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O-2006-3

AN ORDINANCE

ORDINANCE CONCERNING THE REFUNDING OF CERTAIN OUTSTANDING CERTIFICATES OF PARTICIPATION ISSUED TO FINANCE THE ACQUISITION, CONSTRUCTION, RENOVATION AND EQUIPPING OF DESIGNATED RECREATION CENTERS AND OTHER CAPITAL IMPROVEMENTS; AUTHORIZING THE EXECUTION AND DELIVERY BY THE CITY OF A SECOND AMENDMENT TO LEASE PURCHASE AND SUBLEASE AGREEMENT, A CONTINUING DISCLOSURE CERTIFICATE AND AN OFFICIAL STATEMENT; APPROVING THE FORM OF A FIRST SUPPLEMENT TO MORTGAGE AND INDENTURE OF TRUST AND AN ESCROW AGREEMENT; RATIFYING ACTION PREVIOUSLY TAKEN IN CONNECTION THEREWITH; PROVIDING OTHER MATTERS RELATING THERETO; AND DECLARING AN EMERGENCY

WHEREAS, the City of Lakewood (the "City") is a legal and regularly created, established, organized and existing municipal corporation under the provisions of Article XX of the Constitution of the State of Colorado and the City Charter (the "Charter"); and

WHEREAS, the City is authorized to enter into one or more rental or leasehold agreements for any municipal purpose; and

WHEREAS, pursuant to Ordinance No. 0-2000-30, passed by the City Council of the City (the "City Council") on August 15, 2000, the Council has heretofore determined that it is in the best interest of the City and its inhabitants that the projects known as the Charles E. Whitlock Recreation Center, the Carmody Recreation Center and other capital improvements (collectively, the "Projects") be acquired, constructed, renovated and equipped; and

WHEREAS, the City has previously entered into a Ground Lease Agreement dated as of August 1, 2000 (the "Ground Lease"), whereby the City has leased parcels of land more particularly described in Exhibit A thereto (the "Land") to the Lakewood Public Building Authority (the "Lessor"); and

WHEREAS, for purposes of providing the Projects, the City has previously entered into a Lease Purchase and Sublease Agreement dated as of August 1, 2000, as amended by the First Amendment to Lease Purchase and Sublease Agreement dated as of April, 1, 2004 (as so amended, the "Lease"), with the Building Authority; and

WHEREAS, the Lessor is a nonprofit corporation, duly organized, existing, and in good standing under the laws of the State of Colorado, duly qualified to do business in the State of Colorado, and authorized under its articles and bylaws to own and hold real and personal property, to lease the same as lessee or as lessor, and to act in the manner contemplated in the Lease and in the Ground Lease; and

WHEREAS, the Base Rentals and Additional Rentals (both as defined in the Lease) payable by the City shall constitute currently budgeted expenditures of the City, and shall not constitute a general obligation or other indebtedness of the City nor a mandatory charge or requirement against the City in any ensuing fiscal year beyond the then current fiscal year; and

WHEREAS, neither the Lease nor the Ground Lease shall directly or indirectly obligate the City to make any payments beyond those appropriated for the City's then current fiscal year; and

WHEREAS, the Lessor has previously entered into a Mortgage and Indenture of Trust dated as of August 1, 2000 (the "Indenture") with U.S. Bank National Association, as Trustee (the "Trustee"); and

WHEREAS, there have heretofore been issued, pursuant to the Indenture, the Certificates of Participation, Series 2000 (the "2000 Certificates") to finance the acquisition, construction, renovation and equipping of the Projects; and

WHEREAS, the City Council has determined and hereby determines that it is in the best interests of the City to refund a portion of the outstanding 2000 Certificates (the "2006A Refunding Project"), which 2006A Refunding Project will be financed through the execution and delivery of the 2006A Certificates (as defined below); and

WHEREAS, to accomplish the 2006A Refunding Project, it is necessary for the City to enter into a Second Amendment to Lease Purchase and Sublease Agreement (the "Second Amendment") to provide for the 2006A Refunding Project and certain terms in connection therewith; and

