HomeMy WebLinkAbout7A Resolution 2009-036 Giving Preliminary Approval to the Proposed Issuance of Revenue Notes�
- EN HILLs
Requesi for Councii Action
Prepared By: Sue Iverson, Council Meeting Date: November 30, 2009
Finance Duactor/Treasurer
Resolntion 2009-Q36 Giving Prelirni�ary ApprovaI to the Proposed Issuance
of Revenue Notes
Budgeted Amount: Actual Amount: Funding Source:
N/A N/A N/A
Recommendation:
1. Approve Resol�t'ron 2Q09-03G Giving Preliminary Approvai �a the Proposed
Yssuance of Revenne Notes under Minnesota 5tatutes, Sections 469.152 through
469.1651, as amended.
SuppOii'Ing Dpcuments:
1. See the atCached memo frorn Sue Tvexson, dated November 30, 2Q09.
2. Se� attached memo from Kennedy & Graven, dated November 20, 2009.
3. Resolution 2009-036.
�
�i�EN'�HILLS
MEMORANDUM
DATE: November 30, 2009
TO: Honorabie Mayor and City Council Members
Ron Moorse, City Adrni�ist�ator
FROM: Su� Iverson, Finance DirectorlTreasurer
SUB.�ECT: Northwestern College �'ublic Hearing for Tax-exempt Financing
Background
The City Councii approved a"Private Activity Revenue Bond Financittg" procedure which
includes an application process and fees for those seeking to request the City to issue conduit debt
an their behal£ Northwestern Callege has filed an application along wit� the reqUired application
%e of $500 to the City.
Narthvt�estern College is request�ng financing for a new facility — Community Life Commons
{student union) for its campus. The maacimum amount of fnancing requested is $9,000,000. The
zoning of this project is under the terms and conditions of the PUD agreement between the
CoIlege and ihe C�ty approved in Ocfober, 2007. The City will be reim.bt�rsed and held harmless
for all out-of-pocket expenses :related to the financing accordijzg to the City's application process
and the application filet�. According to �he City's policy, the City will receive I/8 of 1% {.125%)
of the outstanding principal balance of the bonds ar�nually, the first yeax this would amount ia
$11,250 and the bonds are from 5 io 25 years. A representative from Northwestern Callege will
be in a�tendance at the rneeting to answer ar�y questions.
The City's bond counsel has reviewed the application and has filled aut the required DEED
application. The City Council adopted ResoIution 2009-029 on October 26, 2d09 calling for a
pubtic hearing on November 30, 2009. Bond Counsel will be present at the hearing to answer
any questions.
Attached are a resolution and a memo from the City's Bond Counsel detailing the bond issuance
and the steps that need to be taken next. After the Public Hearing, the Council wi�l be asked #o
adopt Resolution 2009-036 giving pretiminary approval to the praposed issuance of revenue notes
under Minnesota Statutes, Sections 469.152 through 469.1651, as amended. A copy of
Northwestern College's application and attachments (including the DEED application), was
provided to the City Council in the October 26, 2009 agenda packef.
City Council Meeting
11Metro-inetlardenhillslAdininlCounciIlAgendas & Packet Tnformation12009111-30-09 AegularlPacket
InformationlNorthwestern College_Public Hearing.doc
� � Page 1 of 2
Council Acti�on
If ti�e Counczl vcrouId like ta proceed with the request, t�en a motion to adopt Resolu�ion 2009-
036, a resolution giving preliminary approval to the proposed issuance of revenue notes under
Minnesota Statutes, Sections 469.152 through 469.1651, as amended.
