HomeMy WebLinkAboutMO #2598MUNICIPAL ORDER NO. 2598
A MUNICIPAL ORDER DECLARING THE CITY'S INTENT TO
REIMBURSE ITSELF FOR THE COST OF CAPITAL EXPENDITURES FROM
THE PROCEEDS OF TAX-EXEMPT OBLIGATIONS, AUTHORIZING A
NOTICE TO PROCEED WITH CONSTRUCTION AND UPDATED LETTER OF
COMMITMENT WITH WEYLAND VENTURES DEVELOPMENT, LLC,
AUTHORIZING THE USE OF CAPITAL IMPROVEMENT FUND FUND
BALANCES UNTIL SUCH TIME AS REIMBURSEMENT IS REALIZED, AND
AUTHORIZING THE MAYOR TO EXECUTE ALL DOCUMENTS RELATED
TO SAME
WHEREAS, on August 12, 2020, the City of Paducah (hereinafter the
"City") entered into a Development Agreement (hereinafter the "Agreement") with
Weyland Ventures Development, LLC, (hereinafter "Developer") as authorized by
Ordinance No 2020-08-8650; and
WHEREAS, the Agreement authorizes and governs certain Public
Facilities, which include all of the facilities that are to be constructed by the Developer on
property retained in fee simple ownership by the City, including the parking facility,
Greenspace Park and urban park (collectively, the "City Block Public Facilities Project");
and
WHEREAS, the Agreement authorizes the reimbursement to the
Developer of the actual total costs that the Developer incurs in the development and
construction of the Public Facilities and provides that the City shall provide the
Developer with a not -to -exceed budget for the public facilities no later than the midpoint
of the design plan; and
WHEREAS, the City Commission adopted a Resolution on June 22, 2021
declaring the City's intent to reimburse itself with the proceeds of Reimbursement Bonds
in the reasonably anticipated amount of up to $3,000,000 for the purpose of Capital
Expenditures for the City Block Public Facilities Project that may occur before the
issuance of Reimbursement Bonds; and
WHEREAS, on June 23, 2021, a letter of commitment was issued to the
Developer stating that the City would fund up to $3 million for eligible expenses related
to the development and construction of the Public Facilities; and
WHEREAS, on Tuesday, April 5, 2022, sealed bids were opened for the
City Block Public Facilities; and
WHEREAS, one (1) responsive and responsible bid was received from
Ray Black & Son, Inc. in the amount of $3,444,336 which was 13.79% above the
engineer's construction cost estimate and includes an $80,000 contingency; and
WHEREAS, City of Paducah staff recommend to increase said
contingency by $220,000 for a total contingency amount of $300,000 and a total project
cost of $3,664,336; and
WHEREAS, Code Section 150 and the Reimbursement Regulations
permit the City to issue Tax -Exempt Obligations and to use the proceeds thereof to
reimburse the City for its prior payment of Capital Expenditures provided, among other
things, (i) the City makes a Declaration of Official Intent within sixty days after payment
of such Capital Expenditures, (ii) the City makes a Reimbursement Allocation within
eighteen months after the date a Capital Expenditure was paid or the date the property
acquired with the Capital Expenditure was placed in service, and in any event no later
than three years after the Capital Expenditure was paid; and
WHEREAS, the City desires to make a Declaration of Intent pursuant to
the Reimbursement Regulations related to the payment of Capital Expenditures for the
City Block Public Facilities Project in the new amount of $3.5 million; and
WHEREAS, the City expects to expend existing Capital Improvement
Fund fund balances to pay Capital Expenditures for the City Block Public Facilities
Project until such time as the City is able to reimburse itself with the proceeds of
Reimbursement Bonds; and
WHEREAS, the City desires to authorize an updated Letter of
Commitment and a Notice to Proceed with Construction between the City and the
Developer.
NOW THEREFORE, BE IT ORDERED BY THE CITY OF
PADUCAH,KENTUCKY:
SECTION 1. Affirmation of Preamble. It is hereby found, determined,
and declared that the facts, recitals, and definitions set forth in the recitals of this
Municipal Order are true and correct and are hereby affirmed, and all acts described in
the recitals of this Municipal Order are hereby ratified. Such facts, recitals, and
definitions are hereby adopted and incorporated as a part of this Municipal Order.
SECTION 2. Definitions.
"Allocation" means written evidence that proceeds of Tax -Exempt
Obligations issued after the payment of a Capital Expenditure are to reimburse the
City for such payment.
