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HomeMy WebLinkAbout2011-044AT_ ARBNHILLS CITY OF ARDEN HILLS COUNTY OF RAMSEY STATE OF MINNESOTA RESOLUTION NO. 2011-044 APPROVING THE CONVERSION OF THE CITY'S ADJUSTABLE RATE REVENUE BONDS (NORTHWESTERN COLLEGE PROJECT), SERIES 2010, TO A VARIABLE RATE MODE; AND APPROVING AND AUTHORIZING THE EXECUTION AND DELIVERY OF DOCUMENTS RELATED THERETO WHEREAS, pursuant to Minnesota Statutes, Sections 469.152 through 469.1651, as amended (the "Act "), resolutions of the City of Arden Hills, Minnesota (the "City ") adopted by the City Council on November 30, 2009, March 29, 2010, and November 15, 2010 (collectively, the "Resolutions "), and a Trust Indenture dated as of November 1, 2010 (the "Original Indenture "), between the City and U.S. Bank National Association, as trustee (the "Trustee "), the City issued its Adjustable Rate Revenue Bonds (Northwestern College Project), Series 2010 (the "Series 2010 Bonds "), in the original aggregate principal amount of $8,000,000, on behalf of Northwestern College, a Minnesota nonprofit corporation (the "Borrower "); and WHEREAS, proceeds of the Series 2010 Bonds were loaned to the Borrower pursuant to the terms of a Loan Agreement, dated as of November 1, 2010 (the "Original Loan Agreement "), between the Issuer and the Borrower, to finance the acquisition, construction and equipping of a portion of an approximately 70,000 square foot student center facility, providing new dining facilities, an expanded campus store, student lounges, study areas, office space for student organizations, classrooms, and meeting spaces, located on the portion of the Northwestern Campus located within the City. The portion of the student center facility financed with the proceeds of the Series 2010 Bonds includes student lounges, study areas, student development offices and meeting space for student organizations, common areas, offices, the print shop, mail and shipping areas, receiving area, a conference room, the bookstore, the bookstore storage area, bookstore equipment, the telecommunications room, and a proportionate share of the mechanical room, electrical, elevators, stairs, bathrooms, janitors' closets, hallways, furniture, signage, general equipment and furniture, site work, technology wiring, and technology equipment (collectively, the "Project "); and WHEREAS, the Series 2010 Bonds presently bear interest at the Flex Private Placement Rate Mode, as defined in the Indenture, but the Borrower has determined to convert the Series 2010 Bonds to a Weekly Mode, as defined in the Indenture (the "Conversion "); and WHEREAS, pursuant to Section 6.01 and Section 4.05 of the Original Indenture, prior to the Conversion, a Letter of Credit must be delivered to the Trustee to secure the Series 2010 Bonds; and WHEREAS, Section 6.01 of the Original Indenture also requires a mandatory tender of all Series 2010 Bonds at any time a Letter of Credit (or Substitute Letter of Credit) is delivered to secure the Series 2010 Bonds and such mandatory tender is scheduled to occur on or after September 29, 2011; and 1 WHEREAS, the Borrower has arranged for a Letter of Credit (the "Letter of Credit ") to be issued by BMO Harris Bank N.A., a national banking association (the "Bank ") for the benefit of the Trustee to secure the Series 2010 Bonds. The Letter of Credit is proposed to be delivered to the Trustee and become effective on or after September 29, 2011. The Letter of Credit will be delivered pursuant to the terms of the Reimbursement Agreement, to be dated on or after September 1, 2011 (the "Reimbursement Agreement "), between the Borrower and the Bank; and WHEREAS, the City has been advised by its bond counsel that the provision of the Letter of Credit as security for the Series 2010 Bonds will cause a "reissuance" of the Series 2010 Bonds for tax purposes pursuant to Section 1.1001 -3 of the Treasury Regulations promulgated under the Internal Revenue Code of 1986, as amended, and therefore, for tax purposes, the Series 2010 Bonds will be treated as if they were refunded on the date of the Conversion; and WHEREAS, the Borrower will enter into a Bond Purchase Agreement, to be dated on or after September 1, 2011 (the "Bond Purchase Agreement "), with M &I Financial Advisors, Inc. (the "Underwriter "), pursuant to which the Underwriter will purchase the Series 2010 Bonds following the mandatory tender of the Series 2010 Bonds; and WHEREAS, in order for the Series 2010 Bonds to be sold to the public following the Conversion, a Reoffering Circular has been prepared and is proposed to be distributed to potential purchasers; and WHEREAS, the Borrower will enter into a Remarketing Agreement, to be dated on or after September 1, 2011 (the "Remarketing Agreement "), with BMO Capital Markets GKST Inc., acting as remarketing agent (the "Remarketing Agent "), which sets out the duties and obligations of the Remarketing Agent to remarket the Series 2010 Bonds following the Conversion; and WHEREAS, in conjunction with the Conversion, the mandatory tender of the Series 2010 Bonds, and the issuance of the Letter of Credit, the City, as issuer of the Series 2010 Bonds, must approve certain actions of the parties and execute various document amendments to incorporate the terms of the Conversion and Letter of Credit into the documents related to the Series 2010 Bonds; and NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Arden Hills, Minnesota, as follows: 1. The City Council hereby consents to the Conversion of the Series 2010 Bonds on or after September 29, 2011, and to the reoffering of the Series 2010 Bonds to the public. 