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HomeMy WebLinkAbout6A, Conduit Debt IssuanceEN HILLS Re uest for Council Action q Prepared By: Sue Iverson, Finance Director/Treasurer Council Meeting Date: November 30, 2009 Northwestern College Public Hearing for Conduit Debt Issuance Budgeted Amount: Actual Amount: Funding Source: N/A N/A N/A Recommendation: 1. Authorization to conduct public hearing. ......................................................................................................�--...._._............................._....._.........................__....--.--------..._._...._.............................._�.............................-------.-.----.--..._......................_...---.........................._..------,-----._......................._..._...........----.------..----..__........................__....---.................---..------..................... Supporting Documents: 1. See the attached memo from Sue Iverson, dated November 30, 2009. 2. See attached memo from Kennedy & Graven, dated November 20, 2009. 3. Resolution 2009-036. ��. EN HILLS ME11�OR:AND�JIVI �ATE: November 30, 2009 T�: Honorable Mayor and �ity Council �Vle�bers Ron M�orse, City Adminisirator FROM: Sue Iverson, �inance D�rector/�'reasurer SUBJEC�': Northwesterr� College �'�.blic Hearing for Tax-exempt �i�.ancing �ack�round �'he City Council approved a"Private Activity Revenue Bond Financing" procedure which incl�des an application process and fees for those seeking to request the City to issue c�nduit debi on their behalf. Northwesterr� Coliege has filed an application along with the required application �ee of $504 io the City. Northwestern College is requesti�g �nancing for a new facility — Cornmunit�y Life Corr�rr�ons {siudent u�ion) for iis campus. T�e maximum amount of financing requested is $9,OQO,OOOa `Tl�e zor�ing of this project is under tl�e te�-rr�s and conditions of the PLTD agreement between t�e College and the City approved in October, �007. T�e City will be reimbursed ar�d he�d harnzless for a11 out-of-pocke� expenses related to the fi�ancing according to the C�ty's appl�cation process and the application filed. According to the City's policy, the City will receive 1/8 of 1% (.125%) of ihe outstandi�g principal balance of the bonds annua�ly, �he first year this would amount to � 11,250 and the bonds are from 5 to 25 yea�-s. A representative from l�Torthwestern Caliege �ill be in at�end.ance at t�e �neeting to answer any questions. �he Ci�y's bond counsel has reviewed the app�ication and has fiiled out ihe required DEED applica�ion. The Cit� Council adoptecl Resolutior� 2009-02� on October 26, 2009 ca�ling for a public hearing on November 30, 2009. Bond C�u�sei will be present at the hearir�g to answer an� questions. Attached are a resolution and a memo from tl�e City's �ond Counsel detailing the bond issuanc� ar�d the steps that need to be taken next. After the Public Hearing, �he Council wil� be asked t� adopt �Zesolution 2009-036 giving prelim�nary ap�roval to the proposed issuance of rev�n�� notes under 1VIir��eso�a Sta�utes, Sections 469.152 through 469.165 l, as amended. A copy of Nor�thwest�rn College's application and attacl�r�ents (including the DEE� applicaiion), wa� pro�ided �o the Ciiy Council in the October 2�, 200� agenda packet. Ci�y Counc�l 1V�eeting \\1Vietro-inet\ardenhills�Admin\Council�Agen�as & Packei Information�2009�11-30-09 Reguiar�'ack�t Infflrmation\Northvc�estern College_Public_Hearing.doc Page � of 2 Cou�cil Action If the Counc�l would like to �roceed with the request, then a�not�on to adopt Reso�ution 2009� 036, a reso�ution giving preli�ninary approval to the proposed issuance o� revenue notes under �1/Iinnesota Siatutes, Sec�ions 469. � 52 t�rough 469.1651, as amended. City Council Meeting ��Me�ro-inet\ardenhills�.Admin�Council�Agendas & Packet Informationi2009\1 �-�0-09 RegularlPacket informaiionlNorthwestern_Col�ege_Pub�ic_Hearing.doc �'age 2 of 2 > � . n► a:: _ . . . .... . . . . . �. , � �._.__ ,_... , 4 .. ; � ,:.: : ..:; G H_ A �: 1' E. {� � J� �f�iees in `���� tJ_S. 13a��k �'l:�ra ��� �{il:ttjl ��Xi�l �ii�LL �it�il���o�zs Ii�iinT����c���s� M� �.���(�? {6:1�) �3�-93'�(l t�le���t�ne Sa�nr.. �'aul �G I?) 3 37-9�3 � f} F:r� �:C. ��o�:lt� ��tt�:J1�ti�«�1��.k�nnrd.}•-�rat�e��:cac�i r��f �-marive �crion, Lc�u:�l ���ortuni�i� C�z�Ic�ycr JULIE �. �DI�IN�'i'C�I� 1��lor���r �� I.;�i�r Dir�ct �ia1'��1?} 33.7-'�� 13 Email. je�i�in�vn u��enri�i�r-�v�n.��r�i �ov�rnb�r �0�, ?{��}� �ue ��erson �in�nce �ir���or1'�'r�a��rer City of A�-��� i�i1ls l ?�5 �est I������va�r �� Ax�ien ��lls, �iN �511? �.e: ��,O��O,�t�� E��ca�i�r�ai ���il�ties R�:ve��ue.l�otes �t�o�th�v�st�rn �o�.l��� �"�-a�j����, Ser��s ?0�3 I�ear S�e, �n�Iosed pie��e �nc� �l�e prelit�.�i�1a�� r���lu�ion �t1�e �j��s�o�u�it���"� �r��os�d �fl l�e ca��s���r�d b� tlle �it� C�u���il �tlie :t�a���cil��j �f��e �i�y t�f.�rden �il�s, .�1%r�nesota ��e <`�i " a� its �-� u�arl . �� � � sc e u�ed r��e��ng �on l��n���, I�ov�mb�� 3�, 2'�a�, i� co�e��€�n v�i�h i�e aba�e�ref�rene�d not� iss�e ��l�e ``I��te�'�). �'I�e 1Zes:ol�tia�� �rovi�es �rel�n-��a� �PPr���� fi� ���e is�u���e, d�liver�, �nd �a��. o� tl�e �a�.es in an a�gr�ga�� ��inc�pa� arr�aunt ��� �a �xce�� ��,���,�t�� a�d �rav�c��s a€�fh�ri� t� �€�bnlit an ap�1iG��ion t� tl�e �or��nis:sio�e:r a�` tlle �ir���so�� �epar��n� of �mplQyrr�ent and Econ�nii� ��v�:�c��r���� {��I��E�'�� fo� �p�rova� ��f t��� �'raj�ct �as �escribet� ����w� at�d �e ����sa A bnef ����an�t��� of t��� �`inancin� fall��s. �ar�Il��estern �o��e��, a IV1in��esa��. n�ilprofi� cc�rp�rat�on ��l�e t;�3orro�v��-'=} ���s r�qu�st�ci t�at ���� Ci�}r is�ue �he Not�s in a�r�nc��al �.�v�n� no� t� �x�eed $���t�Q,��t�, under �ir�eso�a S���es, ����i�ns ��9. � �� �r�u� �C�. l ��: �s as anze��i�d �th� ��Ac�"�. �"!�� r�ceeds d�ri��d �r�r� � th� sa1� �f ���e �To��s �re pr�ap�se� iQ �ie �aar��d to �,� ��rr���e�r �ursuan� �o �l�e fi�r�� af � �o�� A�ree��n�, dated` c�r� �r �fter Dee�n��e� l, ��4� {t�e =`�:oan. A�r�������t"�, b�t��eer� �.� �i a�d i�� �orro��rer. ��� �ra�ee�s of the ]r�an ��il� be �p�ali��i �o �i�a��e t��e ca����ct��n ar�d equippin� c�� �. ap�ro���.�:tel� 70,�0� square foat #`ac1li�, �'tt�li��� �'tll�� �3�QV1�E: I1�V� �i�il�g ��Cil1���, an: e��and�d cam��s s#ore, s�d�nt ��un���, �tu.d�r ar�eas, af��e ��ace for �tud��.� ���a�i�at`ion�, classra�ms, �r�d �e�tin� ��ace�, to b� i�ca�ed a� �n �1�� p�r�inn �f ��� �To�h��e���rra C��-n��� lo�c�t�d �v�t�in �1�� �i� ����e =`�'roje��"�. � pQr�ior� �f �.