HomeMy WebLinkAboutItem 15 Intergovernmental Capital Project Loan to SEDA, Franklin Blvd Improvement Project Phase 1 AGENDA ITEM SUMMARY Meeting Date: 10/19/2015
Meeting Type: Regular Meeting
Staff Contact/Dept.: Bob Duey/Finance Staff Phone No: 541.726.3740
Estimated Time: 10 Minutes
S P R I N G F I E L D C I T Y C O U N C I L Council Goals: Provide Financially Responsible and
Innovative Government Services
ITEM TITLE:
INTERGOVERNMENTAL CAPITAL PROJECT LOAN TO SPRINGFIELD ECONOMIC
DEVELOPMENT AGENCY; FRANKLIN BLVD IMPROVEMENT PROJECT PHASE 1.
ACTION REQUESTED:
Adopt/not adopt the following resolutions: A RESOLUTION OF THE CITY OF SPRINGFIELD, OREGON AUTHORIZING
FINANCING OF CAPITAL PROJECTS DESCRIBED IN THE URBAN RENEWAL PLAN FOR THE GLENWOOD URBAN RENEWAL AREA
Approve/not approve the Intergovernmental Agreement to Make Financial Payments
ISSUE
STATEMENT:
The Council has previously approved in the 5-Year CIP the capital project to improve Franklin Blvd within the Glenwood Urban Renewal Plan. Phase 1 of this project has
already been initiated with expenses incurred for design work and right-of-way acquisition. The project budget and the Adopted Budget for FY15 documented the need to borrow the
required $3.6M match for Phase 1. The subsequent decision by the City to combine Phases 1 and 2 into an effort to receive additional grant funds from the Tiger 7 program resulted in
delaying any borrowing decision for Phase 1 until more information was available. Staff is now recommending that the City proceed with completing the financing for Phase 1 by
initiating a loan from the City to SEDA in the amount of $3,000,000. This loan would be paid back over a period not to exceed 10 years. This financing arrangement still allows for
the possible $3.6M in external financing be made available for Phase 2 if the Tiger 7 grant is received.
ATTACHMENTS: Attachment 1. Council Briefing Memorandum Attachment 2. Resolution
Exhibit A: Intergovernmental Agreement to Make Financing Payments
DISCUSSION/ FINANCIAL
IMPACT:
See Council Briefing Memorandum
Attachment 1 Page 1
M E M O R A N D U M City of Springfield
Date: 10/19/2015
To: Gino Grimaldi COUNCIL
From: Bob Duey BRIEFING
Subject: Intergovernmental Loan to SEDA MEMORANDUM
ISSUE:
The Council has previously approved in the 5-Year CIP the capital project to improve Franklin Blvd within the Glenwood Urban Renewal Plan. Phase 1 of this project has already been initiated with expenses incurred for design work and right-of-way acquisition. The project budget and the
Adopted Budget for FY15 documented the need to borrow the required $3.6M match for Phase 1. The subsequent decision by the City to combine Phases 1 and 2 into an effort to receive additional
grant funds from the Tiger 7 program resulted in delaying any borrowing decision for Phase 1
until more information was available. Staff is now recommending that the City proceed with completing the financing for Phase 1 by initiating a loan from the City to SEDA in the amount of
$3,000,000. This loan would be paid back over a period not to exceed 10 years. This financing
arrangement still allows for the possible $3.6M in external financing to be made available for Phase 2 if the Tiger 7 grant is received.
COUNCIL GOALS/
MANDATE:
Financially Responsible and Stable Government Services
BACKGROUND:
In FY14, Phase 1 of the Franklin Blvd Improvement Project was estimated to cost $10.225M with
grants funds covering the costs after a $3.6M match by the City. This was recognized as a project within the Glenwood Urban Renewal District and commitments were made for SEDA to borrow or
service any debt necessary to obtain the match. Since that time two significant events occurred; 1)
the City determined to combine Phases 1 and 2 by attempting to obtain additional grant dollars; and 2) the City took over jurisdiction of Franklin Blvd from ODOT and received $3.2M in funding for
future maintenance on the roadway. The action to seek the additional grant funds increased the
City’s required match from $3.6M to $9.6M.
