HomeMy WebLinkAbout6A Northwestern College PUblic Hearing for Conduit Debt Issuance�
EN H�LLS
Request for Council Action
Prepared By: Sue Iverson, Council Meeting Date: No�ember 30, 2�09
Finance Director/Treasurer
Northwestern College Pablic Hearing for Conduit Debt Issuance
Budgeted Amount; Actual Amount: Funding Source:
NIA NIA N/A
Recomnne�dation:
1. Authorization to condnct public hearing.
Supportin� Documelits:
1. See the attached memo from Sue Iverson, dated November 30, 2009.
2. See attached rnemo fram Kennedy & Graven, dated November 20, 2009.
3. Resolu�ion 2009-03C,
�
�R�N H�LLS
MEMORA.NDUM
DATE: November 30, 2009
TO: Honorable Mayor and City Cou�cil Members
Ron Moorse, City Administrator
FR4M; Sue Iverson, Finance DirectorlTreasurer
SUBJECT: Northwestern Coilege �ubtic Hearing for Tax-exernpt Financing
Sack�ronnd
The City Council approved a"Private Activity Revenue Bond Fiiiancir�b" procedure which
includes an application process and fees for those seeking to request the City to issue cond�it debt
on their i�ehaI£ Narthwestern College has filed an application aIong witt� the required application
fee of $500 to the City.
Northwesiern CoElege is requestir�g financing for a new facility — Community Life ComEnons
{student union) for its catripus. The maxi�nu�n amount of iinar�cing requested is $9,OOO,aoa. Tr►e
zoning of this project is under the tertr►s and condi�ions of the P�TD agreerr�ent betvveen the
College and the City approved in October, 2007. The City will be reimbursed and held harmless
far al] out-of-pocket expenses related to the �nancing aceording to t[�e City's ap�lication process
and the application fiied. Accordfng io the City's policy, �he City will receive 1/$ o� 1% (.125%)
of the outstanding principal ba�anee of the bonds annually, ihe first year this would amount tfl
$11,250 and the bonds are from 5 to 25 years. A representative from Northwestern College wili
be in attendance at the meeting to answer any questions.
The City's bond co�nsel has reviewed the application and l�as filled out the required DEED
application. The City Council adopted R�solution 2009-029 on October 26, 2009 calling for a
pubiic hearing on Novem�er 3d, 2Q09. Bond Counsei will be preseni ai the hearing to answer
any questions.
Attached are a reso�utian and a memo from the City's Bond Counset detailing the bond issuance
and the steps that need to be taken next. After the Pubiic Hearing, the Counci� will be as�Ced to
adopt ResoIution 2009-03G giving preliminary approval to the proposed issuance of revenue notes
under Minnesota Sta#utes, Sections 469.152 through 469.165 l, as amer�ded. A copy of
Narthwestern Col(ege's applicatio� and attac�ments (inciuding the D�ED applicatior�}, was
provided to the City Cauncil in th� Octo6er 26, 2009 agenda pacicet.
City Council Meeting
11Metro-inetlardenhiilslAdminlCouncillAgendas & Packet Ir►formation1200911 I-30-09 RegularlPacket
InformationlNorthwestern College_Public_Hearing.doc
Page 1 of 2
CounciE Action
If the Council would liice to praceed with the r�quest, then a rnotion to adopt Resolution 2009-
03b, a resolution giving preiiminary appraval to the proposed issuance of revenue nates under
Minnesota Statutes, Sections 459.152 through 469.1b5 t, as aznended.
City Council Meeting
11Metro-inetlardenhi11s1AdminlCounciilAgendas & Packet Infoxmation12�0911 i-30-09 AegularlPacket
InformationlNorthwestern College_PubIic Hearing.doc
Page 2 of 2
�����.� � .