WHEREAS, for the purpose of financing the 2006A Refunding Project, the City Council has determined and does hereby determine that it is in the best interest of the City and the residents of the City that the City enter into the Second Amendment in substantially the form presented to this meeting of the City Council; and

WHEREAS, there has also been presented to this meeting of the City Council a First Supplement to Mortgage and Indenture of Trust (the "First Supplement") to be entered into between the Lessor and the Trustee; and

WHEREAS, there will be executed and delivered by the Trustee pursuant to the Indenture and the First Supplement the "Refunding Certificates of Participation, Series 2006A, Evidencing Assignment of a Proportionate Undivided Interest in Rights to Receive Certain Revenues Pursuant to the Lease Purchase and Sublease Agreement, as Amended, Between Lakewood Public Building Authority, as Lessor and Sublessor, and City of Lakewood, Colorado, as Lessee and Sublessee" (the "2006A Certificates") evidencing assignments of the right to receive certain revenues under the Lease, which rights have been assigned to the Trustee by the Lessor; and

WHEREAS, Ambac Assurance Corporation will deliver to the Trustee a municipal bond insurance policy (the "2006A Policy") guaranteeing the scheduled payment of the principal of and interest on the 2006A Certificates when due; and

WHEREAS, there has also been presented to this meeting of the City Council a copy of the Escrow Agreement (the "Escrow Agreement") between the Lessor and U.S. Bank National Association, as escrow agent, relating to the 2006A Refunding Project; and

WHEREAS, in connection with the marketing of the 2006A Certificates, there will be prepared a Preliminary Official Statement (the "Preliminary Official Statement"), including as an appendix thereto a specimen of the 2006A Policy, which Preliminary Official Statement has also been presented to this meeting of the City Council; and

WHEREAS, in connection with the 2006A Certificates and pursuant to a continuing disclosure certificate (the "Disclosure Certificate"), the City will undertake for the benefit of the owners of the 2006A Certificates to provide certain ongoing information as required by Section (b)(5)(i) of Securities and Exchange Commission Rule 15c2-12 under the Securities and Exchange Act of 1934, as amended, which Disclosure Certificate has also been presented to this meeting of the City Council; and

WHEREAS, the City Council desires to approve the forms of the Second Amendment, the Escrow Agreement, the Disclosure Certificate, the Preliminary Official Statement and the First Supplement and authorize the execution and performance, as applicable, by the City of such documents; and

WHEREAS, none of the members of the City Council has any potential conflicting interests in connection with the matters referred to herein, nor are any of the members of the City Council interested, directly or indirectly, in the profits of any contract or job for work or services to be performed for the City in connection therewith; and

WHEREAS, Section 11-57-204 of the Supplemental Public Securities Act, constituting Title 11, Article 57, Part 2, Colorado Revised Statutes (the "Supplemental Act"), provides that a public entity, including the City, may elect in an act of issuance to apply all or any of the provisions of the Supplemental Act.

NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF LAKEWOOD, COLORADO:

Section 1. Ratification and Approval of Prior Actions. All action heretofore taken (not inconsistent with the provisions of this Ordinance) by the City Council or the officers or agents of the City Council or the City relating to the Lease, the Ground Lease and the 2006A Refunding Project (including without limitation, preparation and distribution of the Preliminary Official Statement), is hereby ratified, approved and confirmed.

Section 2. Finding of Best Interests. The City Council hereby finds and determines, pursuant to the Constitution and laws of the State of Colorado, that the 2006A Refunding Project and continuing to lease and sublease the Leased Property (as defined in the Lease) from the Lessor under the terms and provisions set forth in the Lease, are necessary, convenient, and in furtherance of the governmental purposes of the City, and are advantageous to and in the best interests of the City and its citizens and inhabitants; and the City Council hereby authorizes such 2006A Refunding Project and such continued leasing and subleasing of the Leased Property under the terms and provisions of the Lease.

