ITEM 4.1 Resolution 13-47Request for
0tSTy OF
C1 2g0 City Council Action
DEPARTMENT ENT I FO MATIOI
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ORIGINATING DEPA T ENT: �F�� UEST R: MEETING DATE:
Administration Lori Johnson, City Administrator August 2 , 2013
P BSENTER(s): REV] BY: ITEM :
Lori Johnson, City Administrator Documents reviewed by City 4.1
Bond Counsel
AGENDA ITEM DETAILS
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RECOMMENDATION:
Adopt the resolution authorizing and providing for the issuance and sale of revenue bonds in an
aggregate amount up to $10,000,000., at the request of Evans Park., Inc., and approving the
forms of documents required in connection therewith.
ARE YOU SEE KIN G APPROVAL OF A CONTRACT?IS A PUBLIC HEA I NG F E UIRE D?
No No
B KGROUNDIJUSTIFI ATION:
On July 22, 2013, tine City Council adopted a resolution giving preliminary approval to issuance of bonds
for the Evans Pari, Inc., senior housing and health care project to Albertville. Attached is a resolution to
authorize the sale of the bonds. Jinn Bartz CFO of Evans Park, Inc. has stated that the amount of the
bond issue will be $10.,000,000. The City has a fee of .50 percent of the par amount of the bonds; for
this issue the fee i $50,000 arid is due upon closing.
TheCity's bond counsel has reviewed the bond documents and approved the resolution and relevant
documents. The cost for this review will be reimbursed by Evans Park, Inc.
SUPPORTING DOCUMENTS: X ATTACHED u NONE
0 Resolutio n authorizing and providing for the issuance and sale of revenue bonds in ars aggregate
amount up to $10,000,000, t the request of Evans Park, Inc., and approving the forms of
documents required in connection therewith.
POSSIBLE MOTION
Please word motion as you would like it to appear in the minutes.
Motion to approve Resolution 2013-47 authorizing and providing for the issuance and sale of revenue
bonds in an aggregate amount up to $1.0,000,000, at the request of Evans Park, Inc., and approving the
forms of documents required in connection therewith.
FUNDING:I BUDGETER: o YES
N/A
NO
ACTION TAKE
r APPROVED AS REQUESTED ❑ DENIED ❑ TABLED o OTHER (List charges)
COMMENTS:
Resolution No. 2013 -47
A
013 -
A. RESOLUTION AUTHORIZING AND PROVIDING FOR THE ISSUANCE
AND SALE of REVENUE BONDS IN AN AGGREGATE AMOUNT UNT BJP T
$10,000,000.5 AT THE REQUEST VANS PARK, INC., AND APPROVING
THE FORMS OF DOCUMENTS REQUIRED IN CONNECTION
THEREWITH
BE IT RESOLVED by the City Council of the City of Otsego, Minnesota the "City" or
the "Issuer"), as follows:
1. A thoriit , Pursuant to Minnesota Statutes, Chapter 4620, as armed the
"Act"), the Issuer is authorizedto issue revenue bonds and refunding revenue bonds and sell
such bonds at public or private sale as may be determined by the governing body to be most
advantageous; and to loan the proceeds of such bonds to provide financing and refinancing for
projects and multifamily housing developments, all as further provided in the Act, and to refund
bonds previously issued therefor under the Act, Such bonds are authorized to be secured by
pledge of the revenues to be derived from a loan agreement with the borrower of such proceeds,
and by such other security devices as may be deemed advantageous. Under the provisions of the
Act, such bonds shall be special, limited obligations, and shall not constitute an indebtedness of
the issuer thereof, within the meaning of any state constitutional provision or statutory limitation,
,
nor give rise to a pecuniaryliability of the issuer or a charge against its general credit or taxing
powers.
2. Public He . on July 22, 2013, a joint public hearing was held by the Citi'
Council of the Issuer (the "Public Hearing") on behalf of the Issuer and the City of Albertville
(the "Participating Jurisdiction"), with respect to a proposal by Evans Park, Inc., a Minnesota
nonprofit corporation (the "Borrower"), to undertake a project consisting of the acquisition,
construction and equipping of a combination senior lousing and licalth care facility, expected to
consist of 63 units (the "'Project"), located at 5 101 Kassel Avenue NB in the Padicipating
Jurisdiction, and the issuance of the revenue bonds by the Issuer to provide financing therefor.
