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HomeMy WebLinkAbout08-094 - ADMIN Resolution - City Council - 2008/07/21CITY OF ST. LOUIS PARK, MINNESOTA RESOLUTION NO. 08-094 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ST. LOUIS PARK, MINNESOTA, AUTHORIZING THE ISSUANCE, SALE, AND DELIVERY OF ITS VARIABLE RATE DEMAND REVENUE REFUNDING BONDS (PARK NICOLLET HEALTH SERVICES), SERIES 2008 FOR THE BENEFIT OF PARK NICOLLET HEALTH SERVICES, PARK NICOLLET METHODIST HOSPITAL, PARK NICOLLET INSTITUTE, PARK NICOLLET CLINIC, PNMC HOLDINGS, AND PARK NICOLLET HEALTH CARE PRODUCTS; PAYABLE SOLELY FROM REVENUES PLEDGED PURSUANT TO THE INDENTURE; APPROVING THE FORM OF AND AUTHORIZING THE EXECUTION AND DELIVERY OF THE BONDS AND RELATED DOCUMENTS; AND PROVIDING FOR THE SECURITY, RIGHTS, AND REMEDIES WITH RESPECT TO THE BONDS 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 any properties, real or personal, used or useful in connection with a revenue producing enterprise; 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, Park Nicollet Methodist Hospital, a Minnesota nonprofit corporation, Park Nicollet Institute, a Minnesota nonprofit corporation, Park Nicollet Clinic, a Minnesota association that has elected to be treated as a nonprofit corporation, PNMC Holdings, a Minnesota nonprofit corporation, and Park Nicollet Health Care Products, a Minnesota nonprofit corporation (collectively, the "Obligated Group" and individually, a "Member" or "Member of the Obligated Group"), has requested the issuance of revenue refunding bonds pursuant to the Act in a principal amount not to exceed $160,000,000, to redeem and prepay the outstanding principal amount of the (i) Health Care Facilities Revenue Refunding Bonds (Park Nicollet Health Services), Series 2007A, issued by the City on November 14, 2007, in the original aggregate principal amount of $41,600,000 (the "Series 2007A Bonds"); (ii) Health Care Facilities Revenue Bonds (Park Nicollet Health Services), Series 2007B-1, issued by the City on November 14, 2007, in the original aggregate principal amount of $56,595,000 (the "Series 2007B-1 Bonds"); and (iii) Health Care Facilities Revenue Bonds (Park Nicollet Health Services), Series 2007B-1, issued by the City on November 14, 2007, in the original aggregate principal amount of $44,575,000 (the "Series 2007B-2 Bonds," and collective with the Series 2007B-1 Bonds, the "Series 2007B Bonds"). The Series 2007A Bonds and the Series 2007B Bonds (collectively, the "Prior Bonds"), were issued by the City under the authority of the Act for the benefit of the Obligated Group; and L Resolution No. 08-094 -2- WHEREAS, the proceeds derived from the sale of the Series 2007A Bonds were loaned to the Obligated Group and applied by the Obligated Group to: to redeem and prepay the Health Care Facilities Revenue Bonds (Park Nicollet Health Services), Series 2003B, previously issued by the City in the original aggregate principal amount of $41,550,000 (the "Series 2003B Bonds"). The proceeds of the Series 2003B Bonds were used to finance: (i) the construction and equipping of the Obligated Group's Heart and Vascular Center at Park Nicollet Methodist Hospital located at 6500 Excelsior Boulevard in the City of St. Louis Park, the construction of a parking ramp and other improvements at Park Nicollet Methodist Hospital, the construction of public infrastructure improvements with respect to the foregoing, and the acquisition and installation of equipment for Park Nicollet Methodist Hospital; and (ii) the acquisition and installation of a computed tomography scanner ("CT Scanner") at the facilities of the Obligated Group located at 1400 Fairview Drive in the City of Burnsville, Minnesota, a CT Scanner at the facilities of the Obligated Group located at 15800 95th Avenue North in the City of Maple Grove, Minnesota, and 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; and WHEREAS, the proceeds derived from the sale of the Series 2007B Bonds were loaned to the Obligated Group to finance: (i) the acquisition, construction, and equipping of an approximately 82,000 square foot building to house the Obligated Group's Cancer Center and related facilities with approximately 31,000 square feet of the building reserved for future expansion, to be located at 6490 Excelsior Boulevard in the City of St. Louis Park; (ii) the acquisition, construction, and equipping of a new parking ramp which will include approximately 1,700 parking stalls adjacent to the Cancer Center; (iii) the redesign and renovation of the emergency center at Methodist Hospital located at 6500 Excelsior Boulevard in the City of St. Louis Park; (iv) construction and equipping of a new common entrance to Methodist Hospital, the Meadowbrook Building, and the new