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HomeMy WebLinkAbout98-101 - ADMIN Resolution - City Council - 1998/07/20RESOLUTION NO. 98- is i RESOLUTION AUTHORIZING THE ISSUANCE AND SALE BY THE CITY OF ITS NURSING HOME REVENUE BONDS SERIES 1998 (SHOLOM HOME WEST, INC. PROJECT) AUTHORIZING EXECUTION OF AN INDENTURE OF TRUST, A LOAN AGREEMENT, A PURCHASE CONTRACT AND RELATED DOCUMENTS, ALL RELATING TO SAID BONDS, AND AUTHORIZING OTHER ACTION TO BE TAKEN WITH RESPECT TO THE ISSUANCE, SALE AND DELIVERY OF SAID BONDS BE IT RESOLVED by the City Council (the "Council") of the City of St. Louis Park, Minnesota (the "City"or the "Issuer"), as follows: 1. It has been proposed that the City issue, under its Home Rule Charter (its "Charter"), Minnesota Statutes, Chapter Sections 469.152 through 469.1651, as amended (the "Act"), its Nursing Home Revenue Bonds Series 1998 (Sholom Home West, Inc. Project) (the "Series 1998 Bonds"), to refinance a Project located in the City by loaning the proceeds thereof to Sholom Home West, Inc., a Minnesota nonprofit corporation, (the "Borrower"), which will use the proceeds to (i) refinance the current outstanding principal amount of an existing taxable mortgage made in the original aggregate principal amount of $6,000,000 (the "Existing Mortgage"); (ii) fund a reserve fund for the benefit of the Series 1998 Bonds; and (iii) pay certain expenses incurred in connection with the issuance of the Senes 1998 Bonds and the refunding of the Existing Mortgage. The Council adopted a resolution on July 6, 1998, giving preliminary approval to the issuance of bonds under the Act to finance the Project and that approval is hereby confirmed and ratified. Drafts of the following documents relating to the Project and the Senes 1998 Bonds have been submitted to the Council and are now, or shall be placed, on file with the City Clerk: (a) Loan Agreement to be dated as of July 1, 1998 (the "Loan Agreement"), proposed to be made and entered into between the City and the Borrower; (b) Bond Trust Indenture to be dated as of July 1, 1998 (the "Bond Indenture"), proposed to be made and entered into between the City and Firstar Bank of Minnesota, N.A., as trustee (the "Bond Trustee"); (c) Mortgage, Security Agreement and Fixture Financing Statement dated as of July 1, 1998 (the "Mortgage") by and between the Borrower and the City, to be assigned by the City to the Trustee; (d) Assignment of Leases and Rents, dated as of July 1, 1998 (the "Assignment") by and between the Borrower and the Issuer, to be assigned by the Issuer to the Trustee; (e) Preliminary Official Statement dated July 10, 1998 (the "Preliminary Official Statement"), relating to the Series 1998 Bonds; and 1 955854 3 (f) Bond Purchase Agreement to be dated on or about July 29, 1998 (the "Purchase Contract") by and between the City, the Borrower and Norwest Investment Services. 2. It is hereby found, determined and declared that: (a) the real and personal property comprising the Project constitutes a "project" authorized by the Act, and the refinancing of the Project, including without limitation the refunding of the Existing Mortgage, constitutes a public purpose not prohibited by law for which the City may authorize and issue its revenue bonds; (b) the purpose of the Project is, and the effect thereof will be, to retain and improve necessary health care facilities so that adequate health care services are available to residents of the State of Minnesota, including residents of the City, at a reasonable cost and to promote the public welfare by the attraction, encouragement, retention and development of economically sound industry and commerce so as to prevent, so far as possible, the emergence of blighted and marginal lands and areas of chronic unemployment; the development and retention of industry to use the available resources of the community in order to retain the benefit of its existing investment in resources of the community in order to retain the benefit of its existing investment in educational and public service facilities; and halting the movement of talented, educated personnel of mature age to other areas and thus preserving the economic and human resources needed as a base for providing governmental services and facilities; (c) the Project, prior to the issuance of the Series 1998 Bonds, has been or shall be approved by the Department of Trade and Economic Development of the State of Minnesota; (d) the refinancing of the Project, the issuance and sale of the Series 1998 Bonds, the execution and delivery of the Loan Agreement, the Bond Indenture, the Purchase Contract, the Mortgage and the Assignment and the performance of all covenants and agreements of the City contained in the Loan Agreement, the Bond Indenture, the Mortgage, the Assignment and the Purchase Contract and of all other acts and things required under the City's Charter and the Constitution and laws of the State of Minnesota to make the Loan Agreement, the Mortgage, the Assignment, the Bond Indenture, the Purchase Contract, and the Series 1998 Bonds valid and binding obligations of the City in accordance with their terms are authorized by the Act and the City's Charter; (e) the