The Public Hearing was called and held as required by the Act and the provisions of section
147(f) of the Internal Revenue Code of 1986, as amended (the "Code") and regulations
there -under. Following the Public Hearing, all persons present had an opportunity to express their
views with respect to the Project and the issuance of the Bonds.
3. Prior Preliminary Approval of.Project and Revenue Bonds. On July 22, 2013,
following the Public Hearing, the City Council adopted a resolution (the `Preliminary
Resolution") giving preliminary approval to the issuance of its revenue bonds in an aggregate
principal amount not to exceed $10,000,000 as further described below, the "Bonds" , to
provide financing for the Project.
Joint Powers A.green ent. Minnesota Statutes, Section 469.155, subdivision 9,
and Minnesota Statutes, Section 471.656, subdivision 2, authorize a city to provide housing
program and development financial services outside of its corporate boundaries ies when authorized
to do so under a joint powers agreement that authorizes such city to provide the services within
the boundaries of another city. Pursuant to such statutory authority, the authority of the
Preliminary Resolution, and the authority of ars authorizing resolution adopt on July 15, 2013
by the governing body of the Participating Jurisdiction, the City and the Participating Jurisdiction
have authorized their respective officers to enter into a Joint Powers Agreement (the `Joint
Powers Agreement") providing forthe issuance by the City of the Bonds for the purpose of
providing financing for the Project.
5, The Bonds and Bond Documents. Pursuant to the authorities hereinabove recited,
the City shall issue its Revenue Bonds vans Park, Inc. Project), Series 2013 (the "Bonds"), in
an aggregate principal amount not to exceed $10,000,000, the proceeds of which, together with
such other funds of the Borrower as may be necessary for the purpose, shall be used to provide
financing for the Project. The Bonds shall be issued pursuant to a Trust Indenture (the
"Indenture") between the City and U, S. Bank National Assoeiation, as trustee (the "Trustee"),
Pursuant to a Loam Agreement (the "Doan Agreemenf"), the City will loan the proceeds of the
Bonds to the Borrower, and under the Baan Agreement the Borrower will agree to undertake and
complete the Project. The payments to be made by the Borrower under the Loan Agreement
shall be established so as to produce revenue sufficient to pay the principal of, premium, if any,
and interest on the Bonds when due. The right, title and intertest of the City in, to and under,
among other things, the loan repayments payable by the Borrower under the Loan Agreement
will he assigned to the Trustee pursuant to the Indenture. It is further proposed that the Borrower
will execute a Combination Mortgage, Security Agreement and Fixture Financing Statement and
Assignment of Leases and Rents to the Trustee as security for payment of the Bonds (the
"Mortgage"), The Bonds will be purchased by Northland Securities, Inc. (the "Underwriter")
pursuant to a Bond Purchase Agreement by and between the City, the Underwriter and the
BoiTo ver (the `Bond Purchase Agreement'), The Bonds shall be in such principal amount, shall
bear interest at the nates, shall be numbered, shall be dated, shall mature, shall be subject to
redemption prior to maturity, and shall be in such form and have such other details and
provisions as may be prescribed in the Indenture the form of which is on file with the City.
6. Documents Presented. Porins of the following doe -u eats relating to the Project
and the issuance of the Bonds have been submitted to the Issuer and are now on file in the offices
of the City Clerk:
(a) the Indenture
(b) the Loan Agreement;
(c) the Bond Purchase Agreement; and
(d) Preliminary official Statement and form of final official Statement, the
form of the Preliminary Official Statement, together with the insertion of the final
underwriting details of the Bonds, including the interest rates thereon, and any other
changes deemed necessary or desirable, intended to constitute the f rin of the final
Official Statement, and including all Appendices thereto (together the "Official
Statement"), describing the offering of the Bonds, and certain terms and provisions of the
foregoing documents.
. Fi it g . It is hereby found, determined and declared that;
2
a. The Project will further the purposes contemplated by and described in the
Act and promotes the public welfare by providing necessary multifamily rental housing
and health care facilities, so that adequate multifamily rental housing and health care
facilities are available to residents of the City at a reasonable cost.