Cancer Center; and (v) the acquisition, construction, and equipping of an approximately 69,000 square foot Eating Disorders Institute, including a parking ramp and surface lot with an estimated 220 parking stalls, to be located at 3525 Monterey Drive in the City; and WHEREAS, the revenue bonds to be issued to refund the Prior Bonds will be issued under an Indenture of Trust, dated on or after August 1, 2008 (the "Indenture"), between the City and Wells Fargo Bank, National Association (the "Trustee"), and the revenue bonds will be designated as Variable Rate Demand Revenue Refunding Bonds (Park Nicollet Health Services), Series 2008, or such other name as may be designated by appropriate officers of the City (the "Bonds") and shall be issued in three separate series (including the Series 2008A, Series 2008B-1 and Series 2008B-2); and WHEREAS, the proceeds derived from the sale of the Bonds will be loaned to the Obligated Group pursuant to the terms of a Loan Agreement, dated on or after August 1, 2008 (the "Loan Agreement"), between the City and the Obligated Group, and will be applied, together with other available funds of the Obligated Group, to the defeasance, redemption and prepayment of the Prior Bonds and the payment of certain expenses incurred in connection with the issuance of the Bonds; and WHEREAS, in consideration of the loan by the City of the proceeds of the Bonds to the Obligated Group and to secure the payment of the principal of, premium, if any, and interest on the Bonds when due, the Obligated Group will issue and deliver to the City its Series 2008A/B Resolution No. 08-094 -3- Obligation pursuant to a Supplemental Indenture, dated on or after August 1, 2008, pursuant to a Master Trust Indenture, dated as of November 1, 2003, as amended (the "Master Indenture"), between the Obligated Group and Wells Fargo Bank, National Association, which will be in the same aggregate principal amount and bear interest at the same rates as the Bonds, will have redemption provisions corresponding to those of the Bonds, and will be payable in installments equal to the maturities and mandatory redemptions of the Bonds; and WHEREAS, the loan repayments required to be made by the Obligated Group under the terms of the Loan Agreement will be assigned to the Trustee under the terms of the Indenture and the Series 2008A/B Obligation will be assigned by the City to the Trustee under the terms of the Indenture; and WHEREAS, concurrently with the execution and delivery of the Indenture and the original issuance of the Bonds, Wells Fargo Bank, National Association, a national banking association (the "Credit Bank"), will issue and deliver to the Trustee an Irrevocable Letter of Credit (the "Letter of Credit") providing for payment when due of the principal of and interest on the Bonds and payment of the Purchase Price, as hereinafter defined, of Bonds tendered for purchase; and WHEREAS, the Bonds and the interest and any premium on the Bonds: (i) shall be payable solely from the revenues pledged therefor; (ii) shall not constitute a debt of the City within the meaning of any constitutional or statutory limitation; (iii) shall not constitute nor give rise to a pecuniary liability of the City or a charge against its general credit or taxing powers; and (iv) shall not constitute a charge, lien, or encumbrance, legal or equitable, upon any property of the City other than the City's interest in the Loan Agreement and the Series 2008A/B Obligation; and NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ST. LOUIS PARK, MINNESOTA, AS FOLLOWS: 1. The City acknowledges, finds, determines, and declares that: (i) the issuance of the Bonds is authorized by the Act; (ii) the application of the proceeds of the Bonds to the defeasance, redemption and prepayment of the Prior Bonds and the payment of certain expenses incurred in connection with the issuance of the Bonds is consistent with and furthers the purposes of the Act; and (ii) the facilities refinanced with the proceeds of the Bonds constitute a "project" within the meaning of Section 469.153, subdivision 2(b) and (d) of the Act. 2. For the purposes set forth above, there is hereby authorized the issuance, sale, and delivery of the Bonds in one or more series in the maximum aggregate principal amount not to exceed $160,000,000. Each series of Bonds shall bear interest at variable rates established on such dates and in accordance with the terms of the Indenture or may be issued, in whole or in part, or converted to Bonds that bear interest at fixed rates in accordance with the terms of the Indenture. Each series of Bonds shall be designated, shall be numbered, shall be dated, shall mature, shall be subject to redemption prior to maturity, shall be in such form, and