�r��.V�'�
s
OF�iccs in `i7U U.S_ Ba��k i'lara
�ll[15rsvrh Sixiii Scrccc
�itineapolE� A�tinnw�olis, MIv j.j��Z
Sainc Paui {�'� �� 3��-�3Q[1 telephnne
{GS 3 ) 337-93 i [I F�x
Sr. Cloud liac�:il�sstnv.k�nardy-gr.�vcii:cacu
rl�rma[ivr Acuon. Lqual Q}i�orE��nicu GmFlaycr
dULIE A, EDDINCiON
Anomey ttt E,a�v
Direct Dial {612) 337-9? 13
EmaiJ: jeddingtnnQkr.rmcdy-�vcn.com
November ?0, 20Q�
Sue Iverson
Finance DirectorlTrea�urer
City of Aa-den HilIs
I?45 West Hi�l���ay 96
Arden Hil]s, IVII�I �5112
Re: �9,OOO,Q00 Educafiional Facilities Reve���e N�tes �IVo�#hwesterr� College Project}, Series
?�09
Dear S�e,
Enclosed please find tl�e pzeliminat-y resalution (the "R�sa�utioFi") praposad to be considered
by Ehe: City Cou�3ciE (the "CQunci3") of �e City afArden Hills, �fi��nesota (the "Ci#y") at its reguiarly
scheduted. m�ehing on Manday, November 3f}; 2004; in cQn�ecfian with the above refereneed note
issue (ilie "1Votes"}. TEie Resolutioi� prnvides preii3t�inary approva] to the issuance, deIivery, and sa2e
oi t]ie Notes in an aggregaie principai amoui�t not to Exceed �9,.000;000 and prpvic�es authority to
s€�6r��i.t ai-� application to the Conunissioner af tlie Miruiesota Department of LmpIoynr��n# and
Econamic I}eveloprttent ("DEED") for appra�a! of f��e i'rojeet tas. described be]ow) and the NoCes.
A brief explana�ion of the financing fQliows.
1�fortf�western College, a MinEieSata nanprQfit corparation (t��e "Borrower"} has requested
that tite City issue the Nates in a�rincipal amount not ta exceed �9,000,04Q, under MinnesoEa.
Statutes, �ect�ans 469.15Z through 469.165:1, as anieni�ed (the "AcC' ). Tt�e procee.cts derived from
the sale of tl�e NoEes are praposed to be loaned to the Borrower pursuant to ti3e ter�ras nf a Loan
Agrzement, dated on or after December i, 2�€)9 (t�e "I:oan ,4gree��nent"j, b�h.veen fhe City and. the
Borro�ver. Tlle proceeds of the loan tir�ifl be applied to finance tlie canstruction and equippin�; of an
�pprahiinate[y 70,O�D square foat faciIily, ��l�icl� �viil provide new dining faci]iries, an expaaded
camnus s#ore, siudent lounges, study areas, offce space far student Qrganizatiorts, classrooms, and
meetir�g �paces, to be Iocated at on tiie portian af il�e TVor�hwestern Cam�us located �vithin t�le City
(tfie "Pre ject"}_ A pg�tion of t�re proceeds o�'th� Laan will also be applied ta payment of the costs of
issuance of the Np�es.
Ti�e Notes are proposed to he purchased by frien.ds and alumni of the Borrower (fl�e
"P�chasers"), Tl3e Nofes will be issued in denominations of $1fl0,40Q or mnre and will be sold oniy
�o sophisticaf�d investars,
The Nates are proposed to be issued as tax-exempt oi�ligations, t�e interest on which is not
inc]udable in gross incorne fpr federal iricoat-fe, tax purposes. Under applicable provisions of the Act,
�ie Internal Revenue Code of i9Sfi, as amended and t1�E Treas�ry Regula�ions promutgated
thereunder, as a conditiort to the issuance oft�e Notes, t}3e Councif must conduct a pubiic hearing at
which Ehe Council must permit any person to conunent on the pra�ose� finaneing [rar�saction and d�e
faeilities to 6e financed cvith ti�e prc►ceeds of fhe IVotes. 1fi� City has been asked ta iiald the p�b2ic
I�earing ivifh respect to. ti-�e issuance af tIie NoTes and the 1°rajea� ar� Nove�t�er 30, 2009.
36U6G3v1 JA� AR20D-9
Following the public hearing, th�e Cauc►cil is requested #o cansider the encIosed RasoluY�on,
x��hic�i giv�s preliraiinary appmval ta. the iss�aance of the Notes for t}te purposes. described herein_
Fo3lowing receipt af fi�e approual from D�ED, the CounciI wilt be aslced at a future Cour�cil rneeting
to pro�vicie final . approval to fhe issuance of ft�e Notes. and appro�e the forni of tlle Nofes and the
documents relatect. to tr,e Notes.