The current effort to obtain funding for both phases has resulted in a modified plan to reach the
necessary match $3.6M for Phase 1 so as to make possible the goal of the $9.6M for the combined phases. The following is the recommended financing plan for Phase 1 of the Franklin Blvd Improvement Project:
Interfund Loan from City to SEDA $3,000,000
Current SEDA Cash Hand 600,000
Total Match Required $3,600,000
The commitment by both the City Council and SEDA to finance Phase 1 in this manner will be documented in the Intergovernmental Agreement to Make Financial Payments.
Phase 1 will continue under this financing plan regardless of whether the Tiger 7 grant is obtained for
the inclusion of Phase 2,
RECOMMENDED ACTION:
Approve Resolution authorizing the City to lend $3M to SEDA as part of the required grant match
for the Franklin Blvd Improvement Project Phase 1.
Approve Intergovernmental Agreement to Make Financing Payments between the City and SEDA
for the repayment of funds loaned.
Page | 1 of 2 - Resolution Attachment 2
RESOLUTION NO. 2015-_____
A RESOLUTION OF THE CITY OF SPRINGFIELD, OREGON AUTHORIZING
FINANCING OF CAPITAL PROJECTS DESCRIBED IN THE URBAN RENEWAL
PLAN FOR THE GLENWOOD URBAN RENEWAL AREA.
WHEREAS, the City of Springfield voters approved formation of the Glenwood Urban Renwal
District on November 29, 2005; and
WHEREAS, the City of Springfield has pledge its cooperation to assist the Glenwood Urban
Renewal District in the development of projects through a Cooperation and Services Agreement
initially approved on November 29, 2005 and amended on July 21, 2008; and,
WHEREAS, it is desirable to loan up to $3,000,000 to pay for projects described in the
Glenwood Urban Renewal Plan, including reconstruction of a portion of Franklin Boulevard
(collectively, the “Projects”); and,
WHEREAS, the funds for the loan originated from a payment by the State of Oregon
Department of Transportation (ODOT) when the City took over jurisdiction of Franklin Boulevard and the loan funds are currently in Street Fund Reserves; and
WHEREAS, the principal for the loan together with interest shall be repaid in 10 years and bear
interest at an amount not to exceed three percent (3%); and
WHEREAS, all of the Projects will be located within the Glenwood Urban Renewal Area and
owned by the City or the Springfield Economic Development Agency (“SEDA”); and,
WHEREAS, SEDA is projected to have sufficient tax increment revenues to pay the amounts
due from the City in connection with the loan for the Projects, and will enter into an
intergovernmental agreement with the City to use tax increment revenues to pay those amounts;
NOW, THEREFORE, BE IT RESOLVED BY THE COMMON COUNCIL OF THE
CITY OF SPRINGFIELD, OREGON AS FOLLOWS:
SECTION 1. DETERMINATION OF NEED. The Common Council of the City hereby
determines that the Projects are needed for the industrial, commercial, and residential
development of the Glewnood area.
SECTION 2. LOAN AUTHORIZED. The Common Council hereby authorizes the City to
loan up to $3,000,000 in principal amount for the construction of the the Projects.
SECTION 3. PAYMENTS FROM TAX INCREMENT REVENUES. The City Manager is
hereby authorized to enter into an intergovernmental agreement with SEDA under which SEDA
agrees to provide tax increment revenues in sufficient amounts to pay all amounts due from the
City under the loan. The intergovernmental agreement shall be in substantially the form attached
to this resolution as Exhibit A, but with any changes the City Official may approve.
