Explanation
BACKGROUND: This ordinance authorizes the Director of Development to enter into a Consent Order and Settlement Agreement to resolve litigation filed by CD Gaming Ventures, LLC, an affiliate of Penn National Gaming, Inc., regarding development of a casino facility, and more specifically dealing with annexation and the provision of water and sewer services by the City. The proposed Consent Order and Settlement Agreement also provides for reimbursement for public roadway improvements in the area and environmental remediation of the site, payable upon annexation and the City's receipt of satisfactory documentation of reimbursable expenses.
To facilitate the above described actions, this ordinance also amends the 2011 Capital Improvements Budget.
EMERGENCY ACTION: This ordinance is submitted as emergency in order to comply to the terms and conditions of the Consent Order.
FISCAL IMPACT: The $15,000,000 payment will be available as the result of the City issuing general obligation bonds. The debt service associated with these bonds will be retired from the Special Income Tax Fund and from future casino tax revenues.
Title
To authorize the Director of the Department of Development, on behalf of the City of Columbus, to enter into a Consent Order in settlement of the case of CD Gaming Ventures, LLC v. City of Columbus, et al., currently pending in the United States District Court for the Southern District of Ohio; to authorize the amendment of the 2011 Capital Improvements Budget; to authorize the transfer of $15,000,000 from the Special Income Tax Fund to the Streets and Highways G.O. Bonds Fund and the Northland and Other Acquisitions Fund; to authorize the appropriation of said funds to their respective aforementioned funds; to authorize the expenditure of $15,000,000 from the Streets and Highways G.O. Bonds Fund and the Northland and Other Acquisitions Fund for the purpose of reimbursing CD Gaming Ventures, LLC for environmental remediation and public roadway improvements pursuant to the terms and conditions of the Consent Order; and to declare an emergency. ($15,000,000.00)
Body
WHEREAS, the City of Columbus and certain of its officials have been named as defendants in the case of CD Gaming Ventures, LLC v. City of Columbus, et al., Case No. 2:11-CV-216, currently pending in the United States District Court for the Southern District of Ohio; and
WHEREAS, this litigation involves a dispute over the annexation of the site of a proposed casino facility currently located in Franklin Township and the provision of water and sewer services to that site; and
WHEREAS, the parties engaged in settlement negotiations regarding these issues overseen by United States District Court Judge Gregory L. Frost, and reached an agreement in principle to resolve the dispute, which agreement is contained in the proposed Consent Order and Settlement Agreement (hereinafter "Consent Order"); and
WHEREAS, the Mayor and the City Attorney have recommended that settlement of this matter under the terms and conditions of the proposed Consent Order is in the best interest of the City of Columbus and will result in jobs, economic development and increased revenue immediately and for years to come; and
WHEREAS, it is necessary to amend the 2011 Capital Improvements Budget by $15,000,000 to reimburse CD Gaming Ventures, LLC for public roadway improvements and environmental remediation work associated with the casino site located in western Franklin County (the "Project"); and
WHEREAS, it is necessary to transfer and appropriate funds from the Special Income Tax Fund to advance costs of the Project; and
WHEREAS, the City desires to reimburse the Special Income Tax Fund for the amounts advanced for costs of the Project with proceeds of notes or bonds (the "Obligations") to be issued hereafter; and
WHEREAS, this transfer should be considered a temporary funding method; and
WHEREAS, the aggregate principal amount of the Obligations which the City will issue to reimburse the Special Income Tax Fund for amounts advanced to finance the Project is presently expected not to exceed $15,000,000, the debt service charges for which the City intends to pay from future casino tax revenues; and
WHEREAS, the City anticipates incurring certain Original Expenditures, as defined in Section 1.150-2(c) of the Treasury Regulations promulgated pursuant to the Internal Revenue Code of 1986, as amended, (the "Treasury Regulations") with respect to the "Project"; and
WHEREAS, an emergency exists in the usual daily operations of the City in that it is immediately necessary to authorize entering into the proposed Consent Order in order to provide for annexation to the City at the earliest possible date and for the immediate preservation of the public peace, property, health and safety that the resulting increased revenues help ensure; now therefore
BE IT ORDAINED BY THE COUNCIL OF THE CITY OF COLUMBUS:
Section 1. That the Director of Department of Development ("Director"), on behalf of the City of Columbus, is hereby authorized to enter the proposed Consent Order and Settlement Agreement ("Consent Order") in settlement of the case of CD Gaming Ventures, LLC v. City of Columbus, et al., Case No. 2:11-CV-216, presently on file with the City Clerk along with any changes or amendments thereto not inconsistent with this Ordinance and not substantially adverse to the City and which shall be approved by the City Attorney.
