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HomeMy WebLinkAbout16-042 - ADMIN Resolution - City Council - 2016/03/21RESOLUTION NO. 16-042 RESOLUTION CALLING A PUBLIC HEARING REGARDING THE ISSUANCE OF REVENUE BONDS UNDER MINNESOTA STATUTES, SECTIONS 469.152 THROUGH 469.1655, AS AMENDED, AND PROVIDING PRELIMINARY APPROVAL TO THE ISSUANCE THEREOF BE IT RESOLVED by the City Council of the City of St. Louis Park, Minnesota (the "City"), as follows: Section 1. Recitals. 1.01. Pursuant to Minnesota Statutes, Sections 469.152 through 469.1655, as amended (the "Act"), the City is authorized to issue revenue obligations to finance or refinance, 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, whether or not operated for profit, engaged in providing health care services, including hospitals, nursing homes, and related medical facilities. 1.02. Pursuant to Minnesota Statutes, Section 471.656, as amended, a municipality is authorized to issue obligations to finance the acquisition or improvement of property located outside of the corporate boundaries of such municipality if the obligations are issued under a joint powers agreement between the governmental unit issuing the obligations and the governmental unit in which the property to be acquired or improved is located. Pursuant to Minnesota Statutes, Section 471.59, as amended, by the terms of a joint powers agreement entered into through action of their governing bodies, two governmental units 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. 1.03. Mount Olivet Careview Home, a Minnesota nonprofit corporation ("Mount Olivet Careview"), and Mount Olivet Home, a Minnesota nonprofit corporation ("Mount Olivet Home," and together with Mount Olivet Careview, the `Borrower"), have proposed that the City issue its revenue obligations, in one or more series, as taxable or tax-exempt obligations, in an aggregate principal amount not to exceed $33,000,000, and loan the proceeds thereof to the Borrower. The Borrower intends to apply the proceeds thereof, along with other available funds, to (i) refinance the Mount Olivet Home, a 94 -bed boarding care facility (the "Care Facility") located at 5517 Lyndale Avenue South in the City of Minneapolis (the "City of Minneapolis") through the redemption and prepayment of the outstanding Revenue Bond (Mount Olivet Home Project), Series 2011 (the "Prior Bond"), issued by the Minneapolis Community Development Agency in the original aggregate principal amount of $5,971,000; (ii) finance the acquisition, construction, and equipping of a new 36,000 square foot addition to the Mount Olivet Careview Home, a 153 - bed licensed skilled nursing facility (the "Skilled Nursing Facility") located at 603 West 55`x' Street in the City of Minneapolis; (iii) finance the remodeling of approximately 51,000 square feet of the existing Skilled Nursing Facility; (iv) fund debt service reserve funds; (v) finance capitalized interest during the construction of the addition to the Skilled Nursing Facility and remodeling of the Skilled Nursing Facility (the "New Construction"); and (vi) pay costs of issuance of the Bonds. Resolution No. 16-042 -2- 1.04. The Borrower has requested that the City Council conduct a public hearing on April 18, 2016 to (i) approve the issuance of the Bonds pursuant to the requirements of Section 147(f) of the Internal Revenue Code of 1986, as amended (the "Code") and the regulations promulgated thereunder; and (ii) approve the New Construction pursuant to Section 469.154, subdivision 4 of the Act. Section 2. Preliminary Findings. Based on representations made by the Borrower to the City to date, the City Council of the City hereby makes the following preliminary findings, determinations, and declarations: (a) The proceeds of the Bonds will be loaned to the Borrower and the proceeds thereof, along with available funds, will be used to refinance the Care Facility through the redemption and prepayment of the Prior Bond, finance the New Construction to the Skilled Nursing Facility, fund debt service reserve funds, finance capitalized interest during the New Construction of the Skilled Nursing Facility, and pay costs of issuance of the Bonds. The City will enter into one or more loan agreements (or other revenue agreements) with the Borrower requiring loan repayments from the Borrower in amounts sufficient to repay the loan of the proceeds of the Bonds when due and requiring the Borrower to pay all costs of maintaining and insuring the Care Facility and the Skilled Nursing Facility (including the New Construction thereto), including taxes thereon. (b) In preliminarily authorizing the issuance of the Bonds, the City's purpose is to further the policies of the Act. (c) The Bonds will be special, limited obligations of the City payable solely from the revenues pledged to the payment thereof, will not be a general or moral obligation of the City, and will not be secured by or payable from revenues derived from any exercise of the taxing powers of the City. Section 3. Public Hearin. 