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HomeMy Public PortalAbout2018-088 Resolution Authorizing Issuance of Revenue Obligations for the Benefit of Yeshiva of MinneapolisMember Anderson introduced the following resolution and moved its adoption: CITY OF MEDINA, MINNESOTA RESOLUTION NO.2018-88 RESOLUTION AUTHORIZING THE ISSUANCE OF REVENUE OBLIGATIONS FOR THE BENEFIT OF YESHIVA OF MINNEAPOLIS; AUTHORIZING THE EXECUTION OF THE REVENUE OBLIGATIONS AND RELATED DOCUMENTS; AND TAKING OTHER ACTIONS RELATED THERETO BE IT RESOLVED by the City Council of the City of Medina, 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. 1.02. Minnesota Statutes, Section 471.656, as amended, authorizes a municipality to issue obligations to finance the acquisition or improvement of property located outside of the corporate boundaries of such municipality if the governing body of the city in which the property is located consents by resolution to the issuance of such obligations. 1.03. Yeshiva of Minneapolis, a Minnesota nonprofit corporation (the `Borrower"), has proposed that the City issue its revenue obligations, in one or more series, as taxable or tax-exempt obligations (the "Notes"), in an estimated aggregate principal amount not to exceed $10,000,000, for the benefit of the Borrower for the purposes of (i) refinancing the acquisition of a building located at 4411 Minnetonka Boulevard, St. Louis Park, Minnesota and renovating the building to provide faculty housing and to expand its school facilities located at 3115 Ottawa Avenue South, St.Louis Park, Minnesota by constructing a new gymnasium and constructing new student dormitories (the "Project"); (ii) funding any required reserves; (iii) financing capitalized interest during the construction of the Project; and (iv) paying costs of issuance of the Notes. 1.04. 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. 1.05. Section 147(f) of the Code, and regulations promulgated thereunder, and Section 469.154, subdivision 4 of the Act require that, prior to the issuance of the Notes, the City Council approve the issuance of the Notes after conducting a public hearing thereon preceded by publication of a notice of public hearing (in the form required by Section 147(f) of the Code and applicable regulations) in the official newspaper of and a newspaper of general circulation in the City at least fourteen (14) days prior to the public hearing date. 1.06. A notice of public hearing was published at least fourteen (14) days prior to the regularly scheduled meeting of the City Council in the Crow River News, the official newspaper of and a newspaper of general circulation in the City, with respect to the required public hearing under Section 147(f) of the Code and the Act. Resolution No. 2018-88 December 4, 2018 1.07. On the date hereof, the City Council conducted a duly noticed public hearing at which a reasonable opportunity was provided for interested individuals to express their views, both orally and in writing, on the issuance of the Notes pursuant to the requirements of Section 147(f) of the Code and the regulations promulgated thereunder. 1.08. Pursuant to Section 469.154 of the Act, prior to the issuance of the Notes by the City, the Commissioner of the Minnesota Department of Employment and Economic Development ("DEED") must approve the costs of the Project to be funded by the Notes on the basis of an application submitted by the City with all required attachments and exhibits (the "DEED Application"). 1.09. The Notes will be issued in one or more series, as taxable or tax-exempt obligations, and will be sold to Bremer Bank, National Association (the "Lender"), and the City will loan the proceeds derived from the sale of the Notes to the Borrower pursuant to a Loan Agreement (the "Loan Agreement") between the City and the Borrower. 1.10. The Loan Agreement requires the Borrower to make loan repayments to produce revenue sufficient to pay the principal of, premium, if any, and interest on the Notes when due. The City will assign its rights to the loan repayments, basic payments, and certain other rights under the Loan Agreement to the Lender pursuant to the terms of a Pledge Agreement (the "Pledge Agreement") between the City and the Lender. The Borrower may execute, deliver, or cause to be executed and delivered, to the Lender one or more security agreements and/or guaranties as security. 1.11. Forms of the following documents have been submitted to the City and are now on file with the City: (i) the Notes; (ii) the Loan Agreement; and (iii) the Pledge Agreement. Section 2. Issuance of the Notes. 2.01. The City Council hereby finds, determines, and declares that: (a) The issuance and sale of the Notes, the execution and delivery by the City of the Loan Agreement and the Pledge Agreement, and the performance of all covenants and agreements of the City contained in the Loan Agreement and the Pledge Agreement are undertaken pursuant to the Act. (b) It is hereby found and determined that the Project furthers the purposes set forth in the Act, and therefore the Project constitutes a "project" within the meaning of Section 469.153, subdivision 2(b) of the Act. The City acknowledges, finds, determines, and declares that the issuance of the Notes is authorized by the Act and is consistent with the purposes of the Act and that the issuance of the Notes and the other actions of the City under the Loan Agreement, the Pledge Agreement, and this resolution constitute a public purpose and are in the best interests of the City. (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 principal of, premium, if any, and interest on the Notes 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 Notes shall not be payable from or charged upon any funds other than the revenues or funds and assets pledged to its payment, nor shall the City be subject Resolution No. 2018-88 2 December 4, 2018 to any liability thereon, except as otherwise provided in this paragraph. No holder of the Notes shall ever have the right to compel any exercise by the City of its taxing powers to pay any of the Notes 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 Notes 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 Notes shall recite that the Notes are issued pursuant to the Act and Minnesota Statutes, Section 471.656, that the Notes, including interest and premium, if any, thereon, are payable solely from the revenues and assets pledged to the payment thereof, and the that Notes shall not constitute a debt of the City within the meaning of any constitutional or statutory limitations. 