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HomeMy WebLinkAboutAgenda Packets - 2021/12/06 (2) CITY OF MOUNDS VIEW SPECIAL CITY COUNCIL MEETING AGENDA MOUNDS VIEW CITY HALL Monday, December 6, 2021 6:00 p.m. 1. CALL TO ORDER 2. PLEDGE OF ALLEGIANCE 3. ROLL CALL: Mueller, Gunn, Hull, Meehlhause, Bergeron 4. APPROVAL OF AGENDA 5. COUNCIL BUSINESS A. Public Hearing to Consider Resolution 8511 Approving Amendments to the Healthcare and Housing Facilities Revenue Refunding Note (Catholic Eldercare Project), Series 2014C, and Authorizing the Execution and Delivery of Documents Related Thereto B. Truth in Taxation presentation 6. Next Council Work Session: Monday, December 6, 2021 at 6:30 pm Next Council Meeting: Monday, December 13, 2021 at 6:30 pm 7. ADJOURNMENT THIS PAGE LEFT BLANK INTENTIONALLY Item No: 5.A. Meeting Date: December 6, 2021 Type of Business: Council Business Administrator Review: ____ City of Mounds View Staff Report To: Honorable Mayor and City Council From: Mark Beer, Finance Director Item Title/Subject: PUBLIC HEARING to Consider Resolution 8511 Approving Amendments to the Healthcare and Housing Facilities Revenue Refunding Note (Catholic Eldercare Project), Series 2014C, and Authorizing the Execution and Delivery of Documents Related Thereto Introduction: The City in 2014 issued as part of a multi-city funding project $4,000,000 in conduit debt financing for the acquisition, construction, and equipping of a transitional care unit consisting of the addition of 24 skilled nursing beds to the existing 150-bed skilled nursing facility located at 900 2nd Street NE in the City of Minneapolis. The City is part of the service area for this facility thus we were able to use our lending authority. The note and amendments do not constitute a general or moral obligation of the City and will not be secured by or payable from any property or assets of the City and will not be secured by any taxing power of the City. Discussion: The City Council is asked to consider amendments to a Healthcare and Housing Facilities Revenue Note (Catholic Eldercare Project, Series 2014C) that will lower the interest rate floor and extend the maturity for this issuance. There is no financial obligation to the City, all costs related to the amendments are being paid by the borrower. The City is represented by Kennedy & Graven as bond council, Gina Fiorini is available for any questions the Council has. Recommendation: Staff recommends that Council open the public hearing, take any questions, and grant approval to resolution 9511. Respectfully submitted, Mark Beer ________________________ Mark Beer Finance Director CITY OF MOUNDS VIEW, MINNESOTA RESOLUTION 9511 APPROVING AMENDMENTS TO THE HEALTHCARE AND HOUSING FACILITIES REVENUE REFUNDING NOTE (CATHOLIC ELDERCARE PROJECT), SERIES 2014C, AND AUTHORIZING THE EXECUTION AND DELIVERY OF DOCUMENTS RELATED THERETO BE IT RESOLVED by the City Council (the “City Council”) of the City of Mounds View, Minnesota (the “City”), as follows: Section 1. Recitals. 1.01. On December 18, 2014, the City issued its Healthcare and Housing Facilities Revenue Refunding Note (Catholic Eldercare Project), Series 2014C (the “Series 2014C Note”), in the original aggregate principal amount of $4,000,000, pursuant to Minnesota Statutes, Sections 469.152 through 469.1655, as amended, Minnesota Statutes, Sections 471.59 and 471.656, as amended, and a resolution adopted by the City Council on November 10, 2014 (the “Note Resolution”). The City loaned the proceeds of the Series 2014C Note (the “Loan”) to Catholic Eldercare, a Minnesota nonprofit corporation (the “Borrower”), pursuant to the terms of a Loan Agreement, dated as of December 1, 2014 (the “Loan Agreement”), between the City and the Borrower. The City assigned its rights to the basic payments and certain other rights under the Loan Agreement to Northeast Bank, a Minnesota banking and insurance corporation (the “Lender”), pursuant to a Pledge Agreement, dated as of December 1, 2014 (the “Pledge Agreement”), between the City and the Lender. The Borrower secured its obligations with respect to the repayment of the Loan pursuant to Amended and Restated Mortgage, Security Agreement, and Fixture Financing Statement, dated December 18, 2014, by the Borrower in favor of the Lender, and an Assignment of Leases and Rents, dated December 18, 2014, by the Borrower in favor of the Lender. 