3.01. The City Council shall meet at 7:30 p.m. on Monday, April 18, 2016, to conduct a public hearing as requested by the Borrower, notice of which hearing (the "Public Notice") will be published as required by Section 469.154, subdivision 4 of the Act and Section 147(f) of the Code. 3.02. The City Cleric is hereby authorized and directed to publish the Public Notice, in substantially the form attached hereto as EXHIBIT A, in the Sun -Sailor, the official newspaper of the City and a newspaper of general circulation in the City. The Public Notice shall be published at least once, at least fourteen (14) days prior to the date of the public hearing. At the public hearing, reasonable opportunity will be provided for interested individuals to express their views, both orally and in writing, on the proposed issuance of the Bonds for the purposes set forth herein. 3.03. Pursuant to Section 469.154 of the Act, prior to the issuance of the Bonds by the City, the Commissioner of the Minnesota Department of Employment and Economic Development ("DEED") must approve the costs of the New Construction to be funded by the Bonds on the basis of an application submitted by the City with all required attachments and exhibits (the "DEED Application"). Resolution No. 16-042 -5- EXHIBIT A NOTICE OF PUBLIC HEARING CITY OF ST. LOUIS PARK, MINNESOTA NOTICE OF PUBLIC HEARING ON THE ISSUANCE OF REVENUE BONDS UNDER MINNESOTA STATUTES, SECTIONS 469.152 THROUGH 469.1655, AS AMENDED NOTICE IS HEREBY GIVEN that the City Council of the City of St. Louis Park, Minnesota (the "City"), will hold a public hearing on Monday, April 18, 2016, at or after 7:30 p.m. at City Hall, 5005 Minnetonka Boulevard in the City, on a proposal that the City Council approve and authorize the issuance by the City of its revenue bonds, in one or more series, as taxable or tax-exempt obligations (the "Bonds"), under Minnesota Statutes, Sections 469.152 through 469.1655, as amended (the "Act'), for the benefit of Mount Olivet Careview Home, a Minnesota nonprofit corporation ("Mount Olivet Careview"), and Mount Olivet Home, a Minnesota nonprofit corporation ("Mount Olivet Home"), or any of their affiliates (collectively, the `Borrower"). The proceeds of the Bonds, along with other available funds, will be used to (i) refinance Mount Olivet Home, a 94 -bed boarding care facility (the "Care Facility") located at 5517 Lyndale Avenue South in the City of Minneapolis (the "City of Minneapolis") through the redemption and prepayment of the outstanding Revenue Bond (Mount Olivet Home Project), Series 2011 (the "Prior Bond"), issued by the Minneapolis Community Development Agency in the original aggregate principal amount of $5,971,000; (ii) finance the acquisition, construction, and equipping of a new 36,000 square foot addition to the Mount Olivet Careview Home, a 153 -bed licensed skilled nursing facility (the "Skilled Nursing Facility") located at 603 West 55`1' Street in the City of Minneapolis; (iii) finance the remodeling of approximately 51,000 square feet of the existing Skilled Nursing Facility; (iv) fund debt service reserve funds; (v) finance capitalized interest during the construction of the addition to the Skilled Nursing Facility and remodeling of the Skilled Nursing Facility (collectively, the "New Construction"); and (vi) pay costs of issuance of the Bonds. The Care Facility is owned and operated by Mount Olivet Home, and the Skilled Nursing Facility is owned and operated by Mount Olivet Careview. Following the public hearing, the City Council will consider adoption of a resolution approving the issuance of the Bonds to (i) refinance the Care Facility through the redemption and prepayment of the Prior Bond; (ii) finance the New Construction of the Skilled Nursing Facility; (iii) fund debt service funds; (iv) finance capitalized interest during the New Construction of the Skilled Nursing Facility; and (v) pay costs of issuance of the Bonds (collectively, the "Project'). The aggregate face amount of the Bonds proposed to be issued to finance the Project is presently estimated not to exceed $33,000,000. The Bonds will be issued by the City and will constitute special, limited obligations of the City payable solely from the revenues expressly pledged to the payment thereof, and will not constitute a general or moral obligation of the City and will not be secured by the taxing power of the City or any assets or property of the City except interests in the Project that may be granted to the City in conjunction with the financing. A draft copy of the proposed application to the Minnesota Department of Employment and Economic Development for approval of the New Construction of the Skilled Nursing Facility to be financed with the proceeds of the Bonds, together with all attachments and exhibits, shall be available for public inspection at City Hall during normal business hours following the publication of this notice. Resolution No. 16-042 -6- All persons interested may appear and be heard at the time and place set forth above or may file written comments with the City Clerk prior to the date of the hearing set forth above. Dated: [Date of publication] BY ORDER OF THE CITY COUNCIL OF THE