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HomeMy WebLinkAbout85-147 - ADMIN Resolution - City Council - 1985/10/07After some discussion, Councilmember Duff moved for adoption of the following resolution: RESOLUTION NO. 25-1 7 RESOLUTION GIVING PRELIMINARY APPROVAL TO A PROJECT AND ITS FINANCING UNDER THE MUNICIPAL INDUSTRIAL DEVELOPMENT ACT ON BEHALF OF METHODIST HOSPITAL; REFERRING THE PROPOSAL TO THE MINNESOTA DEPARTMENT OF ENERGY AND ECONOMIC DEVELOPMENT FOR APPROVAL; GIVING PRELIMINARY APPROVAL TO A REFUNDING OF CERTAIN REVENUE BONDS OF THE CITY; AND AUTHORIZING PREPARATION OF NECESSARY DOCUMENTS BE IT RESOLVED by the City Council of the City of St. Louis Park, Minnesota (the Municipality), as follows: SECTION 1 Recitals and Findinas 1.1. This Council has received a proposal that the Municipality issue its revenue bonds under Minnesota Statutes, Sections 474.01 through 474.13, as amended (the Act), to (1) finance a portion or all of a proposed project (the Project) consisting of the construction of certain improvements to, and the acquisition and installation of certain equipment to be used in the operation of, the existing hospital facilities of Methodist Hospital, a Minnesota nonprofit corporation (the Corporation), located at 6500 Excelsior Boulevard in the Municipality and commonly known as Methodist Hospital (the Hospital), and (2) refund in advance of their stated maturities the Hospital Facilities Revenue Bonds (Methodist Hospital Issue), Series A, previously issued by the Municipality in the aggregate principal amount of $14,660,000, of which $13,225,000 are presently outstanding (the Series A Bonds), the proceeds of which were loaned to the Corporation to finance certain improvements to the Hospital. 1.2. At a public hearing, duly noticed and held on October 7, 1985, in accordance with the Act, on the proposal to undertake and finance the Project, all parties who appeared at the hearing were given an opportunity to express their views with respect to such proposal and interested persons were given the opportunity to submit written comments to the City Clerk before the time of the hearing. Based on the public hearing, such written comments (if any) and such other facts and circumstances as this Council deems relevant, this Council hereby finds, determines and declares as follows: -4- (a) The welfare of the State of Minnesota requires active promotion, attraction, encouragement and development of economically sound industry and commerce through governmental acts to prevent, so far as possible, emergence of blighted lands and areas of chronic unemployment, and the State of Minnesota has encouraged local government units to act to prevent such economic deterioration. (b) The Project and the refunding of the Series A Bonds would further the general purposes contemplated and described in Section 474.01 of the Act. (c) The Project would improve the quality of health care availabletoresidents of the Municipality and surrounding areas. (d) This Council has been advised by representatives of the Corporation that conventional, commercial financing to pay the cost of the Project is available only on a limited basis and at such high costs of borrowing that the economic feasibility of acquiring, constructing and installing the Project would be significantly reduced, but that with the aid of municipal borrowing, and its resulting lower borrowing cost, the acquisition, construction and installation of the Project will be economically more feasible. (e) This Council has also been advised by representatives of the Corporation that the refunding of the Series A Bonds will result in a reduction in debt service charges for the Corporation and will enable the Corporation to restructure its debt relating to the Series A Bonds as well as to be released from compliance with certain burdensome restrictions and covenants incurred by the Corporation in connection therewith. (f) This Council has also been advised by representatives of the Corporation that, on the basis of their discussions with potential buyers of tax-exempt bonds, revenue bonds of the Municipality could be issued and sold upon favorable rates and terms to finance the Project and refund the Series A Bonds. (g) The Municipality is authorized by the Act to issue its revenue bonds to finance projects consisting of properties, real or personal, used or useful in connection with a revenue producing enterprise, whether or not operated for profit, engaged in providing health care services, including, without limitation, hospitals, nursing homes and related medical facilities, and to refund, in whole or in part, bonds -5- previously issued by the Municipality under the Act, and interest thereon. The issuance of revenue bonds by the Municipality pursuant to the Act would be a substantial inducement to the Corporation to undertake the Project. SECTION 2 Determination to Proceed with the Project and its Financing and the Refunding 2.1. On the basis of the information given the Municipality to date, it appears that it would be desirable for the Municipality to issue its revenue bonds under the provisions of the Act in the approximate aggregate principal amount,of $31,000,000 to finance the Project, and in the approximate aggregate principal amount of $12,000,000 to refund the Series A Bonds (collectively, the Bonds). 