If the NoEes are authorized to i�e issued by #he Council, i��e Notes �vill be issued as conduit
re�enue iVutes sec�red sole}y by the revenues deriyed from the I.aan Agreemer�t exeeuteci by the
Bnrrawe� and from otiiec securiiy provided by the �orrawer. The Nntes wiil not constitute a�eneral
or maral ob3i�ation of the Cilyand avill.riot.lie secured by or payable from any property tir assets of
the Gity (other than #�e i�terests o�the City in t�ze Loan Agreeznen�) and vs�ill nat be secured by any
fiaxing'power of ��e City. The Notes will nnt be subject to any cfebt Iimitafion in�posed on the City
anci tlie issuar�ce af the N.oteS urili not l�a�e any adverse irripact on the credit rat�ng af Che City; euen
in th.e event tha� 'the �orro�ver enc�uiiters �inancia� difficuIties rvith respect to the faciliti�s to be
financed �r�ith the proceeds of the Notes.
Pursuant to the .4nierican Recovery and Reinvestment Tax Act of 20U4, each 501(0)(3)
orgaiiization has the ability to: desigriate t�p to �30,000,��� in taY-exempE bonds as "bank GuaIifed''
in the calenaar yeacs 2009 and ?QIQ_ During those same. years, each municipal.ity has the same
abilit}� to. designate �ap to $3�,0{�0,400 iri �ax-exe�npt ho��ds as "banfe qualified:" Tlius, tt3e issuance
of tl�e Bonds u�ili not adverseiy af%ci the ataiiity of flie CiTy to issue bank quali��cl bonds in salenclar
year ?C}Q9 or ?D I O(if t�ie issuance of th� Bonds is delayed untiE 201�).
Ptease contact me ifyou hav� any quesfions regarding the Notes ar �kus fuiaricing.
I�ENNEDY & GRAVEN, �HAR'TERED
C���
Jutie �dding-ton
36QG53vl iAL• AR2afl-9
CITY OF ARDEN H�LLS, MINNESOTA
RESOLUTION NO. 2009-Q3b
GiVING PRELIM[NARY APPROVAL TO THE PR�POSED
ISSUANCE OF REVEN[JE NOT�S UND�R MINNESOTA
STATUTES, SECT�ONS 469.152 THROUGH 469.1651, AS
AMENDED
BE iT RESOLVED by the City Council of the City af Arden Hilis, Minnesota (the "City"), as
fotlows:
Seciion I_ Recitals.
1.01. The City of Arden Hiils, Minnesota (the "City"}, is a statutory city organized a�d existing
under ihe Constitution and laws of the Siate of Minnesota.
1.02. Pursuant to the Minnesota Statutes, Sections 469.152 through 469.t651, as amended (the
"Act"}, ihe City is authorized to issue revenue bands to iinance, in whofe or in part, the cast of the
acquisition, construction, recons#ruction, improvement, betterrnent or extension of a project, de�ned in
the Act as including any properties, real or personal, used or useful ir� cannection with a
revenue-producing enterprise, whether or not operated for �eo�t.
1.03. Northwestern Colfege, a Minnesota nonprof[ corporation (the "Borrowec"}, t�as pro�osed
that the City issue tax-exempt revenue notes or obiigations pursuant to the Act in one or more series in the
approxirnate principat amount not to exceed $9,0OO,OdO (the "Notes") a�d �oan the proceeds of the Notes
to the Barrower to finance a portion of the cons�ction and equipping of an approximate�y 74,OOd square
foot faciiity, which wilt provide new dining facilities, an ex�anded campus store, student lour�ges, stuc�y
areas, office space for student organizations, classrooms, and meeting spaces, to be located at on the
portion of t�e Northwesterr� Campus �ocaied within the City (#he "Project"}_
I.04. Purs�ant to Section 469.154, subdivision 4, af tE�e Act and Section i47{fl of the Iniemai
Revenue Code of 198b, as amended (the "Code"), and regulations promulgated thereur�der, prior to ihe
issuance of the Notes, the City Council anust approve the Notes aEter conductir�g a public �earing thereon
precede� t�y pub(icatio� of a r�otice of public hearing (in the form reauired by Section 147{� of the Code
at�d app�icable regulations} in the offcial newspaper of the City and a newspaper of general circulation at
�east foUrteen (l�l) days prior to the pubiic hearing date_
i_O5. Pursuant to the Act and �he Code, a notice of public hearing in the form required by the
Act and Section I47(f} of �he Code was pubIished in the Shareview-Arden Hiils Bulletin, the offtcial
newspaper of the City and a newspaper of general circulation in the Ciry, on Wednesday,
November 11, 2009.