b. There is no litigation pending or, to the knowledge of the Issuer,
threatened against the Issuer relating to the Project or the Bonds, or the Indenture, the
Loan Agreement or the Bond Purchase Agreement (collectively referred to as the "Bond
Documents") or questioning the organization, powers or authority of the Issuer to issue
the Bonds or to execute or deliver any of the Bond Documents,
C. The execution and delivery of and the performance of the Issuer's
obligations ander the Bonds and the Bond Documents do not and will not violate any
order of any court or any agency of gover ment of which the Issuer is aware or in any
proceeding to which the Issuer is a pity, or any indenture, agreement or other instrument
to which the Issuer is a patty or by which it or any of its property is bound, or he in
conflict with, result in a breach of, or constitute with due notice or lapse of time or both)
a default under any such indenture, agreement or other instrument.
d. The Loan Agreement provides for payments by the Borrower to the Issuer
of such amounts as will be sufficient to pay the principal of, premium, if any, and interest
on the Bonds when due,
e. Under the provisions of the Act, the Bonds are not and shall not be payable
f-om or charged upon any finds other than amounts payable pursuant to the Loan
Agreement and related documents; the Issuer is not subject to any liability thereon; no
owner of the Bonds shall ever have the right to compel the exercise of the taxing power of
the Issuer to pay the Bonds or the interest thereon, nor to enforce payment thereof against
any property of the Issuer; neither the Bonds nor any document executed or approved in
connection with the issuance thereof shall constitute a pecuniai-y liability, general or moral
obligation, charge, lien or encumbrance, legal or equitable, upon any property of the Issue;
and the Bonds shall not constitute or give fise to a charge against the general credit or taxing
powers of the Issuer.
. Approval and Execution of Documents. The forms of the Indenture, the Loan
n
Agreement and the Bond Purchase Agreement currently on file with the City are approved. The
Issuer shall enter into the Indenture, the Loan Agreement, and the Bond Purchase Agreement,
substantially in the forms on file, but with all such changes therein as may be approved by the
officers executing the same, which approval shall be conclusively evidenced by the execution
thereof, and each of such documents shall be executed and delivered in the name and on behalf
of the Issuer by the officers identified in paragraph 12.
. Approval, Execution and Delivery the Bonds. one or more officers of the
Issuer, as provided f i her herein, are hereby authorized and directed to exec -Lite and issue the
Bonds, and the Bonds shall be issued in such series and shall be substantially in such forms,
mature, bear interest, and be payable according to such terms, and shall otherwise contain such
terms and provisions, as are set forth in the Indenture, which terms are for this purpose
3
incorporated in this Resolution and made a part hereof; provided, however, that the aggregate
principal amount of the Bonds, the interest rates thereon, the amount and dates of the principal
payments required to be made with respect thereto, and the rights of optional and mandatory
redemption with respect thereto shall all be set forth in the Indenture as executed and shall all be
subject to the final approval of the officers of the Issuer who execute and deliver the Indenture in
accordance with the provisions of this Resolution, such approval to be conclusively evidenced by
the execution thereof. Each of the Bonds shall recite that it is issued pursuant to the Act and
such recital shall, to the fullest extent permitted by lair, conclusively establish the legality and
validity thereof.
The Bonds shall be sold to the Underwriter in accordance with and upon the ternis and
conditions set forth in the Bond Purchase Agreement. The proposal of the Underwriter to
purchase the Bonds, as further provided in the Bond Purchase Agreement, at the purchase price
set forth therein, is hereby accepted.
10. certificates, etc. The officers and employees of the Issuer are authorized to
prepare and furnish to Dorsey ey & Whitney LLP, Minneapolis, Minnesota, as Bond Counsel to the
Underwriter, and to the Underwriter, certified copies of all proceedings and records of the Issuer
relating to the Bonds, and such other affidavits and certificates as may be required to show the
facts appearing ftom the boobs and records in the officers' custody and control or as otherwise
known to thein; and all such certified copies, certificates and affidavits, including any heretofore
furnished, shall constitute representations of the Issuer as to the truth of all statements of fact
contained therein.
It. Official Statement. The Issuer hereby consents to the preparation and distribution
of a Preliminary official Statement and a final official Statement for the Bonds; provided that it
is understood that the Issuer has relied upon the Borrower to assure the accuracy and
completeness of the information set forth in the Official Statement and therefore the Issuer has
not made, and will not make, any representations or warranties with respect to the information
contained therein, except under the heading "The Issuer."
