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HomeMy WebLinkAbout2018-045 Council Resolution,.� CITY OF LINO LAKES, MINNESOTA follows: RESOLUTION NO. 18-45 RESOLUTION CALLING A PUBLIC HEARING FOR THE PURPOSE OF PROVIDING HOST APPROVAL FOR THE ISSUANCE OF A REVENUE NOTE BY THE CITY OF COLUMBIA HEIGHTS BE IT RESOLVED by the City Council of the City of Lino Lakes, Minnesota (the "City") as Section 1. Recitals. 1.01. Pursuant to the Constitution and laws of the State of Minnesota, particularly Minnesota Statutes, Sections 469.152 through 469.1655, as amended (the "Act"), the City is authorized to issue revenue obligations 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, in part, as any properties, real or personal, used or useful in connection with a revenue producing enterprise, whether or not operated for profit. 1.02. Minnesota Statutes, Section 471.656, as amended, authorizes a municipality to issue obligations to finance the acquisition or improvement of property located outside of the corporate boundaries of such municipality if the governing body of the city in which the property is located consents by resolution to the issuance of such obligations. 1.03. Love To Grow On, a Minnesota nonprofit corporation (the "Borrower"), has proposed that the City approve the issuance by the City of Columbia Heights, Minnesota (the "City of Columbia Heights") of one or more series of revenue obligations, as taxable or tax-exempt obligations (the "Note"), in the maximum aggregate principal amount of $3,800,000. The Borrower intends to apply the proceeds of the Note to (i) finance the acquisition, construction, and equipping of an approximately 13,000 square foot early childhood educational facility located at 6499 Lakota Trail in the City (the "Project"); (ii) finance capitalized interest on the Note during construction of the Project, if necessary; (iii) fund required reserves for the Note, if any; and (iv) pay the costs of issuing the Note. 1.04. Prior to the issuance of the Note by the City of Columbia Heights, the City Council of the City (the "City Council") is required to (i) conduct a public hearing in accordance with the requirements of the Act and Section 147(0 of the Internal Revenue Code of 1986, as amended (the "Code"), with respect to the proposal to issue the Note; and (ii) approve the issuance of the Note by the City of Columbia Heights to finance the Project. 1.05. The Borrower has requested that the City Council conduct a public hearing on Tuesday, May 29, 2018, to consider the proposed issuance of the Note by the City of Columbia Heights in accordance with the Code and Minnesota Statutes, Section 471.656, as amended, to, among other things, finance the Project. Section 2. Required Actions. 521250v1 JAE CL162-55 2.01. The City Council will meet at 6:30 p.m. on Tuesday, May 29, 2018, to conduct a public hearing and consider the proposed issuance of the Note by the City of Columbia Heights in accordance with the Code and Minnesota Statutes, Section 471.656, as amended, to, among other things, finance the Project. 2.02. Kennedy & Graven, Chartered, as bond counsel to the City of Columbia Heights, is hereby authorized and directed to publish a notice of the public hearing, in substantially the form attached hereto as EXHIBIT A in the Quad Community Press, the official newspaper of and a newspaper of general circulation in the City. The notice shall be published once at least fourteen (14) days prior to the date of the public hearing. 2.03. The Borrower shall pay to the City any and all costs paid or incurred by the City in connection with the Note or the financing of the Project, whether or not the financing is carried to completion, and whether or not the Note or operative instruments are executed and delivered. Approved by the City Council of the City of Lino Lakes mnesota this ► ' day of April, 2018. Mayor ATTEST: The motion for adoption of the foregoing resolution was introduced by Council Member Maher and was duly seconded by Council Member Stoesz and upon vote being taken thereon, the following voted in favor thereof: Maher, Stoesz, Rafferty, Manthey, Reinert The following voted against: none 521250v1 JAE CL162-55 2 STAFF ORIGINATOR: MEETING DATE: TOPIC: VOTE REQUIRED: BACKGROUND CITY COUNCIL AGENDA ITEM 2A Sarah Cotton, Finance Director April 23, 2018 Consider Resolution No. 18-45, Calling a Public Hearing for the Purpose of Providing Host Approval for the Issuance of a Revenue Note by the City of Columbia Heights 3/5 Love To Grow On, a Minnesota nonprofit corporation, who operates early childhood education centers in the City of Lexington and the City of Circle Pines, has proposed to consolidate both centers into a new facility located in the City of Lino Lakes. The City of Lino Lakes Planning & Zoning Board held public hearings on March 14, 2018 and April 11, 2018 regarding the proposed development of the Love To Grow On childcare center. The Planning & Zoning Board recommended approval of the CUP, Variances, and Site Plan; therefore, City Council review is scheduled for the May 7th and 14th Work Session and Council