City Council Meeting
11Meiro-inetlardenhillslAdminlCouncillAgendas & Packet Information120091t 1-30-09 RegularlFac�Cet
InformationlNorthwestern College_i'ublic_Hearing.doc
1'age 2 of 2
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�ue Iverson
Finance ➢ire�tQr/'�'reasurer
City of Arden I�i1Ts
1245 �Vest Hi�h�vay 96
Arden Hills, MN 5� 112
Re; $9,QOO,OQO Educational Faei�ities Revenue Notes (1`�T�rthwestern .Colle�e:Piaject), Seri�s
2009
Dear 5ue;
Enclosed please fnd tlie pxsliininaEy re5olution {tlie "Resolutioai") pro�osed to,lie co.nsidereci
by the Gity Cau��cil �the"Car.«��'il") of �e City o�Arclen Hills, Mtnnesnta {the "Ciiy") at its regularly
seheduIed rr�eefiing on Monday, Noverriber 30, 20Q9; in cannection w�ti� the abave-referenceci n�te.
issu� (tlae "Notesj'}. Tile Resalutioii provides prelimina .ry approva]'to t�ie issuanc.e, .delit�ery; and sale
of the Notes in an a�greg�te principaI amount not to excaed �9,OOQ;000 and. provii3e.s authority to'
subniit an a�splication tfl tlie Cornmis. sioner of i�ie Minnesota Dep�rtment of Lrnpl:oyment and
Econonlic Development {`°T3:�ED") far appro�al oF the I'roject (as described below) and the Not�s.:
A brief explanaiion of tl.le fina.neing �ollows.
Nar�[l�ves.tern Cqil�g�; a Nl�nnesafa noiiproft corporati:on {t��e "}3orriawer") has requested,
that tlie City iss�e the Nofes in a p�ineipal amount nat to. exceed .$9,DOO,QOQ; under Ivlinnesota:
St�l�t�s, Sections 46.9.15� #hrough 4G9.1G51, as amended (the "Act"j, Tl�e proce�ds deriv..ed. from
the sale. of t11e;Notes are proposed ta be loaned to th� Borrower gursuan� .to tl�e tertr,s .af'a LQan
A�'eetnent, dated on or after DeeeniUer 1, 2009:. (t1}e-"Laan Agree�nerit'°), b�tween the City and the
Borrower: Tlie.pio�e�c3s of the l.oan Gvill b.e apptied €o finai�ce tlie consiruction and .equipping of �n.
ap}�roxin3afely 70;OOD square foo# facil3ty, ��vhicll �vil] provide new di"ning facilit�es, an e.xpanded
carnpus store, student lounges; study areas, ot�ice space fnr shide�k organizafions, c�assro�ms, and
meetu�g spaces, to be'Ioaated a� on ihe por�ion of t11e NorLhimestern C.ar�zpus l.ocated v�iithin the City
(tlie "Project"}. A portion of tlte p�oeeeds of the Loan �vill also be,�pplied to �ayment of the costs of
issuance of.the No�es:
e Notes ace proposed ta.. be puichased by friends and alunuii: of the Borzawer (the
"Purchase�s").., Tl�e I�Jrites. wil] be issued ii-� denominations of $100;040 or mare and wiII be sold only
to sophistieated in�estors.
T1ie Notes are proposed to be issued a5 tax=exemp#.obIigations, the in[erest on �vhieli.is no#
includa}�1e iri gross incofne fn:r fedeial income fax pt�rpases. Under applicable provisions of#he.Act,
tlie Internal Revenue Code of 198G, as amended. and the Treasury Regulations pramutgated
tl�ereunder; as a condition la ti�e issuance of't�h� Notes, tlie Conncil n�ust concluct a public hearing at
which tl�e;Council must permit any �aerson to con-�ment an the proposed fnancing �ansaction and tl�e
faeilities to be fnanced with tl3e proceeds.a�the Nates: T'tie City'has been asked #o hold the pi►blic
he.a�irig ��,ritli respeci to the issuance of the Notes anii t3�e Project on.No�ecriber 3.�, 2009.
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�ollowing the p�blie hearin�, the.Council is,i-eqaesteri tn conszder the �nclosed.R�solution,;
whicii gives pr,e�ifriiriary approval fo the: issuance ot� the Notes fi�r the' purposes: described `�ierein.
1� ollowing:receipt af t��� approval :from D�EI.7; .the Council wil] be aslted at � fufui-e Cduncil meeting
to provide final appraval. to the issuanc� a� the Nates and agprove the farn�. o�' tl�e I�ofes and the
docurnents related to the.Notes.