CITY OF ST. LOUIS PARK, MINNESOTA /s/ Melissa Kennedy City Clerk City of St. Louis Park, Minnesota Resolution No. 16-042 -3- 3.04. In accordance with Section 469.154 of the Act, the City Manager and other City staff are hereby authorized and directed to cause a draft copy of the DEED Application, together with drafts of all required attachments and exhibits, to be prepared by Kennedy & Graven, Chartered, as bond counsel ("Bond Counsel'). The DEED Application, together with all attachments and exhibits, shall be made available for public inspection in the office of the City Manager during regular business hours of the City. The City Manager and other officers, employees, attorneys, and agents of the City are hereby authorized to provide DEED with any information needed for this purpose, and the City Manager is authorized to initiate and assist in the preparation of such documents as may be deemed appropriate by Bond Counsel. Section 4. Preliminary Approval. The City Council hereby states its preliminary intention to issue the Bonds in the maximum aggregate principal amount of $33,000,000 to (i) refinance the Care Facility by refunding the outstanding Prior Bond; (ii) finance the New Construction of the Skilled Nursing Facility; (iii) fund debt service reserve funds; (iv) finance capitalized interest during the New Construction of the Skilled Nursing Facility; and (v) pay the costs of issuing the Bonds. Section 5. Reimbursement of Costs under the Code. 5.01„ Treasury Regulations. The United States Department of the Treasury has promulgated final regulations governing the use of the proceeds of tax-exempt bonds, all or a portion of which are to be used to reimburse the City or a borrower from the City for project expenditures paid prior to the date of issuance of such bonds. Those regulations (Treasury Regulations, Section 1.150-2) (the "Regulations") require that the City adopt a statement of official intent to reimburse an original expenditure not later than sixty (60) days after payment of the original expenditure. The Regulations also generally require that the bonds be issued and the reimbursement allocation made from the proceeds of the bonds occur within eighteen months after the later of (i) the date the expenditure is paid; or (ii) the date the project is placed in service or abandoned, but in no event more than three years after the date the expenditure is paid. The Regulations generally permit reimbursement of capital expenditures and costs of issuance of the bonds. 5.02. Reimbursement for Expenditures. To the extent any portion of the proceeds of the Bonds will be applied to expenditures with respect to the capital improvements to the Project, the City reasonably expects to reimburse the Borrower for the expenditures made for costs of the New Construction from the proceeds of the Bonds after the date of payment of all or a portion of such expenditures. All reimbursed expenditures shall be capital expenditures, costs of issuance of the Bonds, or other expenditures eligible for reimbursement under Section 1.150-2(d)(3) of the Regulations and also qualifying expenditures under the Act. Section 6. Official Statement. Other than providing information regarding the City, the City has not and will not participate in the preparation of the Preliminary Official Statement (the "Preliminary Official Statement") or the Official Statement (the "Official Statement") relating to the Bonds and the City assumes no responsibility for the sufficiency, accuracy, or completeness of the information contained in the Preliminary Official Statement and the Official Statement. 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 Preliminary Official Statement and the Official Statement. Section 7. Costs. The Borrower will pay the administrative fees of the City and pay, or, upon demand, reimburse the City for payment of, any and all costs incurred by the City in Resolution No. 16-042 -4- connection with the refinancing of the Care Facility and the financing of the New Construction of the Skilled Nursing Facility and issuing the Bonds, whether or not the Bonds are issued. Section 8. Commitment Conditional. The adoption of this resolution does not constitute a guaranty or firm commitment that the City will issue the Bonds as requested by the Borrower. The City retains the right in its sole discretion to withdraw from participation and accordingly not to issue the Bonds, or issue the Bonds in an amount less than the amount referred to herein, should the City at any time prior to issuance thereof determine that it is in the best interest of the City not to issue the Bonds, or to issue the Bonds in an amount less than the amount referred to in Section 4 hereof, or should the parties to the transaction be unable to reach agreement as to the terms and conditions of any of the documents required for the transaction. after Section 9. Effective Date. This resolution shall be in full force and effect from and the City Council of the City of St. Louis Park, Minnesota, this 21" day of March, 2016. the City Council March 21, 2016 Manager Attest: Me issa Kennedy -,City Clerk