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HomeMy WebLinkAbout2018-24CITY OF COLUMBIA HEIGHTS, MINNESOTA RESOLUTION NO. 2018-24 RESOLUTION CALLING A PUBLIC HEARING ON THE ISSUANCE OF A REVENUE NOTE AND PROVIDING PRELIMINARY APPROVAL TO THE ISSUANCE THEREOF BE IT RESOLVED by the City Council (the "City Council ") of the City of Columbia Heights, Minnesota (the "City "), as follows: Section 1. Recitals. 1.01. Pursuant to the Constitution and laws of the State of Minnesota, particularly Minnesota Statutes, Sections 469.152 through 469.1655, as amended (the "Act'), the City is authorized 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, whether or not operated for profit. 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 governing body of the municipality in which the property is located consents by resolution to the issuance of such obligations. 1.03. Love To Grow On, a Minnesota nonprofit corporation, or any of its affiliates (the "Borrower "), has proposed that the City issue its revenue note, in one or more series, as a taxable or tax - exempt obligation (the "Note "), in an aggregate principal amount not to exceed $3,800,000. The Borrower has proposed to apply the proceeds of the Note to (i) finance the acquisition, construction, and equipping of an approximately 13,000 square foot early childhood educational facility located at 6499 Lakota Trail, Lino Lakes, Minnesota (the "Project'); (ii) finance capitalized interest on the Note during construction of the Project, if necessary; (iii) fund required reserves for the Note, if any; and (iv) pay the costs of issuing the Note. The Project will be owned and operated by the Borrower. 1.04. Pursuant to Section 469.154 of the Act, prior to the issuance of the Note by the City, the Commissioner of the Minnesota Department of Employment and Economic Development ( "DEED ") must approve the costs of the Project on the basis of an application submitted by the City with all required attachments and exhibits (the "DEED Application "). 1.05. Under Section 147(f) of the Internal Revenue Code of 1986, as amended (the "Code "), prior to the issuance of the Note, the City Council must conduct a public hearing after one publication of notice in a newspaper circulating generally in the City at least fourteen (14) days before the hearing. Under Section 469.154, subdivision 4 of the Act, a public hearing must be held after one publication of notice in the official newspaper of and a newspaper of general circulation in the City at least fourteen (14) days before the hearing. 1.06. The Borrower has requested that the City Council conduct a public hearing on Tuesday, May 29, 2018, to (i) approve the issuance of the Note pursuant to the requirements of Section 147(f) of the Code and the regulations promulgated thereunder; and (ii) approve the Project pursuant to Section 469.154, subdivision 4 of the Act. 521192v2 JAE CL 162-55 Section 2. Preliminary Findings. Based on representations made by the Borrower to the City to date, the City Council hereby makes the following preliminary findings, determinations, and declarations: (a) The proceeds of the Note will be loaned to the Borrower and the proceeds of the loan will be applied to (i) finance the Project; (ii) finance capitalized interest on the Note during construction of the Project, if necessary; (iii) fund required reserves for the Note, if any; and (iv) pay the costs of issuing the Note. The City will enter into a loan agreement (or other revenue agreement) with the Borrower requiring loan repayments from the Borrower in amounts sufficient to repay the loan of the proceeds of the Note when due and requiring the Borrower to pay all costs of maintaining and insuring the Project, including taxes thereon. (b) In preliminarily authorizing the issuance of the Note and the financing of the Project, the City's purpose is to further the policies of the Act. (c) The Note will be a special, limited obligation 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 Hearing. 3.01. The City Council shall meet at 7:00 p.m. on Tuesday, May 29, 2018, 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. Kennedy & Graven, Chartered, as bond counsel to the City ( "Bond Counsel "), is hereby authorized and directed to publish the Public Notice, in substantially the form attached hereto as EXHIBIT A, in the Sun - Focus, the official newspaper of and a newspaper of general circulation in the City. The Public Notice shall be published 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 Note and the Project. 3.03. 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 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 Approvals. 4.01. The City Council hereby states its preliminary intention to issue the Note in the maximum aggregate principal amount of $3,800,000 to (i) finance the Project; (ii) finance capitalized interest on the Note during construction of the Project, if necessary; (iii) fund required reserves for the Note, if any; and (iv) pay the costs of issuing the Note. The issuance of the Note is also subject to the mutual agreement of the City, the Borrower, and the initial purchaser of the Note as to the details of the Note and provisions for its payment. 