Loading...
HomeMy WebLinkAbout12-133 - ADMIN Resolution - City Council - 2012/09/24RESOLUTION NO. 12-133 RESOLUTION AUTHORIZING THE ISSUANCE, SALE AND DELIVERY OF THE REVENUE NOTE (BRECK SCHOOL PROJECT), SERIES 2012A; APPROVING THE FORM OF AND AUTHORIZING THE EXECUTION AND DELIVERY OF THE NOTE AND RELATED DOCUMENTS; PROVIDING FOR THE SECURITY, RIGHTS, AND REMEDIES WITH RESPECT TO THE NOTE; AND GRANTING APPROVAL FOR CERTAIN OTHER ACTIONS WITH RESPECT THERETO BE IT RESOLVED by the City Council of the City of St. Louis Park, Minnesota (the "City"), as follows: Section 1. Background. 1.01. Statutory Authorization. The City is authorized by Minnesota Statutes, Sections 469.152 through 469.1651, as amended (the "Act"), to issue revenue obligations 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, in part, as any properties, real or personal, used or useful in connection with a revenue producing enterprise, or any combination of two or more such enterprises engaged in any business. 1.02. The Senes 2012A Note. Breck School, a Minnesota nonprofit corporation (the "Borrower"), has requested that the City issue its Revenue Note (Breck School Project), Series 2012A (the "Senes 2012A Note"), in one or more series, in the onginal aggregate principal amount not to exceed $6,500,000, and loan the proceeds derived from the sale of the Series 2012A Note to the Borrower pursuant to the terms of a Loan Agreement, to be dated on or after October 1, 2012 (the "Loan Agreement"), between the City and the Borrower. The Series 2012A Note is proposed to be purchased by U.S. Bank National Association, a national banking association (the "Lender"). 1.03. The Project. The Borrower has also requested that the City of Minnetonka, Minnesota ("Minnetonka"), issue its Revenue Note (Breck School Project), Series 2012B (the "Senes 2012B Note," and together with the Series 2012A Note, the "Notes"), in one or more series, in the onginal aggregate principal amount not to exceed $6,500,000 and loan the proceeds thereof to the Borrower. The proceeds of the Notes will be applied to the following purposes: (i) to finance the costs of the demolition of a significant portion of the existing Upper School on the Borrower's campus located at 123 Ottawa Avenue North in Golden Valley, Minnesota, and the construction and equipping of a new Upper School on the same site, including the rehabilitation and repurposing of the existing science facilities (the "Project"); (ii) to fund one or more reserve funds, if necessary; (iii) to pay capitalized interest on the Notes; and (iv) to pay the costs of issuance of the Notes and other costs related to the Project. 1.04. Joint Powers Authority. (a) Pursuant to Minnesota Statutes, Section 471.656, as amended, a city may issue obligations to finance the acquisition or improvement of property located outside of the corporate boundaries of such city if the obligations are issued under a joint powers agreement in which one or more of the parties to the joint powers agreement issue such obligations and the property is located entirely within the boundaries of one or more of the parties to the joint powers agreement. (b) Pursuant to Minnesota Statutes, Section 471.59, as amended, by the terms of a point powers agreement entered into through action of their governing bodies, two or more cities Resolution No. 12-133 -2- may jointly or cooperatively exercise any power common to the contracting parties or any similar powers, including those which are the same except for the territorial limits within which they may be exercised and the joint powers agreement may provide for the exercise of such powers by one or more of the participating governmental units on behalf of the other participating units. (c) The City, Minnetonka, and the City of Golden Valley, Minnesota ("Golden Valley") are all authorized by the Act to issue revenue obligations to finance the Project. The City, Golden Valley, and Minnetonka are proposing to enter into a Joint Powers Agreement, to be dated on or after October 1, 2012 (the "Joint Powers Agreement"), pursuant to which Golden Valley, as host city, will consent to the issuance of revenue obligations and the financing of the Project by the City and Minnetonka, and pursuant to which the City and Minnetonka will agree to issue such revenue obligations to finance the Project. 1.05. Tax -Exempt Status of Borrower. The Borrower has represented to the City that it is exempt from federal income taxation under Section 501(a) of the Internal Revenue Code of 1986, as amended (the "Code"), as a result of the application of Section 501(c)(3) of the Code. 1.06. Loan Repayments. The loan repayments to be made by the Borrower under the Loan Agreement will be fixed so as to produce revenue sufficient to pay the principal of, premium, if any, and interest on the Series 2012A Note when due. The City will assign its rights to the basic payments and certain other rights under the Loan Agreement to the Lender pursuant to the terms of a Pledge Agreement, to be dated on or after October 1, 2012 (the "Pledge Agreement"), between the City and the Lender. The Borrower will secure its obligations by executing and delivering to the Lender a Supplemental Agreement, to be dated on or after October 1, 2012 (the "Supplemental Agreement"). 1.07. Disbursement of Series 2012A Note Proceeds. The proceeds of the Series 2012A Note will be disbursed by the Lender to the Borrower pursuant to the Loan Agreement and the Supplemental Agreement. 1.08. Documents. Forms of the following documents have been submitted to the City and are now on file with the City: (i) a form of the Series 2012A Note; (ii) the Loan Agreement; (iii) the Pledge Agreement; (iv) the Joint Powers Agreement; and (v) the Supplemental Agreement. 