HomeMy WebLinkAbout4C, Resolution 2010-019, Approval for Issuance of Revenue Notes for Northwestern�.� EN HILLS
Re uest for Council Action :
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Prepared By: Sue Iverson,
Acting Cit� Administrator : Council Meeting Date: March 29, 2010
Finance Director/Treasurer
Resolution 2010-019 �iving Final Approval to the Proposed Issuance
of Revenue Notes for Northwestern College
Budgeted Amount: Actual Amount: Funding Source:
N/A N/A N/A
Recor�mendation:
1. Approve Resolution 2010-019, a Resolution authorizing the issuance, sale, and
delivery of Educational Facilities Revenue Notes (Northwestern College Pr�j ect),
Series 2010; approving the form of and authorizing the execution and delivery of t�e
notes and the related documents; and providing for the security, rights, and
remedies with respect to the notes.
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Supporting Do�cuments:
1. See the attached memo from Sue Iverson, dated March 29, 2010.
2. See attached memo from Kennedy & Graven, dated March 24, 2010.
3. Resolution 2010-019.
��. EN HILLS
MEMORANDUM
DATE: March 29, 2010
TO: Honorable Mayor and City Council Members
FROM: Sue Iverson, Acting City Admi�istrator
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 pro�ess and fees for those seek�ng to request the City to issue conduit debt
on their behalf. Northwestern College has filed an application along with the required application
fee of $500 to the City.
North�vestern College is requesting �nancing for a new facility — Community Life Commons
(student union) for its campus. The maximum amount of financing requested is $9,000,000. The
zoning of this project 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 harrnless
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.
The City's bond counsel has reviewed the application and has filled out the required DEED
ap�lication. The City Council adopted Resolution 2009-029 on October 26, 2009 calling for a
public hearing on November 30, 2009. The City held a public hearing on November 30, 2009,
and gave preliminary approval to the proposed issuance at that same meeting.
Attached are a resolution and a memo from the City's Bond Counsel detailing the bond issuance
and requesting final approval. 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.
Co�ncil Action
Council to adopt Resolution 2010-019, a resolution authorizing the issuance, sale, and delivery of
Educational Facilities Revenue Notes (Northwestern �ollege Proj ect), Series 2010; approving the
form of and authorizing the execution and delivery of the notes and the related documents; and
providing for the security, rights, and remedies with respect to the notes.
City Council Meeting
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CITY �F ARDEN HILLS, MINNESOTA
RESOLUTION NO. 2010-019
follows:
AUTHORIZING THE ISSUANCE, SALE, AND DELIVERY OF EDiJCATIONAL
FACILITIES REVENUE NOTES (NORTH�VESTERN COLLEGE PROJECT),
SERIES 2010; APPROVING THE FO1�:M OF AND AUTHORIZING THE
E�:ECUTION AND DELIVERY OF THE NOTES AND THE RELATED
DOCUMENTS; AND PROVIDING FOR THE SECURITY, R�IGHTS, AND
REMEDIES WITH RESPECT TO THE NOTES
BE IT RESOLVED by the City Council of the City of Arden I�ills, Minnesota (the "City"), as
Section l. Recitals.
1.01. The City is a statutory city organized and existing under the Constitution and laws of the
State of Minnesota.
1.02. Pursuant to 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
acquisitio�, construction, reconstruction, improvement, betterment or e�tension 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.
1.03. Northwestern College, a Minnesota nonprofit corporation (the "Borrower"), has proposed
that the City issue tax-exempt revenue obligations pursuant to the Act in one or more series in the
approximate principal amount not to exceed $9,000,00� (the "Notes") and loan the proceeds of the Notes
to the Borrower to finance the acquisition, construction and equipping of a portion of an approximately
70,000 square foot student center facility, which wi11 provide new dining facilities, an expanded campus
store, student lounges, study areas, of�ce space for student organizations, classroorns, and meeting
spaces, to be located on the portion of the Northwestern Campus located within the City. The portion of
the student center facility to be �nanced with the proceeds of the Notes will inclucle 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, j anitors' closets, hallways, furniture,
signage, general equipment and furniture, site work, technology wiring, and technology equipment
(collecti�ely, the "Project").