loan payments provided for in the Loan Agreement are fixed, and required to be revised from time to time as necessary, so as to produce income and revenue sufficient to provide for prompt payment of principal of, premium, if any, and interest on the Series 1998 Bonds when due, and the Loan Agreement also provides that the Borrower is required to pay all expenses of the operation and maintenance of the Project; 955854 3 (f) the payments under the Loan Agreement are secured by the Mortgage and the Assignment; (g) it is desirable that the Series 1998 Bonds issued by the City upon the terms set forth herein and in the Bond Indenture, under the provisions of which the City will pledge and grant a security interest in the City's interest in the Loan Agreement and the payments thereunder (except for certain expenses and indemnification), and will assign and endorse the Mortgage and the Assignment (without recourse or warranty) to the Bond Trustee as evidence of and security for the payment of principal of, premium, if any, and interest on the Series 1998 Bonds; (h) under the provisions of Minnesota Statutes, Section 469.162(1), and as provided in the Loan Agreement and Bond Indenture, the Series 1998 Bonds are not to be payable from nor charged upon any funds of the City other than the revenue pledged to their payment, nor is the City subject to any liability thereon; no holders of the Series 1998 Bonds shall ever have the right to compel any exercise of the taxing power of the City to pay any of the principal of, premium, if any, or interest on the Series 1998 Bonds; the Series 1998 Bonds shall not constitute a charge, lien or encumbrance, legal or equitable, upon any property of the City; and each Series 1998 Bond issued under the Bond Indenture shall recite that the Series 1998 Bonds, including interest thereon, are payable solely from the revenue pledged to the payment thereof and that no Series 1998 Bond shall constitute a debt of the City within the meaning of any constitutional or statutory limitation; and (i) the Senes 1998 Bonds are not issued to run for longer than the reasonable life expectancy of the property or improvement for which the Senes 1998 Bonds are authorized within the meaning of the City's Charter, and, in any case, the Series 1998 Bonds are not issued to run for more than thirty years. 3. The forms of Loan Agreement, Bond Indenture, Purchase Contract, Mortgage, Assignment and Preliminary Official Statement referred to in paragraph 1 are approved. The Loan Agreement, Bond Indenture, Mortgage, Purchase Contract and Assignment, the Official Statement (the "Official Statement"), in substantially the form of the Preliminary Official Statement, with such variations, additions and deletions, not inconsistent with this resolution, the City's Charter, the Act or other law, as the executing officers may hereafter deem appropriate, such determination to be conclusively evidenced by the execution and delivery thereof, are hereby approved and the Mayor and the City Manager are hereby authorized and directed to execute and deliver such documents in final form in the name and on behalf of the City with or without the official seal of the City impressed thereon and attested to by the City Clerk. The Council ratifies, confirms and approves the circulation of the Preliminary Official Statement, and authorizes the distribution of the Official Statement, by the Underwriters to dealers and prospective purchasers of the Series 1998 Bonds. For purposes of Section 147(0 of the Internal Revenue Code of 1986, as amended, the Series 1998 Bonds are hereby approved by the Council, an elected legislative body of the City, after a public hearing held July 6, 1998, for which reasonable public notice was given. 4. In anticipation of the collection of payments under the Loan Agreement, the City shall proceed forthwith to issue the Senes 1998 Bonds, m one or more senes, m the maximum 955854.3 3 aggregate principal amount of $7,000,000, plus such additional principal amount, if any, which results from the issuance of Series 1998 Bonds at an original issue discount. The form and terms of the Series 1998 Bonds shall be as set forth in the Bond Indenture including, without limitation, the extraordinary optional redemption provisions, which terms are for this purpose incorporated in this resolution and made a part hereof. The Series 1998 Bonds shall be subject to optional redemption but may contain provisions limiting optional redemption for up to ten years from the date of issuance and may require an optional redemption premium not greater than four percent (4%) of the principal amount of Series 1998 Bonds to be redeemed. The Series 1998 Bonds shall bear interest at rates such that the average stated interest rate of all the Series 1998 Bonds does not exceed 5.75% or the maximum rate otherwise provided by law. No Series 1998 Bond shall be initially offered to the public at a discount greater than 2.0% of the original principal amount thereof. The specific maturities of the Series 1998 Bonds, principal amount per maturity of the Series 1998 Bonds, and mandatory sinking fund installment amounts of the Series 1998 Bonds which are term