Page | 2 of 2 - Resolution Attachment 2
ADOPTED BY THE COMMON COUNCIL OF THE CITY OF SPRINGFIELD AT A REGULAR MEETING HELD ON OCTOBER 19, 2015 BY THE FOLLOWING
VOTES:
THIS RESOLUTION will become effective upon its adoption.
AYES:_____
NAYS:_____
Christine Lundberg, Mayor ATTEST:
Amy Sowa, City Recorder
Attachment 2, Exhibit A 2533407.2 001092 FILE
Intergovernmental Agreement
to Make Loan Payments
by and between the
Springfield Economic Development Agency, Oregon
and the
City of Springfield, Oregon
Dated as of ______________, 2015
Table of Contents Attachment 2, Exhibit A
2533407.2 001092 FILE
TABLE OF CONTENTS
Section 1. Definitions and Recitals. ......................................................................................... 1
(1) Definitions. ....................................................................................................................... 1
(2) Findings. ........................................................................................................................... 1
Section 2. The Loan Payments. ............................................................................................... 2
(1) The Loan Payments. ......................................................................................................... 2
(2) Security for the Obligation of SEDA to Pay the Loan Payments. ................................... 2
Section 3. Prepayment. ............................................................................................................. 2
Section 4. Estoppel. ................................................................................................................... 2
Section 5. Title.............................................................................. Error! Bookmark not defined.
Section 6. Miscellaneous........................................................................................................... 2
(1) Binding Effect. ................................................................................................................. 3
(2) Severability....................................................................................................................... 3
(3) Amendments..................................................................................................................... 3 (4) Execution in Counterparts. ............................................................................................... 3
(5) Applicable Law. ............................................................................................................... 3
(6) Rules of Construction. ...................................................................................................... 3
(7) Headings. .......................................................................................................................... 3
Exhibit A – Loan Payments
Page 1 of 4- Intergovernmental Agreement Attachment 2, Exhibit A
2533407.2 001092 FILE
Intergovernmental Agreement to Make Loan Payments
This Intergovernmental Agreement to Make Loan Payments (the “Intergovernmental Agreement”) is dated as of _______________, and is entered into by and between the
Springfield Economic Development Agency, Oregon (“SEDA”) and the City of Springfield,
Oregon (“City”). The parties hereby agree as follows:
Section 1. Definitions and Recitals.
(1) Definitions.
Unless the context clearly requires otherwise, capitalized terms used in this Intergovernmental
Agreement that are defined in this Section 1(1) shall have the following meanings:
“Area” means the Glenwood Urban Renewal Area described in the Plan.
“Loan” means the loan between the City and SEDA in the principal amount of $3,000,000 to
finance the Projects.
“Loan payment” means the principal and interest payments SEDA is required to make to the
City.
“Plan” means SEDA’s Glenwood Urban Renewal Plan approved by City Ordinance No. 6103, as
that plan may in the future be, amended.
“Projects” means projects described in the Plan, including reconstruction of a portion of Franklin Boulevard.
“Tax Increment Revenues” means all revenues that SEDA collects for the Glenwood Urban
Renewal Area under the provisions of Article IX, Section 1c of the Oregon Constitution and
Oregon Revised Statutes Chapter 457.
(2) Findings.
(A) The City has loaned SEDA $3,000,000 for the costs of the Projects.
(B) The Projects are properly described as urban renewal projects in the Plan.
(C) SEDA is authorized to spend Tax Increment Revenues to pay for the costs of the
Projects.
(D) The Projects will assist SEDA in carrying out its Plan.
(E) SEDA will only spend the proceeds of the Financing Agreement it receives from
the City on the Projects so long as the Projects are described in the Plan, located
in the Area, and are owned by the City or SEDA.
Page 2 of 4- Intergovernmental Agreement Attachment 2, Exhibit A
2533407.2 001092 FILE
(F) SEDA has $__________ of unused maximum indebtedness available prior to
executing this Intergovernmental Agreement.
Section 2. The Loan Payments.
(1) The Loan Payments.