Section 2. That the Director and other appropriate officers of the City are hereby authorized to execute such other agreements and instruments and to take all actions as may be necessary to implement this Ordinance and the transactions contemplated by the Consent Order.
Section 3. That the sum of $15,000,000 be and is hereby appropriated from the unappropriated balance of the Special Income Tax Fund, Fund 430, and from all monies estimated to come into said fund from any and all sources and unappropriated for any other purpose during the fiscal year ending December 31, 2011 to the City Auditor, Department 22-01, Object Level One 10, OCA Code 902023, Object Level Three 5502.
Section 4. That the City Auditor is hereby authorized to transfer $15,000,000 of said funds to the Streets and Highways Bond Fund 704, and the Northland and Other Acquisitions Fund 735, at such time as is deemed necessary by the City Auditor and in an allocation to be determined by the City Auditor and the Director of Finance and Management, and to expend said funds, or so much thereof as may be necessary.
Section 5. That the amount of $15,000,000 is hereby appropriated within the Streets and Highways G.O. Bonds Fund, 704, Department - Division 59-12, Division of Design and Construction, Roadway Improvements - Westside, Project Number 530161-100002, Object Level One 06, Object Level Three 6631, OCA 741612; and the Northland and Other Acquisitions Fund, 735, Development Department 44-01, Green Columbus Initiatives - Casino Site, Project Number 441749-100002, Object Level One 06, Object Level Three 6621, OCA 735492 in an allocation to be determined by the City Auditor and the Director of Finance and Management.
Section 6. That the City Auditor is authorized to establish proper accounting project numbers and to make any accounting changes to revise the funding source for any contract or contract modification associated with the expenditure of funds transferred in Section 4, above.
Section 7. That the City intends that this ordinance constitute an "official intent" for purposes of Section 1.150-2(e) of the Treasury Regulations, and declares its intention to use the proceeds of the Obligations to reimburse itself for costs of the Project (the "Original Expenditure").
The City intends to make a reimbursement allocation on its books for the Original Expenditures not later than eighteen months following the later to occur of the date of the Original Expenditure or the date that the Project for which such Original Expenditures were made is "placed in service" within the meaning of the Treasury Regulations Section 1.150-2(c), whichever occurs earlier. Upon the issuance of the Obligations, the proceeds of such Obligations shall be used to reimburse the fund from which the Original Expenditure is made.
Section 8. All funds necessary to carry out the purpose of this ordinance are hereby deemed appropriated.
Section 9. That for the purposes of making the reimbursement payments provided for in the Consent Order, there is hereby authorized to be expended the sum of Fifteen Million Dollars ($15,000,000), pursuant to the terms of the Consent Order and as authorized by the Director and City Auditor. The expenditure should be made as according to the allocation in Section 5 of this ordinance.
Section 10. That the City Auditor is authorized to make any accounting changes to revise the funding source for all contract or contract modifications associated with this ordinance.
Section 11. That the City Auditor is hereby authorized to transfer the unencumbered balance in a project account to the unallocated balance account within the same fund upon receipt of certification by the Director of the Department administering said project that the project has been completed and the monies are no longer required for said project; except that no transfer shall be so made from a project account funded by monies from more than one source.
Section 12. That the Capital Improvements Budget, Ordinance 0266-2011 is hereby amended to include the total amount of $15,000,000 in accordance with Section 5 of this ordinance.
Section 13. That for the reasons stated in the preamble hereto, which is hereby made a part hereof, this ordinance is hereby declared to be an emergency measure and shall take effect and be in force from and after its passage and approval by the Mayor, or ten days after passage if the Mayor neither approves nor vetoes the same.