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HomeMy WebLinkAbout2015-10Extract of Minutes of a Meeting of the City Council of the City of Gem Lake, Ramsey County, Minnesota Pursuant to due call and notice thereof, a regular meeting of the City Council of the City of Gem Lake, Minnesota was duly held at Heritage Hall, on Tuesday, June 16, 2015, at 7:00 o'clock P.M. The following members were present: Mayor Uzpen, Council Members Artig-Swomley, Lindner, Bosak and Kuny. and the following were absent: None During said meeting Lindner introduced the following resolution and moved its adoption: RESOLUTION NO. 2015 - 10 RESOLUTION APPROVING THE ISSUANCE AND SALE OF SENIOR HOUSING REVENUE REFUNDING NOTES, SERIES 2015, AND AUTHORIZING THE EXECUTION OF DOCUMENTS RELATING THERETO (ST. ANDREW'S VILLAGE PROJECT) The motion for the adoption of the foregoing resolution was duly seconded by Member Bosak, and after full discussion thereof and upon vote being taken thereon, the following voted in favor thereof. Mayor Uzpen, Council Members Artig — Swomley, Lindner, Bosak and Kuny. and the following voted against the same: None whereupon said resolution was declared duly passed and adopted. 4629110 JSB MA355-7 RESOLUTION APPROVING THE ISSUANCE AND SALE OF SENIOR HOUSING REVENUE REFUNDING NOTES, SERIES 2015 AND AUTHORIZING THE EXECUTION OF DOCUMENTS RELATING THERETO (ST. ANDREW'S VILLAGE PROJECT) WHEREAS, (a) Minnesota Statutes, Chapter 462C, as amended (the "Act"), confers upon cities the power to issue revenue bonds to finance a program for the purposes of planning, administering, making or purchasing loans with respect to one or more multi -family housing project developments (including nursing and assisted living facilities). (b) The City Council (the "Council") of the City of Gem Lake, Minnesota (the "City") has received a proposal that it issue its Senior Housing Revenue Refunding Note, Series 2015 (St. Andrew's Village Project Project), in one or more series, which may be taxable or tax- exempt (collectively, the "Note") in the aggregate amount not to exceed $10,000,000 to provide funds to be loaned to PSA Housing & Assisted Living, Inc., a Minnesota nonprofit corporation and 501(c)(3) organization (the "Borrower") to (i) refund a portion of the outstanding Senior Housing Revenue Refunding Bonds (St. Andrew's Village Project) Series 2005 (the "Prior Bonds") previously issued by the City of Mahtomedi, Minnesota ("Mahtomedi") in order to refinance the approximately 139-unit senior housing facility, containing 70 independent living units, 44 assisted living units, 25 memory care units, and approximately 10,170 square feet of daycare space leased to St. Andrew's Church located at 240 East Avenue, Mahtomedi, (the "Project"); and (ii) finance certain other costs related to the Project; (c) In addition, the Borrower has requested that the Economic Development Authority of the Town of White Bear, Minnesota (the "EDA") issue a revenue Note (the "EDA Note") pursuant to the Act on a parity basis with the Note; (d) The issuance and sale of the Note by the City, pursuant to the Act, helps provide access to affordable housing to seniors in the community and is in the interest of the City, and the City hereby determines to issue the Note and to sell the Note to KleinBank in Chanhassen, Minnesota (the "Lender"), as provided herein. The City will loan the proceeds of the Note (the "Loan") to the Borrower in order to assist in refinancing the Project; (e) The City has been advised by representatives of the Borrower that conventional, commercial financing to pay the capital cost of the Project is available only on a limited basis and at such high costs of borrowing that the economic feasibility of operating the Project would be significantly reduced; (f) Based on representations of the Borrower, no public official of the City has either a direct or indirect financial interest in the Project nor will any public official either directly or indirectly benefit financially from the Project; and (g) A public hearing on the Project was held by the City on this date, after notice was published and materials made available for public inspection, all as required by the Act and Section 147(f) of the Internal Revenue Code of 1986, as amended, at which public 2 462911v1 JSB MA355-7 hearing all those appearing who desired to speak were heard and written comments were accepted. BE IT RESOLVED by the City Council (the "Council") of the City of Gem Lake, Minnesota (the "City"), as follows: SECTION 1. LEGAL AUTHORIZATION AND FINDINGS. 1.1 Findings. The City hereby finds, determines and declares as follows: (a) The City is a municipal corporation and a political subdivision of the State of Minnesota and is authorized under the Act to assist the housing project herein referred to, and to issue and sell the Note for the purpose, in the manner and upon the terms and conditions set forth in the Act and in this Resolution. (b) The issuance and sale of the Note by the City, pursuant to the Act, is in the best interest of the City, and the City hereby determines to issue the Note and to sell the Note to K1einBank in Chanhassen, Minnesota, or another bank in Minnesota (the "Lender"), as provided herein. The City will loan the proceeds of the Note (the "Loan") to the Borrower in order to refinance the Project. (c) Pursuant to a Loan Agreement (the "Loan