1.02. The proceeds of the Series 2014C Note were used to refinance all or a portion of the following facilities located in the City of Minneapolis: (i) a 71-unit assisted living facility located at 2919 Randolph Street NE (commonly known as RiverVillage East) owned by Catholic Eldercare Community Services Corporation II, a Minnesota nonprofit corporation and an affiliate of the Borrower; (ii) a 150-bed skilled nursing facility located at 817 Main Street NE (commonly known as Catholic Eldercare on Main) owned by the Borrower; and (iii) a 51-unit assisted living multifamily rental housing facility located at 909 Main Street NE (commonly known as MainStreet Lodge) owned by the Borrower. 1.03. The Lender has agreed to amend certain terms of the Series 2014C Note (the “Amendments”), including reducing the interest rate floor, reamortizing the Series 2014C Note, and extending the maturity date of the Series 2014C Note. 1.04. The City has been advised by Kennedy & Graven, Chartered, acting as bond counsel (“Bond Counsel”), that the proposed Amendments constitute a significant modification of the Series 2014C Note and will cause a “reissuance” of the Series 2014C Note for tax purposes pursuant to Section 1.1001-3 of the Treasury Regulations promulgated under the Internal Revenue Code of 1986, as amended (the “Code”). For tax purposes, the Series 2014C Note will be treated as being refunded on the effective date of the Amendments. 1.05. On the date hereof, the City Council held a duly noticed public hearing regarding the approval of the Amendments, where all persons interested were given the opportunity to be heard. 2 Error! Unknown document property name. 1.06. There has been presented before the City Council an amended and restated form of the Series 2014C Note, which incorporates the Amendments. Section 2. Findings; Authorizations and Approvals. 2.01. The City Council hereby consents to and approves the Amendments to the Series 2014C Note and authorizes and directs the Mayor and the City Administrator to execute the amended and restated Series 2014C Note substantially in the form on file with the City on the date hereof, which is hereby approved, with such changes as shall be approved by the Mayor and the City Administrator; provided that the execution thereof by the Mayor and the City Administrator shall be conclusive evidence of such approval. 2.02. The Mayor and the City Administrator are hereby designated as the representatives of the City with respect to the Amendments to the Series 2014C Note. The Mayor, the City Administrator, and other officers of the City are authorized and directed to execute and deliver any and all certificates, agreements, or other documents which are required by the Loan Agreement, or any other agreements, certificates, or documents which are deemed necessary by Bond Counsel to documents as are necessary, customary, or appropriate in connection with the reissuance of the Series 2014C Note, or are required by Bond Counsel to complete the Amendments to the Series 2014C Note and establish the validity or enforceability of the Series 2014C Note or the exclusion from gross income of interest on the Series 2014C Note for purposes of federal income taxation and State of Minnesota taxation (including but not limited to the execution of an Information Return for Tax-Exempt Private Activity Bond Issues, Form 8038). 2.03. As provided in the Loan Agreement and the Note Resolution, the Series 2014C Note shall not be payable from nor charged upon any funds other than the revenues pledged to its payment, nor shall the City be subject to any liability thereon, except as otherwise provided in this paragraph. No holder of the Series 2014C Note shall ever have the right to compel any exercise by the City of its taxing powers to pay any of the Series 2014C Note or the interest or premium thereon, or to enforce payment thereof against any property of the City except the interests of the City in the Loan Agreement and the revenues and assets thereunder, which have been assigned to the Lender pursuant to the Pledge Agreement. The Series 2014C Note shall not constitute a charge, lien, or encumbrance, legal or equitable, upon any property of the City, except the interests of the City in the Loan Agreement, and the revenues and assets thereunder, which have been assigned to the Lender pursuant to the Pledge Agreement. Section 3. 