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HomeMy WebLinkAbout06-11-18 City Commission Packet Materials - C10. Debt Repayment Agreement with Sports Park Foundation for Sports Park Commission Memorandum REPORT TO: Honorable Mayor and City Commission FROM: Anna Rosenberry, Assistant City Manager SUBJECT: Debt Repayment Agreement Between City of Bozeman and the Bozeman Sports Parks Foundation MEETING DATE: June 11, 2018 AGENDA ITEM TYPE: Consent RECOMMENDATION: Authorize City Manager to Sign Debt Repayment Agreement Between City of Bozeman and the Bozeman Sports Parks Foundation. BACKGROUND: On February 12, 2018 the City Commission considered the Bozeman Sports Parks Foundation request that the city borrow money to install artificial turf fields at the Bozeman Sports Park, to be repaid with field user fees. The meeting memo and materials can be found here. After discussion and public comment, they directed staff to “continue to work with the Sports Parks Foundation to develop agreements to: (i) require the Sports Parks Foundation to pay an amount equal to the City’s debt payments on a loan of up to $1,700,000 to construct sports fields and related infrastructure, including purchase of two turf fields; and (ii) authorize the Foundation to collect user fees and operate the Sports Parks through a user group or management agreement for Commission approval at future dates.” This agreement for debt payment fulfills the first section (i) of the approved motion. Since the original motion passed, we have worked with the Foundation to develop the attached agreement so that the City will be repaid for the amounts that are due each year on the $1,700,000 sports fields loan. Under the agreement, the City will borrow up to $1,700,000 to purchase and install two artificial turf fields at the Bozeman Sports Park. The Foundation agrees to make payments to the City that are equal to the City’s debt payments on the loan when they become due. There is an estimated payment schedule attached; the final payment schedule will be established once the full loan amount is determined at the end of the construction period. The agreement contains a number of other provisions, including financial auditing and reporting, and public meeting requirements. Both the City and the Foundation are in agreement with all of these terms. UNRESOLVED ISSUES: None. 160 FISCAL EFFECTS: This Agreement will require the Sports Parks Foundation will make semi- annual payments the City in the amounts and on the dates listed on the final amortization schedule. The first payment will be due November 30, 2018 and is estimated to be $15,851.45 Attachments: Debt Agreement Exhibit A - Amortization Schedule Report compiled on: May 30, 2018 161 Debt Repayment Agreement between the City and Bozeman Sports Parks Foundation, Inc. Page 1 of 5 DEBT REPAYMENT AGREEMENT BETWEEN CITY OF BOZEMAN AND THE BOZEMAN SPORTS PARKS FOUNDATION, INC. THIS DEBT REPAYMENT AGREEMENT (the “Agreement”) is made and entered into this _____ day of ____________, 2018, by and between the CITY OF BOZEMAN, MONTANA, a self governing municipal corporation organized and existing under its Charter and the laws of the State of Montana, 121 North Rouse Street, Bozeman, Montana, with a mailing address of PO Box 1230, Bozeman, MT 59771, hereinafter referred to as “City,” and the BOZEMAN SPORTS PARKS FOUNDATION, INC., P.O. Box 1230, Bozeman, MT 59771, hereinafter referred to as “Foundation” and together with the City the “Parties.” WHEREAS, the Parties executed a Development Agreement dated February 23, 2015 for the purpose of establishing the rights and obligations of the Parties to each other regarding the financing, design, development and construction of Phase 1 of the Bozeman Sports Park (“Sports Park”); and WHEREAS, the City has awarded a bid to complete construction of Phase 1A of the Sports Park, which will include the first four grass fields, and which when combined with the existing fields at Bronken Park will result in the City having eight fields available for use; and WHEREAS, neither Phase 1B nor any future phases of the Sports Park are included on any City Capital Improvement Plans; and WHEREAS, the Foundation approached the City with a proposal to cause an additional two fields to be built during the construction of Phase 1A, so that soccer and lacrosse tournaments, which require at least ten fields, could be held in Bozeman; and WHEREAS, on February 12, 2018 the Bozeman City Commission adopted a motion to direct the City Manager to continue to work with the Foundation that authorize the Foundation to collect user fees and operate the Sports Park through a user group or management agreement for Commission approval at a future date, and to require the Foundation to pay an amount equal to the City’s debt payments on a loan to the City of up to $1,700,000 to construct sports fields and related infrastructure, including purchase of two turf fields. 