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HomeMy WebLinkAbout2006-050 Council Resolution• Council Member 5tv(tz introduced the following resolution and moved its adoption: CITY OF LINO LAKES, MINNESOTA RESOLUTION NO. 06 -50 AUTHORIZING THE ISSUANCE, SALE, AND DELIVERY OF A REVENUE NOTE (YMCA PROJECT), SERIES 2006A AND A REVENUE NOTE (YMCA PROJECT), SERIES 2006B, IN THE AGGREGATE PRINCIPAL AMOUNT OF $4,000,000, FOR THE BENEFIT OF YMCA OF GREATER SAINT PAUL; PAYABLE SOLELY FROM REVENUES PLEDGED PURSUANT TO THE LOAN AGREEMENT AND FURTHER SECURED BY A MORTGAGE; APPROVING THE FORM OF AND AUTHORIZING THE EXECUTION AND DELIVERY OF THE NOTES, LOAN AGREEMENT, AND RELATED DOCUMENTS; AND PROVIDING FOR THE SECURITY, RIGHTS, AND REMEDIES WITH RESPECT TO THE NOTES WHEREAS, the City of Lino Lakes, Minnesota (the "Issuer" or the "City"), is a municipal corporation and political subdivision duly organized and existing under its Charter and the Constitution and laws of the State of Minnesota; and WHEREAS, pursuant to Minnesota Statutes, Sections 469.152- 469.165, as amended (the "Act "), the Issuer is authorized to issue revenue obligations to finance improvements to land and buildings and capital equipment for the benefit of a revenue producing enterprise to be owned by a contracting party (as defined in the Act); and WHEREAS, the YMCA of Greater Saint Paul, a Minnesota nonprofit corporation (the "Borrower "), submitted an application to the Issuer requesting the issuance by the Issuer of revenue obligations pursuant to the Act, in the aggregate principal amount not to exceed $4,000,000, to finance the construction and equipping of an approximately 45,000 square foot recreational facility, which will include a teen center, gym, indoor lap swimming pool, leisure style zero -depth pool, cardiovascular /strength training area, aerobic studio, family program space, women's, men's and family locker rooms, and Kids Stuff childcare (the "Project ") to be constructed on land in the City, and to pay certain financing and issuance costs related to the revenue obligations; and WHEREAS, following the publication of a notice (the "Public Notice ") of a public hearing (in which a general, functional description of the Project was provided, as well as the maximum aggregate face amount of the obligations to be issued for the purposes referenced above, the identity of the initial owner, operator, or manager of the Project, and the location of the Project) in a newspaper circulating generally in the City, at least fourteen (14) days before a meeting of the Council of the Issuer on March 13, 2006, the Council of the Issuer 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 Project and the proposed issuance of such revenue obligations; and LinoLakesvC - 1 • • • WHEREAS, the Borrower has requested that the Issuer issue revenue obligations to be designated the Revenue Note (YMCA Project), Series 2006A (the "Series 2006A Note "), in the original aggregate principal amount of $3,500,000 and the Revenue Note (YMCA Project), Series 2006B (the "Series 2006B Note," and together with the Series 2006A Note, the "Notes "), in the original aggregate principal amount of $500,000 and apply the proceeds of the Notes to finance the construction and equipping of the Project and to pay certain financing and issuance costs related to the Notes; and WHEREAS, the Notes are to be issued under the terms of this resolution and sold to Patriot Bank, a state banking association (the "Lender") and the proceeds derived from the sale of the Notes are to be loaned to the Borrower pursuant to the terms of a Loan Agreement, to be dated on or after April 1, 2006 (the "Loan Agreement "), between the Issuer and the Borrower; and WHEREAS, from and after the date of issuance of the Notes, the proceeds of the Notes in the amount of $4,000,000 are to be disbursed to the Borrower in accordance with the terms of a Disbursing Agreement, to be dated on or after April 1, 2006 (the "Disbursing Agreement "), between the Issuer, Borrower, and the Lender, and a title insurance company selected by the Borrower and acceptable to the Lender, and applied to the payment of a portion of the costs of the construction and equipping of the Project, the payment of the costs of issuing the Notes, and the payment of financing costs with respect to the Notes; and WHEREAS, in consideration of the loan by the Issuer of the proceeds of the Notes to the Borrower and to secure the payment of the principal of, premium, if any, and interest on the Notes when due, the Borrower will provide certain security for the Notes in accordance with the terms and conditions of the Loan Agreement, including a Combination Mortgage, Security Agreement, Fixture Financing Statement and Assignment of Leases and Rents, to be dated on or after April 1, 2006 (the "Mortgage ") between the Borrower, as mortgagor, and the Lender, as mortgagee; and WHEREAS, the loan repayments required to be made by the Borrower under the terms of the Loan Agreement will be assigned by the Issuer to the Lender under the terms of an Assignment of Loan Agreement, to be dated on or after April 1, 2006 (the "Assignment "), between the Issuer, the Lender, and the Borrower; and WHEREAS, the principal of, premium, if any, and interest on the Notes: (i) shall