shall have such other terms, details, and provisions as are prescribed in the Indenture, in the form now on file with the City, with the amendments referenced herein. The City hereby authorizes the Bonds to be issued as "tax- exempt bonds" the interest on which is not includable in gross income for federal and State of Minnesota income tax purposes. Resolution No. 08-094 -4- All of the provisions of the Bonds, when executed as authorized herein, shall be deemed to be a part of this resolution as fully and to the same extent as if incorporated verbatim herein and shall be in full force and effect from the date of execution and delivery thereof. The Bonds shall be substantially in the form or forms set forth in the Indenture, which form or forms are hereby approved, with such necessary and appropriate variations, omissions and insertions (including changes to the name of the Bonds, the aggregate principal amount of the Bonds, the stated maturities of the Bonds and the maturity dates of the Bonds, the initial interest rates on the Bonds and the terms for determining the variable rates or the fixed rates on the Bonds, and the terms of optional and mandatory redemption of the Bonds) as the Mayor of the City and the City Manager of the City (the "Mayor" and "City Manager"), in their discretion, shall determine. The execution of the Bonds with the manual or facsimile signatures of the Mayor and the City Manager and the delivery of the Bonds by the City shall be conclusive evidence of such determination. 3. The Bonds shall be special limited obligations of the City the proceeds of which shall be disbursed pursuant to the terms of the Indenture and the Loan Agreement, and the principal, premium, and interest on the Series Bonds shall be payable solely from the proceeds of the Bonds, the revenues derived from the Obligated Group pursuant to the terms of the Loan Agreement and the Series 2008A/B Obligation, and other funds pledged pursuant to the Indenture. The Bonds may also be secured by the Letter of Credit issued by the Credit Bank. 4. The City Council of the City hereby authorizes and directs the Mayor and the City Manager to execute and deliver the Indenture, and to deliver to the Trustee the Indenture, and hereby authorizes and directs the execution of the Bonds in accordance with the terms of the Indenture, and hereby provides that the Indenture shall provide the terms and conditions, covenants, rights, obligations, duties, and agreements of the owners of the Bonds, the City, and the Trustee as set forth therein. All of the provisions of the Indenture, when executed as authorized herein, shall be deemed to be a part of this resolution as fully and to the same extent as if incorporated verbatim herein and shall be in full force and effect from the date of execution and delivery thereof. The Indenture shall be substantially in the form on file with the City, which is hereby approved, with such necessary and appropriate variations, omissions, and insertions as do not materially change the substance thereof, or as the Mayor and the City Manager, in their discretion, shall determine, and the execution and delivery thereof by the Mayor and the City Manager shall be conclusive evidence of such determination. 5. The Mayor and City Manager are hereby authorized and directed to execute and deliver the Loan Agreement, the Purchase Contract, dated on or after August 1, 2008 (the "Wells Fargo Purchase Contract"), between Wells Fargo Brokerage Services, LLC. ("Wells Fargo") and the City (pursuant to which Wells Fargo will purchase a portion of the Series 2008 Bonds), and the Letter of Representations and Indemnification, dated on or after August 1, 2008 (the "Wells Fargo Letter of Representation"), between the Wells Fargo, the City, and the Obligated Group, the Purchase Contract, dated on or after August 1, 2008 (the "Morgan Stanley Purchase Contract," and collectively with the Wells Fargo Purchase Contract, the "Purchase Contracts"), between Morgan Stanley & Co. Incorporated ("Morgan Stanley") and the City (pursuant to which Morgan Stanley will purchase a portion of the Series 2008 Bonds), and the Letter of Representations and Resolution No. 08-094 -5- Indemnification, dated on or after August 1, 2008 (the "Morgan Stanley Letter of Representations," and collectively with the Wells Fargo Letter of Representations, the "Letters of Representations"), between Morgan Stanley, the City, and the Obligated Group. All of the provisions of the Loan Agreement, the Purchase Contracts, and the Letters of Representations, when executed and delivered as authorized herein, shall be deemed to be a part of this resolution as fully and to the same extent as if incorporated verbatim herein and shall be in full force and effect from the date of execution and delivery thereof. The Loan Agreement, the Purchase Contracts, and the Letters of Representations shall be substantially in the forms on file with the City which are hereby approved, with such omissions and insertions as do not materially change the substance thereof, or as the Mayor and the City Manager, in their discretion, shall determine, and the execution thereof by the Mayor and the City Manager shall be conclusive evidence of such determination. 