Loading...
HomeMy WebLinkAbout2018-068 Council ResolutionCITY OF LINO LAKES, MINNESOTA RESOLUTION NO. 18-68 RESOLUTION CONSENTING TO AND APPROVING THE ISSUANCE BY THE CITY OF COLUMBIA HEIGHTS OF A REVENUE OBLIGATION FOR THE BENEFIT OF LOVE TO GROW ON AND APPROVING OTHER ACTIONS WITH RESPECT THERETO WHEREAS, the City of Lino Lakes, Minnesota (the "City") is a home rule charter city and political subdivision duly organized and existing under its Charter and the laws of the State of Minnesota; and WHEREAS, pursuant to Minnesota Statutes, Sections 469.152 through 469.1655, as amended (the "Act"), the City is authorized to carry out the public purposes described in the Act by providing for the issuance of revenue obligations to provide funds to finance revenue-producing enterprises, whether or not operated for profit; and WHEREAS, Minnesota Statutes, Section 471.656, as amended, authorizes a municipality to issue obligations to finance or refinance 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; and WHEREAS, Love To Grow On, a Minnesota nonprofit corporation (the "Borrower"), has proposed that the City of Columbia Heights, Minnesota (the "City of Columbia Heights") issue its revenue obligation (the "Note"), in one or more series, as a taxable or tax-exempt obligation, in an aggregate principal amount not to exceed $3,800,000, under the provisions of the Act and Minnesota Statutes, Section 471.656, as amended, and loan the proceeds thereof to the Borrower 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; and WHEREAS, Section 147(0 of the Internal Revenue Code of 1986, as amended (the "Code"), and regulations promulgated thereunder require that prior to the issuance of the Note, the City Council of the City (the "City Council") consent to the issuance of the Note by the City of Columbia Heights after conducting a public hearing thereon 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 within the City at least fourteen (14) days prior to the public hearing date; and WHEREAS, a notice of public hearing (the "Public Notice") was published at least fourteen (14) days before the regularly scheduled meeting of the City Council on the date hereof in the Quad Community Press, the official newspaper of and a newspaper of general circulation in the City, with respect to the required public hearing under Section 147(0 of the Code; and WHEREAS, on the date hereof, the City Council conducted a public hearing at which a reasonable opportunity was provided for interested individuals to express their views, both orally and in writing, on the following: (i) consent to the issuance of the Note by the City of Columbia Heights 524239v1 GAF CL162-55 pursuant to the requirements of Section 147(0 of the Code and the regulations promulgated thereunder; and (ii) approval of the issuance of the Note by the City of Columbia Heights to finance the Project; and NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LINO LAKES, MINNESOTA, AS FOLLOWS: 1. The City Council finds that it is in the best interest of the City to approve the issuance of the Note by the City of Columbia Heights to finance the Project and hereby consents to the issuance of the Note by the City of Columbia Heights for the purposes set forth herein in an amount not to exceed $3,800,000. 2. The Mayor and the City Administrator are hereby authorized and directed to execute and deliver any documents or certificates deemed necessary to fulfill the intentions of this resolution. 3. The Mayor and City Administrator and other officers, employees, and agents of the City are hereby authorized and directed to prepare and furnish to bond counsel and the original purchaser of the Note certified copies of all proceedings and records of the City relating to the approval of the issuance of the Note, including a certification of this resolution. 4. The Borrower will, upon demand, reimburse the City for costs paid or incurred by the City in connection with this resolution. 5. This resolution shall be in full force and effect from and after its passage. Approved by the City Council of the City of Lino Lakes, Minnesota this 29`h day of May, 2018. ATTEST: Ci Jerk —()Thc)*jL--- Mayor The motion for the adoption of the foregoing resolution was introduced by Council Member stoesz, seconded by Council Member Manthey, and upon a vote being taken thereon, the following voted in favor thereof: Stoesz, Manthey, Maher, Rafferty, Reinert The following voted against same: none 524239v1 GAF CL162-55 2 STAFF ORIGINATOR: MEETING DATE: TOPIC: VOTE REQUIRED: BACKGROUND CITY COUNCIL AGENDA ITEM 2A Sarah Cotton, Finance Director May 29, 2018 Public Hearing for and Consideration of Resolution No. 18-68, Consenting To and Approving the Issuance by the City of Columbia Heights of a Revenue Obligation for the Benefit of Love To Grow On 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. Love To Grown On would like to finance the new facility with tax-exempt conduit bonds. 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 City Council adopted Resolution No. 18-45, calling a public hearing on providing host approval on April 23, 2018. Julie Eddington, Kennedy & Graven will be present at the May 29, 2018 meeting to answer any questions the Council may have. RECOMMENDATION Following the public hearing, which grants host approval to the issuance of the Note by the City of Columbia Heights to finance the Love to Grow On facility, staff recommends approval of Resolution No. 18-68. ATTACHMENTS Resolution No. 18-68 Memo from Gina Fiorini, Kennedy & Graven CHARTERED Offices in 470 U.S. Bank Plaza Minneapolis 200 South Sixth Street Minneapolis MN 55402-1458 Saint Paul (612) 337-9300 telephone (612) 337-9310 fax St. Cloud 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 May 23, 2018 Sarah Cotton, Finance Director City of Lino Lakes 600 Town Center Parkway Lino Lakes, MN 55014 Re: Resolution providing 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, As you know, 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 has requested that the City of Columbia Heights issue a revenue obligation, 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"). The City Council adopted a resolution calling a public hearing on providing host approval on April 23, 2018. Enclosed is a resolution for consideration by the City Council on Tuesday, May 29, 2018 following the public hearing, which grants host approval to the issuance of the Note by the City of Columbia Heights to finance the Project, which is located in the City. If the City Council authorizes the City of Columbia Heights to issue the Note, the Note will be issued as a 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 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 524498v1 GAF CL162-55 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 bonds") for purposes of Section 265(b)(3) of the Code. The Borrower will pay the City's application fee for providing host approval and all costs of the financing, including all attorneys' fees, with respect to this transaction. My colleague Julie Eddington will attend the City Council meeting on May 29, 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 524498v1 GAF CL162-55