If the Notes are autharized to be issued �y the Council, the I�Iotes 1�i11 be issued as cpnduit
revenu.e I?lotes secured solely by tlie revenues derjved .froxn tlae. Loan Agreen-�ent execu#eet �y the
Borrower.and from other. security �ro�ii�ed by t�ie Borrower. Th� Notes wiIl not eonstiiute a general
or ri-in'rai oEili�aiion. of the Ciry and �vill not be secuied. h}r ar payable froni any pioperry or assets of
th� City (other than the iin#erests af ti�e City in the Loan Agreement), and wil] not be secured by any
taxing.povver of:filie City..; The.1'�Totes ��i11 n�t be,subject to any de}�t limitation.in1posed on tlie City
anrl the is.suance of .ti�e Notes will not hav:e any �dv�rse impaet on the credit rat[ng o.f ihe Ci#y;. even
in the event th�t :t13e $onorver encouniers financial difficulf�es �r+ith respect tti #he facilities fo be
finaneed witli the �i�aceeds af tlle 1Votes.
Pursuant to the American Recovery and ReinvesfinenY Tax Act af. 20fi9, eao}i 501(c)(3)
orgatiization has the ahiliry. to designate. up to $30;ODp,ODO in tax-exempt bonds as "banfc qualified"
in tt�e calendar years. 2009 and �DIO. .Durix�g those same years, each municrpaiity has tli� Same
ability to..designate up to $30,QQQ;QO.O iri iax-exe�npt botids as "6ank qualified" Tl�us, tlte issuance
af.tlie Bonds will nat aclverseIy affect the ability of the Cityfo iss.ue banlc-qualifetl bonds ii� calendar
year 2009 or ?4I0 (if the issuance af tlie Bonds is deiayed ier�t[12D l Oj.
Flease cont�ct .me if you haue any questians:regarding the Notes or this fuiancing.
I{ENNEDY & GRAVEN,.CHt1RTERED
:�u1ie Ecidington.
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3�06�3,;� Ja�:aRzo�-�
CITY OF ARDEN HYLLS, M�NNESOTA
RESOLUTION t�f0. 2009-036
GYVING PREL�NI�NARY APPROVAL TO THE PROPO�ED
ISSUANCE OF REVENUE NOTES UNDER MINNESOTA
STATUTES, SECTIONS 469.I52 THROUGH 469.1651, AS
AMENDED
BE IT RESOLVED by the City CounciI of the City of Arder� Hilis, Minnesota (the "City"}, as
fo�lows:
Seciion i. Recitals.
1.01. The City of Arden Hills, Minnesota (the "City"), is a statutory city organized and existing
under the Constitution and laws af the State of Minr�esota.
1.02. Pursuant to the Minnesota Stalutes, Sectians 4G9.152 thraugh 469.1651, as amended (the
"Act"), the City is authorized �o issue revenue bonds to finance, in whoie or in part, the cost of the
acquisition, constr�ction, recanstxuction, im�rovement, beiterment or exter�sion of a proj�ct, defined in
the Act as including any properties, real or personal, used or usefui in conneciion with a
revenue-producing enterprise, vvheiher or not operated for profit.
1.U3. Northwestern College, a Minnesota nonpro�t corporation (the "Borrower"), has proposed
ihat the City issue tax-exempt revenue notes or obiigations pursuant to the Act in one or more series in the
approximate principal amount not to exceed $9,000,000 {t�e "Notes") and loan the proceeds of the Notes
to tk�e Borrower to financ� a portion of the construction and equipping of an approximately 70,000 square
foot facility, which will provide new dining faciiities, an expanded campus store, student lounges, study
areas, office space for student arganizations, classrooms, and meeting spaces, to be Iocated at on the
poriio� of the Northwestern Campus Iocated withi�l the City (the "Project").
i.04. Pursuant to Section 469.15�i, subdivision 4, of the Act and Section 147(f} af t�e Internal
Revenue Code of 1486, as amended (the "Code"j, and regulations promulgated thereunder, prior to the
issuance of the Notes, the City Council must approve the Notes after conducting a pubEic hearing thereon
preceded by publication of a notice of public hearing (in the form required }�y Section 147(� of the Code
and appiieabie regulations) in the official newspaper of the City and a newspaper of generaf circulatian at
least fourteen (14) days prior to the pubIic hearing date.