1.04. The City has prepared an Application to the Minnesota Department of Employment and
Economic Development ("DEED") for approval of the Project pursuant to the requirements of Section
469.154 of the Act.
1.05. Section 147(� of the Internal Revenue Code of 1986, as amended (the "Code"), and
regulations promulgated thereunder, requires that prior to the issua�ce of the Notes, the City Council of
the City (the "Council") approve the Notes after conducting a public hearing thereon preceded by
publication of a notice of public hearing (in the form required by Sectian 147(� of the Code and
a�pplicable regulations) in a newspaper of general circulation at least fourteen (14) days prior to the public
hearing date. On November 30, 2009, the Council conducted a duly noticed public hearing at which a
reasonable opportunity was provided for interested individuals to express their views, both orally and in
writing, on the proposed issuance of the Notes.
1.06. Certain accredited investors and financial institutions (collectively, the "Purchasers")
have agreed to purchase the Notes through a private placement in minimum denominations of $100,000 in
a manner consistent with the policies of the City relating to the issuance and sale of non-rated conduit
bonds.
1.07. The proceeds derived from the sale of the Notes are proposed to be loaned to the
Borrower under the terms of a Loan Agreement, dated on or after April 1, 2010 (the "Loan Agreement"),
between the City and the Borrower, and will be applied by the Borrower, together with other funds of the
Borrower, to fina.nce the acquisition, construction and equ�ipping of the Project and the payment of certain
expenses �ncurred in connection with the issuance of the Notes.
1.08. The loan repayments required to be made by the Borrower under the terms of the Loan
Agreement will be a�signed to the Purchasers under the terms of an Assignment of Loan Agreement,
dated on or after April l, 2010 (the "Assignment"), between the City and the Purchasers.
1.09. The Notes and the interest and any premium on the Notes: (i) shall be payable solely
from the revenues pledged therefor; (ii) shall not constitute a debt of the City within the meaning of any
constitutional or statutory limitation; (iii) shall not constitute nor give rise to a pecuniary liability of the
City or a charge against its general credit or taxing powers; and (iv) shall not constitute a charge, lien, or
encumbrance, legal or equitable, upon any property of the City other than the City's interest in the Loan
Ag�eement.
Section 2. The Notes.
2.01. The Cit� acknowledges, finds, determines, and declares that: (i) the issuance of the
Notes is authorized by the Act; (ii) the application of the proceeds of the Notes to finance the acquisition,
construction and equipping of the Proj ect is consistent with and furthers the purposes of the Act; and
(iii) the facilities financed with the proceeds of the Notes constitute a"project" within the meaning of
Section 469.153, subdivision 2(b) of the Act.
2.02. For the purposes set forth above, there is hereby authorized the issuance, sale, and
delivery of the Notes in one or more series in the maximum aggregate princi}��.1 amoux�t not to exceed
$9,000,0�00. The Notes shall be designated, shall be numbered, shall be dated, shall mature, shall be
subj ect to redemption prior to maturity, shall be in such form, and shall have such other terms, details, and
provisions as are set forth in the form of the Note now on �le with the City, with the amendments
referenced herein. The City hereby authorizes the Notes to be issued as "tax-exempt bonds" the interest
on which is not includable in gross income for federal and State of Minnesota income tax purposes.
All of the provisions of the Notes, when executed as authorized herein, shall be deemed to be a
part of this resolution as fully and to the same extent as if incorporated verbatim herein and shall be in full
force and effect from the date of execution and delivery thereof. The Notes shall be substantially in the
form on file with the City, which form is hereby approved, with such necessary and appropriate
variations, omissions and insertions (including changes to the aggregate principal amount of the Notes,
the stated maturities of the Notes and the maturity dat�s, the interest rates on the Notes, and the terms of
redemption of the Notes) as the Mayor of the City (the "Mayor") and t�e City Administrator of the City
(the "City Administrator"), in their discretion, shall determine. The execution of the Notes with the
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manual or facsin�ile signatures of the Mayor and tl�e City Administrator and the delivery of the Notes by
t�e City sha.11 be conclusive evidence of such determination.