1.09. Public Hearing. Section 147(0 of the Code, and regulations promulgated thereunder, requires that prior to the issuance of the Note, the City Council of the City must approve the Note after conducting a public hearing thereon. Section 469.154, subdivision 4, of the Act requires that prior to submitting an application to the Minnesota Department of Employment and Economic Development ("DEED") for approval of the Project, the City Council must conduct a public hearing on the proposal to undertake projects authorized to be financed under the terms of the Act. A notice of public hearing (the "Public Notice") was published in the Sun -Sailor, the official newspaper and a newspaper of general circulation in the City, with respect to: (i) the required public hearing under Section 147(0 of the Code; (ii) the required hearing under Section 469.154, subdivision 4, of the Act; and (iii) approval of the issuance of the Note. The Public Notice was published at least fourteen (14) days before a special meeting of the City Council conducted on September 24, 2012. On such date, the City Council conducted a public hearing at which a reasonable opportunity was provided for interested individuals to express their views, both orally and in writing, with respect to the proposed issuance of the Series 2012A Note and the location and nature of the Project. Resolution No. 12-133 -3- Section 2. Issuance of the Series 2012A Note. • 2.01. Findings. The City Council hereby finds, determines, and declares that: (a) The issuance and sale of the Series 2012A Note, the execution and delivery by the City of the Series 2012A Note, the Loan Agreement and the Pledge Agreement, and the performance of all covenants and agreements of the City contained in the Loan Agreement, the Pledge Agreement, and the Joint Powers Agreement are undertaken pursuant to the Act. (b) The Project furthers the economic development purposes stated in Section 469.152 of the Act and constitutes a revenue producing "project," as defined in Section 469.153, subdivision 2(b), of the Act. (c) The loan repayments to be made by the Borrower under the Loan Agreement are fixed to produce revenues sufficient to provide for the prompt payment of pnncipal of, premium, if any, and interest on the Series 2012A Note issued under this resolution 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, including, but without limitation, adequate insurance thereon and insurance against all liability for injury to persons or property arising from the operation thereof, and all lawfully imposed taxes and special assessments levied upon or with respect to the Project and payable during the term of the Loan Agreement. (d) As provided in the Loan Agreement, the Series 2012A Note shall not be payable from nor charged upon any funds other than the revenues pledged to its payment, nor shall the City be subject to any liability thereon, except as otherwise provided in this paragraph. No holder of the Series 2012A Note shall ever have the right to compel any exercise by the City of its taxing powers to pay any of the Senes 2012A Note or the interest or premium thereon, or to enforce payment thereof against any property of the City except the interests of the City in the Loan Agreement and the revenues and assets thereunder, which will be assigned to the Lender under the Pledge Agreement. The Series 2012A Note shall not constitute a charge, lien, or encumbrance, legal or equitable, upon any property of the City, except the interests of the City in the Loan Agreement, and the revenues and assets thereunder, which will be assigned to the Lender under the Pledge Agreement. The Series 2012A Note shall recite that the Senes 2012A Note is issued pursuant to the Act, and that the Series 2012A Note, including interest and premium, if any, thereon, is payable solely from the revenues and assets pledged to the payment thereof, and the Series 2012A Note shall not constitute a debt of the City within the meaning of any constitutional or statutory limitations. 2.02. Issuance and Sale of the Series 2012A Note. The City hereby authorizes the issuance of the Senes 2012A Note in a principal amount not to exceed $6,500,000, in one or more series, in the form, and with the terms set forth in the form of the Senes 2012A Note now on file with the City. The aggregate principal amount of the Series 2012A Note, the interest rate of the Series 2012A Note, the terms for adjustment of the interest rate on the Series 2012A Note, the date of the documents referenced in this resolution and the Series 2012A Note, and the terms of redemption of the Series 2012A Note may be established or modified with the approval of the City. The execution and delivery of the Series 2012A Note shall be conclusive evidence that the City has approved such terms as subsequently established or modified. The offer of the Lender to purchase the Series 2012A Note at the price of par plus accrued interest, if any, to the date of delivery at the interest rate or rates specified in the Series 2012A Note is hereby accepted. Upon approval of the Project by DEED, the Mayor and City Manager of the City are authorized and directed to prepare and execute the Series 2012A Note as prescnbed in the Loan Agreement and the Series 2012A Note shall be delivered to the Lender. The Mayor and City Manager of the City are hereby authonzed to execute and deliver any agreements with any depository institution, Resolution No. 12-133 -4- including any representation letter or amendment to any existing representation letter, in the event the City and the Lender elect to register the Series 2012A Note in book -entry form. 2.03. Approval of Documents. The Loan Agreement, the Pledge Agreement, and the Joint Powers Agreement are hereby approved in substantially the forms on file with the City on the date hereof. The terms of the Loan Agreement, the Pledge Agreement, and the Joint Powers Agreement may be established or modified with the approval of the City. The execution and delivery of such documents shall be conclusive evidence that the City has approved such terms as subsequently established or modified. The Mayor and City Manager of the City are authorized and directed to execute and deliver the Loan Agreement, the Pledge Agreement, and the Joint Powers Agreement. Copies of all of the documents necessary to the transaction herein described shall be delivered, filed, and recorded as provided herein and in the Loan Agreement. 