2.02. In accordance with Section 469.154 of the Act, the City Administrator 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 City Administrator 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 Administrator is authorized to initiate and assist in the preparation of such documents as may be deemed appropriate by Bond Counsel. 2.03. The City hereby authorizes the issuance of the Notes in a principal amount not to exceed $10,000,000, subject to approval of the costs related to the Project by DEED. The Notes shall be issued pursuant to the terms set forth in the forms of Notes now on file with the City. The aggregate principal amount of the Notes, the interest rate of the Notes, the terms for adjustment of the interest rate on the Notes, the date of the documents referenced in this resolution and the Notes, and the terms of redemption of the Notes may be established or modified with the approval of the City. The execution and delivery of the Notes shall be conclusive evidence that the City has approved such terms as subsequently established or modified. The offer of the Lender to purchase the Notes at the price of par plus accrued interest, if any, to the date of delivery at the interest rate or rates specified in the Notes is hereby accepted. The Mayor and City Administrator are hereby authorized to execute and deliver any agreements with any depository institution, including any representation letter or amendment to any existing representation letter, in the event the City and the Lender elect to register the Notes in book -entry form. 2.04. The Notes shall be special, limited obligations of the City payable solely from the revenues provided by the Borrower pursuant to the Loan Agreement. The City Council of the City hereby authorizes and directs the Mayor and the City Administrator to execute and deliver the Notes in substantially the forms now on file with the City, subject to final approval by the City Attorney. 2.05. The Loan Agreement and the Pledge Agreement are hereby approved in substantially the forms on file with the City on the date hereof, subject to final approval by the City Attorney. The terms of the Loan Agreement and the Pledge 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 Administrator are authorized and directed to execute and deliver the Loan Agreement and the Pledge 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. 2.06. The Mayor, the City Administrator, and the Finance Director 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 Notes, including a certification of this resolution. Such officers, employees, and agents are hereby Resolution No. 2018-88 December 4, 2018 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 Notes. Without imposing any limitation on the scope of the preceding sentence, such officers, employees, and agents are specifically authorized to execute and deliver one or more certificates of the City, one or more endorsements of the City to the tax certificate of the Borrower, an Information Returns 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 Notes. The City hereby authorizes Kennedy & Graven, Chartered, acting as Bond Counsel, to prepare, execute, and deliver one or more approving legal opinions with respect to the Notes. 2.07. The City hereby authorizes the Borrower to provide such security for payment of its obligations under the Loan Agreement and for payment of the Notes, as is agreed upon by the Borrower and the Lender, and the City hereby approves the execution and delivery of such security. 2.08. 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. To the extent any portion of the proceeds of the Notes 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 Project from the proceeds of the Notes 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 Notes, or other expenditures eligible for reimbursement under Section 1.150-2(d)(3) of the Regulations and also qualifying expenditures under the Act. Section 3. Miscellaneous. 3.01. All agreements, covenants, and obligations of the City contained herein 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 Notes shall be liable personally on the Notes or be subject to any personal liability or accountability by reason of the issuance of the Notes. 3.02. Except as herein otherwise expressly provided, nothing herein 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 Notes, 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 Notes Resolution No. 2018-88 December 4, 2018 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. In case any one or more of the provisions of this resolution, other than the provisions contained in the first sentence of Section 2.04 hereof, or of the documents mentioned herein, or of the Notes 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 Notes, but this resolution, the aforementioned documents, and the Notes 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 Administrator, 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 Administrator 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 Administrator with the same force and effect as if such documents were executed and delivered by the Mayor or the City Administrator. 3.04. The Borrower has agreed to 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 Notes are issued. 3.05. This resolution shall be in full force and effect from and after its passage. Approved by the City Council of the City of Medina, Minnesota, this 4t' day of December, 2018. Kathleen Martin, Mayor Attest: Jodi A. Gallup, City Clerk The motion for the adoption of the foregoing resolution was duly seconded by member Cousineau and upon vote being taken thereon, the following voted in favor thereof: Anderson, Cousineau, DesLauriers, Martin, Pederson And the following voted against same: None Whereupon said resolution was declared duly passed and adopted. Resolution No. 2018-88 December 4, 2018