Meeting, respectively. Love To Grown On would like to finance the new facility with tax-exempt conduit bonds. The City of Lino Lakes plans to issue general obligation bonds in the current year to fund capital improvement projects in the City. If the City were to agree to issue conduit bonds for Love To Grow On, the City would not be able to issue its own bonds as bank -qualified ($10 million limit). State Statute authorizes a municipality to issue obligations to finance the acquisition or improvement of property located outside of the corporate boundaries of such municipality if the governing body of the city in which the property is located consents by resolution to the issuance of such obligations. Love to Grow On has requested that the City of Columbia Heights issue a revenue note. In order for the City of Columbia Heights to issue the Note, the City of Lino Lakes must grant "host approval" to the issuance of the Note, following a duly noticed public hearing. The attached resolution set the public hearing for Tuesday, May 29, 2018. Gina Fiorini, Kennedy & Graven will be present at the April 23, 2018 meeting to answer any questions the Council may have. RECOMMENDATION Staff recommends approval of Resolution No. 18-45, calling for a public hearing on Tuesday, May 29, 2018. ATTACHMENTS Resolution No. 18-45 Memo from Gina Fiorini, Kennedy & Graven CHARTERED Offices in Minneapolis Saint Paul St. Cloud 470 U.S. Bank Plaza 200 South Sixth Street Minneapolis MN 55402-1458 (612)337-9300 telephone (612) 337-9310 fax www.kennedy-graven.com Affirmative Action, Equal Opportunity Employer GINA A. FIORINI Attomey at Law Direct Dial (612) 337-9210 Email: gfiorini@kennedy-graven.com April 18, 2018 Sarah Cotton, Finance Director City of Lino Lakes 600 Town Center Parkway Lino Lakes, MN 55014 Re: Resolution calling public hearing on granting host approval for a project to be financed with the proceeds a revenue obligation to be issued by the City of Columbia Heights Dear Sarah, Love To Grow On, a Minnesota nonprofit corporation (the "Borrower"), operates early childhood education centers in the City of Lexington and the City of Circle Pines and has proposed to consolidate both centers into a new facility consisting of approximately 13,000 square feet (the "Project") located at 6499 Lakota Trail in the City of Lino Lakes (the "City"). The Borrower would like to finance the new facility with tax-exempt conduit bonds in the amount of approximately $3,800,000. The City has indicated that it plans to issue general obligation bonds this year and would like them to be bank -qualified bonds (this designation allows banks to buy the bonds and claim the interest on the bonds as tax exempt). In order for the City's bonds to be bank -qualified, the City cannot issue more than $10,000,000 in general obligation bonds or conduit bonds for a nonprofit borrower. If the City agreed to issue the conduit bonds for the Borrower, the City would not be able to issue its own bonds as bank qualified. The Borrower has requested, instead, that the City of Columbia Heights issue a revenue note, in one or more series, as a taxable or tax- exempt obligation (the "Note"), in the maximum principal amount of $3,8000,000 in order to (i) finance the acquisition, construction, and equipping of the Project; (ii) finance capitalized interest during construction of the Project, if necessary; (iii) fund required reserves, if any; and (iv) pay costs of issuance of the Note. In order for the City of Columbia Heights to issue the Note, the City must grant "host approval" to the issuance of the Note, following a duly noticed public hearing, under Minnesota Statutes, Section 471.656, and the Internal Revenue Code of 1986, as amended (the "Code"). Enclosed is a resolution for consideration by the City Council on Monday, April 23, 2018, which calls for a public hearing to be conducted by the City Council on Tuesday, May 29, 2018 for purposes of granting host approval to the issuance of the Note by the City of Columbia Heights to finance the Project. If the City Council authorizes the City of Columbia Heights to issue the Note, the Note will be issued as conduit revenue obligation of the City of Columbia Heights secured solely by the revenues derived from the loan or other revenue agreements executed by the Borrower and from other security provided by the Borrower. The Note will not constitute a general or moral obligation of the City or the City of Columbia Heights, will not be secured by or payable from any property or assets of the City or the City of Columbia Heights, and will not be secured by any taxing power of the City or the City of Columbia Heights. The Note will not be subject to any debt limitation imposed on the City or the City of Columbia Heights and the 521370v1 GAF CL 162-55 issuance of the Note will not have any adverse impact on the credit rating of the City or the City of Columbia Heights, even in the event that the Borrower encounters financial difficulties with respect to the Project. The issuance of the Note by the City of Columbia Heights to finance the Project will not