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HomeMy WebLinkAbout07-069 - ADMIN Resolution - City Council - 2007/06/04CITY OF ST. LOUIS PARK, MINNESOTA RESOLUTION NO. 07-069 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ST. LOUIS PARK, MINNESOTA RELATING TO THE ISSUANCE OF REVENUE REFUNDING BONDS FOR THE BENEFIT OF PARK NICOLLET HEALTH SERVICES UNDER MINNESOTA STATUTES, SECTIONS 469.152-469.165; GRANTING PRELIMINARY APPROVAL THERETO; AUTHORIZING EXECUTION AND DELIVERY OF A BOOKS AND RECORDS LETTER FOR AN INTEREST RATE SWAP AGREEMENT RELATED TO THE REVENUE REFUNDING BON'1S; AND ESTABLISHING COMPLIANCE WITH CERTAIN REIMBURSEMENT REGULATIONS UNDER THE INTERNAL REVENUE CODE OF 1986, AS AMENDED; AND TAKING CERTAIN OTHER ACTIONS WITH RESPECT THERETO WHEREAS, the City of St. Louis Park, Minnesota (the "City"), is a home rule city and political subdivision duly organized and existing under its Charter and the Constitution and laws of the State of Minnesota; and WHEREAS, pursuant to the Minnesota Statutes, Sections 469.152-469.165, as amended (the "Act"), the City is authorized to issue revenue bonds for the following purposes: (i) to finance, in whole or in part, the cost of the acquisition, construction, reconstruction, improvement, betterment or extension of a project, defined in the Act as including any 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 hospitals, nursing homes, and related medical facilities; and (ii) to refund, in whole or in part, bonds previously issued by the City under the authority of the Act and interest on such bonds; and WHEREAS, Park Nicollet Health Services, a Minnesota nonprofit corporation, Methodist Hospital, a Minnesota nonprofit corporation, Park Nicollet Institute, a Minnesota nonprofit corporation, Park Nicollet Clinic, a Minnesota nonprofit corporation, and PNMC Holdings, a Minnesota nonprofit corporation (collectively, the "Obligated Group") is expected to submit an application to the City requesting revenue bond financing pursuant to the Act, in a principal amount estimated not to exceed $47,000,000 to defease and prepay the Health Care Facilities Revenue Bonds (Park Nicollet Health Services), Series 2003B, issued by the City in the original aggregate principal amount of $41,550,000 (the "Pnor Bonds"), proceeds of which were used to finance (A) the construction and equipping of its Heart and Vascular Center at Methodist Hospital located at 6500 Excelsior Boulevard in the City of St. Louis Park, the construction of a parking ramp and other improvements at Methodist Hospital, the construction of public infrastructure improvements with respect to the foregoing, and the acquisition and installation of equipment for Methodist Hospital, and (B) the acquisition and installation of (1) a computed tomography scanner ("CT Scanner") at the facilities of the Obligated Group located at 1400 Fairview Drive in the City of Burnsville, Minnesota, (2) a CT Scanner at the facilities of the Obligated Group located at 15800 95th Avenue North in the City of Maple Grove, Minnesota, and (3) a CT Scanner and a magnetic resonance imaging scanner ("MRI Scanner") at the facilities of the Obligated Group located at 250 North Central Avenue in the City of Wayzata, Minnesota (collectively, the "Project"); and Resolution No. 07-069 -2- WHEREAS, the City has been advised by the Obligated Group that on the basis of information submitted to the Obligated Group and the Obligated Group's discussions with representatives of area financial institutions and potential buyers of tax-exempt bonds, revenue bonds of the City could be issued and sold upon favorable rates and terms to refinance the Project and defease and prepay the Pnor Bonds; and WHEREAS, the Obligated Group is proposing to enter into an interest rate swap agreement with respect to revenue refunding bonds proposed to be issued by the City to redeem and prepay the Prior Bonds; and WHEREAS, the Obligated Group has requested that the City identify on the City's books and records, maintained with respect to revenue refunding bonds proposed to be issued by the City to refinance the Project and defease and prepay the Pnor Bonds, an interest rate hedge agreement entitled the ISDA Master Agreement, dated on or after June 1, 2007 (the "ISDA Agreement"), together with the Credit Support Annex, dated as of June 1, 2007 (the "Annex" and collectively with the ISDA Agreement, the "Swap Agreement" or the "Hedge"), between the Obligated Group and Morgan Stanley Capital Services Inc., a Delaware corporation (the "Hedge Provider"), in order to qualify the Hedge as a "qualified hedge" within the meaning of Treasury Regulations, Section 1.148-4(h)(2) promulgated under Section 148 of the Internal Revenue Code of 1986, as amended (the "Code") and to qualify the Hedge as an "anticipatory hedge" within the meaning of Treasury Regulations, Section 1.148-4(h)(5)(iii) promulgated under the Code; and WHEREAS, pursuant to the requirements of the Treasury Regulations, Section 1.148- 4(h)(2) the City is required to execute a memorandum of the City addressed to the Obligated Group and the Hedge Provider with respect to the Hedge related to the revenue refunding bonds to be issued by the City (the "Books and Records Letter"). NOW THEREFORE BE IT RESOLVED by the City Council of the City of St. Louis Park, as follows: Section 1. Preliminary Approval of Revenue Refunding Bonds. 1.1. The City hereby gives preliminary approval to the issuance of revenue refunding bonds in the pnncipal amount not to exceed $47,000,000 (the "Series 2007 Bonds") to defease and prepay the Prior Bonds. 1.2 City staff, Kennedy & Graven, Chartered, acting as Bond Counsel, and other agents and consultants of the City are hereby authorized and directed to do all things and take all actions as may be necessary or appropriate to prepare and review necessary documents relating to the Series 2007 Bonds to be issued in connection therewith. The City Finance Director and other officers, employees and agents of the City are hereby authorized to assist Bond Counsel in the preparation of such documents. Section 2. Authonzation of Books and Records Letter. For the sole purpose of satisfying the requirements of the Treasury Regulations, Sections 1.148-4(h)(2) and 1.148-4(h)(4), the City hereby authonzes the City Manager or the City Finance Director to execute the Books and Records Letter with respect to the Hedge related to the Series 2007 Bonds, substantially in the form on file with the City on the date hereof. Copies of the Books and Records Letter and the Hedge are hereby authorized to be identified on the City's books and records maintained with respect to the Series 2007 Bonds, no later than three (3) days after the Hedge is entered into. • 0 Resolution No. 07-069 -3- Section 3. Costs. The Obligated Group will pay the administrative fees of the City, or, upon demand, reimburse the City for payment of costs incurred by the City in connection with the issuance of the Series 2007 Bonds, whether or not the Series 2007 Bonds are issued. The City acknowledges that the amount of administrative fees of the City to be paid by the Obligated Group has not been determined as of the date of this resolution. The Obligated Group and the City will negotiate, as part of the bond financing transaction, the amount of the administrative fees that the City will charge the Obligated Group relating to the Project and the issuance of the Series 2007 Bonds by the City. Section 4. Commitment Conditional. The adoption of this resolution does not constitute a guarantee or a firm commitment that the City will issue the Series 2007 Bonds as requested by the Obligated Group. If, based on comments received at the public hearing to be held prior to final approval of the issuance of the Series 2007 Bonds, or other information made available to or obtained by the City dunng its review of the Project, it appears that the Project or the issuance of the Senes 2007 Bonds to refinance the costs thereof is not in the public interest or is inconsistent with the purposes of the Act or the Code, the City reserves the right not to give final approval to the issuance of the Series 2007 Bonds. The City also retains the right, in its sole discretion, to withdraw from participation and accordingly not issue the Senes 2007 Bonds should the City Council, at any time prior to the issuance thereof, determine that it is in the best interests of the City not to issue the Senes 2007 Bonds or should the parties to the transaction be unable to reach agreement as to the terms and conditions of any of the documents for the transaction. ection 5. Effective Date. This Resolution shall be in full force and effect from and after is passa:e. Rev r Administration Attest: City Clerk Adopted by the City Council June 4, 2007 Mayo