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Authorizing and approving (i) the execution and delivery of a Service Agreement between the City of Philadelphia and the Philadelphia Authority for Industrial Development relating to a comprehensive program to improve and enhance the City of Philadelphia's cultural and commercial corridors for the benefit of the residents of the City of Philadelphia, (ii) the issuance by the Philadelphia Authority for Industrial Development of bonds, notes or other evidences of indebtedness in one or more series, to finance or refinance (for debt service savings) the costs of the cultural and commercial corridors program; and (iii) the obligation of the City of Philadelphia to pay in full when due the Service Fee and other amounts payable under the Service Agreement; authorizing certain City officers to take certain actions required to issue bonds, notes or other evidences of indebtedness; covenanting that the City of Philadelphia will make necessary appropriations in each of the City's fiscal years to provide for the Service Fee and other amounts due under the Service Agreement; and covenanting that the City of Philadelphia will make timely payments of the Service Fee and other amounts due under the Service Agreement; all under certain terms and conditions.
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WHEREAS, The City of Philadelphia (the "City") and the Philadelphia Authority for Industrial Development ("PAID") have determined that PAID will, at the direction, and with the cooperation, of the City, undertake a comprehensive cultural and commercial corridors program for the improvement and enhancement of the cultural and commercial corridors in the City for the benefit of the residents of the City; and
WHEREAS, The City is authorized to enter into agreements with PAID respecting action to be taken by the City; to make such appropriations to PAID as are deemed necessary to assist PAID in carrying out its public purposes; and to designate PAID as the City's agent to perform any specified activity or to administer any specified program which the City is authorized by law to do, including, without limitation, redevelopment, renewal, rehabilitation, conservation, urban beautification and comprehensive programs in furtherance of the improvement and betterment of the City; and
WHEREAS, The Council of the City has, by this Ordinance, determined that it is in the best interests of the City to authorize and approve (i) the execution and delivery of a Service Agreement (the "Service Agreement") by and between the City and PAID; (ii) the issuance by PAID of bonds, notes or other evidences of indebtedness in such amount and for such purposes as described in Section 1 herein in one or more series, either as taxable or tax-exempt obligations, and (iii) the performance by the City of its obligation to pay in full when due the Service Fee (as defined in the Service Agreement) and other amounts payable under the Service Agreement; and
WHEREAS, The City is authorized to enter into the Service Agreement and to undertake the Program (as defined below); now, therefore,
THE COUNCIL OF THE CITY OF PHILADELPHIA HEREBY ORDAINS:
SECTION 1. The Council (the "Council") of the City of Philadelphia (the "City") hereby authorizes and approves: (i) the execution and delivery of a Service Agreement (the "Service Agreement"), substantially in the form of Exhibit A hereto, with the Philadelphia Authority for Industrial Development ("PAID"); (ii) the issuance from time to time by PAID of bonds, notes or other evidences of indebtedness (the "Obligations") in an aggregate principal amount not to exceed One Hundred Fifty Million Dollars ($150,000,000) net of original issue discount, plus amounts necessary for any reserves, costs of credit or liquidity enhancement and financial derivatives products, and amounts necessary to effect any refunding, at any one time outstanding, in one or more series, either as taxable or tax-exempt obligations, to finance or refinance (for debt service savings) the costs of: improving and enhancing (a) the City's cultural corridors by providing funding to cultural institutions for capital improvements and other activities to improve the cultural corridors for the benefit of the residents of the City; and (b) the City's commercial corridors by providing funding for streetscapes; redevelopment projects; renovations; property acquisitions for redevelopment; technology equipment and upgrades; loan guarantees; demolition of blighted properties; and other activities to improve the commercial corridors for the benefit of the residents of the City, together with amounts necessary for any reserves, costs of issuance and costs of credit or liquidity enhancement and financial derivatives products, and amounts necessary to effect any refunding (collectively, the "Program"); and (iii) the performance by the City of its obligation to pay in full when due the Service Fee payable under the Service Agreement (the "Service Fee") and other amounts payable under the Service Agreement. The Program is further described on Exhibit B hereto.
SECTION 2. The Director of Finance is hereby authorized to execute and deliver, on behalf of the City, the Service Agreement in substantially the form of Exhibit A hereto, with such changes as the City Solicitor shall advise and the Director of Finance shall approve, consistent with the terms of this Ordinance. No amendment or supplement to the Service Agreement which causes the amount described in Section 1 hereto to be exceeded shall be executed unless first approved by ordinance of the Council.
