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.
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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
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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
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