�e ��a����s of t�ie �;o�.ri ��ri�l �Iso b� ap�li�� �o p���nt o�f �h� �o��s �� i ss�zan�� �f the 1'���es. �e i�o�es are pr�po��d tfl be �urchased b� fr����s a�ti �lurr�ni t��' the Borrower tt�� =`�'t�chas�rs"}: `�'1�� l�totes �.�ri�l be issued i�� d�n�.rnir�atian� c��� I��,4�� o�- �Qre and �i�� �e sv1�. vnl . .. Y �o s��h�st;�a��c� ir�v�s�ors. �'l�e ��t�s ar� �ro�osed t� be i�sued �s �ax-exen-�.�t obli�a�t�o��, �he �n�erest on �v��h i� �o� i�el�da�le in g�-oss incorne �t�r f��era1 i��c�rne t�. ��os�s. U�der �.�pl�cab�� t-o�si�ns �f t�ie A�t � 9 �1e Inter�al �eve��ue �ade o� ����, �s arn�ndec� a�d t��� T��a�� R��ulat�ons pra�nu�gat�� tl�er�un�er, a� a�ond��ia� i� th� �ssUa�ce o� ��e i�t�t�s, the Gouncil x�.u�t condu�t � p�b�ic heari�� �t �v�ich �1�� �Qunci� must p��-mit any }�erson �o con-inie�� o� the prapc�sed �i�a��in� �ransa�i�ion ��d �1�� fac��itie� ttr be fn�ced ��rith i��e pro��e�ds c�� fh� �v��s. T�ie ��� �a� b�en as�ed �o ��ald the pub��� �eariz�g ���i res���� to the i�suan�e t��' t��� I�o�es a�c� �he Prc�ject a� �c�v�r�ber 3�, ��09. 3C���G3�r1 JA� ��00-� �'���o�ing -�ie �ub�ic ����-i�g, �he �auric-il is requested �o c���id�r i�ie �nc�fls�� �eso���cans ��f�i��i gi�es �r���zrii.�ar� ap�ro��I ��a the isst��n�e o�` th� ��#e� f�r t�ie pu�Fos�s desc ; l���I ��re�a �a�l��ng rec�ipt t�f �e �:p�ro�ai �c�n� D�ED, �he �o�nc�� �vill be aslc�� a� a �tur� ���cii �.e��in� t� prt��de �tna� ���rt�v�l t� the %ss�ar�ce c�� i�e �otes and a�pr�ve fihe f�rn� a� t��� �t���� a�d ��ie dt�cur�ents r�late� �o ��� �To��s. I� the �o�es ��-e au�hc�rized �fl b� issu:� by th� �au�ci�, ��e Notes �.�il� b� is�ued as c�nduit r�v�nue �a�es secure� �c�le�� �� �h� re�renu�s d��i��d frar� �he Loan �g�eer�er�t �xec�te� � �h� � BorrQ��rer an� f��x� r���r s���� provideci b� ��e: �3orr��uer. �h� �o�e� �i:�� n�� ��nsfiitu�e a e��r�� � or rna�.ra�� obl��afiioxl o� t��� �i��r ar�d ��i1i r�o� �� secur�d b�r ar pa�ab�� �ronz any �ro��r� �r a�se�s �f ��ie Gi� �o�h�� ��an �he interests of� t��� ��� �n ���e �,oan Agre�rne�.�} a�d �1� .��� �� s�c�red � an Y � �ax�ng �a��ver o� t��� �`��. �e l�'�tes vvil� �a�� �� subj ec� �o �n� de�t Ii�ni�ativ� inipos�d on tl�� �it� �nd ��� iss�uance �f the N�t�� ��rill nofi l�a�e an.�r a�i��rs� im�a�t on t�e �r�dit ra�:n�g c�� t�e �i�Y, ��� ir� ��e e�en� t�a� ��Ie �arro��er en����t��-s ��a�cial �ifficultie� w��h r�spe�� �� the �'a�i�i�ies tt� b� f n�r�c�d ��vith t�� ��ace�+ds af t�e ,��t�s. ur�u�r�� �o th� Arnerica� Re�ov�ry and I�.�inve��rne�t Ta� Ac� of �Q�}, e�.ch S� ����{3j +��gar�izati�n �� �e abi�i�y ta desi�nate �� tfl �30��0(�,Q�Q in �ax-e��rnpt b��� as "�ank qual�fie�'g . . �n �he ca�end�r ��ars Z��� ant� ? 0��. Dut�i�g th��e sa�e. }r�ars, ea�h rnun�cipa���r has �h� ��r�� , a��l�ty �� desi��te u� �� �3�j{�0�,{��� �r� ta����ein�� b���d� �s "�ank-qualif�ed:" �'����s, ���e is������ t�� ���e �on�s wtl� nc�� ar�v�r�ei� affe�� t�e a�ili� �f ��i�e �'it� t� �ss�e ban�: t�uali�ied b�rnc�s �r� ca��r�:�}�r ���r ���� t�r ?� I�{1f the issu�:nce o� t�l� �a�d� �s dela�ed �ti� �� 1�). �'�ease con���� n�� i� �au. ���� ariy �uest�o�� re��rding t�e Not�s �r t� f�an�ir�g, I�1���E�� & GRA�TE�i, ���'���i� . 