162 Debt Repayment Agreement between the City and Bozeman Sports Parks Foundation, Inc. Page 2 of 5 In consideration of the mutual covenants and agreements herein contained, the receipt and sufficiency whereof being hereby acknowledged, the parties hereto agree as follows: 1. Loan. The City agrees to borrow a maximum of $1,700,000 under its general borrowing authority to construct two artificial turf fields at the Sports Park (the “Loan”), provided the City obtains borrowing terms that the City determines, in its sole discretion, to be favorable to the City. The term of the Loan shall be twenty (20) years. 2. Use of Loan proceeds. If the City obtains the Loan, the City will use the proceeds of the Loan to purchase and install two turf fields at the Sports Park. 3. Debt repayment. The Foundation agrees to make payments to the City in an amount equal to the City’s debt payments on the Loan when they become due. An estimated debt service schedule including amounts of debt service payments and dates the payments are due from the Foundation is attached hereto as Exhibit A and by this reference made a part of this Agreement. The City may amend this Exhibit once final Loan payments are determined. 4. Term. This Agreement will terminate upon final repayment of the Loan, unless earlier terminated by mutual agreement of the Parties in writing. 5. Financial audits. The Foundation will annually provide the City audited financial statements, or will open its accounts for auditing by the City’s auditors. The Foundation shall allow the City, its auditors, and other persons authorized by the City to inspect and copy its books and records for such purposes. 6. Representatives. a. City’s Representative: The City’s Representative for the purpose of this Agreement shall be the Director of Parks and Recreation or such other individual as City shall designate in writing. Whenever approval or authorization from or communication or submission to City is required by this Agreement, such communication or submission shall be directed to the City’s Representative and approvals or authorizations shall be issued only by such Representative; provided, however, that in exigent circumstances when City’s Representative is not available, the Foundation may direct its communication or submission to other designated City personnel or agents as authorized by the City’s Director of Parks and Recreation and may receive approvals or authorization from such persons. b. Foundation’s Representative: The Foundation’s Representative for the purpose of this Agreement shall be the Foundation’s Chairperson or such other individual as the Foundation shall designate in writing. Whenever direction to or communication with the Foundation is required by this Agreement, such direction or communication shall be directed to the Foundation’s Representative; provided, however, that in exigent circumstances when the Foundation’s Representative is not available, City may direct its direction or communication to other designated Foundation personnel or agents. 163 Debt Repayment Agreement between the City and Bozeman Sports Parks Foundation, Inc. Page 3 of 5 7. Public Meetings and Access to Public Records a. Meetings of the Foundation that pertain to the Loan are subject to the open meeting requirements of Montana law, including those set forth in Title 7, Chapter 1, Part 41, MCA and Title 2, Chapter 3, MCA. b. The Foundation will provide agendas for meetings that pertain the Loan to the City Clerk’s office no later than 72 working hours prior to meeting for notice on the City’s official posting board and any other sites deemed reasonable by the Clerk’s office. In addition, meeting minutes will be kept by the Foundation and provided to the City Clerk’s office no later than 45 days after the meeting. These minutes shall be posted and made available to the public by the City Clerk’s office except for those minutes taken during a closed meeting in accordance with § 7-1-4144, MCA. Minutes taken during a closed meeting shall also be provided to the City Clerk’s office but shall be handled in accordance with the City Clerk’s regular executive session protocol and kept private in a secured cabinet. Meetings subject to the open meeting requirements of Montana law shall be held in the City Commission room at City Hall, 121 N. Rouse. Room scheduling for open meetings shall be coordinated with the City Clerk. c. In accordance with § 7-1-4144, MCA and subject to any applicable legal obligation to protect and preserve individual confidential or private information, upon reasonable request and at reasonable times during normal business hours, the Foundation shall make such documents and records available for inspection and copying by members of the public. The Foundation may charge for such copying in accordance with the policies of the City, which the Foundation hereby adopts for such purposes. d. To determine whether a meeting or part of a meeting may be closed to the public and to determine whether information contained in the Foundation documents is protected by law from disclosure, the Foundation may seek a determination of the City Attorney at no cost to the