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HomeMy WebLinkAbout7A, Resolution 2009-036■ �/� EN HILLS Re uest for Council Action q Prepared By: Sue Iverson, Council Meetin Date: November 30 2 Finance Director/Treasurer g , 009 Resolution 2009-036 Giving Preliminary Approval to the Proposed Issuance of Revenue Notes Budgeted Amount: Actual Amount: Funding Source: N/A N/A N/A Recommendation: 1. Approve Resolution 2009-036 Giving Preliminary Approval to the Proposed Issuance of Revenue Notes under Minnesota Statutes, Sections 469.152 through 469.1651, as amended. 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 HILL5 MEMORANDUM DATE: November 30, 2009 TO: Honorable Mayor and City Council Members Ron Moorse, City Administrator FROM: Sue Iverson, Finance Director/Treasurer SUBJECT: Northwestern College Public Hearing for Tax-exempt Financing Back�round -, The City Council approved a"Private Activity Revenue Bond Financing" procedure which includes an application process and fees for those seeking to request the City to issue conduit debt on their behalf. Northwestern College has �led an application along with the required application fee of $500 to the City. Northwestern College is requesting financing for a new facility — Community Life Commons (student union) for its campus. The maximum amount of �nancing requested is $9,000,000. The zoning of this proj ect is under the terms and conditions of the PUD agreement between the College and the City approved in October, 2007. The City will be reimbursed and held harmless for all out-of-pocket expenses related to the financing according to the City's application process and the application filed. According to the City's policy, the City will receive 1/8 of 1% (.125%) of the outstanding principal balance of the bonds annually, the first year this would amount to $11,250 and the bonds are from 5 to 25 years. A representative from Northwestern College will be in attendance at the meeting to answer any questions. The City's bond counsel has reviewed the application and has filled out the required DEED application. The City Council adopted Resolution 2009-029 on October 26, 2009 calling for a public 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 will be asked to adopt Resolution 2009-036 giving preliminary approval to the proposed 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 packet. City Council Meeting \�1Vletro-inet\ardenhills�Admin\Council�Agendas & Packet Information\2009\11-30-09 Regular�Packet Information\Northwestern College_Public Hearing.doc � Page 1 of 2 Council Action If the Council would like to proceed with the request, then a motion to adopt Resolution 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. 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Th� ����� w��� ��� c�nsfi�t�.l.�e � ��.��ral or r���ral� ol�l�����on a� t��:� �it}r .���d i��-i11 �o� `l�� �����d b� c�r p�.y��Ie fr�m an� �-� e �r �����s o�' . _ ; th� C�� ���he� ��ia� ��e .tri��r�e�t� a� ���� �i�y �n ��ae �,��� .��r���n���} �n� w�t� .��� �� ��cur�� � ar� _ . t�xir�� �a��u�r �� ���� ���. �`h� �''�t�s �v%11 na� �e �t�b���� ft� ��1; ; ���� .IZTI�It��IOiI 1�'i1 Q��C�, 4I7 ��� '�'" .� � _ _ _ x.�?' „ _ �.�� t�i� Iss���ce o�` t�e �o��� ��ill r�c�t ����� �n�r ad��rs� ir��a�t c�n t�.� cr�d�� r�:�.ng o� �I�e �i ,���n: _ �Y rn ��� +���n� �h�� :��i� �ar������r en��u�����s ��ancxal d1.��cul��es �v��h �re��e�� t� t�� �acilities �� be f n��c��. ��v�t�i ;th� �ra���ds t�� fi�e ��tes. i�r��i�� to t�� �ri�ric�n TT�:e�a�r�r� �nd I�.��x�����nent T�� A�e�. of ����, ��ch ��01 �c���� �ar�ar�iza���z� ��.�' �� ab�lit}r �a� d�si�aY�e �p to ���,���,��� �r� i�a�-e�,���� ���d� as "��nk u�i���e��' �n th� c�Ier�d�r �e�-s ���� �:�� ��IO. D��c`�.�.g ����e s��e. y���rs:, �a�h m�icr���i� ha5 ���� s�rri�e. �bil�ty t� �l�e���nate u� �c� �30,{��.����� ir� �a�W�.�e.m�� bo���s �s «b�.n�C ���.li�ed:�.� �����s, f��e i:ssu�:nce : �.� ���e ��nd� �viil nofi ����r�e�� �:;f��c:� �he al�ilx� �f ���e �ity �� �s�u� �art� qual�fi�d b�n�s .in ����ndar ���r 2Q�� a�r �� I��Yf t�ie is�u:ar�c� o�'t��� �o��� is de�aye:c� �;ti� �O 1�). �����e �c�r��a�� ��e if y�u ��av� a�� �u��ti�n� r���r�i�n� t�.�e I'�a�+�s �r t��:s �'ir�ar���.�g. I����� +� G�:��I'�, C�-I�..T��.E� . ' Ju:��� �ddi�gtt�n. .,���-�`� ' ,� +y. � 3Gf�6�i3v1 :�A� A.RZ(l(�-� CITY OF ARDEN HILLS, MINNESOTA RESOLUTION NO. 2009-036 GIVING PRELIMINARY APPR�VAL TO THE PROPOSED ISSUANCE OF REVENUE NOTES UNDER MINNESOTA STATUTES, SECTIONS 469.152 THROUGH 469.1651, AS AMENDED BE IT RESOLVED by the City Council of the City of Arden Hills, Minnesota (the "City"), as follows: Section l. Recitals. 1.01. The City of Arden Hills, Minnesota (the "City"), is a statutory city organized and existing under the Constitution and laws of the State of Minnesota. 