521192v2 JAE CL 162-55 2 4.02. The Note shall not constitute a charge, lien, or encumbrance, legal or equitable, upon any property of the City except the City's interest in the loan or revenue agreement with respect to the Note and the Project. The Note, when, as, and if issued, shall recite in substance that the Note, including interest thereon, is payable solely from the revenues received from the Project and property pledged to the payment thereof, and shall not constitute a general or moral obligation of the City. 4.03. The law firm of Kennedy & Graven, Chartered, is authorized to act as Bond Counsel and to assist in the preparation and review of necessary documents relating to the Project and the Note issued in connection therewith. The Mayor, the City Manager, and other officers, employees, and agents of the City are hereby authorized to assist Bond Counsel in the preparation of such documents. Section 5. Reimbursement of Costs under the Code. 5.01. Treasury Regulation s. 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 (18) 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 (3) 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 Ex enditures. To the extent any portion of the proceeds of the Note will be applied to expenditures with respect 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 Note 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 Note, 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. Costs. The Borrower will pay the administrative fee of the City and pay, or, upon demand, reimburse the City for payment of, any and all costs incurred by the City in connection with the Project and the issuance of the Note, whether or not the Note is issued. Section 7. Commitment Conditional. The adoption of this resolution does not constitute a guaranty or firm commitment that the City will issue the Note as requested by the Borrower. The City retains the right in its sole discretion to withdraw from participation and accordingly not to issue the Note, or to issue the Note 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 Note, or to issue the Note in an amount less than the amount referred to herein, 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. Section 8. Effective Date. This resolution shall be in full force and effect from and after its passage. 521192v2 JAE CL162 -55 Approved by the City Council of the City of Columbia Heights, Minnesota this 23d day of April, 2018. Motion by: Williams Seconded by: Buesgens All Ayes dy AIL JLtA Mayor Attest: City Clerk 521192v2 JAE CL162 -55 4 EXHIBIT A NOTICE OF PUBLIC HEARING CITY OF COLUMBIA HEIGHTS, MINNESOTA NOTICE OF PUBLIC HEARING WITH RESPECT TO A PROJECT DESCRIBED IN MINNESOTA STATUTES, SECTIONS 469.152 THROUGH 469.1655, AS AMENDED, AND THE ISSUANCE OF A REVENUE NOTE THEREUNDER NOTICE IS HEREBY GIVEN that the City Council of the City of Columbia Heights, Minnesota (the "City ") will hold a public hearing on Tuesday, May 29, 2018, at or after 7:00 p.m., at the Council Chambers in City Hall, located at 590 401h Avenue NE in the City, to consider a proposal regarding the issuance of a revenue obligation of the City, in one or more series, as a taxable or tax - exempt obligation (the "Note "), under Minnesota Statutes, Sections 469.152 through 469.1655, as amended (the "Act "), and Minnesota Statutes, Section 471.656, as amended, on behalf of Love To Grow On, a Minnesota nonprofit corporation, or any of its affiliates (the "Borrower "). The Borrower will use the proceeds of the Note to (i) finance the acquisition, construction, and equipping of an approximately 13,000 square foot early childhood educational facility located at 6499 Lakota Trail, Lino Lakes, Minnesota (the "Project"); (ii) finance capitalized interest on the Note during construction of the Project, if necessary; (iii) fund required reserves for the Note, if any; and (iv) pay the costs of issuing the Note. The Project to be financed with the proceeds of the Note will be owned and operated by the Borrower. Following the public hearing, the City Council will consider adoption of a resolution approving the Project in accordance with the requirements of the Act and the issuance of the Note. The aggregate face amount of the Note proposed to be issued to finance the Project is presently estimated not to exceed $3,800,000 and may be issued in one or more series. The Note proposed to be issued by the City will constitute a special, limited obligation of the City payable solely from the revenues expressly pledged to the payment thereof, will not be 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 any interests of the City in the Project that may be granted to the City in conjunction with this financing. A draft copy of the proposed application to the Minnesota Department of Employment and Economic Development for approval of the Project, together with all attachments and exhibits required under the Act, shall be available for public inspection at City Hall during normal business hours following the publication of this notice. All interested persons may appear and be heard at the time and place set forth above. In addition, interested persons may direct any questions or file written comments respecting the proposal with the City Clerk, at or prior to said public hearing. Dated: [Date of Publication] BY ORDER OF THE CITY COUNCIL OF THE CITY OF COLUMBIA HEIGHTS, MINNESOTA /s/ Katie Bruno City Clerk City of Columbia Heights, Minnesota A -1 521192v2 JAE CL162 -55