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 6th day of December, 2021. Mayor Attest: City Administrator First Draft December 1, 2021 UNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF RAMSEY City of Mounds View Amended and Restated Healthcare and Housing Facilities Revenue Refunding Note (Catholic Eldercare Project) Series 2014C No. R-2 Original Date of Issuance: December 18, 2014 Original Principal Amount: $4,000,000 Date of Modification: December 22, 2021 Outstanding Principal Amount as of Date of Modification: $___________ Final Maturity Date: December 22, 2041 1. Principal Balance. FOR VALUE RECEIVED, the City of Mounds View, Minnesota, a municipal corporation organized and existing under the laws of the State of Minnesota (the “Issuer”), hereby promises to pay to Northeast Bank, a Minnesota banking and insurance corporation (the “Lender”), solely from the source and in the manner hereinafter provided, the principal sum of Four Million Dollars ($4,000,000), or so much thereof as has been advanced and remains unpaid from time to time (the “Principal Balance”), with interest thereon from the date hereof as set forth in Section 2 below. Payments shall be made in any coin or currency which at the time or times of payment is legal tender for the payment of public or private debts in the United States of America, in accordance with the terms hereinafter set forth. 2. Interest. Interest on this Note shall be computed on the basis of a three hundred sixty (360) day year of twelve (12) thirty (30) day months and shall be payable as follows: (A) Commencing on the date of this Note and continuing to December 22, 2021, interest shall accrue on the outstanding principal balance at the rate of 3.00% per annum. (B) On the Date of Modification and continuing to December 22, 2028 (the “First Adjustment Date”), interest shall accrue on the outstanding principal balance at the rate of ______% per annum [a rate per annum equal to 0.695% multiplied by the sum of the 7-Year Treasury Rate (as such term is defined below) plus 260 basis points]. (C) On the First Adjustment Date and continuing to December ___, 2035 (the “Second Adjustment Date”), interest shall be adjusted to a rate per annum equal to 0.695% multiplied by the sum of the 7-Year Treasury Rate (as such term is defined below) plus 260 basis points. Error! Unknown document property name. 2 (D) On the Second Adjustment Date, the interest rate on this Note will be adjusted to a rate per annum equal to 0.695% multiplied by the sum of the 7-Year Treasury Rate plus 260 basis points. Such rate shall be in effect through the Final Maturity Date provided above. (E) The term “LIBOR Swap Rate” shall mean the LIBOR Swap Rate most recently published (as of each Adjustment Date) by the Federal Reserve in its Federal Reserve Statistical Release Document No. H.15(519), “Selected Interest Rates,” or such equivalent successor publication as selected by the Lender. Prior to the Date of Modification, in no event shall the interest rate of this Note be lower than 3.00% or exceed 6.20%. (F) The term “7-Year Treasury Rate” shall mean the business day rate on the U.S. Treasury Securities adjusted to a constant maturity of seven (7) years as published in the Federal Reserve Statistical Release and Historical Data. If such rate is no longer available then such offered rate shall be otherwise independently determined by the Lender from an alternate, substantially similar independent source available to the Lender or shall be calculated by the Lender by a substantially similar methodology as that theretofore used to determine such offered rate. As of the Date of Modification, in no event shall the interest rate of this Note be lower than 2.80% or exceed 6.20%. 3. Payments. Payments of principal of and interest on this Note shall be made by Catholic Eldercare, a Minnesota nonprofit corporation (the “Borrower”), in monthly installments, commencing February 1, 2015, until the Final Maturity Date. Prior to the Date of Modification, principal of and interest on this Note shall be amortized over 20 years to December 18, 2034, and the monthly payments of principal of and interest on this Note during this time shall reflect such amortization. On the Date of Modification, principal of and interest on this Note shall be reamortized over 20 years and the entire remaining unpaid balance of principal and interest shall be due and payable on the Final Maturity Date, together with accrued interest thereon at the interest rate then in effect. The monthly payments of principal and interest on this Note shall be recomputed as of the First Adjustment Date and the Second Adjustment Date in such amounts as are required to fully amortize the Principal Balance through the Final Maturity Date at the interest rate then in effect. Payments shall be applied first to interest due on the unpaid principal and thereafter to reduction of principal. 