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HomeMy WebLinkAbout2010-061APPROVING THE ISSUANCE, SALE, AND DELIVERY OF ADJUSTABLE RATE REVENUE BONDS (NORTHWESTERN COLLEGE PROJECT), SERIES 2010, FOR THE BENEFIT OF NORTHWESTERN COLLEGE, PAYABLE SOLELY FROM REVENUES PLEDGED PURSUANT TO AN INDENTURE; APPROVING THE FORM OF AND AUTHORIZING THE EXECUTION AND DELIVERY OF THE BONDS AND RELATED DOCUMENTS; AND PROVIDING FOR THE SECURITY, RIGHTS, AND REMEDIES WITH RESPECT TO THE BONDS BE IT RESOLVED by the City Council of the City of Arden Hills, Minnesota (the "City as follows: Section 1. Recitals. 71RZEN HILLS CITY OF ARDEN HILLS, MINNESOTA RESOLUTION NO. 2010-061 1.01. 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 acquisition, construction, reconstruction, improvement, betterment or extension of a project, defined in the Act as including any properties, real or personal, used or useful in connection with a revenue producing enterprise. 1.02. Northwestern College, a Minnesota nonprofit corporation (the "Borrower has proposed that the City issue tax exempt revenue obligations (the "Bonds pursuant to the Act in one or more series in the approximate principal amount not to exceed $9,000,000 and loan the proceeds thereof to the Borrower to finance the acquisition, construction and equipping of a portion of an approximately 70,000 square foot student center 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 on the portion of the Northwestern Campus located within the City. The portion of the student center facility to be financed with the proceeds of the Bonds will include 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 1.03. On November 30, 2009, pursuant to Section 147(f) of the Internal Revenue Code of 1986, as amended (the "Code and regulations promulgated thereunder, the City Council of the City (the "Council conducted a duly noticed public hearing (the "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 Bonds to finance the acquisition, construction, and equipping of the Project and to pay certain costs related to the issuance of the Bonds. The Public Hearing was preceded by publication of a notice of public hearing (in the form required by Section 147(0 of the Code and applicable regulations) in a newspaper of general circulation at least fourteen (14) days prior to the Public Hearing date. 1.04. Pursuant to the requirements of Section 469.154 of the Act, the City prepared and submitted an Application (the "Application to the Minnesota Department of Employment and Economic Development "DEED for approval of the Project. On April 13, 2010, following the submission of the Application, the Commissioner of DEED approved the Project. 1.05. The Borrower has proposed that the Bonds be issued and sold to M &I Marshall Ilsley Bank, a state banking corporation organized under the laws of the State of Wisconsin (the "Purchaser 1.06. The Bonds will be issued under a Trust Indenture, dated on or after November 1, 2010 (the "Indenture between the City and U.S. Bank National Association (the "Trustee and the Bonds will be designated as the Adjustable Rate Revenue Bonds (Northwestern College Project), Series 2010, or such other name as may be designated by appropriate officers of the City. 1.7. The proceeds derived from the sale of the Bonds to the Purchaser are proposed to be loaned to the Borrower under the terms of a Loan Agreement, dated on or after November 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 finance the acquisition, construction and equipping of the Project and the payment of certain expenses incurred in connection with the issuance of the Bonds. 1.8. The loan repayments to be made by the Borrower under the Loan Agreement will be assigned to the Trustee under the terms of the Indenture. 1.9. The Bonds and the interest and any premium on the Bonds: (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 Agreement. 1.10. Forms of the following documents have been submitted to the City and are now on file with the City: (i) the Bonds; (ii) the Indenture; and (iii) the Loan Agreement (collectively, the "Bond Documents Section 2. The Bonds. 2.01. The City hereby approves the issuance and sale of the Bonds for the benefit of the Borrower in the maximum aggregate principal amount of $9,000,000 as contemplated by the Bond Documents now on file with the City. The City hereby approves the execution and delivery of the Bonds by the Mayor and the City Administrator of the City. As provided in the Loan Agreement, the Bonds shall not be payable from nor charged upon any funds other than the revenues pledged to their payment, nor shall the City be subject to any liability thereon, except as otherwise provided in this paragraph. No holder of the Bonds shall ever have the right to compel any exercise by the City of its taxing powers to pay any of the Bonds or the interest or premium thereon, or to enforce payment thereof against any property of the City except the interests of the City in the Loan Agreement and the revenues and assets thereunder, which will be assigned to the Trustee under the Indenture. The Bonds shall not constitute a charge, lien, or encumbrance, legal or equitable, upon any property of the City, except the interests of the City in the Loan Agreement, and the revenues and assets thereunder, which will be assigned to the Trustee under the Indenture. The Bonds shall recite that the Bonds are issued pursuant to the Act, and that the Bonds, including interest and premium, if any, thereon, is payable solely from the revenues and assets pledged to the payment thereof, and the Bonds shall not constitute a debt of the City within the meaning of any constitutional or statutory limitations. 