RES 14-51Extract of Minutes of a Meeting of the
City Council of the City of Otsego, Minnesota
Pursuant to due call and notice thereof, a regular meeting of the City Council of the City
of Otsego, Minnesota was duly held at Otsego Prairie Center, Otsego, Minnesota, on Monday,
July 28, 2014, at 7:00 o'clock P.M.
The following members were present: Heidner, Schroeder, Warehime
and the following were absent: Stockamp, Darkenwald
During said meeting Schroeder introduced the following resolution and moved its
adoption:
RESOLUTION NO. 2014-51
RESOLUTION PRELIMINARILY APPROVING THE ISSUANCE AND SALE OF
CHARTER SCHOOL LEASE REVENUE BONDS
(KA.LEIDOSCOPE CHARTER SCHOOL PROJECT)
WHEREAS,
(a) Minnesota Statutes, Sections 469.152 to 469.1655, as amended (the "Act)
authorizes cities to issue revenue bonds to finance industrial development projects to promote the
welfare of the state by the active development of economically sound industry and commerce to
meet the needs of an increasing population and the need for development of land use which will
provide an adequate tax base to finance the increasing cost of governmental services and access
to employment opportunities for such population;
(b) The City of Otsego, Minnesota (the "City") has received from KCS
Building Company, a Minnesota nonprofit corporation organized under the laws of the State of
Minnesota (the "Borrower"), a proposal that the City assist in financing a Project hereinafter
described through the issuance of revenue bonds or other obligations (which may be issued in
one or more series) (the "Bonds") pursuant to the Act;
(c) The City desires to facilitate the selective development of the community,
retain and improve the tax base, and help to provide the range of services and employment
opportunities required by the population, including educational services; and the Project. will
assist the City in achieving those objectives and will enhance the image and reputation of the
community;
(d) The project to be financed by the Bonds is the (a) refinancing the
outstanding principal amount of the City of Falcon Heights, Minnesota $8,110,000 Lease
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Revenue Bonds (Kaleidoscope Charier School Project), Series 2007A, the proceeds of which
were used, in part, to finance the acquisition, construction and equipping of an approximately
42,700 square foot kindergarten through grade eight education facility located at 7525 Kalland
Avenue N.E. in the City, and (b) the acquisition, construction, and equipping of an
approximately 29,000 square foot grade nine through grade twelve addition to the existing
education facility, consisting of a one-story building with nine classrooms, special education,
administration offices, serving kitchen and cafeteria, to be located in the City (collectively, the
"Project"). The Project will be owned by the Borrower and leased to and operated by
Kaleidoscope Charter School, a Minnesota non-profit corporation having federal income tax-
exempt 501(c)(3) status as a public (charter) school; and
(e) The City has been advised by representatives of the Borrower and the
representatives of Dougherty & Company LLC, as underwriter for the Bonds, that with the aid of
municipal financing, and its resulting low borrowing cost, the Project is economically more
feasible;
(f) Based on representations of the Borrower, no public official of the City
has either a direct or indirect financial interest in the Project nor will any public official either
directly or indirectly benefit financially from the Project; and
(g) A public hearing on the Project was held on this date, after notice was
published and materials made available for public inspection at the office of the Administrator,
all as required by the Act and Section 147(f) of the Internal Revenue Code of 1986, as amended,
at which public hearing all those appearing who desired to speak were heard and written
comments were accepted.
BE IT RESOLVED by the City Council of the City, as follows:
Findings. The City hereby finds, determines, and declares as follows:
(a) The City is authorized under the Act to assist the revenue producing
project referred to herein, and to issue and sell the Bonds, as hereinafter defined, for the
purpose, in the manner, and upon the terms and conditions set forth in the Act and in this
Resolution.
(b) On the basis of information available to the City it appears, and the City
hereby finds, that the Project constitutes properties, real and personal, used or useful in
connection with one or more revenue producing enterprises within the meaning of
Subdivision 2(b) of Section 469.153 of the Act; that the Project furthers the purposes
stated in Section 469.152; that the availability of the financing under the Act and the
willingness of the City to furnish such financing will be a substantial inducement to the
Borrower to undertake the Project, and that the effect of the Project, if undertaken, will be
to assist in the prevention of the emergence of blighted and marginal land, to help prevent
chronic unemployment, to help the surrounding area retain and eventually improve the
tax base, to provide the range of service and employment opportunities required by the
population, to help prevent the movement of talented and educated persons out of the
State and to areas within the State where their services may not be as effectively used,
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and to promote more intensive development and use of land within the City and
surrounding communities.