Agreement") to be entered into between the City and the Borrower, the Borrower has agreed to repay the Loan in specified amounts and at specified times sufficient to pay in full when due the principal of, premium, if any, and interest on the Note. In addition, the Loan Agreement contains provisions relating to the maintenance and operation of the Project, indemnification, insurance, and other agreements and covenants which are required or permitted by the Act and which the City and the Borrower deem necessary or desirable for the refinancing of the Project. A draft of the Loan Agreement was available prior to this meeting. (d) Pursuant to a Pledge Agreement (the "Pledge Agreement") to be entered into between the City and the Lender, the City has pledged and granted a security interest in all of its rights, title, and interest in the Loan Agreement to the Lender (except for certain rights of indemnification and to reimbursement for certain costs and expenses). A draft of the Pledge Agreement was available prior to this meeting. (e) Pursuant to an Amended and Restated Mortgage, Security Agreement and Fixture Financing Statement (the "Amended and Restated Mortgage") to be executed by the Borrower in favor of the Lender, the Borrower has secured payment of amounts due under the Loan Agreement, Note and the EDA Note by granting to the Lender a mortgage and security interest in the property described therein. A draft of the Amended and Restated Mortgage was available prior to this meeting. (f) Pursuant to Minnesota Statutes, Sections 471.59 and 471.656, as amended, and Section 147(f) of the Code, Mahtomedi will conduct a public hearing on June 16, 2015 on the proposed issuance of the Note to, among other things, refinance the Project which is located within the jurisdictional limits of Mahtomedi, and Mahtomedi will consider authorizing the issuance of the Note to refinance the Project and authorizing the 462911v1 JSB MA355-7 execution of a Joint Powers Agreement between the City, the EDA and Mahtomedi (the "Joint Powers Agreement"). A draft of the Joint Powers Agreement was available prior to this meeting. (g) The Note will be a special, limited obligation of the City. The Note shall not be payable from or charged upon any funds other than the revenues pledged to the payment thereof, nor shall the City be subject to any liability thereon. No holder of the Note shall ever have the right to compel any exercise of the taxing power of the City to pay the Note or the interest thereon, nor to enforce payment thereof against any property of the City. The Note shall not constitute a debt of the City within the meaning of any constitutional or statutory limitation. (h) It is desirable, feasible and consistent with the objects and purposes of the Act to issue the Note for the purpose of assisting in refinancing the costs of the Project. (i) The payments under the Loan Agreement are fixed to produce revenue sufficient to provide for the prompt payment of principal of, premium, if any, and interest on the Note when due, and the Loan Agreement also provides that the Borrower is required to pay all expenses of the operation and maintenance of the Project, including, but without limitation, adequate insurance thereon and insurance against all liability for injury to persons or property arising from the operation thereof, and all taxes and special assessments levied upon or with respect to the Project and payable during the term of the Loan Agreement. 0) There is no litigation pending or, to the actual knowledge of the City, threatened against the City questioning the City's execution or delivery of the Note, Loan Agreement, the Joint Powers Agreement, or Pledge Agreement or questioning the due organization of the City, or the powers or authority of the City to issue the Note and undertake the transactions contemplated hereby. (k) The execution, delivery and performance of the City's obligations under the Note, Pledge Agreement, the Joint Powers Agreement, and Loan Agreement do not and will not violate any order against the City of any court or other agency of government, or any indenture, agreement or other instrument to which the City is a party or by which it or any of its property is bound, or be in conflict with, result in a breach of, or constitute (with due notice or lapse of time or both) a default under any such indenture, agreement or other instrument. 1.2 Authorization and Ratification of Project. The City hereby authorizes the Borrower, in accordance with the provisions of the Act and subject to the terms and conditions imposed by the Lender, to provide for the refinancing of the Project by such means as shall be available to the Borrower and in the manner determined by the Borrower; the City hereby ratifies, affirms, and approves all actions heretofore taken by the Borrower consistent with and in anticipation of such authority. 4 46291 M JSB MA355-7 SECTION 2. THE NOTE. 2.1 Authorized Amount and Form of Note. The Note is hereby approved and shall be issued pursuant to this Resolution in substantially the form submitted to the Council with such appropriate variations, omissions and insertions as are necessary and appropriate and are permitted or required by this Resolution, and in accordance with the further provisions hereof, and the total aggregate principal amount of the Note that may be outstanding hereunder is expressly limited to $10,000,000, unless a duplicate Note is issued pursuant to Section 2.7. The Note shall bear interest at a variable rate as set forth therein. 