2 2.02. The Bonds shall bear interest at an adjustable rate and may be converted to various types of variable rates in accordance with the terms of the Indenture. The Bonds shall be designated, shall be numbered, shall be dated, shall mature, shall be subject to redemption prior to maturity, shall be in such form, and shall have such other terms, details, and provisions as are prescribed in the Indenture, in the form now on file with the City, with such necessary and appropriate variations, omissions, and insertions (including changes to the name of the Bonds, the aggregate principal amount of the Bonds, the stated maturities of the Bonds and the maturity dates of the Bonds, the initial interest rates on the Bonds and the terms for determining the fixed rates or the variable rates on the Bonds, and the terms of optional and mandatory redemption of the Bonds) as the Mayor and the City Administrator of the City, in their discretion, shall determine. The Bonds will 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. Section 3. Bond Documents. 3.01. The Council hereby authorizes and directs the Mayor and the City Administrator to execute the Indenture, and to deliver the Indenture to the Trustee, and hereby authorizes and directs the execution of the Bonds in accordance with the terms of the Indenture, and hereby provides that the Indenture shall provide the terms and conditions, covenants, rights, obligations, duties, and agreements of the owners of the Bonds, the City, and the Trustee as set forth therein. 3.02. The Mayor and City Administrator of the City are authorized and directed to execute and deliver the Loan Agreement. All of the provisions of the Loan Agreement, when executed and delivered 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 Loan Agreement shall be in substantially the form on file with the City on the date hereof, which is hereby approved, with such omissions and insertions as do not materially change the substance thereof, or as the Mayor and the City Administrator, in their discretion, shall determine, and the execution thereof by the Mayor and the City Administrator shall be conclusive evidence of such determination. 3.03. The Bonds shall be special limited obligations of the City, the proceeds of which shall be disbursed pursuant to the terms of the Indenture and the Loan Agreement, and the principal, premium, and interest on the Bonds shall be payable solely from the proceeds of the Bonds, the revenues derived from the Loan Agreement, the money held in the funds and accounts established under the Indenture, and the other sources set forth in the Indenture. 3.04. The Trustee is hereby appointed as the initial paying agent, bond registrar, and tender agent with respect to the Bonds. Section 4. Closing Documents. 4.01. The Mayor and City Administrator of the City and other officers, employees, and agents of the City are hereby authorized and directed to prepare and furnish to bond counsel and the Trustee certified copies of all proceedings and records of the City relating to the issuance of the Bonds, including a certification of this resolution. Such officers, employees, and agents are hereby authorized to execute and deliver, on behalf of the City, all other certificates, instruments, and other written documents that may be requested by bond counsel, the Trustee, or other persons or entities in conjunction with the issuance of the Bonds. Without imposing any limitation on the scope of the preceding sentence, such officers, employees, and agents are specifically authorized to execute and deliver one or more certificates of the City, an Information Return for Tax Exempt Private Activity Bond Issues, Form 803 8 (Rev. June 2010), and an endorsement of the City to the tax certificate of the Borrower. The City hereby approves the execution and delivery by the Trustee of the Indenture, the Tax Exemption Agreement, dated as of November 1, 2010, between the Borrower and the Trustee, and all other instruments, 3 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 Bonds. 