1.02. Pursuant to the Minnesota Statutes, Sections 469.152 through 469.1651, as amended (the "Act"), the City is authorized to issue revenue bonds to finance, in whole or in part, the cost of the acquisition, construction, reconstruction, improvement, betterment or extension of a proj ect, defined in the Act as including any properties, real or personal, used or useful in connection with a revenue-producing enterprise, whether or not operated for pro�t. 1.03. Northwestern College, a Minnesota nonprofit corporation (the "Borrower"), has proposed that the City issue tax-exempt revenue notes or obligations pursuant to the Act in one or more series in the approximate principal amount not to exceed $9,000,000 (the "Notes") and loan the proceeds of the Notes to the Borrower to finance a portion of the construction and equipping of an approximately 70,000 square foot facility, which will provide new dining facilities, an expanded campus store, student lounges, study areas, office space for student organizations, classrooms, and meeting spaces, to be located at on the portion of the Northwestern Campus located within the City (the "Project"). . 1.04. Pursuant to Section 469.154, subdivision 4, of the Act and Section 147(� of the Internal Revenue Code of 1986, as amended (the "Code"), and regulations promulgated thereunder, prior to the issuance of the Notes, the City Council must approve the Notes after conducting a public hearing thereon preceded by publication of a notice of public hearing (in the form required by Section 147(� of the Code and applicable regulations) in the official newspaper of the City and a newspaper of general circulation at least fourteen (14) days prior to the public hearing date. 1.05. Pursuant to the Act and the Code, a notice of public hearing in the form required by the Act and Section 147(� of the Code was published in the Shoreview-Arden Hills Bulletin, the official newspaper of the City and a newspaper of general circulation in the City, on Wednesday, November 11, 2009. 1.06. On the date hereof, the City held a public hearing on the Proj ect and the issuance of the Notes to finance the Proj ect. 1.07. Pursuant to Section 469.154 of the Act, prior to the issuance of the Notes by the City, the Commissioner of the Minnesota Department of Employment and Economic Development ("DEED") must approve the Proj ect on the basis of an application submitted by the City with all required attachments and e�ibits (the "DEED Application"). 1.08. A draft copy of the DEED Application, together with drafts of all required attachments and exhibits, as prepared by Kennedy & Graven, Chartered, as Bond Counsel, is on file with the City and is available for public inspection in the office of the City Administrator during regular business hours of the City. Section 2. Preliminary A��roval. 2.01. The Project is hereby given preliminary approval by the City. The issuance of the Notes in the approximate aggregate principal amount not to exceed $9,000,000 to finance the Proj ect is hereby approved subj ect to the approval of the Proj ect by DEED as required by the Act, and subj ect to the mutual agreement of the City, the Borrower, and the initial purchasers of the Notes as to the details of the Notes and provisions for their payment. In all events, it is understood, however, that the Notes shall not constitute 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 the Notes and the Proj ect, and the Notes, when, as, and if issued, shall recite in substance that the Notes, including interest thereon, are payable solely from the revenues received from the Proj ect and property pledged to the payment thereof, and shall not constitute a general or moral obligation of the City. 2.02. It is hereby found and determined that the Proj ect 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. 2.03. In accordance with Section 469.154 of the Act, the City Administrator of the City is hereby authorized and directed to submit the proposal for the Project to DEED. The City Administrator and other officers, employees and agents of the City are hereby authorized to provide DEED with any preliminary information needed for this purpose, and the City Administrator is authorized to initiate and assist in the preparation of such documents as may be appropriate to the Project, if it is approved. 2.04. The Borrower will pay any administrative fees of the City and pay, or, upon demand, reimburse the City for payment of, any and all costs incurred by the City in connection with the Proj ect and the issuance of the Bonds, whether or not the Bonds are issued. 2.05. The adoption of this Resolution does not constitute a guaranty or firm commitment that the City will issue the Notes as requested by the Borrower. The City retains the right in its sole discretion to withdraw from participation and accordingly not to issue the Notes, or issue the Notes in an 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 interest of the City not to issue the Notes, or to issue the Notes in an amount less than the amount referred to in Section 2.01 hereof, or should the parties to the transaction be unable to reach agreement as to the terms and conditions of any of the documents required for the transaction. 2.06. This Resolution shall be in full force and effect from and after its passage. 2 Ii�iliZ� Approved by the City Council of the City of Arden Hills, Minnesota, this 30th day of November, CITY OF ARDEN HILLS, MINNESOTA Stanley Harpstead, Mayor ATTEST: Ronald Moorse, City Administrator AR200-9 (JAE) 360561v1