SECTION 3. The Service Agreement authorized by this Ordinance shall be executed in conjunction with the issuance by PAID of its Obligations for the purpose of financing or refinancing (for debt service savings) the Program in an amount that does not exceed that set forth in Section 1 hereof. The proceeds of such Obligations shall be applied to finance or refinance (for debt service savings) the costs of the Program. The Obligations shall not be executed or delivered until the Director of Finance has approved the terms thereof. No series of Obligations shall mature later than thirty years after the date of execution and delivery of the Service Agreement.
SECTION 4. The City covenants to make appropriations beginning in Fiscal Year 2007 and in each and every fiscal year thereafter in such amounts as shall be required in order to make timely all Service Fee payments due and payable and to pay timely all other amounts due and payable under the Service Agreement.
SECTION 5. As long as Obligations issued by PAID to finance or refinance costs of the Program are outstanding, the City covenants unconditionally to make all Service Fee payments and all other amounts due as provided for under the Service Agreement directly to any trustee and other entity (the "Trustee") to which the Service Fee may be assigned as security for payment of the Obligations and the obligations of PAID under any credit facility and/or liquidity facility securing the Obligations or any financial derivative product(s) including an interest rate swap or similar agreement relating to the Obligations, only out of current revenues of the City, which payments shall not be suspended, abated, reduced, abrogated, waived, diminished or otherwise modified in any manner or to any extent whatsoever and regardless of any rights of set-off, recoupment or counterclaim that the City may have against PAID or the Trustee or any holder of Obligations or any other party or parties and regardless of any contingency, act of God, event or cause whatsoever and notwithstanding any circumstances or occurrence that may arise after the date thereof.
SECTION 6. The City agrees to be bound by each and every provision, covenant and agreement set forth in the Service Agreement.
SECTION 7. The Director of Finance and all other proper officials of the City are hereby authorized, jointly and severally, on behalf of the City, to execute all documents (including one or more continuing disclosure agreements and a letter of representations) as may be necessary in order to accomplish the intent and purpose of this Ordinance and to take all actions as may be required by the Constitution and the laws of the Commonwealth of Pennsylvania (the "Commonwealth") in order to effectuate the Program and the issuance of the Obligations.
SECTION 8. The Service Agreement authorized by this Ordinance shall provide that proceeds of Obligations shall be spent only in accordance with the provisions of this Section 8, and shall further provide that the Council is an intended beneficiary of such provision and may sue for its specific enforcement.
(a) Notwithstanding anything to the contrary set forth in this Section 8, expenditures of $112.5 million may be made in accordance with the budget categories described on Exhibit C hereto prior to approval of the first annual budget pursuant to Section 8(b) hereof. Within the Philadelphia Commercial Corridors budget categories "Streetscape Enhancements & Capital Improvements," "Acquisition Pool" and "Targeted Demolition on Commercial Corridors" set forth in Exhibit C, the City will not make any expenditure pursuant to such budget categories in a Council District without the prior written approval of the District Councilperson elected from the district in which the money is to be spent.
(b) No later than ninety (90) days prior to each fiscal year of the Program, the Mayor or the Director of Finance shall submit to the Council for its approval by ordinance an annual budget setting forth proposed Program expenditures for the upcoming fiscal year by budget category. If the ordinance or a form thereof is not enacted within ninety (90) days of submission, the Mayor, in consultation with the President of the Council, is authorized to, and shall, expend the proceeds of the Obligations in accordance with an annual budget as agreed upon by the Mayor and the President of the Council or, in the event no such agreement is reached, in accordance with the annual budget as set forth in the ordinance submitted to the Council. Within the Philadelphia Commercial Corridors budget categories "Streetscape Enhancements & Capital Improvements," "Acquisition Pool" and "Targeted Demolition on Commercial Corridors" set forth in the annual budget, the City will not make any expenditure pursuant to such budget categories in a Council District without the prior written approval of the District Councilperson elected from the district in which the money is to be spent.
(c) Annually, the City shall submit a report to the Council summarizing all expenditures made during the previous fiscal year by budget category. This report will also contain a report on the progress with respect to the Economic Opportunity Plan. See Exhibit D hereto for a description of the Economic Opportunity Plan.
(d) The provisions of this Section 8 are not severable from the remaining provisions of this Ordinance, but are essentially and inseparably connected with all other provisions of this Ordinance. It is hereby declared to be the legislative intent of the Council that the Council would not have enacted this Ordinance or any portion of this Ordinance unless all provisions of this Section 8 were a valid part of such enactment.
SECTION 9. The Council reasonably expects that the proceeds of the Obligations will be expended for the Program within three (3) years of the issuance of the Obligations and will not take any action or omit to take any action which would cause the expenditure of the proceeds of the Obligations for the Program not to proceed with due diligence.
SECTION 10. This Ordinance shall take effect immediately.
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935026.8 10/18/06