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Res 1999 - 74 Giving Preliminary Approval to a Project on Behalf of the St. Thomas Academy & Its Financing Under the Municipal Industrial Development Act; Referring the Proposal to the MN Dept of Trade & Economic Development for Approval��- r� - =� .� RESOLUTION N0. 99-74 RESOLUTION GIVING PRELIMINARY APPROVAL TO A PROJECT ON BEHALF OF THE ST. THOMAS ACADEMY AND ITS FINANCING UNDER THE MITNICIPAL INDUSTRIAL DEVELOPMENT ACT; REFERRING THE PROPOSAL TO THE NIINNESOTA DEPARTMENT OF TR.ADE AND ECONOMIC DEVELOPMENT FOR APPROVAL; AND AUTHORIZING THE PREPARATION OF NECESSARY DOCUMENTS BE IT RESOLVED by the City Council of the City of Mendota Heights, Minnesota (the "City"), as follows: SECTION 1 Recitals and Findin�s 1.1. St. Thomas Academy, a Minnesota nonprofit corporation (the "Borrower"), has advised this Council of its desire to fmance a project consisting of the acquisition, construction and equipping of a new middle school addition to, together with renovation and remodeling of, the Borrower's existing education facilities, together with the acquisition of unimproved land (the "Project"). The location of the Project is 949 and 950 Mendota Heights Road in the City. � 1.2. The Cifiy is authorized to issue its revenue bonds to fmance the Project pursuant to Minnesota Statutes, Sections 469.152 through 469.1651, as amended (the "Industrial Development Act" or the "Act"). The Borrower has requested the City to issue its revenue bonds in an aggregate total amount not to exceed $9,500,000 (the "Bonds") (i) to pay the cost of the Project, and (ii) to finance a portion or all of the costs of issuance of the bonds. 1.3. At a public hearing, duly noticed and opened on October 5, 1999 and continued to the date hereof, in accordance with the Act and Section 147(� ofthe Internal Revenue Code of 1986, on the proposal to undertake and finance the Project, all parties who appeared at the hearing were given an opportunity to express their views with respect to the proposal to undertake and finance the Project and interested persons were given the opportunity to submit written comments to the City Clerk before the time of the hearing. Based on the public hearing, such written comments (if any) and such other facts and circumstances as this Council deems relevant, this Council hereby finds, determines and declares as follows: (a) The Project would further the general purposes contemplated and described in Section 469.152 of the Act and, based upon information supplied by the Borrower, would result in the encouragement and development of economically sound industry and commerce through governmental action for the purpose ofpreventing the emergence ofblighted and marginal lands and areas of chronic unemployment.. (b) This Council has been advised by representatives of the Borrower that the economic feasibility of constructing and operating the Project is significantly improved with the aid of municipal borrowing, and its resulting lower borrowing cost. �- f (c) This Council has also been advised by the Borrower that on the basis of its discussions with potential buyers of tax-exempt bonds, revenue bonds of the City could be issued and sold upon favorable rates and terms to finance the Project. Project. (d) The City is authorized by the Act to issue its revenue bonds to finance the SECTION 2 Determination To Proceed with the Project and Its Financin� 2.1. On the basis of the information given the City to date, it appears that it would be desirable for the City to issue its revenue bonds under the provisions of the Act to finance the Project in the maximum aggregate face amount of $9,500,000. 2.2. It is hereby determined to proceed with the Project and its financing and this Council hereby declares its present intent to have the City issue its revenue bonds under the Act to fmance tl�e Project. All details of the Project of such revenue bond issue and the provisions for payment thereof shall be subject to final approval by the Minnesota Department of Trade and Economic Development (the "Department") and may be subject to such further conditions as the City may specify. The revenue bonds, if issued, shall not constitute a charge, lien or encumbrance, legal or equitable, upon any property of the City, except the revenues specifically pledged to the payment thereof, and each bond, when, as and if issued, shall recite in substance that the bond, including interest thereon, is payable solely from the revenues and property specifically pledged to the payment thereof, and shall not constitute a debt of the City within the meaning of any constitutional or statutory limitation. 2.3. The Application to the Minnesota Department of Trade and Economic Development (the "Application"), with attachments, is hereby approved, and the Mayor and City Clerk are authorized to execute said documents on behalf of the City. 2.4. In accordance with Section 469.154, Subdivision 3 ofthe Act, the Mayor and City Clerk are hereby authorized and directed to cause the Application to be submitted to the Department for approval ofthe Project. The Mayor, City Clerk, City Administrator and other officers, employees and agents of the City are hereby authorized and directed to provide the Department with any preliminary information needed for this purpose. 2.5. All or a portion of the costs of the Project may be paid by the Borrower prior to the issuance of the Bonds under the Act to finance the Project, and, to the extent such costs are paid by the Borrower prior to the issuance of the Bonds, it is the intent of the City and the Borrower to reimburse all or a portion os such costs from the proceeds of the Bonds to the extent permitted by the Act and Section 1.150-2 of the Treasury Regulations promulgated under the Code. The Borrower has represented that the reasonably expected source of funds that will be used to pay the costs ofthe Project to be reimbursed from the proceeds ofthe Bonds is amounts which the Borrower has on hand and available for such purpose, but which do not constitute funds reserved, allocated on a long-term basis or otherwise set aside to provide permanent financing for the costs of the Project. The reasonably expected source of funds to be used to pay debt service on the Bonds is payments to be made by the Borrower pursuant to the Revenue Agreement (as hereinafter defined). SECTION 3 General 3.1. If the bonds are issued and sold, the City will enter into a loan agreement or similar agreement satisfying the requirements of the Act (the "Revenue Agreement") with the Borrower. The loan payments or other amounts payable by the Borrower to the City under the Revenue Agreement shall be sufficient to pay the principal of, and interest and redemption premium, if any, on, the bonds as and when the same shall become due and payable. 3.2. The Borrower has agreed and it is hereby determined that any and all directand indirect costs incurred by the City in connection with the Project, including any legal fees incurred by the City arising at anytime out of litigation relating to the Proj ect, whether or not the Proj ect is carried to completion, and whether or not the Project is approved by the Department, and whether or not the City by resolution authorizes the issuance of the bonds, will be paid by the Borrower upon request. 3.3. With respect to the Project, the Mayor and City Clerk are directed, if the bonds are issued and sold, thereafter to comply with the provisions of Section 469.154, Subdivisions 5 and 7 of the Industrial Development Act. 1095983.1 ,,� y,. � �n Passed and adopted this lgthday of a������ , 199g. 1095983.1 Attest: Mayar %tiQ�Gs(_G9���c- /J t '4�1'rt/Li_�_!_ �f 4h-.� City Cierk