4. Parity Debt. The principal of and interest on this Note is payable by the Borrower on parity with the Borrower’s obligation to pay the principal of and interest on (i) the Healthcare and Housing Facilities Revenue Note (Catholic Eldercare Project), Series 2014A, issued by the City of Lauderdale, Minnesota on the date hereof in the original aggregate principal amount of $9,300,000; and (ii) the Healthcare and Housing Facilities Revenue Refunding Note (Catholic Eldercare Project), Series 2014B, issued by the Minneapolis Community Development Agency on the date hereof in the original aggregate principal amount of $5,000,000 (with the Note collectively, the “Parity Debt”). In the event of a default, monies available to pay the interest and principal on the Parity Debt shall be used to pay principal and interest on the Parity Debt on a pro rata basis pursuant to the terms of the Intercreditor and Parity Agreement, dated December 18, 2014, between the Lender and certain banks that will purchase participation interests in the Parity Debt. 5. Taxability. In the event of a Determination of Taxability (as defined herein), the rate of interest hereon shall be automatically adjusted to an annual rate equal to the interest rate then accruing, divided by 0.695. Such increased rate is to be effective as of the Date of Taxability. The Issuer shall forthwith pay to the holder the aggregate difference between (i) the amounts actually paid hereunder between the Date of Taxability and the date of receipt of notice of the Determination of Taxability and (ii) the amounts which would have been due during such period if the increased interest rate had been in effect. For the purpose of this paragraph, a “Determination of Taxability” shall mean the issuance of a Error! Unknown document property name. 3 statutory notice of deficiency by the Internal Revenue Service, or a ruling of the National Office or any District Office of the Internal Revenue Service, or a final decision of a court of competent jurisdiction which holds that all of the interest payable on this Note is includable in the gross income of the Lender for federal income tax purposes if the period, if any, for contest or appeal of such action, ruling or decision has expired without any such contest or appeal having been properly instituted. The expenses of any such contest shall be paid by the party initiating the contest and neither the Issuer nor the Lender shall be required to contest or appeal any Determination of Taxability. The “Date of Taxability” shall mean that point in time, as specified in the determination, ruling or decision, that the interest payable on this Note becomes includable in the gross income of the Lender for federal income tax purposes. 6. Default. Upon an Event of Default by the Borrower under the Loan Agreement, the interest rate on this Note shall increase by 400 basis points until such Event of Default is cured. 7. Place of Payment. Principal and interest or service charge, if any, due hereunder shall be payable at the principal office of the Lender, or at such other place as the Lender may designate in writing. 8. Purpose; Authority. This Note is issued by the Issuer to provide funds for a project, as defined in Minnesota Statutes, Sections 469.152 through 469.1655, as amended, and Minnesota Statutes, Chapter 462C, as amended (together, the “Act”), consisting of (i) refunding a portion of the outstanding Variable Rate Demand Multifamily Housing Revenue Bonds (St. Hedwig’s Assisted Living Project), Series 2002 (the “2002 Assisted Living Bonds”), issued by the City of Minneapolis (the “City of Minneapolis”) on December 23, 2002, in the original aggregate principal amount of $7,570,000; (ii) refunding a portion of the outstanding Variable Rate Demand Nursing Home Revenue Refunding Bonds (Catholic Eldercare Project), Series 2002 (the “2002 Nursing Home Bonds”), issued by the City of Minneapolis on December 23, 2002, in the original aggregate principal amount of $9,580,000; and (iii) paying the costs of issuance of this Note. The City of Minneapolis loaned the proceeds of the 2002 Assisted Living Bonds to Catholic Eldercare Community Services Corporation II, a Minnesota nonprofit corporation and an affiliate of the Borrower (“CECSC II”), to finance the acquisition, construction, and equipping of a 71-unit assisted living facility located at 2919 Randolph Street NE (commonly known as RiverVillage East) in the City of Minneapolis. The City of Minneapolis loaned the proceeds of the 2002 Nursing Home Bonds to the Borrower to (a) refinance the acquisition, construction, and equipping of the 150-bed skilled nursing facility located at 817 Main Street NE (commonly known as Catholic Eldercare on Main) in the City; and (b) refinance the acquisition, construction, and equipping of a 51-unit assisted living multifamily rental housing facility located at 909 Main Street NE (commonly known as MainStreet Lodge) in the City of Minneapolis. The facilities refinanced with the proceeds of this Note are owned and operated by the Borrower and its affiliates. The Issuer has loaned the proceeds of this Note to the Borrower pursuant to a Loan Agreement, dated as of December 1, 2014 (the “Loan Agreement”), between the Issuer and Borrower. This Note is further issued pursuant to and in full compliance with the Constitution and laws of the State of Minnesota, particularly the Act and Minnesota Statutes, Section 471.656, as amended, and pursuant to resolutions adopted by the City Council of the Issuer on November 10, 2014 and December 6, 2021 (together, the “Resolution”). 