affect the City's ability to issue general obligation or conduit revenue bonds in calendar year 2018. Furthermore, as mentioned above, the issuance of the Note by the City of Columbia Heights will not affect the ability of the City to issue and designate bonds as qualified tax-exempt obligations (or "bank qualified") for purposes of Section 265(b)(3) of the Code. The Borrower will pay the out-of-pocket expenses of the City and all costs of the financing, including all attorneys' fees, with respect to this transaction. I will attend the City Council meeting on April 23, 2018, and can answer any questions that may arise during the meeting. Please contact me if you have questions regarding the foregoing. Sincerely, Gina A. Fiorini 521370v1 GAF CL162-55 Julie Bartell crom: Fiorini, Gina A. <GFiorini@Kennedy-Graven.com> Sent: Tuesday, April 24, 2018 12:21 PM To: Julie Bartell Subject: RE: Love To Grow On Financing Resolution Hi Julie, No need to worry about. We'II take care of publication. Thanks! -Gina Gina Fiorini Kennedy & Graven, Chartered 470 U.S. Bank Plaza 200 South Sixth Street Minneapolis, iNLNT 55402 Phone: (612) 337-9210 Fax: (612) 337-9310 gfiorini@kennedy-graven.com o the extent the preceding correspondence and or any attachment is a written tax advice communication, it is not a full "covered opinion." Accordingly, this advice is not intended and cannot be used for the purpose of (1) avoiding penalties that may be imposed under the Internal Revenue Code of 1986, as amended, or (2) promoting, marketing, or recommending to another party any matters addressed herein. This message (including any attachments) is from a law firm and may contain confidential client information or an attorney-client communication that is confidential and privileged by law. The information is intended only for the use of the individual or entity to whom it is addressed. If you are not the addressee or the employee or agent responsible to deliver this e-mail to its intended recipient, please delete this message (and any attachments) without any review, distribution, or copying and notify the sender of the inadvertent transmission. From: Julie Bartell [mailto:julie.bartell@ci.lino-Iakes.mn.us] Sent: Tuesday, April 24, 2018 12:18 PM To: Fiorini, Gina A. Subject: FW: Love To Grow On Financing Resolution Hi Gina- Regarding the above (and below) mentioned resolution, I'm not clear if I need to publish the hearing notice or if that will be done by you or other city. Please advise. Thank you. Tu2Cei lie Bartell City Clerk 600 Town Center Parkway 1 Lino Lakes, MN 55014 651-982-2406 julie.bartell@ci.lino-Iakes.mn.us [1F LNC` EKES From: Sarah Cotton Sent: Wednesday, April 18, 2018 10:06 AM To: Julie Bartell <iulie.bartell@ci.lino-lakes.mn.us> Subject: FW: Love To Grow On Financing Resolution Good Morning Julie, I will be placing the attached resolution on the 4/23/2018 agenda for council consideration. Exhibit A to the resolution is a Notice of a Public Hearing that will need to be published in the Quad Press 14 days prior to Tuesday, May 29th Let me know if you have any questions. Thanks, Sarah Cotton Finance Director City of Lino Lakes 600 Town Center Pkwy Lino Lakes, MN 55014-1182 651-982-2410 651-982-2499 fax sarah.cotton(cr�ci.lino-Iakes.mn.us From: Fiorini, Gina A. Finailto:GFiorini@Kennedy-Graven.com] Sent: Wednesday, April 18, 2018 8:54 AM To: Sarah Cotton <sarah.cotton@ci.lino-lakes.mn.us> Cc: Eddington, Julie A. <JEddington@Kennedy-Graven.com>; Gerdts, Ellen G. <EGerdts@Kennedy-Graven.com> Subject: Love To Grow On Financing Resolution Hi Sarah, Attached please find a resolution to be considered by the City Council on April 23rd calling a public hearing on the Love To Grow On conduit revenue bonds to be issued by the City of Columbia Heights. I have also attached a letter explaining the resolution and the financing. I will be at the meeting on Monday night in case there are questions. Please let me know if you have questions. Thanks! -Gina Gina Fiorini Kennedy & Graven, Chartered 470 U.S. Bank Plaza 200 South Sixth Street 2 Minneapolis, MN 55402 Phone: (612) 337-9210 Fax: (612) 337-9310 gfiorini@kennedy-graven.com To the extent the preceding correspondence and or any attachment is a written tax advice communication, it is not a full "covered opinion." Accordingly, this advice is not intended and cannot be used for the purpose of (1) avoiding penalties that may be imposed under the Internal Revenue Code of 1986, as amended, or (2) promoting, marketing, or recommending to another party any matters addressed herein. This message (including any attachments) is from a law firm and may contain confidential client information or an attorney-client communication that is confidential and privileged by law. The information is intended only for the use of the individual or entity to whom it is addressed. If you are not the addressee or the employee or agent responsible to deliver this e-mail to its intended recipient, please delete this message (and any attachments) without any review, distribution, or copying and notify the sender of the inadvertent transmission. 3