12. Nature of Issuer's Obligations, All covenants, stipulations, obligations,
representations, and agreements of the Issuer contained in this Resolution or contained in the
aforementioned documents shall be deemed to be the covenants, stipulations, obligations,
representations, and agreements of the Issuer to the full extent authorized or permitted law,
and all such covenants, stipulations, obligations, representations, and agreements shall be
binding upon the Issuer. Except as otherwise provided in this Resolution, all rights, powers, and
privileges conferred, and duties and liabilities imposed xipon the Issuer by the provisions of this
Resolution or of the aforementioned documents shall be exercised or performed by such officers
or agents as may be required or authorized by lav to exercise such powers and to perform such
duties. No covenant, stipulation, obligation, representation, or agreement herein contained or
contained in the documents referred to above shall be deemed to be a covenant, stipulation,
obligation, representation, or agreement of any member of the City Council, or any officer,
agent, or employee of the Issuer in that person's individual capacity, and neither shall any
member of the City Council nor any officer or employee executing the Bonds or such documents
be liable personally on the Bonds or be subject to any representation, personal liability or
accountability by reason of the issuance thereof No provision, representation, covenant or
agreement contained in the Bonds, this Resolution or in any other document related to the Bonds,
and no obligation therein or herein imposed upon the Issuer or the breach thereof, shall constitute
or give rise to a general or moral obligation, or indebtedness or pecuniary liability of the Issuer
or any charge upon 'its general credit or taxing powers, In making the agreements, provisions,
covenants and representations set forth in the Bonds or in any other document related to the
Bonds, the Issuer is not obligated to pay or remit any funds or revenues, except for revenues
derived from the Loan Agreement that are pledged to the payment ofthe Bonds,
13, Authorized Officers, The Bonds and the Bond Documents referred to herein are
authorized to be executed on behalf of the Issuer by either or both of the Mayor and the City
Administrator; provided, however, that in the event that either the Mayor or the City
Administrator shall be unavailable or for any reason be unable to execute the Bonds or any other
document to be entered into by the Issuer in connection therewith, any other officer of the Issuer
is hereby authorized to act in that capacity and undertake such execution or acts on behalf of the
Issuer.
14, Definitions a .d Inter tatiorn. Terms not otherwise defined in this Resolution but
defined in the form of Loan Agreement or Indenture now on file shall have the same meanings in
this Resolution and shall be interpreted herein as provided therein. Notices ,may be given as
provided in the Loan Agreement. In case any provision of this Resolution is for any reason
illegal or invalid or inoperable, such illegality or invalidity or inoperability shall not affect the
remaining provisions of this Resolution, which shall be construed or enforced as if such 'Illegal or
invalid or inoperable provision were not contained herein.
15. Qualifie11 d Tax -Exempt Obligations.. As provided in the Preliminary Resolution,
and pursuant to Section 265(b)(3) the Internal Revenue Code of 1986, as amended the
"Code"), the City hereby confirms its designation ofthe Bonds as "qualified tax-exempt
obligations," within the meaning of Scctio . 265(b)(3). The Bonds are to be issued on behalf of
an organization described in Section 501 c) (3) of the Code and are to be issued as "qualified
501 e 3) buds" under Section 145 of the Code, The City, together with all subordinate entities
thereof, sloes not reasonably expect to issue tax-exempt obligations, including the Bends other
than private activity bonds not constituting "qualified 501 (c)(3) bonds) which, when added
together with all such obligations heretofore issued by the City in calendar year 2013, will be in
an aggregate amount exceeding 10, 0 0 0, 0 00 iu the current calendar year.
Adopted by the City Council of the City of Otsego this 26"' day of August, 2013.
Mayor
Attest;
City Administrator
4839-2734-6965\1
CERTIFICATE
CITY OF OTSEGO
I, the undersigned being a duly qualified and acting officer of the City of Otsego,
Minnesota, hereby attest and certify that;
I , As such officer, I have the legal custody of the original record f om which h
attached resolution was transcribed.
2. I have carefully compared the attached resolution with the original record ofthe
meeting at which the resolution was acted Moon.
I find the attached resolution to be a true, correct and complete copy of'the
original:
A RESOLU'T'ION AUTHORIZING AND PROVIDING FOR THE ISSUANCE
AND BADE OF REVENUE BONDS IN AN AGGREGATE AMOUNT UP T
$1030003000, AT THE REQUEST OF EVANS PARK, INC., AND APPROVING
THE FORMS OF DOCUMENTS REQUIRED IN CONNECTION
THEREWITH
I further certify that the affirmative e vote on said resolution was ayes,
nays, and absent/abstention.
5. Said meeting was duly held, pursuant to call and notice thereof, as required by
law, and a quorum was present.
WITNESS my hand offielally as such officer this day of 52013.
City Clerk