2. The City Council acknowledges the issuance of the Letter of Credit by the Bank to be delivered to the Trustee as security for the Series 2010 Bonds. 3. The City Council hereby approves the changes made to the Series 2010 Bonds to incorporate the terms of the Conversion and the issuance of the Letter of Credit, substantially in the form on file with the City on the date hereof, which is hereby approved, with such changes as shall be approved by the City Administrator and Kennedy & Graven, Chartered, as bond counsel to the City ( "Bond Counsel "); provided that the execution thereof by the Mayor and the City Administrator shall be conclusive evidence of such approval. 4. The City Council hereby approves the First Amendment to Trust Indenture, to be dated on or after September 1, 2011 (the "First Amendment to Indenture "), between the City and the Trustee, and the First Amendment to Loan Agreement, to be dated on or after September 1, 2011 (the "First 2 Amendment to Loan Agreement "), between the City and the Borrower, substantially in the forms on file with the City on the date hereof, which are hereby approved, with such changes as shall be approved by the City Administrator and Bond Counsel, including but not limited to any changes deemed necessary by Bond Counsel in order to obtain a rating from Moody's Investors Service, as rating agency; provided that the execution thereof by the Mayor and the City Administrator shall be conclusive evidence of such approval. 5. The Mayor and the City Administrator are hereby designated as the representatives of the City with respect to the Conversion and the issuance of the Letter of Credit transaction. The Mayor, the City Administrator, and other officers of the City are authorized and directed to execute and deliver any and all certificates, agreements, or other documents which are required by the Original Indenture, as amended by the First Amendment to Indenture, or any other agreements, certificates or documents which are deemed necessary by Bond Counsel to documents as are necessary, customary, or appropriate in connection with the reissuance of the Bond, or are required by bond counsel to complete the Conversion and establish the validity or enforceability of the Bond or the exclusion from gross income of interest on the Bond for purposes of federal income taxation and State of Minnesota taxation (including but not limited to the execution of an endorsement to the Borrower's Tax Certificate and an Information Return for Tax - Exempt Private Activity Bond Issues, Form 803 8 (Rev. April 2011). 6. The City Council consents to the sale of the Series 2010 Bonds to the Underwriter upon the offer of the Underwriter to purchase the Series 2010 Bonds in accordance with the terms of the Bond Purchase Agreement, following the mandatory tender of the Series 2010 Bonds on or after September 29, 2011. 7. The preparation of the Reoffering Circular in conjunction with the remarketing of the Series 2010 Bonds is hereby authorized. The City has not participated in the preparation of the Reoffering Circular and has made no independent investigation with respect to the information contained therein, including the appendices thereto, and the City assumes no responsibility for the sufficiency, accuracy, or completeness of such information. Subject to the foregoing, the City hereby consents to the distribution and the use by the Remarketing Agent of the Reoffering Circular in connection with the remarketing of the Series 2010 Bonds. The Reoffering Circular is the sole material consented to by the City for use in connection with the remarketing of the Series 2010 Bonds. 8. The City hereby approves the execution and delivery by the Trustee of the First Amendment to Indenture, the Continuing Disclosure Agreement, to be dated on or after September 1, 2011 (the "Continuing Disclosure Agreement "), between the Borrower and the Trustee, the Pledge and Security Agreement, to be dated on or after September 1, 2011 (the "Pledge Agreement "), between the Borrower, the Bank, and the Trustee, and all other instruments, certificates, and documents prepared in conjunction with the issuance of the Bonds that require execution by the Trustee. The City hereby authorizes Kennedy & Graven, Chartered, as Bond Counsel of the City, to prepare, execute, and deliver its approving legal opinion with respect to the Conversion of the Series 2010 Bonds and the issuance of the Letter of Credit and the continued validity and enforceability of the Series 2010 Bonds and the tax - exempt status of interest on the Series 2010 Bonds. 9. As originally stated in the Resolutions, the Series 2010 Bonds are special, limited obligations of the City payable solely from the revenues of the Project. The Series 2010 Bonds do not constitute an indebtedness, liability, general or moral obligation, or a pledge of the faith and credit or any taxing powers of the City, the County of Ramsey, the State of Minnesota, or any political subdivision thereof. The Series 2010 Bonds are secured solely by the revenues derived by the City from the Original Loan Agreement, as amended by the First Amendment to Loan Agreement, and pledged to the Series 2010 Bonds pursuant to the terms of the Pledge Agreement and by revenues and assets pledged or applied 3 by the Borrower to the payment of the Series 2010 Bonds. 10. This resolution shall be in full force and effect from and after its passage. 2011. Attest: Adopted by the City Council of the City of Arden Hills, Minnesota, this 12th day of September, CITY OF ARDEN HILLS, MINNESOTA By /120,441/ikij David Grant, Mayor B /( By Patrick Klaers, City Administrator /Clerk AR200 -11 (JAE) 390469v1 5