1.fl6_ On the date hereof, the City held a public hearing on the Projeci and fhe issuance af the
Notes to fiaance the Project.
1.07. Pursuartt to Section 469.154 of ihe Act, prior to the issuance of the Notes by the City, the
Commissioner af tt�e Minnesota Department of Err�ployment and Economic Developinent {"D�ED")
must approve the Project on the basis of an app[ication sub�nitted by the City with ali required
attachmenfis and exhibits (thE "DEHD Application")_
1 AS. A draft copy of the DEED Application, together with drafts of all required attachments
and exhibits, as prepared by Ker�nedy & Graven, Chartered, as Bond Ca�nsel, is on �Ie with the City and
is available for public inspection �n tt�e office of the City Administrator during regular business hours of
the City.
S�ctian 2. Preliminary A��rc�va�.
2.OI. The Project is hereby given prelim�nary approval by the City. The iss�ance of the Notes
in the approxirnate aggregate prir�cipal amount not to exceed $9,Q00,000 to �ina�ce the Project is here�y
approved subject to t�e approval of the Project by DE�D as required by the Act, and subject ta ti�e mutuat
agreemeni af the City, the Barrawer, and the initial purchasers of the NQtes as to the details of the Notes
and provisions for their paymeni. In all events, it is understood, however, that the Notes shall not
constiiute a charge, lien, or encumbrance, legai or equitable, upon any Property of the City except the
Ciry's interest ir� t�e Ioan or revenue agreement with raspect to the Notes and t�e 1'roject, and the Notes,
when, as, and rf issued, shall recite in substance that the Notes, inciuding interest thereon, are payabie
solely fronn ihe revenues received from the Project and property ptedg�d to the payment thereof, and shal!
r�o� constitute a general or moral obligation of the City.
2.02. It is hereby found and determined that the Project furthers the purposes set for�h in the
Act and the Project constilutes a"pro�ect" within the meaning of Section 469. � 53, subdivision 2(b) of the
Aci.
2.03. In accardance with Section 469.154 of the Act, the City Adrtiinisirator of the Ciry is
hereby authorized and directed to sub�nit the propasal for the Project to DEED. The City Adrnin�strator
and other officers, employees and agents of the City are hereby authorized to provide DEED with any
preIim�nary in%rrr�ation needed for �his �urpose, and the City Administrator is autharized to initiate and
assist in the preParaiion of such documents as may be appropriate to the Project, if it is approved_
2.04. The Borrower will pay any administrative fees of th� City and pay, or, upon demand,
reimburse the City for payment of, any and al� costs incurred by tt�e City in cannection with the Project
and the issuance of the Bor�ds, whether or r�ot the Bonds are issued.
2.05. The adoption of this Resolution does not constitute a guaranry or frm comrnitm�nt that
the City will issue the Notes as requested by t�e Borrower. The City retai�s the right in its sole discretion
to withdraw from participation and accordingly not to issue the Notes, or issue the Nc�ies in an amount
less than the amount referred to herein, shouid the City at any time prior % issuance thereof determine
that it is in the b�st interest of the City not to issue the Notes, or to issue the Notes ir� ari amaunt less than
the arr�ount referred to in Section 2_O1 hereof, or should the parties to the transaction be unable to reach
agree�ent as to the terms and conditions of any of the documents req�ired for the lransaction.
2.d6. This Resolution shalt be in full fvrce and effect fram and at�er its passage.
2
Approved by the City Council of ihe Ciiy of Arden E-I�IIs, Minnesota, this 30ti� day of November,
2009.
C�TY O�' ARD�N HILLS, MINNESOTA
Stanley Ha�-pstead, Mayor
ATTEST:
Ronaid Moorse, City Adminis�rator
ARzao-9 ��A��
3605biv1