2.03. The Notes shall be special limited obligations of the City the proceeds of which shall be
disbursed pursuant to the terms of the Loan Agreement, and the principal, premium, and interest on the
Notes shall be payable solely from the proceeds of the Notes, the revenues derived from the Borrower
pursuant to the terr�s of the Loan Agreement, and other security pledged by the Borrower to the
Purchasers.
Section 3. Note Documents.
3.01. The Mayor and City Administrator are hereby authorized and directed to execute and
deliver the Loan Agreement and the Assignment. All of the provisions of the Loan Agreement and the
Assignme�t, when executed and delivered as authoriz�d herein, shall be deemed to be a part of this
resolution as fully and to the same extent as if inco�porated verbatim herein and shall be in full force and
effect from the date of execution and delivery thereof. The Loan Agreemen:t and the Assignment shall be
substantially in the forms on file with the Ci.ty which are hereby approved, with such omissions and
insertions as do not materially change the substance thereof, or as the Mayor and the Cit.y Administrator,
in their discretion, shall determ��ne, and the execution thereof by the Mayor and the City Administrator
shall be conclusive evidence of such determination.
3.02. The Notes shall be revenue obligations of the City the proceeds of which shall be
disbursed pursuant to the terms of t�he Loan Agreement, and the principal:, premium, and interest on the
Notes shall be payable solely from the proceeds of the Notes, the revenues derived from the Loan
Agreement, and other security pledged by the Borrower to the Purchasers.
3.03. The City Administrator is hereby appointed as the initial paying agent, bond registrar,
and tender agent with respect to the l�otes.
Section 4. Closin�, Documents.
4.01. The Mayor and City Administrator are hereby authorized to execute and deliver, on
behalf of the City, such other documents as are necessary or app�opriate in connection with the issuance,
sale, and deli�ery of the Notes, in�cluding one or more certificates of the City, an endorsement of the City
to a tax certificate of the Borrower, the Information Return for Tax-Exempt Private Activity Bond Issues,
Form 803 8, a�d all other documents and certificates as shall be necessary and appropriate in connection
with the issuance, sale, and delivery of the Notes. The City hereby approves the execution and delivery
by the Borrower of a Tax E�emption Agreeme��t, dated on or after April l, 2010 (the "Tax Exemption
Agreement"), bet�veen the Borrower and the Pu�rchasers, and all other instruments, certi�cates, and
documents prepared in conjunction with the issuance of the Notes that require execution by the Borrower.
The City hereby authorizes Kennedy & Graven, Charte�red, as bond counsel of the �ity, to prepare,
execute, and deliver its approving legal opinion with respect to the Notes.
4.02. �xcept as otherwise provided in this resolution, all rights, powers and privileges
conferred and duties and liabilities imposed upon the City or the Council by the provisions of this
resolution or of the aforementioned documents shall be exercised or performed by the City or by such
rnembers of the Council, or such of� cers, board, body or agency thereof as may be required or authorized
by law to exercise such powers and to perform such duties.
No covenant, stipulation, obligation, or agreement herein cQntained or contained in ��e
aforementioned documents shall be deemed to be a covenant, stipulation, obligation, or agreement of any
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member of the Council, or any of�cer, agent, or employee of the City in that person's individual capacity,
and neither the Council nor any officer or ernployee executing the Notes shall be liable personally on the
Notes or be subj ect to any personal liability or accountability by reason of the issuance thereof.
No provision., covenan�t, or agreement contained in the aforementioned documents, the Notes, or
in any other docurnent relatin� to the Notes, and no obligation therein or herein imposed upon the City or
the breach thereof, shall constitute or gi�e rise to any pecuniary liability of the City or any charge upon its
general credit or ta:xing powers. In making the agreements, provisions, covenants, and representations set
forth in such d�cuments, the City has not obligated itself to pay or remit any funds or revenues, ot�er than
funds and revenues derived from the Loan Agreement and the Assignment which are to be applied to the
pay�ment of the Notes, as provided therein.
4.03. The City has not participated in the preparation of any disclosure documents relating to
the offer and sale of the Notes (the "Disclosure Documents"), and has made no independent investigation
with r�esp�ct to the information contair�ed therein and the City assumes no responsibility for the
sufficiency, accuracy, or completeness of any such information.
