04-14-2021 Council Packet - Laserfiche WebLink

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13098837v1 Chris Heineman January 27, 2021 Page 2 This assistance reduces borrowing costs for nonprofit corporations and enables them to provide their services more cost effectively. It is a fairly common means of obtaining necessary financing for all nonprofit entities, including senior housing and health care providers like the Borrower. To accomplish this purpose, the Issuers will enter into Loan Agreements with the Borrower under which the Borrower will agree to pay all principal and interest on the Bonds and the Notes. The Issuers will assign all of their rights to payments under the Loan Agreements the Trustee and, as applicable, the Lender, who will purchase the Notes and loan the purchase price of the Notes directly to the Borrower. The Issuers are merely a conduit and the money and obligations flow only between the Trustee or Lender and the Borrower. The Bonds and Notes and the resolutions adopted by the Issuers will recite that the Bonds and Notes, if and when issued, will not to be payable from or charged upon any of the Issuers’ funds, other than the revenues received under the Loan Agreements and pledged to the payment of the Bonds and Notes, and the Issuers are not subject to any liability on the Bonds or Notes. No holder of the Bonds and Notes will ever have the right to compel any exercise by the Issuers of their taxing powers to pay any of the principal of the Bonds or Notes or the interest or premium thereon, or to enforce payment of the Bonds or Notes against any property of the Issuers except the interests of the Issuers in payments to be made by the Borrower under the Loan Agreements. The Bonds and Notes will not constitute a charge, lien, or encumbrance, legal or equitab le, upon any property of the Issuers, except the interests of the Issuers in payments to be made by the Borrower under the Loan Agreements. The Bonds and Notes are not moral obligations on the part of the State or its political subdivisions, including the Issuers, and the Bonds and Notes will not constitute a debt of the Issuers within the meaning of any constitutional or statutory limitation. The issuance of the Bonds and Notes will not affect the Issuers’ credit rating on bonds they issue for municipal purposes. Each city may issue up to $10,000,000 of its own and 501(c)(3) bonds each calendar year as “bank-qualified” bonds. Because the total cost of the financing is approximately $36,000,000 and Maplewood has its own bond issuance planned for 2021 which it intends will be bank- qualified, Maplewood cannot issue 501(c)(3) bonds for the benefit of the Borrower. Therefore, other cities are being sought to act as the issuers for the Bonds and other obligations. Under the federal tax law, alternative issuers are permitted, but a “nexus” between the jurisdictional city and the issuer is preferred. In this case, Little Canada has geographical proximity to Maplewood and is within the market area for the Project. Little Canada’s residents could be potential beneficiaries of the Project, either as employees or future residents of the Project. The Bonds will affect the bank-qualified status of any of the City's tax-exempt obligations issued for its own governmental purposes in 2021. However, it is our understanding that Little Canada will not be issuing bonds on its own behalf in 2021. The City also currently expects to issue bonds for the benefit of Presbyterian Homes that would also cause the City to exceed its