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HomeMy WebLinkAbout90-131 - ADMIN Resolution - City Council - 1990/09/17RESOLUTION NO. 90-131 RESOLUTION GIVING PRELIMINARY APPROVAL TO A PROJECT AND ITS FINANCING UNDER THE MUNICIPAL INDUSTRIAL DEVELOPMENT ACT; REFERRING THE PROPOSAL TO THE MINNESOTA DEPARTMENT OF TRADE AND ECONOMIC DEVELOPMENT FOR APPROVAL; AND AUTHORIZING PREPARATION OF NECESSARY DOCUMENTS BE IT RESOLVED by the City Council (the "Council") of the City of St. Louis Park, Minnesota (the "City"), as follows: SECTION 1 Recitals and Findings 1.01 This Council has received a proposal that the City issue its revenue bonds and refunding revenue bonds to finance a portion or all of the cost of a proposed project and refunding under Minnesota Statutes, Sections 469.152 to 469.165, as amended (the "Act"), on behalf of Methodist Hospital, a Minnesota nonprofit corporation (the "Borrower"), consisting of the issuance of up to $74,000,000 hospital facilities revenue bonds on behalf of the Borrower to finance a hospital facilities Project and up to $44,500,000 refunding revenue bonds to refund and redeem on July 1, 1995 $364125,000 of the City's Hospital Facilities Revenue Bonds and Refunding Revenue Bonds (Methodist Hospital Project), Series 1985-A and 1985-B, in a maximum aggregate principal amount of $118,500,000. 1.02 The Project consists of constructing improvements to and remodeling and equipping hospital facilities including, but not limited to, a new cancer treatment center, an intensive oncology care and bone marrow transplant unit and improvements to the kidney dialysis unit, the imaging center, respiratory therapy center, surgery and surgery support facilities, obstetric facilities and mechanical and electrical systems (collectively, the "Project"). The projects financed and refinanced by the Series 1985-A Bonds and the Series 1985-B Bonds (the "Prior Projects") are generally described as (i) the acquisition, construction and installation of certain improvements to and equipment to be used by the Borrower undertaken by the Borrower in 1985 and approved by the City Council of the City by Resolution No. 85-147 adopted October 7, 1985 and (ii) constructing an addition to and otherwise improving the hospital facilities of the Borrower to increase the ratio of private rooms, to relocate certain ancillary service departments, to remodel the dormitory building for educational and administrative purposes, and to expand space for stores, mechanical -service, medical -records, management, engineering and business and finance offices, together with necessary site improvements and equipment, undertaken by the Borrower in 1977 and approved by the City Council of the City by Resolution No. 5896, adopted November 7, 1977. The Borrower owns and operates the Prior Projects and will own and operate the Prior Projects and the Project at 6500 Excelsior Boulevard within the City boundaries. 1.03 At a public hearing, duly noticed and held on September 17, 1990, in accordance with the Act, on the proposal to undertake and finance the Project and refinance the Prior Projects, all parties who appeared at the hearing were given an opportunity to express their views with respect to the proposal to undertake and finance the Project and refinance the Prior Projects 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: (a) The welfare of the State of Minnesota requires the provision of necessary health care facilities, so that adequate health care services are available to residents of the State of Minnesota at reasonable cost, and the State of Minnesota has encouraged local government units to act to provide such facilities. (b) The Project would further the general purposes contemplated and described in Section 469.152 of the Act. (c) This Council has been advised by representatives of the Borrower, that a reduction in debt service charges to patients and third party payors will occur as a result of the refunding and that reductions to debt service charges pursuant to the refunding will be passed to patients and third party payors. This Council deems the extent of the proposed refunding of the Series 1985-A Bonds and 1985-B Bonds to be necessary, including the payment of interest to the date on which final payment is made and the payment of premium, if any, on such date. (d) This Council has been advised by representatives of the Borrower that the undertaking of the proposed Project and the issuance of the revenue bonds and refunding revenue bonds to finance the cost thereof will promote the public purposes and legislative objectives of the Act by providing substantial inducement for the continuation of the health care operations of the Borrower in the City and surrounding areas. (e) This Council has been advised by representatives of the Borrower that (i) the Project will create approximately 99 construction jobs paying an average wage level of $35.00 per hour, including benefits, 237:DBND-3857-359 08/10/90 for an estimated 616,000 hours; and (ii) it is anticipated that the Project will assist in preventing the occurrence of conditions requiring redevelopment, or aid in the redevelopment of existing areas of blighted, marginal land, and the avoidance of substantial and persistent unemployment. (f) This Council has been advised by representatives of the Borrower that (i) 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 operating the Borrower's medical