be payable solely from the revenues pledged therefor; (ii) shall not constitute a debt of the Issuer within the meaning of any constitutional or statutory limitation; (iii) shall not constitute nor give rise to a pecuniary liability of the Issuer or a charge against the general credit or taxing powers of the Issuer; and (iv) shall not constitute a charge, lien, or encumbrance, legal or equitable, upon any property of the Issuer other than the Issuer's interest in the Loan Agreement; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE ISSUER AS FOLLOWS: 1. The Issuer acknowledges, finds, determines, and declares that the issuance of the Notes is authorized by the Act and is consistent with the purposes of the Act and that the issuance of the Notes and the other actions of the Issuer under the Loan Agreement and this resolution constitute a public purpose and are in the best interests of the City. LinoLakesvC - 2 • • 2. For the purposes set forth above, there is hereby authorized the issuance, sale, and delivery of the Notes in one or more series in the approximate aggregate principal amount not to exceed $4,000,000. The Notes shall bear interest at rates designated by the terms of the Loan Agreement and the Notes, and shall be designated, shall be numbered, shall be dated, shall mature, shall be subject to redemption prior to maturity, shall be in such form, and shall have such other terms, details, and provisions as are prescribed in the Notes and the Loan Agreement, in the forms now on file with the Issuer, with the amendments referenced herein. The Issuer hereby authorizes the Notes to be issued as "tax- exempt bonds," the interest on which is not includable in gross income for federal and State of Minnesota income tax purposes. The issuance of the Notes is subject to the approval of the Project by the Minnesota Department of Employment and Economic Development ( "DEED "), as required by the Act. All of the provisions of the Notes, when executed as authorized herein, shall be deemed to be a part of this resolution as fully and to the same extent as if incorporated verbatim herein and shall be in full force and effect from the date of execution and delivery thereof. The Notes shall be substantially in the form now on file with the Issuer, which form is hereby approved, with such necessary and appropriate variations, omissions, and insertions (including changes to the name of the Notes, the aggregate principal amount of the Notes, the stated maturities of the Notes and the maturity dates of the Notes, the interest rates on the Notes, and the terms of optional and mandatory redemption of the Notes) as the Mayor and City Administrator of the Issuer (the "Mayor" and "City Administrator"), in their discretion, shall determine. The execution of the Notes with the manual or facsimile signatures of the Mayor and the City Administrator and the delivery of the Notes by the Issuer shall be conclusive evidence of such determination. 3. The Notes shall be a special limited obligation of the Issuer the proceeds of which shall be disbursed pursuant to the terms of the Loan Agreement and the Disbursing Agreement, and the principal, premium, and interest on the Notes shall be payable solely from the revenues derived from the Borrower pursuant to the terms of the Loan Agreement, and the security provided by the Borrower in accordance with the terms of the Loan Agreement, the Mortgage, and any other security granted by the Borrower to the Lender. 4. The Mayor and the City Administrator are hereby authorized and directed to execute and deliver the Loan Agreement, the Assignment, and the Disbursing Agreement. All of the provisions of the Loan Agreement, the Assignment, and the Disbursing Agreement, when executed and delivered as authorized herein, shall be deemed to be a part of this resolution as fully and to the same extent as if incorporated verbatim herein and shall be in full force and effect from the date of execution and delivery thereof. The Loan Agreement, the Assignment, and the Disbursing Agreement shall be substantially in the forms on file with the Issuer which are hereby approved, with such omissions and insertions as do not materially change the substance thereof, or as the Mayor and the City Administrator, in their discretion, shall determine, and the execution thereof by the Mayor and the City Administrator shall be conclusive evidence of such determination. 5. The proceeds of the Notes shall be disbursed in accordance with the terms of the Loan Agreement and Disbursing Agreement for the payment of the costs of the Project and related costs in accordance with the terms of the Loan Agreement and Disbursing Agreement. 6. The Lender is hereby appointed as Paying Agent and Registrar for the Notes. 