due under the Lease for the applicable Pledge Period. The Common Council hereby covenants to levy a tax each year Rentals are payable under the Lease and there are not sufficient other revenues identified on the Determination Date for such purpose. Section IX. This Ordinance shall be in full force and effect from and after its passage by the Common Council and approval b he Mayor. By: - L � Member of the Common Council Attest: City Clerk Presented by me to the Mayor of the City of South Bend on the day of 2013, at o'clock ((.in. City Cl koa Approved and signed by me on the Z I day of A Pie 1 L , 2013, at o'clock q .m. 1 st READING q4-1 3 PUBLIC HEAPING y —LZ 13 3 rd REAMING L. _tj,— 3 NOT ANPIROVED; REFERRED PASSED Lt— Z-2--t 3 DMS_US 51840778v2 Mayor, City of South Bend -3- Filed _ W-1 AIDR :3 an J0�� =..04 nyOORDE CETV CiXR :, SOUTH SEND, IN TO THE COMMON COUNCIL OF THE CITY OF SOUTH BEND: Your Committee of the Whole, to whom was referred: BILL NO. 17 -13 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 A NEW FIRE SAFETY TRAINING CENTER 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. This bill was heard by the Health & Public Safety Committee. Karen L. White Chairperson, Committee of the Whole 120ON COUNTY -Crrr BunDING 227 W. JEFFERSON BLVD. SOUTH BEND, INDIANA 46601 -1830 PHONE 5741235-9216 FAx 574/235 -9928 CITY OF SOUTH BEND PETE BUTTIGIEG, MAYOR DEPARTMENT OF ADMINISTRATION AND FINANCE April 3, 2013 Mr. Derek Dieter President, South Bend Common Council 4th Floor, County -City Building South Bend, IN 46601 Re: Resolution and Ordinance Concerning Lease for Construction and Equipping of New Fire Station #5 and Fire Safety Training Facility Dear President Dieter: As you know, discussions have been ongoing about the need to replace Fire Station #5 located at 2221 Prairie Avenue in South Bend, and the benefit to the City of constructing a fire safety training facility in South Bend. An ordinance and a resolution are being filed this date which commence the process for lease financing of both of these state of the art facilities. A duplicate original of this letter is being submitted to cover both the Resolution and the Ordinance because they are integrally related. The attached Ordinance approves and authorizes the execution of a Lease whereby construction of both new Fire Station #5 and the fire safety training facility will be achieved through a lease between the City as lessee and the City of South Bend Building Corporation as lessor, for a term not to exceed twenty one years, at a lease rental rate of not more than $561,000 per year, payable in semi - annual installments of $280,500 each. The proposed Lease is also attached. It is expected that lease rental payments shall be payable from the Emergency Medical Services Fund (EMS Funds), and that EMS Funds will fully cover the Lease costs. Should EMS Funds and other revenues be insufficient for this purpose, the Lease has been structured so that the tax levy will serve as back -up only; this will enable marketing of the Building Corporations bonds at a lower rate of interest. Please note that the Project does not constitute a "controlled project" as such term is defined by IC 6- 1.1- 20 -1.1 because such rentals are reasonably expected to be paid from funds other than property taxes that are exempt from the levy limitations of IC 6 -1.1 -18.5. A pre - curser to passage of the Ordinance is the attached Resolution which authorizes the steps required to approve the proposed Lease under IC 36 -1 -10. Therefore, the Resolution sets public hearing on the Lease for April 22, 2013 which is intended to coincide with the Council's review, public hearing, and passage of the Ordinance. The Resolution also directs that a petition from at least 50 South Bend real property owners be circulated and signed requesting that the City enter the proposed Lease, all as required by State law (IC 36- 1 -10 -7) . Derek Dieter Page 2 April 3, 2013 The City Administration has been pleased with the Common Council's positive response to the discussions of these Projects in the recent past, and hopes that the Council will approve both the Resolution and Ordinance. I will present the companion Resolution and Ordinance to the Common Council at its Committee meeting and at the public hearing. Thank you for your consideration of these matters. Sincerely, Mark Neal City Controller Filed in C ie0 Off i 50 [APR �31 4013 CITY CUR# , SOUTH BEND, IN FaegreBD.com FAEG RE BAKER EANIELS Randolph R. Rompola Partner randolph.rompola @FaegreBD.com Direct +1574 239 1926 April 12, 2013 USA • UK , CHINA Faegre Baker Daniels LLP 202 South Michigan Street. Suite 1400 South Bend .Indiana 46601 -2020 Phone +1574 234 4149 Fax +1574 239 1900 yL9 HAND DELIVERY John Voorde Clerk, City of South Bend County -City Building, 4t" Floor South Bend, IN 46601 Re: Verified Petition of Taxpayers of City of South Bend, Indiana, Relating to the Fire Station and Fire Safety Training Center Projects Dear John: Enclosed is the Petition of Taxpayers of the City of South Bend, Indiana, requesting that the City enter into a lease with the City of South Bend Building Corporation to provide for the completion of the proposed new fire station and fire safety training facility projects. The petition has been verified as indicated by the Auditor's Certificate, which is also enclosed. As verified, the petition contains the signatures of 66 owners of taxable real property in the City, which exceeds the amount of 50 signatures required by Indiana Code 36 -1 -10. The petition should be available for Council members at the upcoming April 22 meeting at which time the Council will hold a public hearing regarding the lease and consider adoption of the ordinance approving the form of lease and the issuance of bonds by the Building Corporation to provide for the financing of the proposed new projects. We will forward the proofs of publication for the notice as soon as we receive them. Should you have any questions regarding the enclosed petition or Auditor's Certificate, please do not hesitate to call. Sincerely, FAEGRE BAKER DANIELS LLP Randolph RRR/ays Enclosures cc: Mark W. Neal (via Electronic Mail) Aladean DeRose, Esq. (via Electronic Mail) John H. Murphy (via Electronic Mail) Todd Skwarcan (via Electronic Mail) Richard L. Hill, Esq. (via Electronic Mail) DMS_US 51916307v1 �M tea' 013 ii wl" 4�4e�W .r......uve.++'- Ywwv'nixfla+b 01 4OUTH Be VOORD cffy CRK.