6. The Bonds shall be revenue obligations of the City the proceeds of which shall be disbursed pursuant to the terms of the Indenture and the Loan Agreement, and the principal, premium, and interest on the Bonds shall be payable solely from the proceeds of the Bonds, the revenues derived from the Loan Agreement, the revenues derived from the Series 2008A/B Obligation, the money held in the funds and accounts established under the Indenture, payments made in accordance with the terms of the Letter of Credit, and the other sources set forth in the Indenture. 7. The Trustee is hereby appointed as the initial paying agent, bond registrar, and tender agent with respect to the Bonds. 8. The Mayor and City Manager of the City are hereby authorized to execute and deliver, on behalf of the City, such other documents as are necessary or appropriate in connection with the issuance, sale, and delivery of the Bonds, including one or more certificates of the City, an endorsement of the City to a tax certificate of the Obligated Group, the Information Return for Tax -Exempt Private Activity Bond Issues, Form 8038, and all other documents and certificates as shall be necessary and appropriate in connection with the issuance, sale, and delivery of the Bonds. The City hereby approves the execution and delivery by the Trustee of the Indenture and all other instruments, certificates, and documents prepared in conjunction with the issuance of the Bonds that require execution by the Trustee. The City hereby authorizes Kennedy & Graven, Chartered, as bond counsel of the City, to prepare, execute, and deliver its approving legal opinion with respect to the Bonds. 9. The City has not participated and will not participate in the preparation of the Official Statement relating to the offer and sale of the Bonds (the "Official Statement") except for information regarding the City to be set forth in the Official Statement under captions entitled "The City" and "Litigation—The City" (collectively, the "City Information"). The City has not made and will not make any independent investigation with respect to the information contained in the Official Statement (except for the City Information), including the appendices thereto, and the City assumes no responsibility for the sufficiency, accuracy, or completeness of such information. Subject to the foregoing, the City hereby consents to the distribution and the use by the Underwriter in connection with the sale of the Bonds of the Official Statement, in the form on file with the City. The Official Statement is the sole material consented to by the City for use in connection with the offer and sale of the Bonds. Resolution No. 08-094 -6- 10. Except as otherwise provided in this resolution, all rights, powers and privileges conferred and duties and liabilities imposed upon the City or the City Council by the provisions of this resolution or of the aforementioned documents shall be exercised or performed by the City or by such members of the City Council, or such officers, board, body or agency thereof as may be required or authorized by law to exercise such powers and to perform such duties. No covenant, stipulation, obligation, or agreement herein contained or contained in the aforementioned documents shall be deemed to be a covenant, stipulation, obligation, or agreement of any member of the City Council of the City, or any officer, agent, or employee of the City in that person's individual capacity, and neither the City Council of the City nor any officer or employee executing the Bonds shall be liable personally on the Bonds or be subject to any personal liability or accountability by reason of the issuance thereof. No provision, covenant, or agreement contained in the aforementioned documents, the Bonds, or in any other document relating to the Bonds, and no obligation therein or herein imposed upon the City or the breach thereof, shall constitute or give rise to any pecuniary liability of the City or any charge upon its general credit or taxing powers. In making the agreements, provisions, covenants, and representations set forth in such documents, the City has not obligated itself to pay or remit any funds or revenues, other than funds and revenues derived from the Loan Agreement and the Series 2008A/B Obligation which are to be applied to the payment of the Bonds, as provided therein and in the Indenture. 