9. Security. The loan repayments to be made by the Borrower under the Loan Agreement (the “Loan Repayments”) will be fixed so as to produce revenue sufficient to pay the principal of, premium, if any, and interest on this Note when due. The Issuer has assigned its right, title, and interest in and to the Loan Agreement, including, but not limited to, the Issuer’s right to receive Loan Repayments (but not including certain reserved rights of the Issuer to receive payment for fees and expenses and indemnification) pursuant to the Pledge Agreement, dated as of December 1, 2014 (the “Pledge Agreement”), between the Issuer and the Lender. The Parity Debt is also secured by the following documents which may be amended from time to time: (i) an Amended and Restated Combination Mortgage, Security Agreement, and Fixture Financing Statement, dated December 18, 2014, from the Borrower; (ii) an Assignment of Rents and Leases, dated Error! Unknown document property name. 4 December 18, 2014, from the Borrower; (iii) a Security Agreement, dated December 18, 2014, between the Foundation and the Lender; and (iv) an Investment Account Reserve Escrow Agreement, dated December 18, 2014, between the Borrower and the Lender. As further security for the Borrower’s obligation to repay the principal of and interest on all of the Parity Debt, the Borrower will cause to be delivered to the Lender guaranty agreements from the Borrower’s affiliates, including Catholic Eldercare Community Foundation, Catholic Eldercare Community Services Corporation, CECSC II, and Catholic Eldercare at St. Hedwig’s, each guarantying the full amount of the Parity Debt. The guaranty from CECSC II is secured by an additional mortgage and an assignment of rents and leases. 10. Waiver of Demand; Extension. The Issuer, for itself, its successors and assigns, hereby waives demand, presentment, protest and notice of dishonor; and to the extent permitted by law, the Lender may extend interest and/or principal of or any service charge or premium due on this Note, all without notice to or consent of any party liable hereon or thereon and without releasing any such party from such liability. 11. Prepayments After Date of Modification. After the Date of Modification, this Note may be prepaid in whole or in part at any time. All prepayments shall be applied first to accrued interest and then to principal. All prepayments applied to principal shall be applied to installments of principal in the inverse order of their maturity. A notice of any such prepayment shall be given by the Borrower to the Lender, not less than ten (10) days prior to the date proposed for prepayment. On the date fixed for prepayment, funds shall be paid to the Lender at its registered address. The prepayment price is equal to the outstanding principal amount of this Note to be prepaid, plus accrued interest, plus a premium as set forth in the table below: If Prepayment Occurs during the Following Years after Date of Modification: Redemption Premium as a Percentage of Principal Amount of Note to Be Prepaid: Years 1, 2, 8, 9, and 15 3.0% Years 3, 4, 10, 11, 16, and 17 2.0% Years 5, 6, 12, 13, 18, and 19 1.0% At all other times 0.0% Notwithstanding the foregoing, however, the Borrower has the option to prepay up to fifteen percent (15%) of the outstanding Principal Balance during each loan year following the Date of Modification without paying a prepayment premium, as set forth above. 12. Transfer; Registration. As provided in the Resolution and subject to certain limitations set forth therein, this Note is only transferable upon the books of the Issuer at the office of the Finance Director of the City, by the Lender in person or by its agent duly authorized in writing, at the Lender’s expense, upon surrender hereof together with a written instrument of transfer satisfactory to the Finance Director, duly executed by the Lender or its duly authorized agent. Upon such transfer the Finance Director will note the date of registration and the name and address of the new registered owner in the registration blank appearing below. The Issuer may deem and treat the person in whose name this Note is last registered upon the books of the Issuer with such registration noted on this Note, as the absolute