4.02. Except 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 members of the Council, or such officers, 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 contained or contained in the aforementioned documents shall be deemed to be a covenant, stipulation, obligation, or agreement of any member of the Council, or any officer, agent, or employee of the City in that person's individual capacity, and neither the Council nor any officer or employee executing the Bonds shall be liable personally on the Bonds or be subject to any personal liability or accountability by reason of the issuance thereof. No provision, covenant, or agreement contained in the aforementioned documents, the Bonds, or in any other document relating to the Bonds, and no obligation therein or herein imposed upon the City or the breach thereof, shall constitute or give rise to any pecuniary liability of the City or any charge upon its general credit or taxing powers. In making the agreements, provisions, covenants, and representations set forth in such documents, the City has not obligated itself to pay or remit any funds or revenues, other than funds and revenues derived from the Loan Agreement which are to be applied to the payment of the Bonds, as provided therein and in the Indenture. Section 5. Miscellaneous Provisions. 5.01. Except as herein otherwise expressly provided, nothing in this resolution or in the aforementioned documents, expressed or implied, is intended or shall be construed to confer upon any person, firm, or corporation, other than the City or any holder of the Bonds 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 aforementioned documents and all of their provisions being intended to be and being for the sole and exclusive benefit of the City and any holder from time to time of the Bonds issued under the provisions of this resolution. 5.02. In case any one or more of the provisions of this resolution, other than the provisions contained in the first sentence of Section 3.03 hereof, or of the aforementioned documents, or of the Bonds issued hereunder shall for any reason be held to be illegal or invalid, such illegality or invalidity shall not affect any other provision of this resolution, or of the aforementioned documents, or of the Bonds, but this resolution, the aforementioned documents, and the Bonds shall be construed and endorsed as if such illegal or invalid provisions had not been contained therein. 5.03. The Bonds, when executed and delivered, shall contain a recital that they are issued pursuant to the Act, and such recital shall be conclusive evidence of the validity of the Bonds and the regularity of the issuance thereof, and that all acts, conditions, and things required by the laws of the State of Minnesota relating to the adoption of this resolution, to the issuance of the Bonds, and to the execution of the aforementioned 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. 5.04. The officers of the City, bond counsel, other attorneys, engineers, and other agents or employees 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 the Bonds for the full, punctual, and complete performance of all 4 the terms, covenants, and agreements contained in the Bonds, the aforementioned documents, and this resolution. In the event that for any reason the Mayor is unable to execute and deliver the documents 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 execution and delivery or acts shall be valid and binding on the City. If for any reason the City Administrator is unable to execute and deliver the documents referred to in this resolution or carry out any of 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 undertake such execution and delivery or acts on behalf of the City with full force and effect, which execution and delivery or acts shall be valid and binding on the City. 5.05. The City understands that the Borrower will pay directly any and all costs paid or incurred by the City in connection with the transactions authorized by this resolution, whether or not the Bonds are issued. 5.06. 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 Recovery and Reinvestment Tax Act of 2009, the Borrower has designated the Bonds as "qualified tax- exempt obligations" for purposes of Section 265(b)(3) of the Code. 5.07. The City further acknowledges that the Borrower intends to cause the Bonds to be initially issued in a flexible rate mode at the same interest rate through the completion of the acquisition, construction, and equipping of the Project. Once the Project is complete, the Borrower intends to cause the Bonds to be converted to a weekly variable rate or daily variable rate and further intends to obtain a letter of credit to secure the payment of interest on and principal of the Bonds. At the time of such conversion, the City will be required to approve revisions to the Indenture, the Loan Agreement, and the form of Bonds and may be required to execute additional documents related to such conversion. Attest: 5.08. This resolution shall be in full force and effect from and after its passage. Adopted by the City Council of the City of Arden Hills, Minnesota, this 15th day of November, 2010. By gl/-?;ri Patrick Klaers, City Administrator /Clerk AR200 -9 (JAE) 377253v2 5