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Res 1999 - 67 Proposed Housing Facilities Project & the Proposed Issuance Therefor of Revenue Bonds by the City of Mendota Heights, MNAfter some discussion, Council member introduced the following resolution and moved its adoption: RESOLUTION NO. 99-67 RESOLUTION CALLING A PUBLIC HEARING ON PROPOSED HOUSING FACILITIES PROJECT AND THE PROPOSED ISSUANCE THEREFOR OF REVENUE BONDS BY THE CITY OF MENDOTA HEIGHTS, MINNESOTA WHEREAS, the City Council of the Ciiy of Mendota Heights, Minnesota (the "City"), has received a request from Dakota Communities, Inc., a Minnesota nonprofit corporation (referred to as the "Borrower"), for the City to issue its revenue bonds (the "Bonds") in an aggregate principal amount not to exceed $2,500,000 pursuant to Minnesota Statutes, Chapter 462C, as amended (the "Act"); and WHEREAS, the proceeds of the Bonds would be loaned to the Borrower to finance the costs of a Housing Program, substantially in the form attached hereto as Exhibit A (the "Housing Program"), including the funding of required reserves and to partially defray the costs of issuance of the Bonds, all as authorized by the Act (the financing, construction and improvement of the facilities described in the Housing Program is sometimes referred to as the "Proj ect"); and WHEREAS, pursuant to the Act and Section 147(fl of the Internal Revenue Code of 1986, as amended, it is necessary for the City to conduct a public hearing before the City issues the Bonds; and WHEREAS, the Borrower has agreed to reimburse the City for the cost of publication of notice of the hearing in the official newspaper of the City and other associated expenses through payment of the City's required Application Fee, in the amount of $2,500; NOW, THEREFORE, be it resolved by the City Council of the City of Mendota Heights, Minnesota, that: 1. The City Council shall hold a public hearing on the Housing Program and the issuance of the Bonds on Tuesday, November 2, at 7:30 o'clock P.M., at the City Hall in Mendota Heights, Minnesota. The City Clerk or any employee of the City shall publish or cause to be published a legal notice in connection therewith, substantially in the form attached hereto as E�ibit B. Prior to the publication of the legal notice, a copy of the Housing Program shall be filed with the Metropolitan Council, as required by the Act. 2. The Borrower, Dorsey & Whitney LLP, as bond counsel, officers of the City, and other City representatives and officials, are authorized to initiate the preparation of a -� loan agreement, a trust indenture, an official statement and related documents as may be ���� necessary or appropriate to the financing of the Project so that, when and if this Council gives its � final approval thereto, such financing may be carried out expeditiously. 3. In no event shall the Bonds ever be payable from or charged upon any funds of the City other than amounts payable under the loan agreement which is to be pledged to the payment thereof; no holder of the Bonds shall ever have the right to compel the exercise of the taxing power of the City to pay the Bonds or the interest thereon, nor enforce the payment thereof against any property of the City other than the City's interest in the Project facilities; the Bonds shall not constitute a general or moral obligation of the City or a charge, lien or encumbrance, legal or equitable, upon any property of the City; and the Bonds do not constitute an indebtedness of the City within the meaning of any constitutional, statutory, or charter limitation. Adopted this Sth day of October, 1999. Exhibit A HOUSING PROGRAM RELATING TO THE ISSUANCE OF CITY OF MENDOTA HEIGHTS REVENUE BONDS UNDER MINNESOTA STATUES, CHAPTER 462C, FOR THE FINANCING AND REFINANCING OF HOUSING FACILITIES FOR THE DEVELOPMENTALLY DISABLED, ON BEHALF OF DAKOTA COMMUNITIES, INC. 1. Local Housin�Policv. The housing policies of the City of Mendota Heights (the "City" or the "Issuer") are currently set forth in the City's Comprehensive Plan and in related plans and documents. This Housing Program has been developed pursuant thereto, all in accordance with and as contemplated by Minnesota Statutes, Chapter 462C, as amended (the "Act"). Under the Act, the City, prior to issuing revenue bonds or other obligations with respect to a multi-family housing development, as described in Section 462C.05 thereof, is to adopt a program setting forth the information required by the Act, including but not limited to Section 462C.05, Subd. 6, of the