Section 5. Miscellaneous Provisions.
5.01. Except as herein otherwise expressly provided, n�thing in tl�is resolution or in the
aforementioned documents, expressed or implied, is intended or shtlal�l be construed to confer upon any
person, firn�, or corporation, other than the City or any holder of the Notes issued under the provisions of
this resolution; any right, remedy, or claim, legal or equitable, under and by reason of this resolution or
any provisions hereof, this resolution, the afo�ementioned documents and all of their provisions being
intended to l�e and being for the sole and exclusive benefit of the City and any holder from time to time of
the Notes iss�ed under the provisions of this resolution.
5.02. In case any one or more of the provisions of this resolution, other than the provisions
contain,ed in the first sentence of Section 2.03 hereof, or of the aforementi�ned documents, or af the Notes
issued hereunder shall for any reason be l�eld to be illegal or invalid, such illegality or invalidit� shall not
affect any other provision of this resolution, or of the aforementioned documents, or of the Notes, but this
resolution, the aforementioned documents, and the Notes shall be construec� and endorsed as if such
illegal or invalid provisions had not been contained therein.
5.03. Notwithstanding anything in this resolution to the contrary, the approvals and
authori.zations given l�erein are speci�.cally subject to a.�d contingent upon the receipt of an approval of
the Proj ect by the Minnesota Department of Employment and Economic Development.
5.04. The City acknowledges, finds, determines, and declares that the issuance of the Notes is
authorized by the Act and is consistent �vith the purposes of the Act and that the issuance of t�e Notes and
the other actio�s of the City under this resolution, the Notes, the Loan Agreement, and the Assignment
constitute a public purpose and are in the best interests of the Cit.y.
5.05. The Notes, when executed and delivered, shall contain a recital that they are issued
pursuant to the Act, and such recita.l shall be conclusive evidence of the validity of the Notes and t�e
regularity of the issuance thereof, and that all acts; conditions, and things requi�-ed by the laws of the State
of Min�esota relating to the adoption of this resolution, to the issuance of the Notes, and to the execution
of the aforementi�ned documents to happen, exist, and be performed precedent to the execution of the
aforementioned documents have happened, exist, and have been performed as so required by law.
L�
5.06. The of� cers of the City, bond counsel, other attorneys, engineers, and other agents or
en��lo��es of the City are hereby authorized to do all acts and things required of them by or in connection
with this resolution, the aforementioned documents, and tl�� Notes for thae full, punctual, and complete
p�erformance of all the terms, covenants, and agreements contained in the Notes, the aa.forementioned
documents, and this resolution. In the event that for any reason the Mayor is unable to execute and
deliver the doc�ments referred to in this resolution or carry out any of the other acts provided herein, any
persons delegated the duties of the Mayor shall be authorized to act in the capacity of the Mayor and
undertake such execution and delivery or acts on behalf of the City with full force and effect, which
e��ecutio� an�d delivery or acts shall be valid and bir�ding on the City. If for any reason the City
Adr�inistraior is unable to execute and deliver the documents referred to in this resolution or carry out
any af the other acts provided herein, any persons delegated the duties of the City Administrator shall be
authorized to act in the capacity of the City Administrator and undertak�e such execution and delivery or
acts on behalf of t�e City with full force and effect, which execution and delivery or acts shall be valid
and binding on the City.
5.07. The City understands that the Borrower will pay directly any and all �osts paid or
incurred by the City� in connection with the transactions authorized by this resolution, whether or not the
Notes are issued.
5.08. The City acknowledges that pursuant to Section 265(b)(3) of the Internal Revenue Code
of 1986, as amended by Section 1502 of the American Recove�-y and Reinvestment Tax Act of 2009, the
Borrower has designated the Notes as "qualified tax-exempt obligations" for purposes of
Section 265(b)(3) of the Code.
5.09. This resolution shall be in full force and effect from and after its passage.
5
Adopted by the �City Council of the City of Arden Hills, Minnesota, this 29th day of March, 2010.
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Attest:
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CITY OF ARDEN HILLS, MINNESOTA
Stanley Harpstead, Mayor
Susan iverson, Acting City Administrator/Deputy Clerk
AR200-9 (JAE)
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