7. The Mayor and the City Administrator of the Issuer are hereby authorized to execute and deliver, on behalf of the Issuer, such other documents as are necessary or LinoLakesvC - _131- appropriate in connection with the issuance, sale, and delivery of the Notes, including an Issuer's Tax Certificate, an Information Return for Tax - Exempt Private Activity Bond Issues, Form 8038, and all other documents and certificates as shall be necessary and appropriate in connection with the issuance, sale, and delivery of the Notes. The Issuer hereby approves the execution and delivery by the Lender of the Loan Agreement, the Assignment, the Disbursing Agreement, the Tax Exemption Agreement, to be dated on or after April 1, 2006, between the Borrower and the Lender, and all other instruments, certificates, and documents prepared in conjunction with the issuance of the Notes that require execution by the Lender. The Issuer hereby authorizes Kennedy & Graven, Chartered, as bond counsel of the Issuer, to prepare, execute, and deliver its approving legal opinion with respect to the Notes. 8. The Lender is hereby authorized to accept the Mortgage and all other security provided by the Borrower in order to secure payment of the Notes and is hereby authorized to take all actions necessary or appropriate under the terms of the Mortgage and such other security to ensure timely payment of the principal of, premium, if any, and interest on the Notes. 9. The Issuer has not participated in the preparation of any official statement or other disclosure document relating to the offer and sale of the Notes and the Issuer assumes no responsibility for the sufficiency, accuracy, or completeness of any information set forth in any such disclosure document. 10. Except as otherwise provided in this resolution, all rights, powers, and privileges conferred and duties and liabilities imposed upon the Issuer or the Council by the provisions of this resolution or of the aforementioned documents shall be exercised or performed by the Issuer or by such members of the Council, or such officers, board, body, or agency thereof as may be required or authorized by law to exercise such powers and to perform such duties. No covenant, stipulation, obligation, or agreement herein contained or contained in the aforementioned documents shall be deemed to be a covenant, stipulation, obligation, or agreement of any member of the Council of the Issuer, or any officer, agent, or employee of the Issuer in that person's individual capacity, and neither the Council of the Issuer nor any officer or employee executing the Notes shall be liable personally on the Notes or be subject to any personal liability or accountability by reason of the issuance thereof. 11. No provision, covenant, or agreement contained in the aforementioned documents, the Notes, or in any other document relating to the Notes, and no obligation therein or herein imposed upon the Issuer or the breach thereof, shall constitute or give rise to any pecuniary liability of the Issuer or any charge upon its general credit or taxing powers. In making the agreements, provisions, covenants, and representations set forth in such documents, the Issuer has not obligated itself to pay or remit any funds or revenues, other than funds and revenues derived from the Loan Agreement which are to be applied to the payment of the Notes, as provided in the terms of the Notes and the Loan Agreement. 12. Except as herein otherwise expressly provided, nothing in this resolution or in the aforementioned documents, expressed or implied, is intended or shall be construed to confer upon any person or firm or corporation, other than the Issuer or any holder of the Notes issued under the provisions of this resolution, any right, remedy, or claim, legal or equitable, under and by reason of this resolution or any provisions hereof, this resolution, the aforementioned documents, and all of their provisions being intended to be and being for the sole and exclusive benefit of the Issuer and any holders from time to time of the Notes issued under the provisions of this resolution. LinoLakesvC - 4 • • 13. In case any one or more of the provisions of this resolution, other than the provisions contained in Sections 3 and 11 hereof, or of the aforementioned documents, or of the Notes issued hereunder shall for any reason be held to be illegal or invalid, such illegality or invalidity shall not affect any other provision of this resolution, or of the aforementioned documents, or of the Notes, but this resolution, the aforementioned documents, and the Notes shall be construed and endorsed as if such illegal or invalid provisions had not been contained therein. 14. The Notes, when executed and delivered, shall contain a recital that it is issued pursuant to the Act, and such recital shall be conclusive evidence of the validity of the Notes and the regularity of the issuance thereof, and that all acts, conditions, and things required by the laws of the State of Minnesota relating to the adoption of this resolution, to the issuance of the Notes, and to the execution of the aforementioned documents to happen, exist, and be performed precedent to the execution of the aforementioned documents have happened, exist, and have been performed as so required by law. 15. The officers of the Issuer, bond counsel, other attorneys, engineers, and other agents or employees of the Issuer are hereby authorized to do all acts and things required of them by or in connection with this resolution, the aforementioned documents, and the Notes for the full, punctual, and complete performance of all the terms, covenants, and agreements contained in the Notes, the aforementioned documents, and this resolution. In the event that for any reason the Mayor of the Issuer is unable to carry out the execution of any of the documents or other acts provided herein, any persons delegated the duties of the Mayor shall be authorized to act in the capacity of the Mayor and undertake such execution or acts on behalf of the Issuer with full force and effect, which execution or acts shall be valid and binding on the Issuer. If for any reason the City Administrator of the Issuer is unable to execute and deliver the documents referred to in this resolution, such documents may be executed by any person delegated the duties of the City Administrator, with the same force and effect as if such documents were executed and delivered by the City Administrator of the Issuer. 