owner hereof, whether or not overdue, for the purpose of receiving payment, or on the account, of the Principal Balance or interest and for all other purposes, and all such payments so made to the Lender or upon its order shall be valid and effective to satisfy and discharge the liability upon this Note to the extent of the sum or sums so paid, and the Issuer shall not be affected by any notice to the contrary. Error! Unknown document property name. 5 13. Incorporation. All of the agreements, conditions, covenants, provisions and stipulations contained in the Resolution, the Loan Agreement, and the Pledge Agreement are hereby made a part of this Note to the same extent and with the same force and effect as if they were fully set forth herein. 14. LIMITED LIABILITY. THIS NOTE AND INTEREST HEREON AND ANY SERVICE CHARGE, IF ANY, DUE HEREUNDER ARE PAYABLE SOLELY FROM THE REVENUES AND PROCEEDS DERIVED FROM THE LOAN AGREEMENT AND DO NOT CONSTITUTE A DEBT OF THE ISSUER WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY LIMITATION, ARE NOT PAYABLE FROM OR A CHARGE UPON ANY FUNDS OTHER THAN THE REVENUES AND PROCEEDS PLEDGED TO THE PAYMENT THEREOF, AND DO NOT GIVE RISE TO A PECUNIARY LIABILITY OF THE ISSUER OR ANY OF ITS OFFICERS, AGENTS OR EMPLOYEES, AND NO HOLDER OF THIS NOTE SHALL EVER HAVE THE RIGHT TO COMPEL ANY EXERCISE OF THE TAXING POWER OF THE ISSUER TO PAY THIS NOTE OR THE INTEREST HEREON, OR TO ENFORCE PAYMENT THEREOF AGAINST ANY PROPERTY OF THE ISSUER, AND THIS NOTE DOES NOT CONSTITUTE A CHARGE, LIEN OR ENCUMBRANCE, LEGAL OR EQUITABLE, UPON ANY PROPERTY OF THE ISSUER, AND THE AGREEMENT OF THE ISSUER TO PERFORM OR CAUSE THE PERFORMANCE OF THE COVENANTS AND OTHER PROVISIONS HEREIN REFERRED TO SHALL BE SUBJECT AT ALL TIMES TO THE AVAILABILITY OF REVENUES OR OTHER FUNDS FURNISHED FOR SUCH PURPOSE IN ACCORDANCE WITH THE LOAN AGREEMENT, SUFFICIENT TO PAY ALL COSTS OF SUCH PERFORMANCE OR THE ENFORCEMENT THEREOF. 15. Rights on Default. If an Event of Default (as that term is defined in the Loan Agreement) shall occur, then the Lender shall have the right and option to declare, upon ten (10) days’ written notice, the Principal Balance and accrued interest thereon immediately due and payable, whereupon the same, plus any service charges, shall be due and payable, but solely from sums made available under the Loan Agreement. Failure to exercise such option at any time shall not constitute a waiver of the right to exercise the same at any subsequent time. 16. Exercise of Remedies. The remedies of the Lender, as provided herein and in the Loan Agreement and the Pledge Agreement, are not exclusive and shall be cumulative and concurrent and may be pursued singly, successively or together, at the sole discretion of the Lender, and may be exercised as often as occasion therefor shall occur; and the failure to exercise any such right or remedy shall in no event be construed as a waiver or release thereof. 17. Waivers. The Lender shall not be deemed, by any act of omission or commission, to have waived any of its rights or remedies hereunder unless such waiver is in writing and signed by the Lender and, then only to the extent specifically set forth in the writing. A waiver with reference to one event shall not be construed as continuing or as a bar to or waiver of any right or remedy as to a subsequent event. 18. Securities Registration. This Note has been issued without registration under state or federal or other securities laws, pursuant to an exemption for such issuance; and accordingly this Note may not be assigned or transferred in whole or part, nor may a participation interest in this Note be given pursuant to any participation agreement, except in accordance with an applicable exemption from such registration requirements. The Issuer acknowledges that the Lender may enter into a participation agreement with one or more sophisticated investors, providing for participations in amounts of at least $100,000. 19. Qualified Tax-Exempt Obligation. The Issuer has designated this Note as a “qualified tax-exempt obligation” pursuant to Section 265(b)(3) of the Internal Revenue Code of 1986, as amended. Error! Unknown document property name. 6 IT IS HEREBY CERTIFIED AND RECITED that all conditions, acts and things required to exist, to happen and to be performed precedent to or in the issuance of this Note do exist, have happened and have been performed in regular and due form as required by law. (The remainder of this page is intentionally left blank.) Error! Unknown document property name. S-1 IN WITNESS WHEREOF, the Issuer has caused this Note to be duly executed in its name by the manual or facsimile signatures of its officers identified below. CITY OF