11. Except as herein otherwise expressly provided, nothing in this resolution or in the aforementioned documents, expressed or implied, is intended or shall be construed to confer upon any person, firm, or corporation, other than the City or any holder of the Bonds issued under the provisions of this resolution, any right, remedy, or claim, legal or equitable, under and by reason of this resolution or any provisions hereof, this resolution, the aforementioned documents and all of their provisions being intended to be and being for the sole and exclusive benefit of the City and any holder from time to time of the Bonds issued under the provisions of this resolution. 12. In case any one or more of the provisions of this resolution, other than the provisions contained in the first sentence of Section 3 hereof, or of the aforementioned documents, or of the Bonds issued hereunder shall for any reason be held to be illegal or invalid, such illegality or invalidity shall not affect any other provision of this resolution, or of the aforementioned documents, or of the Bonds, but this resolution, the aforementioned documents, and the Bonds shall be construed and endorsed as if such illegal or invalid provisions had not been contained therein. 13. The Bonds, when executed and delivered, shall contain a recital that they are issued pursuant to the Act, and such recital shall be conclusive evidence of the validity of the Bonds and the regularity of the issuance thereof, and that all acts, conditions, and things required by the laws of the State of Minnesota relating to the adoption of this resolution, to the issuance of the Bonds, and to the execution of the aforementioned documents to happen, exist, and be performed precedent to the execution of the aforementioned documents have happened, exist, and have been performed as so required by law. Resolution No. 08-094 -7- 14. The officers of the City, bond counsel, other attorneys, engineers, and other agents or employees of the City are hereby authorized to do all acts and things required of them by or in connection with this resolution, the aforementioned documents, and the Bonds for the full, punctual, and complete performance of all the terms, covenants, and agreements contained in the Bonds, the aforementioned documents, and this resolution. In the event that for any reason the Mayor of the City is unable to execute and deliver the documents referred to in this resolution or carry out any of the other acts provided herein, any persons delegated the duties of the Mayor shall be authorized to act in the capacity of the Mayor and undertake such execution and delivery or acts on behalf of the City with full force and effect, which execution and delivery or acts shall be valid and binding on the City. If for any reason the City Manager of the City is unable to execute and deliver the documents referred to in this resolution or carry out any of the other acts provided herein, any persons delegated the duties of the City Manager shall be authorized to act in the capacity of the City Manager and undertake such execution and delivery or acts on behalf of the City with full force and effect, which execution and delivery or acts shall be valid and binding on the City. 15. The City understands that the Obligated Group will pay directly or through the City any and all costs paid or incurred by the City in connection with the transactions authorized by this resolution, whether or not the Bonds are issued. 16. The City acknowledges that the Obligated Group is proposing to modify and amend the interest rate swap agreements related to the Prior Bonds so that such interest rate swap agreements relate to the Bonds. Such interest rate swap agreements do not affect or alter the obligations of the Obligated Group pursuant to the Loan Agreement or the Series A/B Obligation. The City shall have no rights or obligations under the interest rate swap agreements. 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 authorizes the City Manager or the City Finance Director to execute one or more Books and Records Letter with respect to the interest rate swap agreements, in a form approved by the City's bond counsel. Copies of the Books and Records Letters and the interest rate swap agreements are hereby authorized to be identified on the City's books and records maintained with respect to the Bonds, no later than three (3) days after the modified interest rate swap agreem- is are entered into. 17. This resolution shall be in full force and effect from and after its passage. Review ministration: City Attest: City Clerk Adopted by the City Council July 21, 2008 Mayor 9L&.z(