Section 3. Approval of City Documents. The Second Amendment and the Disclosure Certificate, each in substantially the form presented to this meeting of the City Council, are in all respects approved, authorized and confirmed, and the Mayor of the City is authorized and directed to execute and deliver the Second Amendment and the Disclosure Certificate in substantially the forms and with substantially the same contents as presented to this meeting of the City Council, for and on behalf of the City.

Section 4. Acknowledgment of First Supplement, Escrow Agreement and 2006A Certificates. The City Council hereby acknowledges and consents to the execution and delivery by the Lessor and the Trustee of the First Supplement in substantially the form and with substantially the same content as presented to this meeting of the City Council. The City Council hereby acknowledges and consents to the execution and delivery by the Lessor and U.S. Bank National Association, as escrow agent, of the Escrow Agreement in substantially the form and with substantially the same content as presented to this meeting of the City Council. The City Council hereby further acknowledges the execution and delivery of the 2006A Certificates pursuant to the First Supplement and the Indenture and acknowledges and approves the form, terms and provisions of the 2006A Certificates contained in the First Supplement.

Section 5. Official Statement. The Preliminary Official Statement, in substantially the form presented to this meeting of the City Council, is hereby authorized and approved. The City Council hereby authorizes a City Representative (as defined in the Lease) to deem the Preliminary Official Statement final as of its date within the meaning of Rule 15c2-12(b)(1) of the Securities and Exchange Commission. The City Council hereby authorizes the preparation and distribution of a final Official Statement in conjunction with an offer of the 2006A Certificates to the public. The Official Statement shall contain such corrections and additional or updated information so that it will not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading. The Mayor of the City is hereby authorized and directed, for and on behalf of the City, to execute copies of the final Official Statement on behalf of the City.

Section 6. Authorization to Execute Collateral Documents. The officers of the City and members of the City Council are authorized and directed to take any and all other actions necessary or appropriate to effectuate the provisions of this Ordinance. The appropriate officers of the City are authorized to execute on behalf of the City agreements concerning the deposit and investment of funds in connection with the transactions contemplated by this Ordinance. The execution of any instrument by the aforementioned officers or members of the City Council shall be conclusive evidence of the approval by the City of such instrument in accordance with the terms hereof and thereof.

Section 7. Parameters. The aggregate principal amount of the Base Rentals (as defined in the Lease) attributed to the 2006A Certificates, the total amount of such Base Rentals, and the amount of such Base Rentals payable in each year and the payment dates of such Base Rentals shall be set forth in a supplemental resolution to be adopted by the City Council, subject to the following parameters and restrictions: (a) the aggregate principal amount of the Base Rentals attributable to the 2006A Certificates shall not exceed $27,625,000; (b) the maximum total amount of the Base Rentals attributable to the 2006A Certificates shall not exceed $41,475,000; (c) the maximum amount of the Base Rentals attributable to the 2006A Certificates payable in any year shall not exceed $5,475,000; and (d) the last payment date of the Base Rentals attributable to the 2006A Certificates shall be no later than December 1 ,2022. The portion of the Lease attributable to the 2006A Certificates shall be subject to mandatory prepayment in connection with the mandatory redemption of the 2006A Certificates as provided in the First Supplement.