2. Preliminary Approval. The City hereby gives preliminary approval to the
proposal of the Borrower that the City undertake the Project, and the financing therefor, pursuant
to the Act and to issue the Bonds in the principal amount not to exceed $17,500,000.
3. DEED Application. The financing of the Project by the issuance of the Bonds by
the City is subject to, among other things, (a) the approval of the Project by the City and the
Minnesota Department of Employment and Economic Development, (b) final approval by the
City, the Borrower and the purchaser of the Bonds as to the ultimate details of the financing, and
(c) review and approval of the proposed Project by Bond Counsel.
4. Payment of Costs. The Borrower has agreed and it is hereby determined that any
and all costs incurred by the City in connection with the financing of the Project whether or not
the Project is carried to completion and whether or not approved by the City will be paid by the
Borrower.
5. Bond Documents. Briggs and Morgan, Professional Association, acting as bond
counsel, is authorized to assist in the preparation and review of necessary documents relating to
the Project, to consult with the Borrower and the purchaser of the Bonds as to the maturities,
interest rates and other terms and provisions of the Bonds and as to the covenants and other
provisions of the necessary documents and submit such documents to the City for final approval.
6. Limited Obli a� tion. Nothing in this Resolution or the documents prepared
pursuant hereto shall authorize the expenditure of any municipal funds on the Project other than
the revenues derived from the Project or otherwise granted to the City for this purpose. The
Bonds shall not constitute a charge, lien, or.encumbrance, legal or equitable, upon any property
or funds of the City except the revenue and proceeds pledged for the payment thereof, nor shall
the City be subject to any liability thereon. No holders of the Bonds shall ever have the right to
compel any exercise of the taxing power of the City to pay the outstanding principal on the
Bonds or the interest thereon, or to enforce payment thereon against any property of the City,
except such property as may be expressly pledged for the security of the Bonds. The Bonds shall
recite in substance that the Bonds, including the interest thereon, is payable solely from the
revenue and proceeds pledged to the payment thereof. The Bonds shall not constitute a debt of
the City within the meaning of any constitutional or statutory limitation.
7. Reimbursement. In anticipation of the approval of the Project by the State of
Minnesota, Department of Employment and Economic Development and all other necessary
entities and the issuance of the Bonds to finance all or a portion of the Project, and in order that
completion of the Project will not be unduly delayed when approved, the City hereby authorizes
the Borrower, in accordance with the provisions of the Act and subject to the terms and
conditions imposed by the Lender, to provide for the acquisition, construction, and equipping of
the Project by such means as shall be available to the Borrower and in the manner determined by
the Borrower, and without advertisement for bids as may be required for the construction and
acquisition of other municipal facilities; the City hereby ratifies, affirms, and approves all actions
heretofore taken by the Borrower consistent with and in anticipation of such authority; and the
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STATE OF MINNESOTA
COUNTY OF WRIGHT
CITY OF OTSEGO
I, the undersigned, being the duly qualified and acting Clerk of the City of Otsego,
Minnesota, DO HEREBY CERTIFY that I have compared the attached and foregoing extract of
minutes with the original thereof on file in my office, and that the same is a full, true and
complete transcript of the minutes of a meeting of the City Council duly called and held on the
date therein indicated, insofar as such minutes relate to a resolution giving preliminary approval
for the'issuance of revenue Bonds.
WITNESS my hand this a °1 day of July, 2014.
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Clerk
Borrower is hereby authorized to make such expenditures and advances toward payment of that
portion of the costs of the Project to be financed from the proceeds of the Bonds as the Borrower
considers necessary, including the use of interim, short-term financing, subject to reimbursement
from the proceeds of the Bonds if and when delivered but otherwise without liability on the part
of the City.
Adopted by the City Council of Otsego, Minnesota, this 28th day of July, 2014.
ATTEST:
Administrator
The motion for the adoption of the foregoing resolution was duly seconded by Member
Schroeder , and after full discussion thereof and upon vote being taken
thereon, the following voted in favor thereof: Heidner, Schroeder, Warehime
and the following voted against the same: None
whereupon said resolution was declared duly passed and adopted.
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