MOUNDS VIEW, MINNESOTA By Its Mayor By Its City Administrator Error! Unknown document property name. R-1 BOND REGISTER The ownership of the unpaid Principal Balance of this Note and the interest accruing thereon is registered on the books of the City of Mounds View, Minnesota, in the name of the holder last noted below. Date of Registration Name and Address Registered Holder Signature of Finance Director Northeast Bank 77 Broadway Street NE Minneapolis, MN 55413 Error! Unknown document property name. Amendments to: $4,000,000 City of Mounds View, Minnesota Healthcare and Housing Facilities Revenue Refunding Note (Catholic Eldercare Project) Series 2014C We have acted as Bond Counsel to the City of Mounds View, Minnesota (the “Issuer”) in connection with the issuance and sale by the Issuer of its Healthcare and Housing Facilities Revenue Refunding Note, Series 2014C (the “Series 2014C Note”), dated December 18, 2014, in the original aggregate principal amount of $4,000,000, which is currently outstanding in the principal amount of $____________. The Series 2014C Note was purchased by Northeast Bank, a Minnesota banking and insurance corporation (the “Lender”). Proceeds of the Series 2014C Note were loaned by the Issuer to Catholic Eldercare, a Minnesota nonprofit corporation (the “Borrower”), pursuant to a Loan Agreement, dated as of December 1, 2014 (the “Loan Agreement”), between the Issuer and the Borrower. Capitalized terms used herein that are otherwise not defined have the meanings provided in the Loan Agreement. The Lender has subsequently agreed to amend certain provisions of the Series 2014C Note and documents executed in connection with the original issuance of the Series 2014C Note (collectively, the “Amendments”), including reducing the interest rate floor, reamortizing the Series 2014C Note, and extending the maturity date of the Series 2014C Note. We have advised the Issuer that the Amendments result in a significant modification of the Series 2014C Note and will cause a “reissuance” of the Series 2014C Note for tax purposes pursuant to Section 1.1001-3 of the Treasury Regulations promulgated under the Internal Revenue Code of 1986, as amended (the “Code”). For tax purposes, upon reissuance, the Series 2014C Note is treated as being refunded on the date such changes become effective. In connection with the Amendments, the Issuer has amended and restated the Series 2014C Note (the “Amended and Restated Series 2014C Note”). On the date hereof, the Amendments to the Series 2014C Note become effective, resulting in a reissuance of the Series 2014C Note for tax purposes pursuant to Section 1.1001-3 of the Treasury Regulations promulgated under the Code. We have reviewed such certificates and other documents as we have deemed necessary for the purpose of giving this opinion, including the Loan Agreement, the Amended and Restated Series 2014C Note, and the other documents related to the Amendments. Based on such review, it is our opinion that the reissuance of the Series 2014C Note on the date hereof will not adversely affect the exemption from federal income taxation of interest on the Series 2014C Note. Furthermore, it is our opinion that the execution and delivery of the Amended and Restated Series 2014C Note is in the interests of the Issuer. Dated December ___, 2021 at Minneapolis, Minnesota. City of Mounds View Truth in Taxation Meeting December 6, 2021 6:00 pm Vision and Mission Statement Vision A Thriving Desirable Community Mission Provide High Quality Public Services in a Fiscally Responsible Manor Truth in Taxation The Truth in Taxation meeting covers those City and Economic Development Authority (EDA) funds that get a portion of the City-wide tax levy. Those funds are as follows: General ($4,961,188) Police officer referendums ($385,000)(Part of General Fund) Fire Bonds ($165,916)(Part of General Fund) GO Capital Improvement Plan Bonds ($416,766)(Public Works Facility) Street Improvement Capital Projects ($150,000) EDA ($100,000) The General Fund is the City’s operating fund and accounts for most city- wide activities, the GO CIP Plan Bond Debt Service Fund accounts for debt service for the PW facility. The Street Improvement Capital Projects Fund accounts for construction and major maintenance of City streets, parking lots, and trails. The EDA fund is the economic development fund of the City. Expenditures by Type Personnel 62% Supplies 4% Contractual services 21% Contingency 0% Debt service 2% Capital outlays 1%Transfers 10% 2022 General Fund Expenditures by Type General Government 13% Economic Development 6% Public Safety 51% Streets & Highways 11% Park & Recreation 7% Debt service 2% Other 1% Transfers 9% 2022 General Fund Expenditures by Function Expenditures by Function - 500,000 1,000,000 1,500,000 2,000,000 2,500,000 3,000,000 3,500,000 4,000,000 4,500,000 General Government Community Development Public Safety Streets & Highways Park & Recreation Debt service Other Transfers General Fund Expenditures 2020 Actual 2021 Budget 2022 Proposed Expenditure Bar Graph General Fund Expenditure Changes 2022 General Fund operating expenditures are proposed to increase by $367,221 or 5.31%,this includes personnel services, materials and supplies, contractual services, and contingency. Personnel services are the primary driver of the increase. 