2.04. Certifications of the City. The Mayor and City Manager of the City and other officers, employees, and agents of the City are hereby authorized and directed to prepare and furnish to bond counsel and the Lender certified copies of all proceedings and records of the City relating to the issuance of the Series 2012A Note, including a certification of this resolution. Such officers, employees, and agents are hereby authorized to execute and deliver, on behalf of the City, all other certificates, instruments, and other written documents that may be requested by bond counsel, the Lender, or other persons or entities in conjunction with the issuance of the Series 2012A Note. Without imposing any limitation on the scope of the preceding sentence, such officers, employees, and agents are specifically authorized to execute and deliver a certificate relating to federal tax matters including matters relating to arbitrage and rebate certificate, a receipt for the proceeds derived from the sale of the Series 2012A Note, an order as to the application of the proceeds of the Series 2012A Note, a general certificate of the City, and an Information Return for Tax -Exempt Private Activity Bond Issues, Form 8038 (Rev. April 2011). 2.05. Security for the Series 2012A Note. The City hereby authorizes the Borrower to provide such security for payment of its obligations under the Loan Agreement and for payment of the Series 2012A Note, as is agreed upon by the Borrower and the Lender. 2.06. DEED Application. As required by the terms of Section 469.154 of the Act, the employees, officers, and agents of the City are hereby authorized and directed to submit an application to DEED for approval of the Project and the issuance of the Series 2012A Note. 2.07. Bank Qualification Designation. The City hereby determines that the reasonably anticipated amount of tax-exempt obligations which will be issued by the City during calendar year 2012 does not exceed $10,000,000. The 2012A Note is hereby designated as a "qualified tax-exempt obligation" by the City for the purposes of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended. Section 3. Miscellaneous. 3.01. Agreements Binding. All agreements, covenants, and obligations of the City contained in this resolution and in the above -referenced documents shall be deemed to be the agreements, covenants, and obligations of the City to the full extent authorized or permitted by law, and all such agreements, covenants, and obligations shall be binding on the City and enforceable in accordance with their terms. No agreement, covenant, or obligation contained in this resolution or in the above -referenced documents shall be deemed to be an agreement, covenant, or obligation of any member of the City Council, or of any officer, employee, or agent of the City in that person's individual capacity. Neither the members of the City Council nor any officer executing the Series 2012A Note shall be liable personally on the Series 2012A Note or • • • Resolution No. 12-133 -5- be subject to any personal liability or accountability by reason of the issuance of the Series 2012A Note. 3.02. Rights Conferred. Except as herein otherwise expressly provided, nothing in this resolution or in the Loan Agreement, expressed or implied, is intended or shall be construed to confer upon any person, firm, or corporation other than the City and the registered and beneficial owners of the Series 2012A Note, any right, remedy, or claim, legal or equitable, under and by reason of this resolution or any provision hereof or of the Loan Agreement or any provision thereof; this resolution, the Loan Agreement and all of their provisions being intended to be, and being for the sole and exclusive benefit of the City and the registered and beneficial owners of the Series 2012A Note issued under the provisions of this resolution and the Loan Agreement, and the Borrower to the extent expressly provided in the Loan Agreement. 3.03. Validity. In case any one or more of the provisions of this resolution, or of the documents mentioned herein, or of the Series 2012A Note 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 Series 2012A Note, but this resolution, the aforementioned documents, and the Series 2012A Note shall be construed and endorsed as if such illegal or invalid provisions had not been contained therein. If for any reason the Mayor or the City Manager of the City, or any other officers, employees, or agents of the City authorized to execute certificates, instruments, or other written documents on behalf of the City, shall for any reason cease to be an officer, employee, or agent of the City after the execution by such person of any certificate, instrument, or other written document, such fact shall not affect the validity or enforceability of such certificate, instrument, or other written document. If for any reason the Mayor or the City Manager is unable to execute and deliver the documents referred to in this resolution, such documents may be executed by any member of the City Council or any officer of the City delegated the duties of the Mayor or the City Manager with the same force and effect as if such documents were executed and delivered by the Mayor or the City Manager. 3.04. Effective Date. This resolution shall be in full force and effect from and after its approval. A' .. ed by the City Council of the City of St. Louis Park, Minnesota, this 24th day of `epte ober, 2012. R for • dministration: 1111. City ' a,� r Attest: / l City Clerk Adopted by the City Council September 24, 2012