0 Ju�ie ���.ir�gtor� 3f�6f�3v1 JAL AR20Q-� CITY O� ARDEN HILLS, MII�TNES(�TA RESO�.�TTION 1�T0. 2009-036 GIVI�TG PRELIIVIINARY APPROVAL TO TH� PROPOSED ISSUANCE OF REVENU� �TOTES IJ�iDER MII��TESUTA S'�'ATITTES, SECTiONS 469.152 T�-IRCJUGH 469.1651, AS AME�TDED �E IT �ZESOLVED by tl�e City Cou�cii of the City of Arden Hills, 1Vlinnesota (the `tCity"�, as fo�lows: Sectio� 1. Reciials. �.0 l. �'he �ity of Arden Hill�, Minnesota (the "City"), is a statu�ory city organized and ex�stir�� under ��e Con�tituiion and laws of the State of I�Iinnesota. 1.02. Pursuant to the Minnesota Sta�tutes, Sections 469.15 2�hro�gh 469.165 �, as �.rnended �the "Act"�, �he City is auihorized to issue rev�nue bonds �o f�nar�ce, in v�hole or �n part, the cos� �� th� acquisition, constructi�n, reconstruction, improvement, beiterment or extension of a project, defined in t�e Act as including any proper�ies, real or personal, used or useful in cor�nection vvit� a reven�e-producing enterprise, whether or not operated for profit. 1.03. Northwestern College, a�iinnesota nonprofit co�-poration (the "Borrower"�, has proposed that the City �ssue iax-exem�t re�enu� notes or obligations pursuant to the Act in one or more �eries ir� the ap�roximate principal amouni not to exceed $�,000,000 (the "Notes") and loan the proceeds of ihe N�t�s to the Borrower to �nance a portion of the consiruction and equipping of an approximately 70,�00 squa�e foot facility, which wi�� provide new dining fac��ities, an ex�anded campus store, student lounges, study areas, office space for student organizations, classrooms, and rneeting spaces, to be located at on the portio� of the I�orthvvestern Can�pus located within t�e �ity (the "Pro�ect"j. 1.04. P�.rsuant to Section 469,154, SLl%C�1V1S10�1 4, of the A�� and Sectian 14�(#� o� �he Inter-r�al Reven�e Code of 1986, as arnended (the "Code"), ar�d regulations promulgated the�eunder, p�-ior to the issuance of the �lotes, the City Counci� must approve the Noies after conduciing a publ�c hearin� thereor� preceded by publication o� a notice o� public hear�ng ��n the forn� required by Section 147�� of the Cod� and applicabie regulatio�s) in the of�cial new�paper af t�e City and a nevvspaper of ge�eral circulation a� least fourt�en { 14j days prior to the public hearing date. 1.05. Pursuant to the Act and the Code, a notic� of public �earing in the �orm required by �he Act ar�d Section 14�(� of the C�de was published i� tl�e Shoreview-Arden Hills �3ulletin, the c�fficial newspaper o� the City and a newspaper of generai circulation in t�e City, on �]V�ednesday, November 1 l, 2009. 1.06. On the date �ereof, the �ity �eid a public hearing on the Project and �he iss�.anc� of t�e Notes �o finance the Project. 1:07. Pursuant to Section 469.154 of the Act, prior to the issuance of t�e Notes by i�e City9 �hc� Con�missioner of the Mir�nesota Depari�nent o� Employment �.nd Econo�ic Development {"I�E�1�79� �nust a�prove the �'roj ect on the basis of an ap��ication submitted by the City with all �-ec�uired attachments a�d e��bits {the "DE�D Application"). 