SEDA hereby agrees to pay to the City amounts that are owing under the loan. The amounts and
dates of the Loan Payments are shown in Exhibit A.
(2) The Loan Terms.
The loan is for $3,000,000. Principal and interest to be paid over a ten (10) year period at an
interest rate not to exceed 3%.
(2) Security for the Obligation of SEDA to Pay the Loan Payments.
This Intergovernmental Agreement shall constitute indebtedness of SEDA in the amount of the
Financing Agreement. SEDA is obligated to make the payments due under this
Intergovernmental Agreement solely from the Tax Increment Revenues. Pursuant to Oregon
Revised Statutes Section 287A.310, SEDA pledges the Tax Increment Revenues to pay the amounts described in Section 2(1) of this Intergovernmental Agreement. The pledge that secures
this Intergovernmental Agreement shall be superior to all other pledges or commitments of Tax
Increment Revenues that SEDA makes, unless the City agrees in writing to subordinate its claim
against the Tax Increment Revenues or to grant a lien on the Tax Increment Revenues on parity.
However, the pledge of Tax Increment Revenues to pay amounts described in Section 2(1) of this Intergovernmental Agreement is subordinate to/on parity with the pledge that secures the
following Intergovernmental Agreements/borrowings: [To be completed]
Section 3. Prepayment.
SEDA may exercise its option to prepay the Loan without first obtaining consent from the City
or paying a prepayment penalty.
Section 4. Estoppel.
SEDA hereby certifies, recites and declares that all things, conditions and acts required by the
Constitution and Statutes of the State of Oregon and by this Intergovernmental Agreement to
exist, to have happened and to have been performed precedent to and in the execution and the
delivery of this Intergovernmental Agreement, do exist, have happened and have been performed in due time, form and manner, as required by law, and that this Intergovernmental Agreement is
a valid and binding obligation of SEDA that is enforceable against SEDA in accordance with its
terms, except to the extent that enforceability may be limited by applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium or other laws or judicial
decisions or principles of equity relating to or affecting the enforcement of creditors’ rights or contractual obligations generally.
Section 5. Miscellaneous.
Page 3 of 4- Intergovernmental Agreement Attachment 2, Exhibit A
2533407.2 001092 FILE
(1) Binding Effect.
This Intergovernmental Agreement shall inure to the benefit of and shall be binding upon SEDA
and the City and their respective successors and assigns.
(2) Severability.
In the event any provisions of this Intergovernmental Agreement shall be held invalid or
unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render
unenforceable any other provisions hereof.
(3) Amendments.
This Intergovernmental Agreement may be amended only by a written document signed by both parties.
(4) Execution in Counterparts.
This Intergovernmental Agreement may be simultaneously executed in several counterparts,
each of which shall be an original and all of which shall constitute the same instrument.
(5) Applicable Law.
This Intergovernmental Agreement shall be governed by and construed in accordance with the
laws of the State of Oregon. Any action regarding this Intergovernmental Agreement or the
transactions contemplated hereby shall be brought in an appropriate court of the State of Oregon
in Lane County, Oregon.
(6) Rules of Construction.
References to section numbers in documents that do not specify the document in which the
section is located shall be construed as references to section numbers in this Intergovernmental
Agreement.
(7) Headings.
The headings, titles and table of contents in this Intergovernmental Agreement are provided for convenience and shall not affect the meaning, construction or effect of this Intergovernmental
Agreement.
Page 4 of 4- Intergovernmental Agreement Attachment 2, Exhibit A
2533407.2 001092 FILE
IN WITNESS WHEREOF, SEDA and the City have executed this Intergovernmental Agreement
as of the date indicated above.
For the Springfield Economic Development
Agency, Oregon
______________________________________
Authorized Officer
For the City of Springfield, Oregon
______________________________________
Authorized Officer
Page 1 of 1– Attachment 2, Exhibit A
2533407.2 001092 FILE
EXHIBIT A Loan Payments