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HomeMy WebLinkAboutResolution 8155 RESOLUTION NO.8155 CITY OF MOUNDS VIEW COUNTY OF RAMSEY STATE OF MINNESOTA RESOLUTION GIVING PRELIMINARY APPROVAL TO THE PROPOSED ISSUANCE OF A SUBORDINATE HEALTHCARE FACILITIES REVENUE NOTE UNDER MINNESOTA STATUTES, SECTIONS 469.152 THROUGH 469.1655, AS AMENDED; AUTHORIZING THE PUBLICATION OF A NOTICE OF PUBLIC HEARING; AND ESTABLISHING THE DATE FOR A PUBLIC HEARING BE IT RESOLVED by the City Council of the City of Mounds View, Minnesota(the "City"), as follows: Section 1. Recitals. 1.01. Statutory Authorization. Minnesota Statutes, Sections 469.152 through 469.1655, as amended (the "Act"), authorizes a municipality 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, engaged in providing health care services, including hospitals,nursing homes,and related medical facilities. 1.02. Subordinate Note. Benedictine Living Center of Fridley, LLC, a Minnesota nonprofit limited liability company (the "Borrower"), which will be controlled by Benedictine Health System ("BHS"), either as its sole member or as a joint member with Allina Health System ("Allina") or any affiliate of BHS or Allina,has proposed that the City issue its Subordinate Health Care Facilities Revenue Note (BHS/Allina TCU Project), Series 2013 (the "Subordinate Note"), in an aggregate principal amount not to exceed$3,000,000. 1.03. Project. The Borrower has proposed to apply the proceeds of the Subordinate Note, along with the proceeds of a senior revenue note (the "Series 2013 Note") proposed to be issued by the City of Fridley, Minnesota (the "City of Fridley") in the aggregate principal amount not to exceed $10,000,000 and equity of the Borrower, to (i)finance the acquisition, construction, and equipping of a 45-bed transitional care facility and 5 care suites located on the Unity Hospital/Allina campus at 550 Osborne Road in the City of Fridley(the "Project"); (ii)fund capitalized interest on the Series 2013 Note and the Subordinate Note (together, the "Notes"); (iii) fund any necessary reserves; and(iv)pay costs of issuance of the Notes and other costs related to the Project. The Project will be owned and operated by the Borrower. 1.04. Public Hearing Required. Prior to the issuance of the Subordinate Note,the City Council of the City must conduct a public hearing to (i) approve the issuance of the Subordinate Note pursuant to the requirements of Section 147(f) of the Internal Revenue Code of 1986, as amended, and regulations promulgated thereunder (the "Code"); and (ii) approve the Project pursuant to Section 469.154, subdivision 4 of the Act. 431774v2 JAE NR380-1 1.05. Host Approval. Prior to the issuance of the Subordinate Note, the City Council of the City of Fridley must hold a duly noticed public hearing and provide host approval to the issuance of the Subordinate Note by the City pursuant to the requirements of Section 147(f)of the Code. Section 2. City Council Approvals. 2.01. Preliminary Approval. The Project is hereby given preliminary approval by the City. The issuance of the Subordinate Note in one or more series in the aggregate principal amount not to exceed $3,000,000 to finance the Project is hereby approved subject to the City Council holding a public hearing on the Project and the issuance of the Subordinate Note, the approval of the Project by the Minnesota Department of Employment and Economic Development ("DEED") as required by the Act, and the host approval of the City Council of the City of Fridley following a duly noticed public hearing. The issuance of the Subordinate Note is also subject to the mutual agreement of the City, the Borrower, and the initial purchaser of the Subordinate Note as to the details of the Subordinate Note and provisions for its payment 2.02. Subordinate Note Not Obligation of City. The Subordinate Note shall not constitute a charge, lien, or encumbrance, legal or equitable, upon any property of the City except the City's interest in the loan or revenue agreement with respect to the Subordinate Note and the Project, and the Subordinate Note, when, as, and if issued, shall recite in substance that the Subordinate Note, including interest thereon, is payable solely from the revenues received from the Project and property pledged to the payment thereof,and shall not constitute a general or moral obligation of the City. 2.03. Approval of the Project. It is hereby found and determined that the Project furthers the purposes set forth in the Act, and the Project constitutes a "project" within the meaning of Section 469.153, subdivision 2(d)of the Act. 2.04. Submission of Project Application to DEED. In accordance with Section 469.154 of the Act, the City Administrator of the City is hereby authorized and directed to submit the proposal for the Project to DEED. The City Administrator and other officers, employees and agents of the City are hereby authorized to provide DEED with any preliminary information needed for this purpose, and the City Administrator is authorized to initiate and assist in the preparation of such documents as may be appropriate to the Project, if it is approved. 2.05. Approval of Bond Counsel. The law firm of Kennedy & Graven, Chartered, is authorized to act as Bond Counsel and to assist in the preparation and review of necessary documents relating to the Project and the Subordinate Note issued in connection therewith. The Mayor, City Administrator, and other officers, employees, and agents of the City are hereby authorized to assist Bond Counsel in the preparation of such documents. Section 3. Public Hearing. 3.01. Establishment of Public Hearing. The City Council shall meet at or after 7:00 p.m. on Monday, October 28, 2013,to conduct a public hearing on the Project and the issuance of the Subordinate Note by the City as requested by the Borrower. 3.02. Notice of Public Hearing. The City Administrator is authorized and directed to publish notice of the hearing in substantially the form attached hereto as EXHIBIT A in the Sun-Focus, the official newspaper and a newspaper of general circulation in the City, once, at least fourteen(14) days prior to the date of the public hearing. 431774v2 JAE NR380-1 2 Section 5. Costs. The Borrower will pay the administrative fees of the City and pay, or, upon demand, reimburse the City for payment of, any and all costs incurred by the City in connection with the Project and the issuance of the Subordinate Note,whether or not the Subordinate Note is issued. Section 6. Commitment Conditional. The adoption of this resolution does not constitute a guaranty or firm commitment that the City will issue the Subordinate Note as requested by the Borrower. The City retains the right in its sole discretion to withdraw from participation and accordingly not to issue the Subordinate Note, or issue the Subordinate Note in an amount less than the amount referred to herein, should the City at any time prior to issuance thereof determine that it is in the best interest of the City not to issue the Subordinate Note,or to issue the Subordinate Note in an amount less than the amount referred to in Section 2.01 hereof, or should the parties to the transaction be unable to reach agreement as to the terms and conditions of any of the documents required for the transaction. Section 7. Effective Date. This resolution shall be in full force and effect from and after its passage. Approved by the City Council of the City of Mounds View, Minnesota, this 23`d day of September,2013. oe Flaherty, ayor (ATTEST) JO/n c.e1)Yv James,Ericson City Administrator (SEAL) 431774v2 JAE NR380-1 3