facilities would be significantly reduced, but that with the aid of municipal borrowing, and its resulting lower borrowing cost, the Project is economically more feasible, and (ii) the Project would not be undertaken but for the availability of -Industrial Development Bond financing. (g) This Council has also been advised by Dain Bosworth Incorporated that, on the basis of their discussions with potential buyers of tax-exempt bonds, revenue bonds and refunding revenue bonds of the City could be issued and sold upon favorable rates and terms to finance the Project. (h) The City is authorized by the Act to issue its revenue bonds and refunding revenue bonds to finance the Project. SECTION 2 Determination to Proceed with the Project and its Financing 2.01 On the basis of the information given the City to date, it appears that it would be desirable for the City to issue its revenue bonds and refunding revenue bonds under the provisions of the Act to finance the Project and refinance to Prior Projects in the maximum aggregate principal amount of $118,500,000. 2.02 It is hereby determined to proceed with the Project and its financing and this Council hereby declares its present intent to have the City issue its revenue bonds and refunding revenue bonds under the Act to finance the Project and refinance to Prior Projects. Notwithstanding the foregoing, however, the adoption of this resolution shall not be deemed to establish a legal obligation on the part of the City or its City Council to issue such revenue bonds or refunding revenue bonds. All details of such revenue bond and refunding revenue bond issues and the provisions for payment thereof shall be subject to final approval of the Project by the Minnesota Department of Trade and Economic Development and may be subject to such further 237:DBND-3857-359 08/10/90 -3- conditions as the City may specify. The revenue bonds and/or the refunding revenue bonds, if issued, shall not constitute a charge, lien or encumbrance, legal or equitable, upon any property of the City, 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 City within the meaning of any constitutional, statutory or charter limitation. 2.03 Notwithstanding anything in this resolution to the contrary, the preliminary approval hereby granted shall not be deemed an authorization of the Borrower to begin exterior construction activity or to sell revenue bonds to finance such exterior construction activity until such time as the Council has approved a campus plan providing for such exterior construction. The Project does not include the proposed North Ramp and this resolution shall not in any way affect, or bind the City or waive any rights of the City with respect to, any approval required by, or any action which may be taken by, the City with respect to the proposed North Ramp. 2.04 The Application to the Minnesota Department of Trade and Economic Development substantially in the form attached hereto as Exhibit A, with all attachments and exhibits, is hereby approved, and the Mayor, City Manager and City Clerk are authorized to execute said. documents on behalf of the City. 2.05 In accordance with Section 469.154, Subdivision 3 of the Act, the Mayor, City Mana9er and City Clerk are hereby authorized and directed to cause the Application to be submitted to the Minnesota Department of Trade and Economic Development for approval of the Project. The Mayor, City Manager, City Clerk, City Attorney and other officers, employees and agents of the City are hereby authorized and directed to provide the Minnesota Department of Trade and Economic Development with any preliminary information needed for this purpose. The City Attorney and/or Special Counsel for the City is authorized to initiate and assist in the preparation of such documents as may be appropriate with respect to the issuance of the revenue bonds, if approved by the Department. 2.06 This resolution and the intentions set forth herein are subject to the Borrower entering into the Agreement as to Indemnity and Payment of Expenses (the "Agreement"), between the City and the Borrower. The Mayor and City Clerk are hereby authorized and directed to execute and deliver, on behalf of the City, the Agreement substantially in the form attached hereto as Exhibit B, providing the Borrower's obligation to indemnify the City and reimburse the City for fees and expenses incurred in connection with the issuance of revenue bonds and refunding revenue bonds as herein provided. 237:DBND-3857-359 08/10/90 2.07 Popham, Haik, Schnobrich & Kaufman, Ltd. is hereby designated as Bond Counsel and is authorized to proceed with the preparation of documents as directed by the Borrower. SECTION 3 General 3.01 If the bonds are issued and sold, the City will enter into a loan agreement or similar agreement satisfying the requirements of the Act (the "Revenue Agreement") with the Borrower. The loan payments or other amounts payable by the Borrower to the City 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. 3.02 The Mayor, City Manager and City Clerk are directed, if the bonds are issued and sold, thereafter to comply with the provisions of Section 469.154, Subdivisions 5 and 7 of the Act. Adopted this 17th day of September, 1990. ATTES� _ 6) 'IAL42r0Z4IIt1JI%III-' Mayor City C erk Reviewed for administration: Approved as to form and execution: k'. e-06,402,1 • City Manager City Attorney 237:DBND 237:DBND-3857-359 08/10/90 -5-