2.2. It is hereby determined to proceed with the Project and its financing and the refunding of the Series A Bonds and this Council hereby declares its present intent to have the Municipality issue the Bonds in one or more issues under the Act to finance the Project and to refund the Series Bonds in advance of their stated maturities. All details of the issuance of such Bonds and the provisions for payment thereof shall, in the case of that portion of the Bonds to be issued to finance the Project, be subject to final approval of the Project by the Minnesota Department of Energy and Economic Development and may be subject to such further conditions as the Municipality may specify. The Bonds, if issued, shall not constitute a charge, lien or encumbrance, legal or equitable, upon any property of the Municipality, except the revenues specifically pledged to the payment thereof, and each Bond, when, as and if issued, shall recite in substance that the Bond, including interest thereon, is payable solely from the revenues and property specifically pledged to the payment thereof, and shall not constitute a debt of the Municipality within the meaning of any constitutional, statutory or charter limitation. 2.3. The Application to the Minnesota Department of Energy and Economic Development, with attachments, is hereby approved, and the Mayor and City Clerk are authorized to execute said documents on behalf of the Municipality. 2.4. In accordance with Section 474.10, Subdivision 7a of the Act, the Mayor and City Clerk are hereby authorized and directed to cause the Application to be submitted to the Minnesota Department of Energy and Economic Development for approval of the Project. The Mayor, City Manager, City Clerk, City Attorney and other officers, employees and agents of the I -6- Municipality, in conjunction with Dorsey & Whitney, Bond Counsel to the Municipality, are hereby authorized and directed to provide the Department with any preliminary information needed for this purpose. The City Attorney is authorized to initiate and assist in the preparation of such documents as may be appropriate to the Project and the refunding of the Series A Bonds. SECTION 3 General 3.1. If the Bonds are issued and sold, the Municipality will enter into a lease, sale or loan agreement or similar agreement satisfying the requirements of the Act (the Revenue Agreement) with the Corporation. The lease rentals, installment sale payments, loan payments or other amounts payable by the Corporation to the Municipality under the Revenue Agreement shall be sufficient to pay the principal of, and interest and redemption premium, if any, on, the Bonds as and when the same shall become due and payable. 3.2. It is hereby determined that any and all direct and indirect costs incurred by the Municipality in connection with the Project and the refunding of the Series A Bonds, whether or not the Project or such refunding is carried to Doi completion, and whether or not the Project is approved by the Minnesota Department of Energy and Economic Development, and whether or not the Municipality by resolution authorizes the issuance of the Bonds, will be paid by the Corporation upon request. 3.3. The Mayor and City Manager are directed, if the Bonds are issued and sold, thereafter to comply with the provisions of Section 474.01, Subdivisions 8 and 11 of the Act. 3.4. All commitments of the Municipality expressed herein are subject to the condition that within twelve (12) months from the date of adoption of this resolution the Municipality and the Corporation shall have agreed to mutually acceptable terms and conditions of the Revenue Agreement, the Bonds and the other instruments and proceedings relating to the Bonds, and this Council shall have adopted a resolution authorizing the issuance of the Bonds. If the events set forth -7- in this subsection do not take place within the time set forth herein or any extension thereof, this resolution shall expire and be of no further force and effect. Adopted this 7th day of October, 1985. VA I &I LJAI I- �W// MIA Reviewed for administration: y anager Approved:/. Mayor Approved as to form and legality: City Attorney The motion for the adoption of the foregoing resolution was duly seconded by Councilmember Martin and, upon vote being taken thereon, the following voted in favor thereof: Mayor Hanks, Counc,lmembers Backes, Duffy, Martin, Meland and Mitchell and the following voted against the same: No one whereupon the resolution was declared duly passed and adopted and was approved by the Mayor, whose signature was attested by the City Clerk.