"Capital Expenditure" means any expense related to the City Block Public
Facilities Project for an item that is properly depreciable or amortizable or is
otherwise treated as a capital expenditure for purposes of the Code, as well as any
costs of issuing Reimbursement Bonds.
"Code" means the Internal Revenue Code of 1986, as amended.
"Declaration of Official Intent" means a written declaration, including this
Resolution, which the City intends to fund Capital Expenditures with an issue of
Reimbursement Bonds and reasonably expects to reimburse the City from the
proceeds of such an issue.
"Reimbursement" means the restoration to the City of money temporarily
advanced from other funds, including moneys borrowed from other sources, by
the City to pay for Capital Expenditures before the issuance of Reimbursement
Bonds intended to fund such Capital Expenditures. "To reimburse" means to
make such a restoration.
"Reimbursement Bonds" means Tax -Exempt Obligations that are issued to
reimburse the City for Capital Expenditures, and for certain other expenses
permitted by the Reimbursement Regulations, previously paid by or for the City.
"Reimbursement Regulations" means Treasury Regulation §1.150-2 and
any amendments thereto or superseding regulations, whether in proposed,
temporary, or final form, as applicable, prescribing conditions under which the
proceeds of Tax -Exempt Obligations may be allocated to reimburse the City for
Capital Expenditures and certain other expenses paid before the issuance of the
Tax -Exempt Obligations so that the proceeds of such Tax -Exempt Obligations
will be treated as "spent" for purposes of Code Sections 103 and 141 to 150.
"Tax -Exempt Obligations" means tax-exempt bonds, notes, certificates, or
other obligations included in the meaning of "bonds" under Code Section 150.
SECTION 3. Declaration of Oficial Intent. That the City hereby
declares, pursuant to the Reimbursement Regulations, its official intent to reimburse itself
with the proceeds of Reimbursement Bonds in the reasonably anticipated amount of up to
$3,500,000 for the purpose of Capital Expenditures for the City Block Public Facilities
Project that may occur before the issuance of Reimbursement Bonds.
SECTION 4. Authorization of Notice to Proceed. That the Mayor of the
City of Paducah, Kentucky, is hereby authorized and directed to execute the Notice to
Proceed with Construction between the City and Weyland Ventures Development, LLC.
SECTION 5. Authorization for Updated Letter of Commitment. That
the Mayor of the City of Paducah, Kentucky, is hereby authorized and directed to issue
an updated Letter of Commitment to Weyland Ventures Development, LLC, to commit a
not -to -exceed amount of $3,664,336 for eligible expenses related to the development and
construction of the City Block Public Facilities Project.
SECTION 6. Authorization for Use of Fund Balances. That the City
hereby authorizes the use of existing Capital Improvement Fund fund balances to fund
reimbursement to Weyland Ventures Development, LLC, for the City Block Public
Facilities Project in an amount not to exceed $3,664,336 until such time as the City may
reimburse itself with the proceeds of reimbursement bonds as referenced herein.
SECTION 7. Severability. That if any section, paragraph or provision of
this Municipal Order shall be held to be invalid or unenforceable for any reason, the
invalidity or unenforceability of such section, paragraph or provision shall not affect any
of the remaining provisions of this Municipal Order.
SECTION 8. Conflicts. That all resolutions, orders or parts thereof in
conflict with the provisions of this Municipal Order are, to the extent of such conflict,
hereby repealed and the provisions of this Municipal Order shall prevail and be given
effect.
SECTION 9. Effective Date. That this Order shall be in full force and
effect from and after the date of its adoption.
Bray, M
ATTE T:
lit
indsay Parish, -'ity Clerk
Adopted by the Board of Commissioners, June 28, 2022
Recorded by Lindsay Parish, City Clerk, June 28, 2022
\mo\City Block Public Facilities Project Funding & Reimbursement 6-2022
CERTIFICATION
I, the undersigned, do hereby certify that I am the duly qualified and acting City
Clerk of City of Paducah, Kentucky, and as such City Clerk, I further certify that the
foregoing is a true, correct, and complete copy of Municipal Order 2598 duly enacted by
the Board of Commissioners of the City at a duly convened meeting held on June 28, 2022,
on the same occasion signed by the Mayor as evidence of his approval, and now in full
force and effect, all as appears from the official records of the City in my possession and
under my control.
Witness my hand as City Clerk of the City as of June 2^8J, 2022.
Lindsay Parish
City Clerk