2.2 The Note. The Note shall be dated as of the date of delivery to the Lender, shall be payable at the times and in the manner, shall bear interest at the rate, and shall be subject to such other terms and conditions as are set forth therein. 2.3 Execution. The Note shall be executed on behalf of the City by the signatures of its Mayor and Administrator -Clerk and shall be sealed with the seal of the City; provided that the seal may be intentionally omitted as provided by law. In case any officer whose signature shall appear on the Note shall cease to be such officer before the delivery of the Note, such signature shall nevertheless be valid and sufficient for all purposes, the same as if such officer had remained in office until delivery. In the event of the absence or disability of the Mayor and Administrator -Clerk such officers of the City as, in the opinion of the City Attorney, may act in their behalf, shall without further act or authorization of the Council execute and deliver the Note. 2.4 Delivery of Initial Note. Before delivery of the Note there shall be filed with the Lender (except to the extent waived by the Lender) the following items: (1) an executed copy of each of the following documents: (a) the Loan Agreement; (b) the Pledge Agreement; (c) the Joint Powers Agreement; (d) the Amended and Restated Mortgage; (2) an opinion of Counsel for the Borrower as prescribed by the Lender and Bond Counsel; (3) the opinion of Bond Counsel as to the validity and tax exempt status of the Note; (4) a 501(c)(3) determination letter from the Internal Revenue Service evidencing that the Borrower is exempt from income taxation under Section 501(c)(3) of the Code; 462911v1 JSB MA355-7 (5) such other documents and opinions as Bond Counsel may reasonably require for purposes of rendering its opinion required in subsection (3) above or that the Lender may reasonably require for the closing. 2.5 Disposition of Proceeds of the Note. Upon delivery of the Note to Lender, the Lender shall, on behalf of the City, advance the proceeds of the Note to the Borrower or at its direction to refund a portion of the Prior Bonds in accordance with the terms of the Loan Agreement. 2.6 Registration of Transfer. The City will cause to be kept at the office of the Mayor and Administrator -Clerk a Note Register in which, subject to such reasonable regulations as it may prescribe, the City shall provide for the registration of transfers of ownership of the Note. The Note shall be initially registered in the name of the Lender and shall be transferable upon the Note Register by the Lender in person or by its agent duly authorized in writing, upon surrender of the Note together with a written instrument of transfer satisfactory to the Mayor and Administrator -Clerk, duly executed by the Lender or its duly authorized agent. The following form of assignment shall be sufficient for said purpose. For value received hereby sells, assigns and transfers unto the within Note of the City of Gem Lake, Minnesota, and does hereby irrevocably constitute and appoint attorney to transfer said Note on the books of said City with full power of substitution in the premises. The undersigned certifies that the transfer is made in accordance with the provisions of Section 2.9 of the Resolution authorizing the issuance of the Note. Dated: Registered Owner Upon such transfer the Mayor and Administrator -Clerk shall note the date of registration and the name and address of the new Lender in the applicable Note Register and in the registration blank appearing on the Note. 2.7 Mutilated, Lost or Destroyed Note. In case the Note issued hereunder shall become mutilated or be destroyed or lost, the City shall, if not then prohibited by law, cause to be executed and delivered, a new Note of like outstanding principal amount, number and tenor in exchange and substitution for and upon cancellation of such mutilated Note, or in lieu of and in substitution for such Note destroyed or lost, upon the Lender's paying the reasonable expenses and charges of the City in connection therewith, and in the case of a Note destroyed or lost, the filing with the City of evidence satisfactory to the City with indemnity satisfactory to it. If the mutilated, destroyed or lost Note has already matured or been called for redemption in accordance with its terms it shall not be necessary to issue a new Note prior to payment. 2.8 Ownership of Note. The City may deem and treat the person in whose name the Note is last registered in the Note Register and by notation on the Note whether or not such Note shall be overdue, as the absolute owner of such Note for the purpose of receiving payment of or 6 462911v1 JSB MA355-7 on account of the Principal Balance, redemption price or interest and for all other purposes whatsoever, and the City shall not be affected by any notice to the contrary. 2.9 Limitation on Note Transfers. The Note will be issued to an "accredited investor" and without registration under state or other securities laws, pursuant to an exemption for such issuance; and accordingly the Note may not be assigned or transferred in whole or part, nor may a participation interest in the Note be given pursuant to any participation agreement, except to another "accredited investor" or "financial institution" in accordance with an applicable exemption from such registration requirements and with full and accurate disclosure of all material facts to the prospective purchaser(s) or transferee(s). 