Foundation. Such request and determination shall not create an attorney-client relationship between the Foundation and the City. 8. Miscellaneous. a. Binding Effect. This Agreement is binding upon and inures to the benefit of the heirs, legal representatives, successors, and assigns of the Parties. b. Nondiscrimination. The Foundation will have a policy to provide equal employment opportunity in accordance with all applicable state and federal anti-discrimination laws, regulations, and contracts. The Foundation will not refuse employment to a person, bar a person from employment, or discriminate against a person in compensation or in a term, condition, or privilege of employment because of race, color, religion, creed, political ideas, sex, age, marital status, national origin, actual or perceived sexual orientation, gender identity, physical or mental disability, except when the reasonable 164 Debt Repayment Agreement between the City and Bozeman Sports Parks Foundation, Inc. Page 4 of 5 demands of the position require an age, physical or mental disability, marital status or sex distinction. The Foundation shall require these nondiscrimination terms of its contractors, agents, or sub-contractors providing services under this Agreement. c. Modification and Assignability. This Agreement may not be enlarged, modified or altered except by written agreement signed by both parties hereto. The Foundation may not assign its rights or obligations under this Agreement without the prior written consent of the City Commission. Any assignee will be bound by all of the terms and conditions of this Agreement. d. Non-Waiver. A waiver by either Party of any default or breach by the other Party of any terms of conditions of this Agreement does not limit the other Party’s right to enforce such term or conditions or to pursue any available legal or equitable rights in the event of any subsequent default or breach. e. Severability. If any portion of this Agreement is held to be void or unenforceable, the balance thereof shall continue in effect. f. Applicable Law; Venue. The Parties agree that this Agreement is governed in all respects by the laws of the State of Montana. The Parties agree to personal jurisdiction in the courts of Gallatin County, Montana. g. Dispute Resolution. i. Any claim, controversy, or dispute between the parties, their agents, employees, or representatives shall be resolved first by negotiation between senior-level personnel from each party duly authorized to execute settlement agreements. Upon mutual agreement of the parties, the parties may invite an independent, disinterested mediator to assist in the negotiated settlement discussions. ii. If the Parties are unable to resolve the dispute within thirty (30) days from the date the dispute was first raised, then such dispute may only be resolved in a court of competent jurisdiction in compliance with the Applicable Law provisions of this Agreement. h. Notice. Any notice required or permitted under this Agreement shall be deemed sufficiently given or served if sent by email with read-receipt requested or by United States certified mail, return receipt requested. The date of mailing shall be deemed the date of such notice and service thereof. i. Attorney’s Fees and Costs. In the event it becomes necessary for either Party of this Agreement to retain an attorney to enforce any of the terms or conditions of this Agreement or to give any notice required herein, then the prevailing Party or the Party giving notice shall be entitled to reasonable attorney's fees and costs, including fees, salary, and costs of in-house counsel to include the City Attorney. 165 Debt Repayment Agreement between the City and Bozeman Sports Parks Foundation, Inc. Page 5 of 5 j. No Third-Party Beneficiary. This Agreement is for the exclusive benefit of the Parties, does not constitute a third-party beneficiary agreement, and may not be relied upon or enforced by a third party. k. Counterparts. This Agreement may be executed in counterparts, which together constitute one instrument. l. Integration. This Agreement and all exhibits attached hereto constitute the entire agreement of the parties. Covenants or representations not contained therein or made a part thereof by reference, are not binding upon the parties. There are no understandings between the parties other than as set forth in this Agreement. All communications, either verbal or written, made prior to the date of this Agreement are hereby abrogated and withdrawn unless specifically made a part of this Agreement by reference. **** END OF AGREEMENT EXCEPT FOR SIGNATURES **** IN WITNESS WHEREOF, the parties hereto have executed this instrument the day and year first above written. CITY OF BOZEMAN, MONTANA BOZEMAN SPORTS PARKS FOUNDATION, INC. By________________________________ By_____________________________ Andrea Surratt, City Manager Print Name: ____________________ Title: __________________________ APPROVED AS TO FORM: By_______________________________ Greg Sullivan, Bozeman City Attorney 166 167 168