Act. This Program advances the City's stated housing goals by enhancing and increasing the City's supply of affordable rental housing facilities for low income and developmentally disabled persons at reasonable rental rates, and through the renovation, upgrading and improvement of the City's existing housing facilities, all as authorized, contemplated and prescribed by the Act. This Housing Program and the facilities described herein are to be undertaken pursuant to Section 462C.05, Subd. 2, of the Act. 2. Program. This Housing Program comprises an effort by the City to advance its housing and related goals by providing financing and refinancing for the housing developments described in paragraph 4 below (sometimes referred to herein generally in the aggregate as the "Facilities"). Certain of the Facilities will be newly constructed and certain of the Facilities will be refinanced and rehabilitated (all sometimes referred to collectively as the "Project"). The proposed construction of the new Facilities to be built is expected to increase the supply of affordable rental housing facilities for low income and disabled persons. The proposed refinancing of the remaining Facilities is anticipated to produce debt service savings that will permit the maintenance of rates and charges for such Facilities at the most reasonably affordable levels. This refinancing will consist of the payment and discharge of taxable mortgage indebtedness currently outstanding with respect to these Facilities a.nd the rehabilitation of the refinanced Facilities. With respect to the refinancing of existing mortgage indebtedness of the Borrower, the Borrower will undertake at least the minimum amount of rehabilitation with respect to each such Facility as is required under Section 462C.05, subd. 1. The method of financing to be advanced for this Program shall consist of the issuance of revenue bonds (the "Bonds") by the City, on behalf of the jurisdictions listed in E�ibit 1 hereto (the "Participating Jurisdictions"), pursuant to the provisions of the Act and a Joint Powers Agreement to be entered into between the Issuer and the Participating Jurisdictions under the provisions of the Act and of Minnesota Statutes, Section 471.59, as amended. The principal amount of the Bonds is to be not in excess of $2,500,000. The proceeds of the Bonds will be loaned to Dakota Communities, Inc., a Minnesota nonprofit corporation (the "Borrower") pursuant to a loan agreement with the City, which will provide for the undertaking of the Project by the Borrower and the repayment by the Borrower of the Bonds (the "Loan Agreement"). Under the Loan Agreement, the Borrower will agree to complete each of the projects described in the Loan Agreement and to make or cause to be made payments sufficient to provide for payment in full of all principal of, premium, if any, and interest on the loan when due. Additional security may be provided for the Bonds as determined by the original purchaser of the Bonds, including a mortgage against each of the Facilities. It is anticipated that the proceeds of the Bonds may also be used, in part, to pay for certain costs of issuance of the Bonds, to the extent such costs are reasonable and are within an amount equal to 2.00% of the proceeds of the Bonds, and to fund necessary reserves, including a debt service reserve fund. Issuance costs in excess of available bond proceeds are to be paid for by the Borrower from funds other than proceeds of the Bonds. It is anticipated that the timetable for the financing will be carried out on an expedited basis and be concluded by not later than the end of the current calendar year. 3. Annlicable Income Limitations. The Facilities are to be occupied by persons of low and moderate income, as required by the Act. The Facilities shall be designed to be affordable by persons and families with adjusted gross income not in excess of the limits set forth in Section 462C.03, subd. 2, of the Act (the greater of: (a) 110% of the median family income, as estimated by HUD for the nonmetropolitan county or standard metropolitan statistical area, as the case may be, or (b) 100% of the income limits established by the Minnesota Housing Finance Agency in which the city is located), and by other persons and families to the extent determined to be necessary in furtherance of the policy of i 1 economic integration stated in Minnesota Statutes, Section 462A.02, subd. 6(eliminating � � and preventing the recurrence of substandard housing conditions by housing persons of varied economic means and a wide range of incomes in the same developments). In any event, at least 20% of the dwelling units in the Facilities are to be held for occupancy by families or individuals with adjusted gross income not in eYcess of 80% of the median family income as estimated by the United States Department of Housing and Urban Development ("H[TD") for the nonmetropolitan county or standard metropolitan statistical area, as the case may be. Program requirements as to the Facilities are to be monitored by the City or private parties, as will be provided in the applicable agreements to be entered into in connection with the issuance of the Bonds. 