1.05. Pursuant to the Act and the Cade, a notice of �tiblic hearing in the form required by the
Act and Section 147(fl of the Code was published in the Shoreview-Ardera Hills Bulletin, the officia�
newspaper of t�ie City and a newspaper of general circulataon in the City, on Wednesday,
November 11, 2009.
1_06. On the date hereof, the City �eld a public hearing an the Project and the issuance of t�e
Notes to finance the Project.
1.07. Pursuant to Sectian 469, i54 of the Act, p�-ior to the issuance of the Notes by the City, the
Commissioner of the Minnesota Departrrtent of Emgloyment and Economic De�e(o��nent ("DEED")
must approve ihe Project on the basis of an application sub�itted by the City witI� alt required
attachments and exhibits (the "DEED Application").
1.08. A draft capy of the DEED Appiication, tagether with drafts of ali required attachments
and exhibits, as prepared by Kennedy & Graven, Chartered, as Bond Counsel, is on �'ile with the City and
is available for public inspection in the affice of the City Administrator during regular business hours of
the City.
Section 2. Preliminary Approval.
2.01. The Project is hereby given preliminary approval by the City. The issuance oithe Notes
in the approxirr�ate aggregate principal amo�nt not to exceed $9,04�,000 to finance the Project is hereby
approved subject to the approval of #he Project by DEED as required by the Act, ar�d subject to the mutual
agreeinent of the City, the Borrower, and the initial purchasers af t�ae Notes as to the details of the Notes
and provisions for their payment. In ail evet�ts, rtt is understood, however, that t�e Notes shall not
aonstitute 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 t�e No�es and the Project, and the Notes,
when, as, and if issued, shaiI recite in substance that the Notes, incl�eding interest thereon, are payable
solely from the revenues received from the Project and property plecigec� to the payment thereof, anc� shall
not constitute a general or moral obligation of the City.
2.02. It is hereby found and determined ttaat the Project furthers the purposes set forth in the
Act and the Project constitutes a"project" within the meaning of Section 469.153, subdivision 2(b} of the
Act.
Z.03. In accordance with Section 469.154 of the Aci, the City Administraior of the City is
hereby authorized and directed to submit the proposal far the Project to DEED. The City Administrator
and other officers, etttployees and agents of the City are heretay authorized to provide DEED with any
pre�iminary informatian needed for this purpose, and the City Admir�istrator is a�thorized to initiate and
assist in the preparation of such documenis as may be appropriate to the Project, if it is approved.
2.04. The Borrower will �ay any adrr�fnistrative fees of the City and pay, ar, upon demand,
reimburse ihe City for pa�ent of, any and aii casts incurred by the City in connection with the Project
and the issuance of the Bonds, whether or not the Bonds are issued.
2.05. The adoption of this ResoIution does not consntute a guaranty or firtn commitment that
the City wi11 issue the Notes as requested by the Bot�'ower. The City retains the right in its sole discreiion
io withdraw froin participation and accordingly not to issue the Notes, or issue the Not�s in ar� 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 in#erest of #he City not �o issue the Notes, or to issue the Notes in an amo�nt Iess than
the arnount referred to in Section 2A1 hereaf, or should the parties to �he transaction �ae unabie to reach
agreement as to the terms and conditions of any of the documents required for the iransaction.
2.06. This Resolut�on shall be in full force and effect from and after iis passage.
Zao9.
Approved by the City Council of ihe City of Arden Hills, Minnesota, this 30th day of Navember,
CYTY OF ARDEN HILLS, MINNESOTA
Stanley Haipstead, Mayor
ATTEST:
Ronald Moorse, City Administrator
A�t20fl-9 (1AE)
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