2.10 Issuance of a New Note. Subject to the provisions of Section 2.9, the City shall, at the request and expense of the Lender, issue a new note, in aggregate outstanding principal amount equal to that of the Note surrendered, and of like tenor except as to number, principal amount, and the amount of the periodic installments payable thereunder, and registered in the name of the Lender or such transferee as may be designated by the Lender. SECTION 3. MISCELLANEOUS. 3.1 Severability. If any provision of this Resolution shall be held or deemed to be or shall, in fact, be inoperative or unenforceable as applied in any particular case in any jurisdiction or jurisdictions or in all jurisdictions or in all cases because it conflicts with any provisions of any constitution or statute or rule or public policy, or for any other reason, such circumstances shall not have the effect of rendering the provision in question inoperative or unenforceable in any other case or circumstance, or of rendering any other provision or provisions herein contained invalid, inoperative, or unenforceable to any extent whatever. The invalidity of any one or more phrases, sentences, clauses or paragraphs in this Resolution contained shall not affect the remaining portions of this Resolution or any part thereof. 3.2 Authentication of Transcript. The officers of the City are directed to furnish to Bond Counsel certified copies of this Resolution and all documents referred to herein, and affidavits or certificates as to all other matters which are reasonably necessary to evidence the validity of the Note. All such certified copies, certificates and affidavits, including any heretofore furnished, shall constitute recitals of the City as to the correctness of all statements contained therein. 3.3 Authorization to Execute Agreements. Subject to approval by the City after the public hearing to be conducted on this date, the forms of the proposed Loan Agreement, Joint Powers Agreement and Pledge Agreement are hereby approved in substantially the form presented to the Council, together with such additional details therein as may be necessary and appropriate and such modifications thereof, deletions therefrom and additions thereto as may be necessary and appropriate and approved by Bond Counsel prior to the execution of the documents. The Mayor and Administrator -Clerk of the City are authorized to execute, in the name of and on behalf of the City, the Loan Agreement, the Joint Powers Agreement and the Pledge Agreement and such other documents as Bond Counsel considers appropriate in connection with the issuance of the Note. In the event of the absence or disability of the Mayor and Administrator -Clerk such officers of the City as, in the opinion of counsel to the City, may 7 462911v1 JSB MA355-7 act on their behalf, shall without further act or authorization of the Council do all things and execute all instruments and documents required to be done or executed by such absent or disabled officers. The execution of any instrument by the appropriate officer or officers of the City herein authorized shall be conclusive evidence of the approval of such documents in accordance with the terms hereof. 3.4 Qualified Tax Exempt Obligation. In order to qualify the tax-exempt portion of the Note as a "qualified tax-exempt obligation" within the meaning of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended (the "Code"), the City hereby makes the following factual statements and representations; (a) the Note will be issued after August 7, 1986; (b) the Note is not treated as a "private activity bond" under Section 265(b)(3) of the Code; (c) the City hereby designates the tax-exempt portion of the Note as a qualified tax-exempt obligation for purposes of Section 265(b)(3) of the Code; (d) the reasonably anticipated amount of tax-exempt obligations (other than obligations described in clause (ii) of Section 265(b)(3)(C) of the Code) which will be issued by the City (and all entities whose obligations will be aggregated with those of the City) during the calendar year 2015 will not exceed $10,000,000; and (e) not more than $10,000,000 of obligations issued by the City during the calendar year 2015 have been designated for purposes of Section 265(b)(3) of the Code. 8 4629110 JSB MA355-7 Adopted by the City Council of the City of Gem Lake, Minnesota, this 16th day of June, 2015. z Mayor ATTEST: W4tf rator-Clerk 462911v1 JSB MA355-7 STATE OF MINNESOTA COUNTY OF RAMSEY CITY OF GEM LAKE I, the undersigned, being the duly qualified and acting Administrator -Clerk of the City of Gem Lake, Minnesota, DO HEREBY CERTIFY that I have compared the attached and foregoing extract of minutes with the original thereof on file in my office, and that the same is a full, true and complete transcript of the minutes of a meeting of the City Council duly called and held on the date therein indicated, insofar as such minutes relate to a resolution authorizing the issuance of one or more revenue notes. 4% WITNESS my hand this 1 q clay of June, 2015. NK� - Ac liinistrator-Clerk 10 462911v1 JSB MA355-7