Section 8. Supplemental Act. The City Council hereby elects to apply Sections 11-57-207, 11-57-208, 11-57-209, 11-57-210, 11-57-211, 11-57-212 and 11-57-214 of the Supplemental Act to the 2006A Certificates and the Lease.
Section 9. No Indebtedness. No provision of this Ordinance, the Second Amendment, the Lease, the Ground Lease, the First Supplement, the Indenture, the Escrow Agreement, the 2006A Certificates, the Preliminary or final Official Statement, or any other documents executed in connection therewith shall be construed as creating or constituting a general obligation or other indebtedness of the City within the meaning of any constitutional, statutory or Charter debt limitation, nor a mandatory charge or requirement against the City in any ensuing budget year beyond the then current budget year. No provision of the foregoing shall be construed or interpreted as creating a multiple-fiscal year direct or indirect City debt or other financial obligation whatsoever within the meaning of Article X, Section 20 of the Colorado Constitution. The City shall have no obligation to make any payment with respect to the 2006A Certificates except in connection with the payment of the Base Rentals and certain other payments under the Lease, which payments may be terminated by the City in accordance with the provisions of the Lease. No provision of the Second Amendment, the Lease, the Ground Lease or the 2006A Certificates shall be construed or interpreted as creating an unlawful delegation of governmental powers nor as a donation by or a lending of the credit of the City within the meaning of Sections 1 or 2 of Article XI of the Colorado Constitution. Neither the Second Amendment, the Lease, the Ground Lease nor the 2006A Certificates shall directly or indirectly obligate the City to make any payments beyond those budgeted and appropriated for the City's then current fiscal year.

Section 10. Reasonableness of Rentals. The City Council hereby determines and declares that the Base Rentals do not exceed a reasonable amount so as to place the City under an economic compulsion to renew the Lease.

Section 11. No Recourse Against Officers and Agents. Pursuant to Section 11-57-209 of the Supplemental Act, if a member of the City Council, or any officer or agent of the City acts in good faith, no civil recourse shall be available against such member, officer or agent for payment of the principal or interest on the 2006A Certificates. Such recourse shall not be available either directly or indirectly through the City Council or the City, or otherwise, whether by virtue of any constitution, statute, rule of law, enforcement of penalty, or otherwise. By the acceptance of the 2006A Certificates and as a part of the consideration of their sale or purchase, any person purchasing or selling such certificate specifically waives any such recourse.

Section 12. Repealer. All bylaws, orders, resolutions and ordinances of the City, or parts thereof, inconsistent herewith are hereby repealed to the extent only of such inconsistency. This repealer shall not be construed to revive any other such bylaw, order, resolution or ordinance of the City, or part thereof, heretofore repealed.

Section 13. Severability. If any section, subsection, paragraph, clause or other provision of this Ordinance for any reason is invalid or unenforceable, the invalidity or unenforceability of such section, subsection, paragraph, clause or other provision shall not affect any of the remaining provisions of this Ordinance, the intent being that the same are severable.

Section 14. Safety Clause. The City Council finds and declares that this Ordinance is promulgated and adopted for the public health, safety and welfare and this Ordinance bears a rational relation to the legislative object sought to be obtained.

Section 15. Declaration of Emergency. In order to complete the execution and delivery of the 2006A Certificates while favorable market conditions exist to effect the 2006A Refunding Project, it is hereby declared, pursuant to Section 7.4(b) of the Charter, that an emergency exists and that this Ordinance is necessary for the immediate preservation of the public peace, health, safety and financial well-being of the City. This Ordinance is hereby declared, pursuant to Section 13.2(a) of the Charter, exempt from referendum.

Section 16. Effective Date, Recording and Authentication. This Ordinance shall be in full force and effect immediately upon enactment and publication following final passage. This Ordinance shall be recorded in the City Book of Ordinances kept for that purpose, and shall be authenticated by the signatures of the Mayor and City Clerk, and published in accordance with law.
I hereby attest and certify that the within and foregoing ordinance was introduced and read on first reading at a regular meeting of the Lakewood City Council on the 23rd day of January, 2006; published by title in the Rocky Mountain News and in full on the City of Lakewood's website, www.lakewood.org., on the 26th day of January, 2006; set for public hearing on the 13th day of February, 2006; read, finally passed and adopted by the City Council on the 13th day of February, 2006, and, signed and approved by the Mayor on the 14th day of February, 2006.

Stephen A. Burkholder, Mayor

ATTEST:
Margy Greer, City Clerk

APPROVED AS TO FORM:
Roger Noonan, City Attorney

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