16. The Issuer understands that the Borrower will pay the administrative fees of the Issuer and pay, or upon demand, reimburse the Issuer for payment of, any and all costs incurred by the Issuer in connection with the Project and the issuance of the Notes, whether or not the Notes are issued. 17. The Notes are hereby designated by the Issuer as "qualified tax - exempt obligations" for purposes of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended (the "Code "). With respect to the status of the Notes as qualified tax - exempt obligations, the Issuer hereby certifies that: (i) the reasonably anticipated amount of tax - exempt obligations (excluding private activity bonds other than qualified 501(c)(3) bonds and other than certain refunding bonds described in Section 265(b)(3) of the Code) which will be issued by the Issuer in 2006 does not exceed $10,000,000; and (ii) the Notes are qualified 501(c)(3) bonds. 18. The United States Department of the Treasury has promulgated Treasury Regulations, Section 1.150 -2 (the "Regulation "), governing the use of the proceeds of tax - exempt bonds, all or a portion of which are to be used to reimburse the Issuer or a borrower from the Issuer for project expenditures paid prior to the date of issuance of such bonds. The Regulation requires that the Issuer adopt a statement of official intent to reimburse an original expenditure not later than sixty (60) days after payment of the original expenditure. The Regulation also generally requires that the bonds be issued and the reimbursement allocation LinoLakesvC - 5 — 32,a_ • made from the proceeds of the bonds within eighteen (18) months after the later of: (i) the date the expenditure is paid; or (ii) the date the project is placed in service or abandoned, but in no event more than three (3) years after the date the expenditure is paid. The Regulation generally permits reimbursement of capital expenditures and costs of issuance of the bonds. The Issuer expects that a portion of the costs of the Project will be paid by the Borrower prior to the date of issuance of the Notes. The Issuer reasonably expects to reimburse the Borrower for such expenditures from the proceeds of the Notes on or after the date of issuance of the Notes. All reimbursed expenditures shall be capital expenditures, a cost of issuance of the Notes, or other expenditures eligible for reimbursement under Section 1.150- 2(d)(3) of the Regulation and also qualifying expenditures under the Act. 19. This resolution shall be in full force and effect from and after its passage. LinoLakesvC - 6 [326' • Adopted by the Council of the City of Lino Lakes, Minnesota, this 13th day of March, 2006. Attest: CITY OF LINO LAKES, MINNESOTA 1 ne Bartell, Ci Clerk 'Donnell, Acting Mayor Adopted by the Lino Lakes City Council this r 3, day of Audi 2006. The motion for the adoption of the foregoing resolution was duly seconded by Council Member and Jupon vote being taken thereon, the following voted in favor thereof: S�I1z, Rei h4L, , ic+ V1l Molar 0 /11onintII The following voted against same: l Whereupon said resolution was declared duly passed and adopted. LinoLakesvC - 7 -- 132c- iner,v AGENDA ITEM 2B STAFF ORIGINATOR Al Rolek MEETING DATE March 13, 2006 TOPIC Public Hearing for and Consideration of Resolution 06 -50 Relating to the Issuance of Revenue Notes for the Benefit of YMCA of Greater Saint Paul VOTE REQUIRED Simple Majority The YMCA, in partnership with the City for the proposed Lino Lakes YMCA, has made a request to the City to issue tax exempt revenue notes to finance a portion of the project cost. The City Council opened a public hearing at its February 27th meeting to consider this request, and continued the hearing to this evening to take any additional public comment on the issuance of up to $4,000,000 in tax - exempt revenue notes for the benefit of the YMCA. Following the public hearing, the City Council is to consider Resolution 06 -50. Approval of the resolution grants approval to the issuance of the revenue notes, authorizes and directs submission of the proposal to the Department of Employment and Economic Development ( "DEED "), authorizes an intent to reimburse costs with revenue note proceeds under IRC section 1.150 -2, and calls for the YMCA to reimburse the City for costs incurred in connection with the project and the issuance of the notes. It is staff's recommendation that the City Council approve Resolution 06 -50 relating to the issuance of revenue notes for the benefit of YMCA of Greater Saint Paul. 1. Adopt Resolution 06 -50. 2. Refer to Staff for further review. 3. Deny Resolution 6 -50. Option 1