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HomeMy WebLinkAbout08-06 conduit bond north lakes acadCity of Falcon Heights Council Resolution 08-06 July 23, 2008 RESOLUTION RECITING A PROPOSAL FOR A PUBLIC (CHARTER) SCHOOL PROJECT; GIVING PRELIMINARY APPROVAL THERETO AND TO THE ISSUANCE OF REVENUE BONDS PURSUANT TO MINNESOTA LAW (NORTH LAKES ACADEMY PROJECT) WHEREAS, Minnesota Statutes, Sections 469.152 to 469.1651, as amended (the "Act) authorizes cities to issue revenue bonds to finance industrial development projects to promote the welfare of the state by the active development of economically sound industry and commerce to meet the needs of an increasing population and the need for development of land use which will provide an adequate tax base to finance the increasing cost of governmental services and access to employment opportunities for such population; and WHEREAS, NLA Building Company, a 501(c)(3) organization (the "Borrower") has proposed that the City of Falcon Heights, Minnesota (the "City") issue revenue bonds or other obligations (in one or more series) (the "Bonds") pursuant to the Act. The Borrower is currently engaged in the business of purchasing, constructing and equipping a public schoolhouse to be leased to North Lakes Academy, a Minnesota nonprofit corporation, formed as a public (charter) school pursuant to Minnesota Statutes, Section 124D.10. The project to be financed by the Bonds is the acquisition, construction and equipping of an approximately 42,000 square foot grade five through twelve public schoolhouse (the "Project"). The Project will be located at the intersection of U.S. Highway 61 and the extension of 257th Street in the City of Wyoming, Minnesota. The Project will be owned by the Borrower and leased to and operated by North Lakes Academy; and WHEREAS, the City desires to facilitate the development of the community and surrounding area and help to provide the range of services, educational facilities and employment opportunities required by the population and the Project will assist the City in achieving these objectives; and WHEREAS, a public hearing on the Project was held on the date hereof, after notice was published and materials made available for public inspection at the City Hall, all as required by the Act and Section 147(f) of the Internal Revenue Code of 1986, as amended, at which public hearing all those appearing who desired to speak were heard and written comments were accepted; and WHEREAS, no public official of the City participating in the deliberations on this matter or voting on this resolution 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. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Falcon Heights, Minnesota, as follows: 1. The City hereby gives preliminary approval to the proposal of the Borrower that the City undertake the Project, and the program of financing therefor, pursuant to the Act and a loan agreement to be entered into between the City and the Borrower, so as to produce income and revenues sufficient to pay, when due, the principal and interest on the Bonds in an aggregate principal amount not to exceed $10,000,000 and the City hereby undertakes preliminarily to issue its Bonds in accordance with such terms and conditions. 2. At the option of the City, the financing may be structured so as to take advantage of whatever means are available and are permitted by law to enhance the security for, or marketability of, the Bonds; provided that any such financing structure must be consented to by the Borrower. 3. On the basis of information available to the City it appears, and the City hereby finds, that the Project constitutes properties, real and personal, used or useful in connection with a revenue producing enterprise within the meaning of Subdivision 2(b) of Section 469.153 of the Act; that the availability of financing under the Act and the willingness of the City to furnish the financing will be a substantial inducement to the Borrower to undertake the Project, and that the effect of the Project, if undertaken, will be to encourage the development of economically sound industry and commerce, to help prevent chronic unemployment, to provide the range of services and employment opportunities required by the population and to help prevent the movement of talented and educated persons out of the state and to areas within the state where their services may not be as effectively used. 4. The Project and the program to finance the Project by the issuance of the Bonds, are hereby given preliminary approval, subject to final approval by the City, the Borrower and the purchaser of the Bonds as to ultimate details of financing the Project. 5. The Borrower has agreed and it is hereby determined that any and all costs incurred by the City in connection with financing the Project whether or not the Project is carried to completion will be paid by the Borrower. 6. Briggs and Morgan, Professional Association, acting as bond counsel, is authorized to assist in the preparation and review of necessary documents relating to the Project, to consult with the City Attorney, Borrower and the purchaser of the Bonds as to the maturities, interest rates and other terms and provisions of the Bonds and as to the covenants and other provisions of the necessary documents and submit such documents to the City for final approval. 7. Nothing in this resolution or the documents prepared pursuant hereto shall authorize the expenditure of any municipal funds on the Project other than the revenues derived from the Project or otherwise granted to the City for this purpose. The Bonds shall not constitute a charge, lien or encumbrance, legal or equitable, upon any property or funds of the City except the revenue and proceeds pledged to the payment thereof, nor shall the City be subject to any liability thereon. The holders of the Bonds shall never have the right to compel any exercise of the taxing power of the City to pay the outstanding principal on the Bonds or the interest thereon, or to enforce payment thereon against any property of the City, except such property as may be expressly pledged for the security of the Bonds. The Bonds shall recite in substance that the Bonds, including the interest thereon, are payable solely from the revenue derived from the Project and pledged to the payment thereof. The Bonds shall not constitute a debt of the City within the meaning of any constitutional or statutory limitation. 8. In anticipation of the approval of the Project by the State of Minnesota, Department of Employment and Economic Development and all other necessary entities, the issuance of the Bonds to finance all or a portion of the Project, and in order that completion of the Project will not be unduly delayed when approved, the Borrower is hereby authorized to make such expenditures and advances toward payment of that portion of the costs of the Project to be financed from the proceeds of the Bonds as the Borrower considers necessary, including the use of interim, shortterm financing, subject to reimbursement from the proceeds of the Bonds if and when delivered but otherwise without liability on the part of the City. Adopted by the City Council of the City of Falcon Heights, Minnesota this 23rd day of July, 2008. Moved by: Approved by: ________________________ Peter Lindstrom, Mayor July 23, 2008 LINDSTROM ____ In Favor Attested by: ________________________ KUETTEL Justin Miller HARRIS ____ Against City Administrator LONG July 23, 2008 MERCER-TAYLOR