4. Need for the Program. This Program is needed as a means of implementing the City's stated housing goals, as provided in the Act and the City's Comprehensive Plan. The Comprehensive Plan recognizes and is consistent with a goal of A-2 maintaining and improving the number of units of affordable housing for low income and developmentally disabled persons and families in the City. Finally, the City believes that accomplishment of its housing goals should occur through private development, supported by government financing programs. By virtue of issuing the Bonds and providing financing and refinancing for the Facilities, the City will be assisting in the improvement of and the reduction of the overall costs of operating the Facilities. 5. Descri�tion of Facilities. The Facilities which are to be the subject of the proposed financing are described in Exhibit 2(all of such facilities being referred to in the aggregate as the "Facilities"). The existing Facilities are currently owned by, and the new Facilities will be owned by, the Borrower. � � Exhibit 1 (To Housing Program) PARTICIPATING JURISDICTIONS 1. City of Mendota Heights 2. City of Eagan 3. City of South St. Paul 4. Eagan 5. City of Inver Grove Heights 6. City of West St. Paul 7. City of Maplewood 8. City of Vadnais Heights 9. City of Crystal : �� Exhibit B NOTICE OF PUBLIC HEARING ON A PROPOSED HOUSING PROGR.AM AND THE ISSUANCE OF REVENUE BONDS BY THE CITY OF MENDOTA HEIGHTS, MINNESOTA NOTICE IS HEREBY GIVEN that a public hearing shall be conducted by the City Council of the City of Mendota Heights (the "City") on a proposal by Dakota Communities, Inc., a Minnesota nonprofit corporation (the "Borrower") that the City issue revenue bonds pursuant to Minnesota Statutes, Chapter 462C, as amended. Under the proposal, the City will issue its revenue bonds in one or more series, in a principal amount of up to approximately $2,500,000 (the "Bonds"), and the proceeds would be loaned to the Borrower to pay costs of the Housing Program described below, including related costs necessary to fund required reserves and defray the costs of issuance of the Bonds. The Bonds would be issued pursuant to a Joint Powers Agreement to be entered into among each of the cities referred to in the next paragraph and which are included in the Housing Program. The Housing Program consists of: (a) the acquisition and construction by the Borrower of residential facilities for the developmentally disabled in the Cities of Eagan, South St. Paul, Inver Grove Heights and Maplewood; together with: (b) the refinancing of existing mortgage indebtedness incurred by the Borrower with respect to certain of its existing residential facilities for the developmentally disabled, and including the rehabilitation of those refinanced facilities, located in the Cities of Mendota Heights, West St. Paul, Vadnais Heights and Crystal. One facility included in the Housing Program is located in the City of Mendota Heights, at 732 Cheyenne Lane, Mendota Heights, Minnesota. Proceeds of the Bonds in an amount not to exceed $95,000 would be applied to the refinancing and rehabilitation of the facility. The facility houses four developmentally disabled residents, and is approximately 1,360 square feet in size. The Borrower will be the owner and operator of each of the facilities included in the Housing Program. Complete copies of the Housing Program and the Joint Powers Agreement are on file in the offices of the City Treasurer at City Hall and are available for public inspection. I:�i1 The hearing vvzll be held in City Hai1, located at I I41 Victoria Curve, Mendota Heights, Minnesota on Tuesday, November 2, 1999 at 7:30 o'clock P.M. At such time and place the City shall give all pariies who appear or submit written carr�znents an opport:unity ta express #heir views with respect to the proposal. October �, 1999 1s �`��-u-�.��...� Ci Clerk :