bonds, shall be set forth in the Purchase Contract as executed and delivered by the Obligated Group, and shall be in such years and in such amounts as is necessary to provide approximately level debt service through the life of the Series 1998 Bonds. In no event shall the Series 1998 Bonds be issued to run for more than thirty years. The aggregate principal amount of the Series 1998 Bonds herein authorized may be reduced to an amount deemed sufficient by the Borrower to refund the Existing Mortgage, to fund a reserve fund as provided in the Bond Indenture, and to pay expenses incurred in connection with the issuance of the Series 1998 Bonds. The Series 1998 Bonds shall contain a recital that they are issued pursuant to the City's Charter and the Act and such recital shall be conclusive evidence of the validity and regularity of the issuance thereof. The Mayor, the City Manager and City Clerk are authorized and directed to prepare and execute by manual or facsimile signature the Series 1998 Bonds as prescribed in the Bond Indenture and to deliver them to the Bond Trustee, together with a certified copy of this resolution and other documents required by the Bond Indenture, for authentication and delivery to the Underwriters. The Bond Trustee is hereby appointed authenticating agent with respect to the Series 1998 Bonds pursuant to Minnesota Statutes, Section 475.55, and the certificate of authentication on the Series 1998 Bonds shall evidence authentication of the Series 1998 Bonds under this authority. 5. The Mayor, City Manager, City Clerk and any other officers of the City are authorized and directed to prepare, execute and furnish, upon issuance of the Series 1998 Bonds, certified copies of all proceedings and records of the City relating to the Series 1998 Bonds, and such other affidavits and certificates as may be required to show the facts relating to the legality of the Series 1998 Bonds as such facts appear form the books and records in the officers' custody and control or as otherwise known to them; and all such certified copies, certificates and affidavits, including any heretofore furnished, may be executed by one or more of such officers and shall constitute representations of the City as to the truth of all statements contained therein. The Mayor, City Manager, City Clerk and any other officers of the City are further authorized to execute, deliver and receive all such other documents, certificates and agreements which are required by the Bond Indenture, the Loan Agreement, the Series 1998 Bonds, the Mortgage, the Assignment or the Purchase Contract, or which are necessary or desirable to carry out, give effect to and consummate the transactions contemplated therein or herein or described in the Preliminary Official Statement or the issuance of the Series 1998 Bonds. 6. The approval hereby given to the various documents referred to above includes an approval of such additional details therein as may be necessary and appropriate and such 955854 3 4 F 1 modifications thereof, deletions therefrom and additions thereto, not inconsistent with this resolution, the City's Charter, the Act or other law, as may be necessary and appropriate and approved by the City's Bond Counsel prior to the execution of the documents. The execution of any instrument by the appropriate officer or officers of the City herein authorized shall be conclusive evidence of the approval of such documents in accordance with the terms hereof. In the absence of the Mayor, City Manager or City Clerk, any of the documents authorized by this resolution to be executed may be executed by the Acting Mayor, Acting City Manager or Acting City Clerk, respectively. 7. The proposal of the Underwriters to purchase the Senes 1998 Bonds upon the terms and conditions set forth in the proposed Purchase Contract, and at a purchase price equal to an amount not less than 98% of the aggregate original principal amount of the Series 1998 Bonds issued less original issue discount to be initially offered to the public (subject to the limitations provided herein) plus accrued interest, is hereby found and determined to be reasonable and is hereby accepted and the execution and delivery thereof by the Mayor and City Manager in the name and on behalf of the City is hereby authorized, directed and approved. 8. It is hereby found and determined that the reasonably anticipated amount of tax- exempt obligations, other than obligations described in Section 265(b)(3)(c)(ii) of the Internal Revenue Code of 1986, as amended (the "Code"), which will be issued by the City in calendar year 1998 does not exceed $10,000,000. The City does hereby designate not to exceed $3,000,000 aggregate principal amount of the Bonds for the purposes of Section 265(b) of the Code, which designated amounts shall be such whole maturities in such final principal amounts, not to exceed $3,000,000 in the aggregate as set forth in the Bond Indenture. 9. This resolution shall be effective immediately upon its final adoption. PASSED by the City Council of the City of St. Louis Park, Minnesota, this 20th day of July, 1998. Attest: CiClerk Reviewe, for administration: City Manager 955854 3 5 1-4 4 4 Mayor