2022 General Fund capital expenditures, debt service and transfers are proposed to increaseby $77,714 or 8.27%. Capital Outlays for fire equipment is the primary driver of the increase. Total 2022 General Fund expenditures are proposed to increase by $444,935 or 5.66%over 2021. Revenue Pie Chart General property taxes 68% Other taxes 5% Licenses & permits 3% Intergovernmental 16%Other revenues 5% Transfers from other funds 3% General Fund Revenues 2022 Proposed Budget $0 $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000 General Fund Revenues 2020 Actual 2021 Budget 2022 Proposed Revenue Bar Graph Budget Summary 2022 General Fund significant budget items •The City proposes a 5.66% increase in General Fund spending which includes increases in operational spending of $367,221 and an increase in non-operational spending (debt service, capital outlay, transfers) of $77,714 for an overall increase of $444,935. •Estimated LGA in 2022 is $850,373, the City included only 90% of this in the budget as a precaution from future uncertainty at the state level. This represents 9.22% of the General Fund budget. •Other non-property tax revenues are projected to increase $387,068, this excludes transfers. •Fund Balance will be reduced by $238,000 with $238,000 coming from Levy Reduction Assigned Fund Balance. Proposed Property Tax Levy 2021 2022 Property tax base levy 4,666,859$ 4,922,043$ Special levy - Police Referendum 220,000 255,000 Special levy - Police Referendum 110,000 130,000 Special levy - PERA rate increase 39,145 39,145 Debt service levy - Fire bonds 166,291 165,916 Debt service levy - PW Building 413,984 416,766 Capital Project Street Imp.150,000 150,000 EDA/HRA levy 100,000 100,000 Total Levy 5,866,279$ 6,178,870$ 5.33%312,591$ What Your Tax Dollars Buy Median Market Valued Home in Mounds View 270,500$ City Tax on Median Valued Home 979.24$ Police 440.10 44.94% Public Works 109.76 11.21% Fire 100.14 10.23% Parks and Recreation 84.44 8.62% Administration 73.12 7.47% PW Building Debt Service levy 57.08 5.83% Community Development 46.11 4.71% Community Center 47.94 4.90% Street Construction 20.55 2.10% 979.24$ 100.00% Sample Home Tax Impact 2021 Home 2021 2022 Home 2022 Taxable City Taxable City Value Tax Value Tax Difference 50,125$ 198 56,955 224 26 137,450 528 151,210 579 51 224,773 858 245,463 934 76 312,098 1,188 339,717 1,288 100 399,423 1,519 432,272 1,637 118 480,748 1,828 518,727 1,965 137 560,871 2,132 605,180 2,292 160 640,996 2,437 691,635 2,620 183 City of Mounds View 26.26 cents Ramsey County 35.81 cents School District 33.88 cents Other taxing districts 4.05 cents Tax Bill Breakdown Tax Levy Per Capita Arden Hills $446.91 Mounds View $466.37 New Brighton $489.28 Blaine $508.39 Spring Lake Park $522.61 Shoreview $522.89 Fridley $608.30 Roseville $698.08 $0.00 $100.00 $200.00 $300.00 $400.00 $500.00 $600.00 $700.00 $800.00 1 Spending per Capita In the most recent data available from the Office of State Auditor, For cities over 2500 in population the City spending per capita ranked. 187 out of 226 The City net tax levy per capita ranked 195 out of 226 The state-wide average per capita levy is $489 for cities between 10,000 and 20,000. The City compares favorably at $426 per capita. Prior Year’s Tax Levy Tax Levy General Fund in 2021 3.43%, Debt Service -.130% General Fund in 2020 4.20%, Debt Service 0.06%, Police Officer 0.37% General Fund in 2019 4.40%, Debt Service 1.40%, Police Officer 0.30%, Street levy 3.02% General Fund in 2018 4.30%, Debt Service 9.08%, Police Officer 1.86%, Street levy -6.57% General Fund in 2017 1.71%, EDA 2.28% General Fund in 2016 1% General Fund in 2015 2% General Fund in 2014 2% No levy increase 2013, 2012 General Fund in 2011 2% Street levy in 2010 7.9% No levy increase 2009,2008,2007,2006 Summary The City strives to be a good steward of public resources by considering the following: •Thoughtful Expenditures, linked to mission and priorities, aimed at sufficiency, and attentive to total cost and value. •Maintenance and conservation •Commitment to ongoing improvement City of Mounds View Questions?