1.08. A draft copy o� the �E�D �pplication, together with drafts of all requi�ed attachment� and exhibits, as prepared by Kennedy & Graven, Chartered, as Bond Counsel, is o� �le with the City and is avai�able for public inspection �n t�e office of the City Ad�ninistrator during regular busi�ess %o�rs �f the City. Section 2. Prelirni�ary Approval. 2.01. The Project is he�-eby give� preli�ninary approval by the City. The issuance of the l�Totes in the approximate aggregate principal amount not to �xceed $9,000,000 to �nar�ce t�e Project i� �er�by app�-oved subj ect to the approval of zhe Proj ect �y D�ED as required by the Ac�, and subj ect to tl�e mut�a� agreemer�t of the City, the Borrower, and the initial p�rchasers of the Notes as �o the details of ihe 1�Totes and provisions for their pa�mer�t. In all events, it is understood, however, z�ai the Notes shall noi const�tute a�harge, lien, or encumbrance, legal or equitable, �po� any property of �he City except i�e Ciiy's interest in t�e loan or rev�nue agreement with respect to the I�otes and the Project, and �he Note�, when, as, and if issued, s�ial� recite in substa.nce that the �totes, incl�ding interest �hereon, are payab�� so�ely from the revenues received from �he �'roject and property pledged to t�e �ayment �hereo�, and s�all not constitute a general or moral obligation of t�e City. 2.02. It is h�reby foun� and de�ermined that the Proj ect fu�-�hers t�e pur�oses set fort� i� tl�� Act and the Project constiiutes a"proj�ct" within the meaning o� Section 4d9.153, subdivision 2(b) of t�e Act. �.03. In accordance w��h Section 469.154 of the Act, the �it� Administrator of the �ity �s hereby aut�orized and directed to submit the proposal for the Proj ect to DEED. The City Adminis�rator and other of�cers, employees and agents of the City are hereby authorized to pr.ovide DEED wiih a�y preliminary information needed for ��is purpose, and the City Administrator is authorized �o initiate and a��ist in the preparation of such documents as may be appropriate to the Project, if it is approveda 2.04. The Borrawer wi�� pay a�y �.dministra�ve fees of the �ity and pay, or, upon demand, rei�nburse the City for pay�nent of, any and a�l costs incur�-ed by the C�ty in cor�ection with �he 1'rojec� and the issuance of the Bonds, whether or not the Bonds are issued. 2.05. The adoptior� of �his �esolution c�oes not consti�ute a guaranty or ��-m cornmitmen� thai the Cit� will issue the Notes as requested by the Bo�-�-ower. The City retains t�e righ� �n its sole dis��etio� to withdrav� fro� pa�ticipa�ion ar�d according�y not to issue the I�ot�s, or issue the Notes in an arr���n� less than the amour�t referred to herein, should the City a� any time prior to issuance thereof dete�ir�e that it �s in the best interest of the Cit� not to �ssue the Noies, o� to iss�e #he l�otes in an amount less than the amount referred �o in Section 2.01 �ereof, or should the parties to t�e transactior� be unable to ��ac� agreement as to the term� and conditions of any flf the documents required for the transaction. 2.06. This Resolution shall be in full force and ef�ect fron3 and after its passage. � A�p�oved by �he City Council of �he City of Arden Hi�ls, �Vli�nesota, this 30th day of l�ov�rnber, 2009. CITY OF AR�EN HILLS, M�NNESOTA S ta�ley Ha�-p stead, Mayor AT�'EST: Ronald Moorse, City Administrator AR200-9 (JAE) 3bOS6�vl